Energy companies make a great case for public ownership

The energy companies again shoot themselves in the foot with a no show by chief executives at the Commons Energy and Climate Change Committee.

Only two of the “Big Six” chief executives appeared before the committee in person. The other four sent lower-ranking executives to answer questions.

Labour MP Ian Lavery didn’t mince his words, “It’s a disgrace that the same energy bosses who have imposed huge price rises are refusing to defend them in front of MPs. The energy bosses aren’t just turning their noses up at the House of Commons, they’re also turning their noses up at millions of hard-pressed consumers who do not understand why they are facing even higher energy bills this winter. It might be half-term for the energy bosses, but ordinary working people face a winter of misery because of these greedy companies and their unjustified price hikes.”

The strength of Scottish customer concern was highlighted by one of the subs, Neil Clitheroe, head of retail and generation at ScottishPower. He revealed that 60,000 customers called the company with concerns “virtually straight away” when the firm announced its 8.6 per cent increase in bills last week.

The companies, with support from the Prime Minister, have used Green levies as a smokescreen for rises. But as Philip Pearson at the TUC points out, there is some £9bn in taxpayer and consumer subsidies and less than a third goes to low carbon energy support. Fossil fuel, gas and nuclear gets the rest.

Their other defence is wholesale price increases. However, as this chart (Labour List) shows, there was a 1.7% increase in wholesale prices as against an 11.1% consumer cost hike.

The one cost companies have been good at cutting is their own tax bill. The Independent on Sunday exposed Scotia Gas, half owned by SSE, that runs Scotland’s gas networks. They have used a tax loophole to avoid £72m in tax. In response to this news Ed Miliband said, “On top of failing to address the broken energy market, David Cameron is failing to stamp out tax avoidance. We have a prime minister unwilling to take the side of hard-working people. Unwilling to act against the energy companies, unwilling to clamp down on tax avoidance and close down tax loopholes."

If that isn’t enough, a whistleblower at British Gas revealed to the Guardian that the company is siphoning off £20m of extra profits annually, by keeping hold of money owed to former customers who have built up credit on their accounts.

As Michael Meacher put it in Left Futures, “Nobody makes a better case that exploitative private markets in areas of basic public need repeatedly evade proper regulation and can only be made to serve the public interest by being brought back, whether whole or in part, into public ownership.”

Whether it’s a Swiss based tax exile at Grangemouth, or the ‘Big 6’ energy companies – it’s they who are holding Britain to ransom. It’s time to put the ‘public’ back into monopolistic services, and what’s more, the polls show the public agrees.