by Gavin Hayes
contribution by Caroline Lucas and Gavin Hayes
from Liberal Conspiracy 13.2.12
This week has been the coldest so far this winter. But whilst in recent days our papers have been filled with stories of fun in the snow, in the weeks ahead they’re more likely to be filled with chilling stories of yet more excessive profiteering by Britain’s big six energy companies, coupled with big pay awards for their top executives.
In the first six months of 2011 alone the big six energy companies made around £3.5BN in profits.
At the same time, it’s now estimated that over 5 million households in the UK are facing fuel poverty.
At the same time energy companies profit margins appear to go up and up unabated, leading to OFGEM warning last October that profits on dual fuel deals had risen from £15 per household to a staggering £125 – a rise of 733%.
Clearly something is going very wrong and it’s time we did something about it. That’s why this week over 100 leading figures have launched a new cross-party campaign coalition for affordable energy called End the Big Six Energy Fix – this has been backed and endorsed by The Independent.
To tackle the behaviour of predatory energy companies we are proposing three simple and sensible solutions.
First, we are calling on the Government to respond to the excessive profiteering of the big six energy suppliers by imposing a similar levy to the one they have imposed on North Sea oil companies and the big banks.
Over time such a levy could raise billions, revenues that could be ring-fenced and used to ensure that every home is insulated and highly energy efficient – starting with the homes of the fuel poor. This would form part of a Green New Deal and help to create thousands of new skilled jobs in the process.
Second, to prevent energy companies from passing the cost of any levy on to customers, we want the Government to give the regulator OFGEM the power to cap prices. This could be linked to the wholesale price to make energy prices fairer – we could perhaps call this an ‘energy price escalator’. Indeed interestingly this week we’ve heard that the telecoms regulator OFCOM is looking to cap the cost of landline phone rental – so why not allow OFGEM to cap the price of energy too?
Third, we want the Government to launch an independent public inquiry into the big six energy companies. In much the same way that we have had an Independent Commission on Banking led by Vickers and now an investigation into the media led by Levenson, so we now urgently need a similar public inquiry on the energy industry.
We then need to devise appropriate reforms that ensure we have a market and an industry that serves people and planet before profit.
Finally, we need to kick-start a national debate on energy that not only focuses on the issue of price and competition, but more fundamentally on the kind of energy industry we want for the future, recognising that energy provision should be viewed not merely as a market commodity, but as a crucial public service on which we all rely.
Caroline Lucas MP is leader of the Green Party; Gavin Hayes is General Secretary of Compass. More at: www.endthebigsixenergyfix.org.uk