When EDF joined the other four members of the ‘big six’ energy suppliers in a huge price hike it left only E.ON to bang up its prices, something it can now do whilst claiming that it resisted the ‘necessity’ for as long as possible.
But have these massive increases (averaging out at 8.1 percent) really been necessary?
‘Of course!’ shout the energy companies in unison. And from their point of view, they are quite correct, since they exist to produce not energy but maximum profit for their shareholders.
We cannot, however, expect these incidental providers of our energy supplies to be candid enough to tell us that prices are rocketing because of the need to increase the profits pocketed by their shareholders and fat-cat directorate, so we have to wade through the torrent of feeble and dishonest excuses currently being proffered by the privateers.
Are price rises justified by increased production costs?
The ‘big six’ all assert that mounting wholesale costs are partly to blame for their price rises, and yet even the data from the toothless energy regulator Ofgem shows that those prices have only gone up by 1.7 percent over the past year and should therefore only have added £10 to a bill at most.
When gas and electricity were privatised, this robbery was effected in the name of ‘competition’, which, we were told, would ‘keep prices down’. The reality was always going to be the opposite, however, as the large multinationals, hedge funds and pension funds that very quickly acquired most of the shares demanded ever-growing pay-outs on their investments.
It has now sunk into even the thickest skulls in Parliament that energy companies are held in the same bitter contempt and outright hatred by the public as are bankers and the parliamentary whores themselves, and so we can expect to see the staging of a mock fight over the issue of energy as a centrepiece to the 2015 election show.
Are price rises caused by the need to develop ‘green’ energy (and can we afford not to?)
The executives’ attempts to shift the responsibility range from blaming people who drink tea in isolation (and therefore boil kettles of water for one instead of going out and finding others who fancy a cuppa at that moment so as to get the most energy efficiency from the boiled kettle … yes, this really was put forward by E.ON as a justification for escalating costs in the industry) to blaming the costs involved in researching and developing renewable forms of energy.
According to the Renewable Energy Association (REA), however, in an analysis based on figures both from the industry and from government departments, the costs incurred from the research and introduction of renewable energy have added a mere £4.00 to the average bill over two years. Yet the average bill in that time has risen by a staggering £205, meaning that the proportion that can be attributed to renewable energy costs is a mere 2 percent.
So what is causing the other 98 percent increase? Perhaps it really is those solo tea drinkers?
The government, through David Cameron, says that it is looking at ‘rolling back’ some of the ‘green’ projects to save us some of this 2 percent that renewable energy is costing us. The Register, meanwhile, lays the problem squarely at the door of ‘Europe’!
“The EU introduced a renewables obligation that the region produces 20 percent of its electricity from renewable sources by 2020. This includes solar, wind, hydroelectric and ‘biofuels’.” (‘Price rises and power cuts by 2016? Thank the EU’s energy policy’ by Andrew Orlowski, theregister.co.uk, 15 October 2013)
The author asserts that a gas plant needs to be operating at 57 percent capacity to be economically viable and that, therefore, if an attempt to switch to renewable energy is seriously undertaken, the energy companies will switch off their gas plants in the name of economic good management – and thereby create chaos.
These arguments could not better illustrate the decadent state of capitalism in its dying years. In the interests of profit today it is only too happy to consign to oblivion the needs of future generations. Traditional energy sources are bound to run out and are in any event destroying the environment even now. It is therefore a matter of life and death to promote renewable resources, yet the profit motive is providing a serious obstacle to taking this essential step, which in a socialist society would be taken as a matter of course without being used as an excuse for upping energy prices for the benefit of the fat cats.
In fact, rather than taking care of the environment and the needs of future generations, the corrupt capitalists are resorting to one of the most damaging possible methods of energy extraction, simply because it is cheap yet can be sold expensive, giving rise to lovely, lovely profit (even whilst pumping toxins into the earth that we rely on for food and water).
We are told in a report by energy consultants CapGemini that energy prices in the US are falling because of the ‘sensible’ use of shale gas. Nothing to do with all the stolen energy resources acquired from the many countries where US troops have brought ‘democracy’ with bombs and guns, then?
The extraction of gas from shale is achieved through a process called ‘fracking’, which involves sinking a drill into the underground shale and breaking it up with a mixture of hundreds and thousands of gallons of water and a cocktail of highly-toxic chemicals.
What becomes of all this polluted water that has been pumped deep underground at high pressure? Well, eventually, it will naturally find its way to the water table that feeds our crops and grasses, and it will also by this route end up in water for domestic use, making it virtually impossible to keep out of the food chain.
Fracking is about to start across many parts of northern England and the Midlands and, apart from the usual government claims that it will cause no harm, it is possible that the energy companies may decide at some point that a slight price reduction in the price of gas (after it has been yet further increased of course) may make such a bitter drink more palatable.
However, no one has mentioned price reductions yet. On the contrary, if energy-helpline.com spokesman Mark Todd is to be believed, the average household bill, which has already climbed to around £1,400 per annum, could more than double in the next seven years to hit the £3,000 mark.
The Labour ‘alternative’
The Labour party says it will freeze energy prices for 20 months following an election victory, and is also pledging to introduce a number of new regulations. It may well do this, but we can be sure that any such regulations will not affect the energy barons’ profits.
Since Labour is now widely seen as the probable winner in 2015, barring some unexpected event, we can expect huge price rises in the run-up to the general election that will act as compensation for any 20-month freeze that might then be imposed. What the Labour party will not talk about is the renationalisation of energy. And, indeed, why would it?
The Labour party is a fully-fledged party of capitalism; its interests are the interests of the ruling class, albeit occasionally wrapped up and presented to us as something else. The Conservatives have insisted that their government, if elected, would ensure that the energy companies will charge the lowest rate to consumers. They have not yet said how they will manage to achieve this trick. Perhaps they plan to borrow some of those meaningless regulations from Labour?
These, then, are the election battle lines regarding energy, drawn and ready, with the career politicians just awaiting the orders to sally forth and batter each other with senseless verbiage and to bamboozle us plebs with lies, false promises and the usual disdain.
The poor pick up the tab
We wrote previously in this paper of the misery of fuel poverty – ie, when 10 percent or more of a person’s income is spent on energy – noting how a significant minority of workers were already regularly making the terrible choice between heating and eating. (See Proletarian, February 2011)
This minority has steadily increased since then. The job losses, benefit cuts, food price increases, rent increases, welfare cuts and more that are pushing ever greater numbers of British people into abject poverty under their combined weight are now also affecting wider and broader sections of the population, forcing even many better-off workers and sections of the middle strata down into the poverty trap.
A recent poll across supermarkets shows that, as the crisis spreads, beef and lamb joints, along with gourmet cheeses, are now among the top 20 items targeted by shoplifters. At the same time, the fat cats are getting richer and richer.
“The super-rich – the top 1 percent of earners – now pocket 10p in every pound of income paid in Britain, while the poorest half of the population take home only 18p of every pound between them, according to a report published this week by the Resolution Foundation think tank, which reveals the widening gap between those at the very top and the rest of society.
“Inequality has grown sharply over the past 15 years, according to Resolution’s analysis: the top 1 percent of earners have seen their slice of the pie increase from 7 percent in the mid-1990s to 10 percent today, while the bottom half have seen their share drop from 19 percent to 18 percent.” (‘Shocking figures reveal the growth in UK’s wealth gap’ by Heather Stewart, Observer, 10 February 2013)
And how is this achieved? Why, by milking consumers dry to the greatest possible extent!
MPs on the Commons Energy and Climate Change Select Committee recently called in representatives of the ‘big six’ energy companies – British Gas, SSE, Scottish Power, E.ON, EDF and Npower – to explain their price increases and related strategy.
There may well be some harsh words uttered during this process for the sake of keeping up the pantomime of parliamentary democracy, but there will be no pressure, in any real sense, on these companies, which sell the same products through the same pipes and wires in a tragi-farce that gives us the ‘choice’ of buying our energy from one of six sellers who in fact own neither the energy they sell nor the method of delivery.
This would indeed be almost humorous, except that, as the robbery continues this winter, once again people will die for lack of warmth, and hunger will be the uninvited Christmas guest in many homes.
Only one course of action can really keep energy prices down and lower energy use while making sure that no one goes cold or hungry. The chief waster of energy (not to mention the chief polluter) is the anarchic system of production that we call capitalism. When that is ended and all productive forces and goods are owned by the masses, and tied firmly to production for need under socialism, our children will marvel at the madness of the system that we used to allow ourselves to be ruled by.
The move from capitalism to socialism, however, will not be achieved as a result of any parliamentary vote held under the present dictatorship of the bourgeoisie. Those who understand the necessity of this transition must join or work for a truly revolutionary party – one which will be capable of using the science of Marxism Leninism to lead the masses to revolution.
We call on all those who want to end the obscenity of imperialist greed and to replace it with a just socialist society, which cares and works for the needs of the masses over the profit hunger of a handful of exploiters, to join with us now.