While the Big Six’s profits from us increased fivefold from 2009-2013, one in four people struggle to pay their extortionate fuel bills
Yesterday a new report once again made it abundantly clear that the corporate-controlled energy system is a catastrophe for the UK. The report by the Competition and Markets Authority (CMA) shows that the Big Six energy companies are charging their most loyal customers up to £234 extra a year.
As usual the people hardest hit by this are also the people most vulnerable in cold winters: pensioners, disabled people, single parent families, and people on low incomes.
The energy market has failed. And it has failed the hardest for the people who need energy the most. Yet Ofgem, the government regulator of the energy utilities, sees no other solution to the problem than providing even more market.
In Ofgem’s logic the problem is the Big Six’s virtual monopoly on energy provision. Therefore splitting up the big energy companies into smaller entities would be the only change necessary to right the wrongs of privatised energy.
It doesn’t take more than a quick look at the current situation for millions of people in the UK to see that splitting up the Big Six doesn’t even begin to address the problems of the current energy system. While the Big Six’s profits from us increased fivefold from 2009-2013, one in four people struggle to pay their extortionate fuel bills.
In the past few years fuel bills have risen eight times faster than our wages and Which? have calculated that our bills were £145 too high last year because energy companies failed to pass on savings from falling wholesale energy prices to consumers. That’s just the financial tip of the iceberg of problems with our energy system.
Every year thousands of people die in cold homes because they are unable to afford adequate heating. And it is estimated that more than one in five of us has had to make the difficult choice between heating and eating this winter.
Break up the system, not just the Big Six
The corporate-controlled energy system has not just made us all worse off by increasing our energy bills in general; it has also constructed a system where the poorest consumers subsidise the bills of the richest. People on prepayment meters pay more for their energy and people in debt pay more again.
Every day the Big Six break into people’s homes across the country to impose more prepayment meters and more than four million people are already in debt to their energy provider.
Yes, maybe splitting up the Big Six could provide some benefits for some of the richer part of the population who’re paying their bills via direct debit. But people forced onto prepayment meters and people indebted by energy bills and unable to change providers have nothing to win from this exercise.
Splitting up the big energy companies is not going to provide any support for the people who really need it – or even stop the exploitation of some of the most vulnerable groups in our society. Yesterday’s report from the CMA is just another proof that the ‘free’ market is not bringing down our bills, but instead contributing to more inequality and fuel poverty.
For everyone who wants a more equal society and for everyone that wants to see an end to fuel poverty, the only solution is an end to the corporate-controlled profit-driven energy system.
Taking back power
The solutions to our energy problems are already being created here in the UK and across the world. Instead of looking to big business for solutions, we should look to Germany where the people of Hamburg are taking back control of their energy. We should look to Indonesia and Costa Rica where rural energy coops are providing green, affordable energy and jobs to local communities.
If we want to create an energy system where everyone can access the energy they need and where energy does not destroy our climate, we must take back power from big corporations. More than two thirds of people in the UK want to bring back energy under public control. If our ‘representatives’in Westminster cannot see the need for real change of our energy system, we need to show them the way.
Join the fight for a democratic energy system at www.fuelpovertyaction.org.uk.
Morten Thaysen is part of Fuel Poverty Action and Reclaim the Power. He also works for Global Justice Now.
49 Responses to “Privatised energy has failed – we need to take back the power”
Guest
Nonsense. There’s a 75% marginal rate, for salaries only.
Guest
Er…no. They’ve made record profits.
And no, massively expensive “distributed” systems, for which the inflated subsidy bills are being passed on 100% to the consumer, are a major reason for the rise. Especially when combined with the fact that the end-users of those technologies are not paying for connections, grid balancing, etc.
You want to be bailed out again I see.
ForeignRedTory
Aye, that is what I meant with income. That was le suck of ze French.
Now, the important thing is the taxation of the trade in derivates at a 25 pence on the hundred pounds.
Leon Wolfeson
It wasn’t really the issue.
Studies have shown that the really rich don’t depend on salaries for income in the first place, but rather capital – and they manage to avoid most tax anyway. You hit people like footballers with that sort of income tax, and not many others.
Also, again, it’s a marginal rate and there’s no actual evidence of a Laffer effect. France’s problems were caused because the government *waffled* and caused major uncertainty! That’s always an economic sin no matter what the economic ideology.
Transaction tax rates are more complex. Simply put, profits can be quite low and you have to be careful not to hit i.e. pension funds heavily. Transaction taxes might be due, for instance, only on short-term holdings. It’s not quite as simple as saying it’s a low rate.
steroflex
I am staggered.
Mr Miliband himself, ably supported by the leader of the opposition, Mr D. Cameron and the rest of the Commons all voted for the climate change bill which, in conjunction with the EU and the Green Lobbies, set targets for Renewables that simply cannot be met.
What happens when the wind doesn’t blow?
What happens when, in winter, the sun doesn’t shine?
What happens when we close down all the coal fired power stations?
Where are the promised new nuclear power stations?
Please do not pretend that all the above is not true.
Oh – I nearly forgot – the Green blob has also forbidden fracking because a HIGE GREEN GOBLIN comes out of the taps. This is proved scientifically in America in a University!!!
Are we surprised that prices go up. Things that are getting harder to obtain tend to cost slightly more…