In a well-timed, recently published pamphlet ‘The Great Energy Rip Off’, Stewart McGill and Richard Shillock debunk the myths surrounding energy price hikes and make a strong, well-researched argument for the nationalisation of Britain’s energy industry that all socialists should pay attention to.
We all know that energy bills are on the increase, and the Communist Party has recently played a significant role in the cost-of-living demonstrations organised by the People’s Assembly. The new energy price hike will mean that over 6 million people will be in fuel poverty.
The pamphlet explains that it doesn’t have to be like this: we are overpaying energy distribution networks to the tune of more than £7.5 billion annually, a product of lax regulation. The ‘Big Six’ energy companies make over £1.4 billion every year by overcharging existing customers that haven’t switched tariffs. A whopping 80% of their pre-tax profits goes into the pockets of shareholders, six times their corporation tax bill. This money should be used to invest for the good of society and the planet, not to enrich a few shareholders.
The ineptitude (collusion) of Ofgem is also brought into sharp focus. Ofgem has sanctioned the generous returns that energy companies are allowed to give to their shareholders, and allowed Bulb Energy to operate with £100 of share capital before ultimately going bust with losses of £223 million. Ofgem had previously given the company a clean bill of health!
Although it is rightly scathing of the complicity between the energy companies and the regulators that are supposed to protect us, the pamphlet is also rich with socialist solutions to the problem. A strong argument is that VAT tax should be removed from energy bills (as it is with children’s clothes, deemed a necessity whilst warm homes are not), before ultimately being removed completely as a tax that disproportionately affects the working class.
Another key solution is the insulation of new homes and retro-fitting in existing properties. This should be implemented at a local level, not by private companies cutting corners, using non-unionised labour, but by local councils, funded by the huge profits that large energy companies make. This will be a crucial step in mitigating the effects of climate change and should be a matter of priority.
The pamphlet also discusses alternative models of energy production and distribution, giving the example of other capitalist countries such as Germany and Denmark where much of the electricity is bought from both municipally, and co-operatively owned energy companies. China is also an important example of what can be done under a socialist administration; despite the tired strains from much of the mainstream western media, China has increased its electricity production from renewables (excluding hydroelectric) by 9000% over the last 20 years.
The pamphlet ends in a call for unity amongst the left in tackling the energy crisis. Temporary coalitions perpetuating the hold that large energy companies have, both over the state and the working class are not going to cut it. We need to engage a broad left coalition, including trade unions, workplaces, foodbanks and through good old fashioned street campaigning to effect the change that is necessary. The Communist Party of Britain will be at the forefront of this fight.
The Great Energy Rip Off pamphlet can be downloaded, price £1 from https://shop.communistparty.org.uk/?q=pamphlets/great-energy-rip