Miliband is right to stand up to the energy companies' blackmail

Were trade unions threatening to plunge the country into darkness, Cameron would be calling in the troops.

Ed Miliband's promise to fix energy bills for 20 months if Labour win the 2015 election will remove some of the pressure that ordinary people across the country feel every day. Households are already paying £2bn more for their gas and electricity after the last hikes in November 2012. Now the energy companies are looking to add another £1.4bn onto bills this coming winter. This has added £300 to the average bill in this parliament. This cannot go on.

Immediately after Ed’s announcement, the usual shouts came that this was "meddling in the free market". "Back to the seventies" and "you can't beat supply and demand" echoed on. Let us put aside the fact that the average yearly growth in the 1970s, 2.88%, is more than the economy has grown in total since Quarter 3 2010. The energy market in this country is not a free market, it is a racket. Six multinational companies dominate, and in much of the country choice is reduced still further. These companies are now threatening blackouts if their profits are in any way challenged by an elected government. Were this a trade union threatening to plunge the country into darkness, Mr Cameron would be calling in the troops. Yet when it is time to challenge a private cartel about that classic seventies question, “who runs Britain?” this government is silent. 

Npower were first out of the traps on Tuesday, with their spokesman decrying these "easy answers", and that the "global market" would drive costs regardless of what they did. The biggest shareholders in Npower, or to give it its proper name Rheinisch-Westfälisches Elektrizitätswerk Npower plc, are a group of German towns and cities. In other words, the profits Npower extracts from the British people allow German municipalities to keep the rates down. The people of Middlesbrough are effectively paying rent to the people of Münster. It seems state intervention is acceptable when investing in your corporation, but bad when it seeks to limit your profits.

This confused attitude to the "free market" runs through all the "Big Six". Iberdrola, owners of Scottish Power, are kept liquid by €27bn in state backed loans and massive subsidies from the struggling Spanish government.  Both Centrica and Scottish and Southern Electric are receiving over £50m each in subsidies just for wind power. E.On’s decision whether or not to build a new biomass generator in Bristol was not dependent upon ‘market forces’, but how much tax-payer money the Department for Energy and Climate Change would promise it.

Perhaps the greatest example of state interference however is Électricité de France, EdF, controlled by the French state. They are the company that we are turning to to build a new generation of nuclear power stations. Britain, which built the first commercial nuclear generator in the world at Calder Hall, must now wait on the whim of the French President.

Has it really come to this? That a country once the workshop of the world relies on the French to build its power stations? On the Danes to forge its turbines? On Norwegian gas to keep our lights on? Is Britain a ‘third world’ country that it has to beg for foreign investment to upgrade its infrastructure?

I welcome companies from all around the world who want to set up shop in Britain. This nation gains greatly from international firms bringing their skills and expertise here, and we are richer for it. Our membership of the European Union and good working relationship with our European neighbours is a key part of this attraction. But those meetings must always be as equals, not as supplicants.

The repeated refusal of the British state to back its own people has led to the basics of life; from water, to energy, to transport being sold off not to thousands of plucky entrepreneurs, but to American corporate titans, Chinese and Arab sovereign wealth funds, or the state-backed enterprises of our savvier European cousins. Rather than invest in our own youngsters, our own infrastructure, our own future, a small elite have skewed our economy not by accident, but by design. As Ed said on Tuesday, Britain can do better than this.

Andy McDonald is the Labour MP for Middlesbrough

The logo of the French electricity company EDF is pictured on a building of the Fessenheim nuclear power plant reactor in eastern France. Photograph: Getty Images.
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Arsène Wenger: how can an intelligent manager preside over such a hollowed-out team?

The Arsenal manager faces a frustrating legacy.

Sport is obviously not all about winning, but it is about justified hope. That ­distinction has provided, until recently, a serious defence of Arsène Wenger’s Act II – the losing part. Arsenal haven’t won anything big for 13 years. But they have been close enough (and this is a personal view) to sustain the experience of investing emotionally in the story. Hope turning to disappointment is fine. It’s when the hope goes, that’s the problem.

Defeat takes many forms. In both 2010 and 2011, Arsenal lost over two legs to Barcelona in the Champions League. Yet these were rich and rewarding sporting experiences. In the two London fixtures of those ties, Arsenal drew 2-2 and won 2-1 against the most dazzling team in the world. Those nights reinvigorated my pride in sport. The Emirates Stadium had the best show in town. Defeat, when it arrived in Barcelona, was softened by gratitude. We’d been entertained, more than entertained.

Arsenal’s 5-1 surrender to Bayern Munich on 15 February was very different. In this capitulation by instalments, the fascination was macabre rather than dramatic. Having long given up on discerning signs of life, we began the post-mortem mid-match. As we pored over the entrails, the curiosity lay in the extent of the malady that had brought down the body. The same question, over and over: how could such an intelligent, deep-thinking manager preside over a hollowed-out team? How could failings so obvious to outsiders, the absence of steel and resilience, evade the judgement of the boss?

There is a saying in rugby union that forwards (the hard men) determine who wins, and the backs (the glamour boys) decide by how much. Here is a footballing equivalent: midfielders define matches, attacking players adorn them and defenders get the blame. Yet Arsenal’s players as good as vacated the midfield. It is hard to judge how well Bayern’s playmakers performed because they were operating in a vacuum; it looked like a morale-boosting training-ground drill, free from the annoying presence of opponents.

I have always been suspicious of the ­default English critique which posits that mentally fragile teams can be turned around by licensed on-field violence – a good kicking, basically. Sporting “character” takes many forms; physical assertiveness is only one dimension.

Still, it remains baffling, Wenger’s blind spot. He indulges artistry, especially the mercurial Mesut Özil, beyond the point where it serves the player. Yet he won’t protect the magicians by surrounding them with effective but down-to-earth talents. It has become a diet of collapsing soufflés.

What held back Wenger from buying the linchpin midfielder he has lacked for many years? Money is only part of the explanation. All added up, Arsenal do spend: their collective wage bill is the fourth-highest in the League. But Wenger has always been reluctant to lavish cash on a single star player, let alone a steely one. Rather two nice players than one great one.

The power of habit has become debilitating. Like a wealthy but conservative shopper who keeps going back to the same clothes shop, Wenger habituates the same strata of the transfer market. When he can’t get what he needs, he’s happy to come back home with something he’s already got, ­usually an elegant midfielder, tidy passer, gets bounced in big games, prone to going missing. Another button-down blue shirt for a drawer that is well stuffed.

It is almost universally accepted that, as a business, Arsenal are England’s leading club. Where their rivals rely on bailouts from oligarchs or highly leveraged debt, Arsenal took tough choices early and now appear financially secure – helped by their manager’s ability to engineer qualification for the Champions League every season while avoiding excessive transfer costs. Does that count for anything?

After the financial crisis, I had a revealing conversation with the owner of a private bank that had sailed through the turmoil. Being cautious and Swiss, he explained, he had always kept more capital reserves than the norm. As a result, the bank had made less money in boom years. “If I’d been a normal chief executive, I’d have been fired by the board,” he said. Instead, when the economic winds turned, he was much better placed than more bullish rivals. As a competitive strategy, his winning hand was only laid bare by the arrival of harder times.

In football, however, the crash never came. We all wrote that football’s insane spending couldn’t go on but the pace has only quickened. Even the Premier League’s bosses confessed to being surprised by the last extravagant round of television deals – the cash that eventually flows into the hands of managers and then the pockets of players and their agents.

By refusing to splash out on the players he needed, whatever the cost, Wenger was hedged for a downturn that never arrived.

What an irony it would be if football’s bust comes after he has departed. Imagine the scenario. The oligarchs move on, finding fresh ways of achieving fame, respectability and the protection achieved by entering the English establishment. The clubs loaded with debt are forced to cut their spending. Arsenal, benefiting from their solid business model, sail into an outright lead, mopping up star talent and trophies all round.

It’s often said that Wenger – early to invest in data analytics and worldwide scouts; a pioneer of player fitness and lifestyle – was overtaken by imitators. There is a second dimension to the question of time and circumstance. He helped to create and build Arsenal’s off-field robustness, even though football’s crazy economics haven’t yet proved its underlying value.

If the wind turns, Arsène Wenger may face a frustrating legacy: yesterday’s man and yet twice ahead of his time. 

Ed Smith is a journalist and author, most recently of Luck. He is a former professional cricketer and played for both Middlesex and England.

This article first appeared in the 24 February 2017 issue of the New Statesman, The world after Brexit