While the Tories stand up for the energy companies, Labour stands up to them
Our pledge to freeze energy prices isn't a "gimmick" to customers being squeezed by corporate profiteers.
What confusing times we live in if you’re a Conservative. A fortnight ago, your leader, David Cameron, was attacking his Labour counterpart as akin to Stalin for promising an energy price freeze in Britain. A few days ago he changed tack and conceded that Ed Miliband might have "struck a chord" with the nation for pointing out that energy bills are outstripping wages for average families in our country. Then yesterday, another volte-face, at PMQs, when the Prime Minister seemed keener to defend the energy companies’ profits than concede that the British people might need their government to freeze prices on their behalf. Blinded by faith in the market – no matter how broken it might be – Mr Cameron appears to have permanently misplaced his Tory instinct that the customer should be king. Tell Sid about that.
I wonder if the Prime Minister knew yesterday, when he described Labour’s pro-customer stance as a "socialist gimmick" from a "Marxist universe", that this morning the energy company SSE planned to announce an inflation-busting 8.2% price rise for their customers across Britain – a million of whom live in Wales. He may not have done, but he might have anticipated it was coming given that SSE hiked their prices by 9% last year too. And even through the fog of confusion, he must surely have seen the injustice of such increases being imposed on customers in places like Wales where energy bills are already among the highest and the wages to pay them lower than elsewhere.
Of course the company would have us believe that these prices rises are necessary to allow reasonable returns to shareholders who are investing in infrastructure improvements, complying with decarbonisation targets and facing increased wholesale costs. And those claims might carry more force were the truth not that SSE announced in March an operating profit for its retail arm of £410m, as part of an overall pre-tax profit of £1.4bn for the group’s network, generating and retail arms as a whole. No wonder they can afford to pay their chief executive a £755,000 basic salary and their finance director a mere £610,000, when those profits rose 18.9% in the particularly lucrativenNetworks arm (the wires and pipes which constitute part of their £6.36bn 'Natural Monopoly Business') and a whopping 27.5% in the retail arm which is milking its customers. No wonder, too, they could afford to pay the £10.5m fine imposed by Ofgem earlier this year for mis-selling to those same customers by misleading them about the savings they might make by switching to SSE tariffs.
In Wales, where energy prices, according to the Department for Energy and Climate Change, are already the highest in Britain, at an average of £1,310 per annum versus £1,279 across the rest of the UK, the news that SSE intends turn the screw in order to deliver above-inflation dividends next year will land with the force of an SSE bill on the doormat. Wages in Wales have fallen by an average of £1,700 per household since the Tory-led coalition came to power and disposable incomes have traditionally always been lower in our post-industrial economy. The cost of living crisis is felt at its sharpest here.
Wales needs a government in Westminster to stand up to these companies and demand that they desist from the profiteering in which they are clearly engaged. Ed Miliband is asking for the opportunity to lead such a government and his words of warning to SSE and their five fellow companies have rung out across the country. When looking for comparators for Ed, David Cameron might do well to well to drop the McCarthyite rhetoric of reds under the bed, and reflect instead on the relevance of another figure from US politics: Theodore Roosevelt and the 'trust-busting' policies which carried him to power. Mr Cameron has a choice to make: does he want to stand up for the energy companies or stand up to them? We already know the choice Ed Miliband has made: we will speak for the people and freeze that bill.