“As we are facing one of the biggest falls in living standards in a generation or more, many will ask why this has been allowed to happen, especially in Britain, one of the richest countries on earth.”
By Jon Trickett MP.
Jon Trickett was speaking at “Progressive Solutions to the Energy Crisis” a socialist policy seminar from the Socialist Campaign Group of MPs on April 25th, 2022. You can watch it in full below:
The present energy crisis is not simply a result of uncontrollable events as many claim, it is the effect of a broken energy market which puts profit ahead of the nation’s interests.
Energy prices rose by a staggering 54% in April, which on average amounts to an increase in bills of £693. Coupled with rising inflation and declining wages most people are now really feeling the pinch.
Indeed, the rising cost of living could plunge as many as 20 million people into fuel poverty. Sadly this could also mean more people dying as a result, with 14% of excess winter deaths linked to fuel poverty this year.
As we are facing one of the biggest falls in living standards in a generation or more, many will ask why this has been allowed to happen, especially in Britain, one of the richest countries on earth.
Firstly, the privatisation of the energy companies has impacted the price consumers pay. Studies examining the UK energy market have concluded that electricity prices are 10-20% higher than they would have been without privatisation.
Why might this be?
Research by CommonWealth shows that oil and gas companies have handed out almost £200 billion to shareholders since 2010. Money which, if the energy market was in public hands, would have been used to cut bills and invest in cheaper energy supply.
Often these profits don’t even stay in the country. Let’s remind ourselves that 77% of the UK household energy market is controlled by companies or, in some cases, the government, of France, Spain and Germany.
Some people may argue that it doesn’t really matter where a company is owned. I am not sure that is true when it comes to crucial infrastructure and services such as energy supply.
Many people say that the energy market is out of control, but it is, in some senses, totally in control. Our politics, our state institutions and even our parliament are penetrated through and through by the industry.
Boris Johnson’s Tories have received £1 million in energy donations. The Tories have also registered many more donations, shares, salaries, gifts and tickets to sporting events from fossil fuel companies, petrostates, aviation companies and climate sceptics, according to declarations made in the parliamentary record of MPs’ interests between 2008 and 2019.
It is unsurprising therefore that Tory Ministers met fossil fuel companies 9 times as often as clean energy ones.
So how can we tackle this state of affairs?
In the short to medium term, there has been a great deal of discussion about a windfall tax on “super profits”. This is not a new idea. The Blair Government had a tax on “the excess profits of the privatised utilities”. The tax produced an estimated one off income to the government of £5 billion, which was used to fund the New Deal, a welfare-to-work program that sought to tackle long-term unemployment, as well as providing capital investment for schools and the University for Industry (Learndirect).
Equally interesting – and perhaps even more radical but from a right wing point of view, Geoffrey Howe – Thatcher’s Chancellor – had a different use entirely for a windfall tax in 1980, which was used in part to prepare for privatisation by restructuring the sector in 1982.
But this is a temporary fix. In the long term, public ownership of energy is crucial, not only in reducing prices but also in order to urgently address the climate crisis. We need an end to the market and to private ownership and why not reverse what Thatcher did by using funds from the super profits to take the whole sector back into democratic public ownership with reasonable prices and a green agenda.
Let’s be clear, taking large private corporations back into the public sector will be a fight for democracy against the interests of oligarchy. But it’s a fight worth having.
- This article is a published version of the speech given by Jon Trickett MP at the Socialist Policy Seminar: “Progressive Solutions to the Energy Crisis” on April 25th, 2022. You can watch it in full here.
- You can follow Jon Trickett on Facebook, Instagram and twitter.
