Labour's energy price freeze: “sheer, unbridled socialism”?

Submitted by Matthew on 2 October, 2013 - 11:28

Ed Miliband’s announcement at Labour Party conference that a post-2015 Labour government would freeze energy prices has been met with outrage from energy bosses and the right-wing press.

The Express foresaw “rationing” and “blackouts”. Bosses from Centrica, RWE Npower, SSE, and other firms denounced the plan. Centrica chair Roger Carr called it “a recipe for economic ruin”.

Miliband promised a 20-month gas and electricity price freeze for homes and businesses. He was addressing a real problem for working-class people. Government statistics show that over two million UK homes are in “fuel poverty”, calculated by measuring energy prices against household income.

In the first year of ConDem government, there was a 120% increase in cases of people over 60 being admitted to hospital with hypothermia. These were pensioners who are unable to afford to heat their homes.

Gas and electricity bills for the average household have increased by 68% since 2008 — a leap several times greater than the rate of inflation. Meanwhile, the profits of the “big six” energy companies have increased 74% since 2009.

Critics have said policy would will lead to price increases, with companies likely to increase their prices now in anticipation of a freeze post-2015. Three of the “big six” have a deal offering customers a price freeze until 2016 or 2017.

Digby Jones, the former head of the Confederation of British Industry and a minister in Gordon Brown’s government, called the policy “sheer, unbridled socialism”. If only it were. While it will, if implemented, make life better for millions of working-class people, it is more to do with a populist turn from Labour than a consistently left-wing one.

“Sheer, unbridled socialism” would do a great deal more to the energy industry than freeze prices, and a great deal more than the bureaucratic state control that right-wingers fear (almost certainly needlessly) is Miliband’s real agenda.

It would take the entire industry into social ownership, expropriating the vast wealth of the energy companies without compensation.

It would use that wealth to ensure free or very cheap energy supply, and set up mechanisms of community planning of energy supply and distribution so that it fulfils social need.

Power plants would be taken into democratic workers’ control.

Crucially, workers would be given the training and tools necessary to turn ecologically-unsustainable coal and gas-fired power stations into “factories” to produce socially-necessary goods.

The current government’s “dash for gas”, a plan to build more gas-fired power stations, would be scrapped and replaced with massive investment in renewable energy sources such as wind and wave power.

The right to energy — light, heat, cooking fuel — is a fundamental one, part of the right to decent housing. As a socially-necessary product, there is no reason why its supply should be controlled by market forces. The way to ensure affordable and equitable energy supply for all is to run the industry democratically under social ownership and workers’ control.

That policy would terrify Miliband and the Labour leaders as much as it would the Tories and the energy bosses.

To win such a policy, the labour movement will need to fight independently and impose itself and its interests on society as a governing force.

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