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Time for Labour to lay out how it will re-set energy markets in 2015-7: here’s how

Big-six-energy-companiesCurrent UK energy policy is a colossal failure. It is supposed to (1) deliver cheap and affordable energy to consumers, (2) provide security of supply, and (3) shift from carbon fuels to renewable energy as a key part of tackling climate change. But under the current privatised regime the UK is monumentally failing on all 3 counts.

On affordability, the most recent figures for domestic electricity prices show that despite its wealth of natural energy resources, the UK has the fourth highest prices in the EU (excluding the new East and Central European accession states). Other studies over a number of years have consistently concluded that UK electricity prices are consistently higher than they would have been without privatisation. At the same time the UK has some of the worst statistics in Europe for fuel poverty. What is most shocking of all is the number of UK pensioners who die from extreme cold every winter at a rate double that of Finland despite the latter’s much colder winter climate. Indeed the UK rates are also far higher than for countries with similarly severe winter weather like Sweden and Germany.

On the energy security issue, the UK’s current carbon-based and nuclear power energy stations are being phased out, with about one-quarter of the existing power station capacity due to be closed by 2025. It has been estimated by DECC that at least £110bn infrastructure investment is required to achieve both security of supply and the UK’s environmental objectives of meeting 30% of its electricity generation from renewables by 2020. There is no sign whatever that the privatised companies are preparing to deliver this unless the government provides enormous financial incentives for them to invest, i.e. the companies privatise the profits but socialise the cost of investment.

On tackling global warming, the UK has one of the worst records in Europe in shifting its energy production towards renewables, still with only 4% of its energy consumption coming from renewables, just one-third of the EU average. The Commons Environmental Audit Committee has estimated that no less than £200-£1,000bn will be required over the next 10-20 years to achieve the commitment to 80% reduction in greenhouse gas emissions by 2050. Perversely the Danish state energy company DONG and the Swedish government-owned Vattenhall have now become the largest beneficiaries of UK government subsidies earning £156m and £128m respectively in wind farm subsidies. UK energy privatisation has not brought the promised investment or efficiency gains, but instead led to private value extraction at the expense of the public purse while leaving a legacy of decaying infrastructure. Faced with these massive contradictions the only sensible way now to re-set energy markets is through taking the energy companies back into public ownership to secure the investment now desperately needed (‘to keep the lights on’) and to regain strategic direction in the public interest in a key sector of the economy.

2 Comments

  1. Robert says:

    It would be nice and since your to the left Mr Meacher and since I was born socialist with grand parents who were miners in the most and Union men and women, and hard working which seems to be a labour priority these days. Until they died from the old miners lungs coughing up blood sitting in a room unable to do anything, living off a pittance of a pension, you grow up being socialist.

    Today we have Miliband as leader of the One Nation Progress party in which labour is so close to the Tories, we no longer do policies we do caps, caps are taking over from a direct policy this way you can tell the public we will cap gas electricity water, and of course railways. This is much better then having to explain to people how your going to change something which has not worked, it will not work by labour trying to get another ten smaller firms into the market place , it’s the market place which is not working profit rule it rules the Tories it will rule labour profits means prizes tax revenue.

    The big boys from France and Germany saw a way of making money and the EU went along with it and hey presto you have Blair and Brown and Miliband and Cameron basically agreeing with each other. lets redo Privatization lets start again see what happens it may just win me an election once in we can leave it for a few years.

    Sadly New labour did not die it just went into hiding Progress is now running the party and to me and others like me sadly voting for a second rate Tory party is not going to happen.

    Should we go green yes I do not mind, should going green be another form of money making for the privileged six companies we have no nope. So what do we do Privatise yes go for it, but whom do we vote for to get this Miliband do not make me laugh my ribs are hurting already.

  2. David Pavett says:

    I am a little puzzled by this contribution by Michael Meacher. I have no great expectations of Labour’s promised energy reforms but, all the same it has actually set out what it intends to do if elected in the Green Paper Powering Britain: One Nation Labour’s plans to reset the energy market. Maybe that document is all nonsense. I don’t know, I haven’t read it. But shouldn’t criticism start out from what Labour has actually proposed in its published documents? Glancing through the Green Paper I see that it makes a number of the same points as Michael Meacher above.

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