The Great Power Rip Off
Ken Ferguson looks at the latest round of energy price rises
Pity the poor power companies, that’s the almost daily message from the
sharp suited spin doctors as they tearfully tell customers of their “deep
regret” at the latest price hikes.
Of course there is no question, they assure us, of the power bosses actually
wanting to increase prices - it is all forced on them by those mysterious creatures,
market forces.
Sadly they point at rising prices for oil, coal, gas and other key factors
in their production costs and patiently explain that such increases just have
to be followed by a rise in the cost of energy.
The result is that, during January, over 9 million gas and electricity customers
had massive price rises imposed showing the fairy tale that we live in a competitive
market where the customer is king to be straight from the pages of Harry Potter.
Far from the fantasy market in which power companies strive to outdo each other
with fierce price cutting and superb service, the customer is faced with the
brutal reality that all sources of electricity are in the hands of profit hungry
private firms.
And anybody who really believes that this handful of firms are in competition
really does need to take more water with it.
Essentially almost all UK customers take their power from the so called “big
six” energy firms, all of whom work hand in glove to make sure that
their cosy cartel continues to milk the public to feed their profits.
In an elegant office just a stones throw from Trafalgar Square, the blandly
titled Energy Retail Association is the spider at the centre of the profiteers
web.
Bosses of the big firms meet at the ERA to discuss market conditions and strategy
in what is in effect a thinly disguised process to rip off the public and safeguard
their inflated profits and fat cat pay.
Gathered among the potted plants in their plush chairs for such highly secret
gathering are top bosses such as David Threlfall, chief executive of Npower,
Ian Peters, chief operating officer of British Gas, and EDF big cheese Eva
Eisen-Schimmel, whose previous claim to fame was to oversee the launch of
Häagen-Dazs
ice cream in Europe.
ERA spokespeople underline the fact that these meetings never discuss prices
as such discussion would be illegal. So, of course, we must conclude that when
they put up prices one after the other it is purely a coincidence.
Further reassurance that all is well came from the so called “regulator” charged
with keeping the power firms in line, the government’s toothless watchdog
Ofgem, who soothingly told angry customers there was no evidence of anti-competitive
behaviour and dismissed claims of price fixing.
However sceptical campaigners called for an official inquiry into the “obscene” profits
being made by energy firms, claiming that consumers were being “ripped
off.”
The National Right to Fuel Campaign and public service union Unison claimed
increases in energy charges to consumers were almost £2.5billion more
than the extra costs in producing and selling gas and electricity.
Even laid back Chancellor Alistair Darling was moved to action. In a move which
will doubtless have the power bosses trembling he wrote to Sir John Mogg, chairman
of Ofgem, asking him to explain why fuel prices were rising!
However the truth is that prices are still rising, and the entire machinery
of so called regulation and advice on switching your supplier stands exposed
for the hollow sham it is.
Well meaning calls to protect the poor are all very well but, twenty years
since it was handed to the fat cats, the entire power supply industry is revealed
as a dripping roast for the power bosses which prioritises profits over public
need.
As we prepare to see a range of major changes in how power is generated,
the time is now overdue to make sure that the planned wind farms and wave
power
don’t result in handing our natural resources to the profiteers.
If it was Scotland’s oil then it certainly is Scotland’s wind
and waves. These developments need to be socially owned and the provision
of such
a vital service taken away from private profit into democratic public ownership.
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