Soaring energy prices, as 4 of the Big 6 energy companies demand huge price rises this winter (four times the rate of inflation), are making waves in the political sphere. Cameron has just said: “Switching is one of the best ways to get energy bills down”.
Obviously he’s never tried to do it himself because if he had, he would know that making a choice among the 500 or so tariffs on offer, with every conceivable overlapping permutation, is like sticking in a pin blindfold to find the best option.
Even if you succeed today, within a week or a month it will be out of date as many of the permutations have changed. The whole system is designed, not to inform the customer, but to swamp him with such an overload of data that he’s bamboozled into compliance.
Whatever you finally choose, if you switch at all, you will find your energy bill heading north inexorably. So much so that even the political parties are getting worried, though their response has been bizarre. Cameron has just announced that he “will be legislating so that energy companies have to give the lowest tariff to their customers”.
This is perverse for two reasons. It will encourage the cabal of companies to collaborate to make sure the lowest tariff is kept high enough to maintain their rising (and excessive) profits. Even more significantly, it is an implicit admission that the so-called private competitive market has collapsed: what is the point of having 6 big energy companies if they’re all charging exactly the same price?
The logic of that seems to have escaped Cameron: since there is no competition, energy supply should be in public ownership, and that would indeed ensure low prices without the risk that they will be driven up by the Big 6 cartel manoeuvres.
For the Labour Party the response given by Caroline Fleet has been equally paradoxical. Essentially she said on Newsnight that Labour wants to stick with competitive markets when it’s the utter breakdown of so-called competitive markets that’s at issue.
The private market has failed to offer fair and reasonable prices, has failed to prevent retail prices rising steadily far beyond prices in the wholesale oil and gas markets, and has failed to prevent exploitative super-profits for the companies at a time when more than 5 million UK customers have fallen into fuel poverty.
The solution to this private market collapse is the remedy that dare not speak its name. Not on ideological grounds at all, but straightforwardly on commonsensical grounds the role of public ownership in rescuing the disaster areas that are energy, housing, rail, pensions and banking needs now urgently to rise up the political agenda.