RED BARON'S WORDS

In yet another example of the abdication of central responsibility big society the government has decided to get stuck in to the energy price debacle debate.  The regulator OFGEM has stated that due to the lack of transparency of the tariffs consumers are finding it near impossible to get the best deals.  There has been speculation that some form of intervention is required in order to redress the balance a little more in favour of the consumer given that the average price rise over the last 12 months has been £100 per household.

Energy Secretary Chris Huhne however does not feel that focusing on the energy companies is the correct strategy, after all “They aren’t the Salvation Army” and infers that it is the consumer that is to blame for not insulating and finding the cheapest tariff.  The argument that the high cost of energy has been due to the contraction of players in the market from 40 when energy was deregulated in 2000 to 6 now has been refuted.  Phil Bentley the MD of British Gas claims that the sole driver of consumer energy prices is the wholesale price of gas in the international marketplace and cites the fact that we currently import 50% of the gas we use.  According to figures quoted in the Daily Mirror though the energy companies have made an ­estimated £30billion in profits since 2006 of which £8billion has been paid out in dividends.  British Gas themselves reported a 24% jump in profits to a record £742m last year adding 267,000 customers to its 16million customer base.  In addition operating profits at British Gas’s parent company Centrica broke through the £2bn mark, increasing by 29% to £2.3bn, which is also a record.  At the same time around 8 million British Gas customers were hit with a price rise on 10 December 2010, raising the average customer’s dual-fuel bill from £1,157 to £1,239 a year.  Centrica mounted a defence of its prices when it announced the figures, pointing out that British Gas made only £4 profit each month per customer and that it would pay  £761m in tax during the year.  One wonders therefore whether it is Arthur Andersen who is doing their books since £4 x 16million = £64 million – £761 million does not come anywhere close to + £742 million… or am I missing something like a fucking decimal point or a 0 somewhere here?

It is all very well for Huhne and Cameron to say that the consumer should be looking for cheaper tariffs in the morass of variations and that loft insulation should be carried out but let’s look at this a little more closely.  The switch sites are very often on commission based on the deals they offer, it is therefore in their interest to get you to switch supplier since staying on your existing one denies them any revenue.  The myriad assortment of deals and their terms and conditions is baffling to anybody’s mind and this has been admitted by this government and the previous one, both of whom have failed to do anything about it.  On the subject of loft insulation let us ask what the position is for the few remaining council tenants, do they all have insulation?  If not then what provision is being given to councils to do it?  Presumably the same that is given to them to install solar panels to increase self-sufficiency.  What pressure is there on private landlords to ensure all of their properties are sufficiently energy efficient?  Where are the schemes for the worst off to receive free loft insulation since such moves would be more likely to reduce their bills and increase their ability to live from day to day, perhaps even to not have to solely rely on state benefits?  It would seem to be a far better method in getting people off benefits by raising their household income and lowering their expenditure rather than arbitrarily removing them from certain benefits whilst not advising them of others to which they would be entitled.

Labour have attacked the energy companies and the government however whilst Ed Milliband may talk a good game he did little to stop the rampaging energy company profits whilst he was Energy Secretary in the last administration.  This would suggest that he either did not wish to do so or that he was unable to do so, either way what exactly has changed to make it more likely now?

In perhaps the most cynical comment of the debate Chancellor Gideon George Osborne thinks that keeping to our climate change goals on emissions will hurt business “Britain makes up less than 2% of all global emissions so we’re not going to save the planet by putting our country out of business.”  For a man who went to one of the best schools that his parents could pay for he seems to have a quite catastrophically inept grasp of logic.  If the planet is not saved there won’t be a country let alone businesses in it.  For the wider universe this must represent a tantalising prospect.  Or again am I missing something here?

Investment in renewable energy sources by the energy companies is 5% of their total investment, in the last year the UK has gone from 3rd to 13th in its investment in renewables.  The government claims that green energy will cost £300/year per household in order to make itself sustainable, why should it, surely the latent sustainability of this form of power generation would in fact guarantee the energy companies revenue long after fossil fuels have run out.  In fact is it not the case that the government is doing British business a grave disservice by not ensuring their long-term future?  Is it not sensible to take no chances with regard to whether or not impending climate doom may befall both from a moral and economic perspective?  The argument as to whether wind farms are an eyesore or not should be devolved so that communities be permitted to opt out of central funding for renewable energy generation on the proviso that they be removed from the National Grid and thus responsible for their own power generation.  Why when profits are increasing, in contrast to often the dropping of wholesale prices, is the difference not ploughed back into investment in renewables?  Why in the age of fuel imports, tightening of belts, “rising wholesale prices” is the head of RWE npower, Volker Beckers, getting a £1million compensation package last year while EDF Energy’s Vincent de Rivaz has got a 30% rise to £1.3million?  Former Scottish Power boss Nick Horler received £1.3million, E.On’s Paul Golby £1.2million and Ian Marchant of Scottish and Southern £1.2million.

Putting the onus on the consumer is merely an example of the cosy relationship between government and business and the utter contempt for which government holds for the vast majority of the population who are facing real-terms pay cuts, pension obliteration, rising food prices and huge fuel bills both at home and on the road.  The consumer does not have the power to change energy policy, the consumer does not have the ability to force investment in renewable energy, the consumer does not have the lobbying power or influence to put any pressure on the energy companies merely to blithely accept what they are all doing multilaterally which is to raise prices at the very time that demand is likely to be highest.  It isn’t a wonder that people are out on the streets it is a wonder they haven’t been out prior to now.  After all for most currently the streets may well be warmer than our homes.