Ending the energy rip-off means breaking the big six deadlock

Nick Clegg’s direct mail initiative for cheaper tariffs is welcome, but only a complete rethink of t

There are few more demoralising sensations in life than the feeling of being ripped off. And when the product or service is something that you simply cannot live without, the sense of futility and frustration is all the more acute.

Public anger over skyrocketing consumer bills running parallel with the huge profits and executive bonuses of the Big Six energy companies – EDF, E.ON, British Gas, Southern, Scottish Power and npower – is growing.

The amount we pay for our power seems set on a never ending trajectory upwards. Average annual household bills for gas and electricity rose from £600 in 2004 to around £1,200 in 2011. USwitch has predicted that by 2020, this could rise to a massive £3,202.

For many people hit by the perfect storm of job losses, frozen wages and rising living costs, the situation is becoming desperate. As many as 6 million British households are now thought to be living in fuel poverty, with around 3,000 premature winter deaths attributed to the impact of living in damp, cold and leaky homes.

OFGEM and DECC figures show that the driving factor behind the price hikes has been the rising wholesale cost of gas and the fluctuating costs of other fossil fuels, underscoring the urgent need for a move towards renewable energy and ambitious energy efficiency.

But to add insult to injury, the Big Six actually appear to be increasing their profit margins on each bill. Last October, OFGEM warned that profits on dual fuel deals had increased by 733%, from £15 per household to £125.

Meanwhile, the Institute for Public Policy Research has found as many as 5.6 million people may be being overcharged as a result of Big Six pricing policies which also, it believes, prevent new companies from gaining a foothold in the market.

Indeed, despite OFGEM’s mandate to create a truly competitive energy market, nearly two decades after privatisation, the profiteering Big Six still control more than 99% of the retail market.  

To my mind, this is now about completely changing the behaviour of those operators and making it easier for new actors to enter the market. It is also about rethinking the way we produce energy in order to secure a more affordable and sustainable power supply.

So when the Deputy Prime Minister announced this week that he had struck a deal with the energy companies requiring them to send a once yearly letter to consumers with information about the cheapest tariffs, it felt like a monumental anti climax.

That’s not to say it isn’t a welcome development. Government proposals to simplify the confusing and complex range of tariffs which have often resulted in customers switching to a worse deal – and for customers to be offered the best tariff if their contract comes to an end – are well overdue, as are plans to give OFGEM powers to direct the energy companies to compensate overcharged consumers.

But reading this, I was struck by the fact that energy companies were not already obliged to do those things. With an estimated seven out of 10 people still not on the best available tariff, it seems the Big Six have been ripping customers off for far too long.

In February, I joined with Compass to help launch a campaign to End the Big Six Energy Fix – nearly 9,000 people have since signed the online petition calling for change.

We are appealing for an independent public inquiry into the energy industry, in the same way that that we had an Independent Commission on Banking led by Sir John Vickers and an investigation into the media by Lord Leveson, to get to the root causes of the problem.

In order to address the market failure and ensure that the energy companies pay a premium for their privileged market position, the campaign is also calling for a windfall levy on profits – with the money raised, together with revenues from environmental taxes, being channelled into energy efficiency programmes and demand reduction initiatives.

Because although the Government seems finally to be waking up to the potential of measures such as cavity wall insulation, loft lagging and condensing boilers, the Green Deal policies that are supposed to make these happen are weak and underfunded. Serious initiatives to reduce overall energy demand are still worryingly thin on the ground.

Furthermore, rather than tinkering around the edges with mail outs and barcodes on bills, we should be making it easy for communities and councils up and down the UK to generate their own energy – reducing consumer dependence on the Big Six.

The forthcoming Electricity Market Reform, albeit deeply flawed and overly complex, should in theory make it easier for smaller operators to enter the energy market. But this is far from certain, and the current proposals largely ignore the vast potential of community energy.

The Government should be doing far more to localise and decentralise the sector, drawing from best practice in countries like Germany where community ownership of the grid has played a pivotal role in allowing renewables and energy efficiency to flourish.

Here in Britain, where the grid is privately owned and controlled, people are far removed from energy generation and have little knowledge of where our energy comes from. Yet in Germany, citizens see themselves more as owners and generators of their energy, not just consumers.

With the right political will and ambition, we can create an energy sector which genuinely serves the interests of the people and protects the planet. But only by curbing the power of the Big Six, increasing transparency around bills, and investing in renewables, efficiency measures and demand management that will ultimately help wean us off fossil fuel addiction, can this become a reality.

Caroline Lucas is MP for Brighton Pavilion and Co-Chair of the All Party Parliamentary Group on Fuel Poverty

Energy: the rising costs, Getty images.

Caroline Lucas is the MP for Brighton Pavilion.

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Labour's establishment suspects a Momentum conspiracy - they're right

Bernie Sanders-style organisers are determined to rewire the party's machine.  

If you wanted to understand the basic dynamics of this year’s Labour leadership contest, Brighton and Hove District Labour Party is a good microcosm. On Saturday 9 July, a day before Angela Eagle was to announce her leadership bid, hundreds of members flooded into its AGM. Despite the room having a capacity of over 250, the meeting had to be held in three batches, with members forming an orderly queue. The result of the massive turnout was clear in political terms – pro-Corbyn candidates won every position on the local executive committee. 

Many in the room hailed the turnout and the result. But others claimed that some in the crowd had engaged in abuse and harassment.The national party decided that, rather than first investigate individuals, it would suspend Brighton and Hove. Add this to the national ban on local meetings and events during the leadership election, and it is easy to see why Labour seems to have an uneasy relationship with mass politics. To put it a less neutral way, the party machine is in a state of open warfare against Corbyn and his supporters.

Brighton and Hove illustrates how local activists have continued to organise – in an even more innovative and effective way than before. On Thursday 21 July, the week following the CLP’s suspension, the local Momentum group organised a mass meeting. More than 200 people showed up, with the mood defiant and pumped up.  Rather than listen to speeches, the room then became a road test for a new "campaign meetup", a more modestly titled version of the "barnstorms" used by the Bernie Sanders campaign. Activists broke up into small groups to discuss the strategy of the campaign and then even smaller groups to organise action on a very local level. By the end of the night, 20 phonebanking sessions had been planned at a branch level over the following week. 

In the past, organising inside the Labour Party was seen as a slightly cloak and dagger affair. When the Labour Party bureaucracy expelled leftwing activists in past decades, many on went further underground, organising in semi-secrecy. Now, Momentum is doing the exact opposite. 

The emphasis of the Corbyn campaign is on making its strategy, volunteer hubs and events listings as open and accessible as possible. Interactive maps will allow local activists to advertise hundreds of events, and then contact people in their area. When they gather to phonebank in they will be using a custom-built web app which will enable tens of thousands of callers to ring hundreds of thousands of numbers, from wherever they are.

As Momentum has learned to its cost, there is a trade-off between a campaign’s openness and its ability to stage manage events. But in the new politics of the Labour party, in which both the numbers of interested people and the capacity to connect with them directly are increasing exponentially, there is simply no contest. In order to win the next general election, Labour will have to master these tactics on a much bigger scale. The leadership election is the road test. 

Even many moderates seem to accept that the days of simply triangulating towards the centre and getting cozy with the Murdoch press are over. Labour needs to reach people and communities directly with an ambitious digital strategy and an army of self-organising activists. It is this kind of mass politics that delivered a "no" vote in Greece’s referendum on the terms of the Eurozone bailout last summer – defying pretty much the whole of the media, business and political establishment. 

The problem for Corbyn's challenger, Owen Smith, is that many of his backers have an open problem with this type of mass politics. Rather than investigate allegations of abuse, they have supported the suspension of CLPs. Rather than seeing the heightened emotions that come with mass mobilisations as side-effects which needs to be controlled, they have sought to joins unconnected acts of harassment, in order to smear Jeremy Corbyn. The MP Ben Bradshaw has even seemed to accuse Momentum of organising a conspiracy to physically attack Labour MPs.

The real conspiracy is much bigger than that. Hundreds of thousands of people are arriving, enthusiastic and determined, into the Labour party. These people, and their ability to convince the communities of which they are a part, threaten Britain’s political equilibrium, both the Conservatives and the Labour establishment. When the greatest hope for Labour becomes your greatest nightmare, you have good call to feel alarmed.