Tuesday, 29 October 2013

Labour and energy

The big six energy companies are clearly not too bothered by the furore surrounding their price hikes with, as Jill Treanor tells us, only E.ON "dispatching its UK chief executive" to give evidence to the Commons energy and climate change committee, and the rest sending mere divisional heads.(Business analysis,29/10/13) Why should they, as they are obviously acting in union, have prepared their spurious "excuses" off pat, and will raise prices at least once more before the election, in order to get "their retaliation in first" in case Miliband does win the 2015 election and freezes their prices? So when Lord Jenkin condemns their "oligopoly" and tables an amendment in the House of Lords "calling for greater competition", are we expected to believe that three or four new energy providers would make a significant difference to household bills? (Electricity costs fell as househod bills went up,29/10/13) They would still be privately owned and have profit and shareholders` dividends as their priorities, so they would not offer gas and electricity prices much different from the others.
      Nationalisation of the energy companies, the preferred option, polls tell us, of 74% of the population, is deemed to be too expensive for the opposition to contemplate, so why not consider state ownership of just one of the small providers, outside the big six? This could be affordable, especially with progressive taxation, advocated recently by no less a body than the IMF. The governmnent owned company could offer much lower prices, reacting to wholesale  prices when they fall as well as rise; profit margins could be nearer the "adequate margin" deemed by the regulator in 1998 when "the market was liberalised", to be 1.5%, and the customers could rest assured no corporate taxes were avoided. Labour has benefitted hugely from their conference energy proposals, whilst Cameron and co. have looked increasingly desperate as their obfuscation and over-reliance on the market lose them support; it`s time for Labour to hammer home their advantage and step closer to election victory.

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