Thousands of people in Britain will die needlessly this winter because they can’t afford to heat their homes adequately. Many hundreds of thousands more will have to chose between heating and eating.
Since Ed Miliband spoke on energy prices at Labour Conference, a debate has been raging on snug TV sofas and in temperature-controlled offices of newspapers about how energy prices are affecting people and what sticking-plaster policy will play well in key marginals. Scarcely mentioned, though, has been the real answer: take the energy companies into public ownership and put them under democratic control.
Even better-off workers are struggling to budget. The average household bill for dual fuel is now over £1250 a year. Four of the Big Six energy companies that dominate 98% of the domestic electricity and gas markets have just put up prices between 8 and 11%. They have imposed similar rises for the last 3 years in a row.
The energy companies argue they are simply passing on the rises in wholesale prices. They forget to mention that all of the Big Six own power generating facilities, too, and so often benefit from rising wholesale electricity prices as generators.
Even on the supplier side, the regulator Ofgen says on average the Big Six profit margin had more than doubled in the last year before the recent price increases.
The Tories look likely to cave to pressure from the energy companies and right wing press to cut green levies. These are obligations and costs put on suppliers which make up 5% of the bill. They fund home insulation for the poorest, help subsidise the cost and the feed-in tariffs of renewables, and deliberately drive up the cost of fossil fuel generation.
The initial idea was that these costs would be born by the companies but they have always passed them on to the user in price rises.
If the levies are scrapped, then the energy companies’ record indicates that they will swallow the extra money as profit rather than cutting bills. Even if they did pass on the saving, that would be a 5% cut at most, while help for the poorest and investment in renewables would be scaled back.
Another idea that has been trailed is a windfall tax on the Big Six. We should be taxing the rich anyway. A one-off tax on profits will make little difference to bills, and anyway some of these companies are good at hiding their real profits.
Labour’s policy is a two-year price freeze while the Big Six are broken up into smaller companies.
The companies can afford this, Despite their wailing, it will not affect investment on the generation side because the companies only invest when the government promises them lucrative fixed prices for energy generated.
Sadly, Labour is not talking about the transfer of the ownership of the power stations.
There is little talk about climate change in the current debate on energy, and even less about the workers in the industry.
The industry still has a higher union density then most of the private sector. On the distribution and generation side workers still have some industrial muscle. Pay and conditions used to be a bit better than other parts of the private sector.
The Big Six have steadily eroded pay and conditions, and the unions’ response has often been weak. In the last period, outsourcing and off-shoring have been used to undermine workers’ conditions and cut costs. This seems likely to gather pace as the Big Six are under pressure.
The issue of man-made climate change is also ignored by much of the debate at the moment. Compared to many European nations Britain lags behind in renewable energy and low-carbon generation like nuclear energy.
Electricity generated by coal emits three times as much carbon as the same unit of electricity generated by gas stations. Yet many gas stations stand idle while coal power stations are burning day and night, entirely because coal is currently a cheaper fuel then gas and more money can be made by generating companies out of coal.
Many workers in the industry fear that public ownership would make them redundant because their current jobs revolve around the fragmentation imposed by privatisation or the duplication of effort inevitable when big vertically-integrated companies compete.
Workers in carbon-intensive power stations also often fear for their jobs if there is a serious push on nuclear and renewables. The unions in the sector sometimes reflect this by lobbying alongside the Big Six for the status quo or for extreme energy.
The electricity and gas to heat and light our buildings are necessities of life. Current methods of supply are degrading the environment and generating obscene profits.
Socialists demand that the entire energy industry be taken under democratic public ownership, with workers in control in the workplace. Immediately, the profit principle can be abolished along with the complex market structure of Suppliers, Agents, Distributors and Generators.
The savings can be passed to users in lower bills. Prices should also be heavily graduated and progressive according to quantity used, income and need. This way the richest, the most wasteful and the most polluting pay for the energy the poorest need.
Even with profit and waste removed, the cost in both monetary and environmental terms will remain high until energy generation is de-carbonised and shifted to renewables and new-generation nuclear.
The way our societies use energy also needs to be addressed. We need to improve our housing and public spaces, Old and new ideas like combined heat and power, public laundries, urban allotments, etc. all could make a huge difference.
There is no national solution to the issues of energy. The world energy and climate crises show the bankruptcy of the system of bourgeois nation states. The working class is the truly international class with an interest in ending the environmental chaos inherent in capitalism.
We should seize the moment to win the argument in our class and in general — put pressure on Labour and the unions to move from mildly populist Big Six bashing to advocating workers’ control and public ownership.
Polls show that public ownership of the energy industry is backed by up to 69%. Socialists in Britain have had few such easy openings recently to start discussion on why democratic common ownership of the economy is necessary.
The role of the workers in this sector is vital. In Workers Liberty we have been involved in the recovering of a lost tradition in working-class politics- the idea that workers in industries take control and lead the transition from socially or environmental harmful production to socially useful production. This is sometimes called worker-led just transition.
In this case we need to argue the hundreds of thousands of workers in energy are not an inconvenient obstacle in the way of developing a carbon neutral energy policy but an agency to bring it about. We argue for unions to fight for better pay and conditions and for workers’ control over a transition to a better, cleaner energy sector using the skills and expertise in the industry.
For the future of humanity, the working class needs to take the power.
