Npower, one of the ‘Big Six’ energy companies, has recently announced that it will raise its electricity and gas prices further. Even the Tories have been forced to acknowledge that the “markets aren’t working” when it comes to energy prices. We say: nationalise the energy industry without compensation!
Npower, one of the ‘Big Six’ energy companies, has recently announced that it will raise its electricity prices by 15% and its gas prices by 4.8%. The energy giant blamed these increase on rising costs, as well as the introduction of government policies and renewable energy subsidies.
Given the monopolistic nature of the industry, when one of the Big Six announces they are going to raise prices, the rest follow suit. After Npower’s announcement, Scottish Power stated that they would increase their prices by a similar amount: 10.8% for electricity and 4.7% for gas. They also cited the same reasons as Npower for the price increase. Although it had cut prices for one month, EDF also revealed similar increases in energy prices for after March. British Gas is the only one of the major energy firms to announce a freeze – which will last up until August, meaning they’ll likely just increase their prices later on.
These sudden and sizeable price rises aroused some suspicion with the Tories – but only enough for them to give the Big Six a slap on the wrist. The government threatened to crackdown on energy prices, with ministers even stating that they were prepared to act where the markets were seen not to be “working”. Since the Tories are the staunchest defenders private property and the market, it is hard to imagine what more than could do other than offer a stern word. The standard advice from Ofgem and other money saving experts, meanwhile, is to shop around for the better deals – not exactly a solution when all of the providers raise their prices in unison!
Increasing fuel prices are going to force more people into having to decide between ‘heating or eating’. Already, many cannot even afford to heat their homes, including as many as 60,000 in Birmingham alone. Added to this are figures released by the government that indicate that over 2.3 million households (10% of households in the UK) are in ‘fuel poverty’ – essentially meaning they are cannot afford to heat their home to a decent standard. This figure rises to 20% amongst those in privately rented housing. Switching fuel is unlikely to make any significant difference, as the average amount needed to escape fuel poverty is £371 per year.
A charity called National Energy Action has released a report stating that children born today will be unable to escape fuel poverty. This is not just the result of increasing energy prices, but also the fact that real wages have stagnated for years. On top of that is the uncertainty of Brexit, which will bring further price inflation and economic stagnation. All of the Big Six energy companies have international ties –all but two are based outside of Britain; EDF, E.ON, Npower and Scottish Power are all based in European countries. With Britain leaving the single market, energy companies will be pushed to further increase their prices.
Following the recent price announcements, John McDonnell, the Shadow Chancellor, went on the BBC to say that Labour would introduce legislation that would limit how much prices could increase by and also suggested capping prices. Clive Lewis also chipped in, stating that a Labour government would seek to curb energy price increases. The Tories retorted that Labour’s plans would crash the economy – an ironic statement from a party that is hell-bent on the economic suicide of a Hard Brexit!
When Ed Miliband, as Labour leader, proposed freezing energy prices (for a period of just 18 months), the Big Six reeled in horror and threatened to cause a blackout by withdrawing investment if such a policy was implemented. Such behaviour from the energy cartel is an indication of what would happen if a Corbyn-led Labour government came to power and attempted to slash energy prices, or even just to cap them; we’d see such a government effectively held hostage and forced to cave in the. Similarly, proposals to break up the monopolies ignore the fact that, as Marx explained, capitalist competition inevitably leads towards monopoly.
This, in essence, demonstrates the limits of trying to regulate and reform capitalism. Although caps and price slashing reforms are welcomed, they are increasingly utopian solutions in the context of a capitalist system that is falling ever deeper into crisis.
The only solution that can solve Britain’s energy crisis is to take these companies and put them under democratic and public control. The fat cat energy monopolies should be nationalised without compensation, placed under the democratic control of the labour movement and its elected representatives, and integrated into rational plan of production alongside the banks, construction companies, and other major utilities in order to provide green energy and a decent home for all.