The energy companies can't avoid the blame for rising prices

While shifting the debate towards green levies, the Big Six have remained much quieter about their healthy profits.

They may be public enemy number one but you can't accuse the energy companies of being inept at public relations. Since their appearance in front of the energy select committee two weeks ago, the Big Six have successfully moved the conversation about energy bills away from their own profits and practices and on to so-called green levies. But by promising to "roll back" these charges, the Prime Minister is marching to their tune and failing to get the best deal for consumers.

Energy companies like to blame anyone but themselves for rising energy prices. In announcing their inflation-busting price rises, energy companies were quick to focus on wholesale gas prices and the levies on bills for low carbon energy and fuel poverty reduction.

They were much quieter about their own rising profits and operating costs. Energy firms make a healthy 5 or 6 per cent from their supply arms. They claim this is needed to make necessary investments but their own generation businesses report profits as high as 20 per cent.

Instead of scrutinising the acceptability of this level of profits in the energy supply industry, or questioning why operating costs appear to be spiralling upwards, the media have lapped up energy bosses describing green levies as a "stealth poll tax".

The only obfuscation, however, is by the energy companies themselves. New figures from Ofgem, released following a freedom of information request by IPPR, show that the two companies performing least well are those that have jacked up their energy prices the most. British Gas added £50 to consumers' bills for these charges but has delivered just 4, 6 and 9 per cent of its obligations. Scottish Power, by contrast, have delivered 24, 48 and 31 per cent and only raised green charges by £20.

If the money can be found, there is something to be said for moving green charges off energy bills and onto general taxation. That would make them more progressive. But a higher priority should be moving subsidies for low carbon generation off bills and onto taxation, because landowners and big companies are currently the big beneficiaries of this subsidy. Moving measures to improve fuel poverty should come second because these are at least partly progressive.

Regardless, the government now looks all but certain to do this at the oddly-named Autumn Statement on 5 December. If this is the case, it must ensure that this goes hand in hand with reform of its fuel poverty policy. The current policy is failing to get help to the intended recipients. As IPPR has shown, around 80 per cent of the policy budget, £434m of £540m, is being spent on homes that are not fuel poor. And 1.3 million fuel poor households are not eligible for any form or support.

Instead, we need a much more targeted approach to fuel poverty. The best approach is for local organisations to give out free assessments to work out who is fuel poor so that support reaches those who really need it. And to help everyone who is struggling with high energy bills, low interest loans for making energy efficiency improvements should be made widely available.

The EDF coal-fired plant, in Blenod-les-Pont-a-Mousson, eastern France. Photograph: Getty Images.

Will Straw was Director of Britain Stronger In Europe, the cross-party campaign to keep Britain in the European Union. 

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An Irish Sea border – and 3 other tricky options for Northern Ireland after Brexit

There is no easy option for Northern Ireland after Brexit. 

Deciding on post-Brexit border arrangements between Northern Ireland and the Irish Republic is becoming an issue for which the phrase "the devil is in the detail" could have been coined. Finding a satisfactory solution that delivers a border flexible enough not to damage international trade and commerce and doesn’t undermine the spirit, or the letter, of the Good Friday Agreement settlement is foxing Whitehall’s brightest.

The dial seemed to have settled on David Davis’s suggestion that there could be a "digital border" with security cameras and pre-registered cargo as a preferred alternative to a "hard border" replete with checkpoints and watchtowers.

However the Brexit secretary’s suggestion has been scotched by the new Irish foreign minister, Simon Coveney, who says electronic solutions are "not going to work". Today’s Times quotes him saying that "any barrier or border on the island of Ireland in my view risks undermining a very hard-won peace process" and that there is a need to ensure the "free movement of people and goods and services and livelihoods".

The EU’s chief Brexit negotiator, Michel Barnier, has made dealing with the Irish border question one of his top three priorities before discussions on trade deals can begin. British ministers are going to have to make-up their minds which one of four unpalatable options they are going to choose:

1. Hard border

The first is to ignore Dublin (and just about everybody in Northern Ireland for that matter) and institute a hard border along the 310-mile demarcation between Northern Ireland and the Irish Republic. Given it takes in fields, rivers and forests it’s pretty unenforceable without a Trump-style wall. More practically, it would devastate trade and free movement. Metaphorically, it would be a powerful symbol of division and entirely contrary to the spirit of the Good Friday Agreement. The Police Federation in Northern Ireland has also warned it would make police officers "sitting ducks for terrorists". Moreover, the Irish government will never agree to this course. With the EU in their corner, there is effectively zero chance of this happening.

2. Northern EU-land

The second option is to actually keep Northern Ireland inside the EU: offering it so-called "special status". This would avoid the difficulty of enforcing the border and even accord with the wishes of 56 per cent of the Northern Irish electorate who voted to Remain in the EU. Crucially, it would see Northern Ireland able to retain the £600m a year it currently receives from the EU. This is pushed by Sinn Fein and does have a powerful logic, but it would be a massive embarrassment for the British Government and lead to Scotland (and possibly London?) demanding similar treatment.

3. Natural assets

The third option is that suggested by the Irish government in the Times story today, namely a soft border with customs and passport controls at embarkation points on the island of Ireland, using the Irish Sea as a hard border (or certainly a wet one). This option is in play, if for no other reason than the Irish government is suggesting it. Again, unionists will be unhappy as it requires Britain to treat the island of Ireland as a single entity with border and possibly customs checks at ports and airports. There is a neat administrate logic to it, but it means people travelling from Northern Ireland to "mainland" Britain would need to show their passports, which will enrage unionists as it effectively makes them foreigners.

4. Irish reunification

Unpalatable as that would be for unionists, the fourth option is simply to recognise that Northern Ireland is now utterly anomalous and start a proper conversation about Irish reunification as a means to address the border issue once and for all. This would see both governments acting as persuaders to try and build consent and accelerate trends to reunify the island constitutionally. This would involve twin referendums in both Northern Ireland and the Republic (a measure allowed for in the Good Friday Agreement). Given Philip Hammond is warning that transitional arrangements could last three years, this might occur after Brexit in 2019, perhaps as late as the early 2020s, with interim arrangements in the meantime. Demographic trends pointing to a Catholic-nationalist majority in Northern Ireland would, in all likelihood require a referendum by then anyway. The opportunity here is to make necessity the mother of invention, using Brexit to bring Northern Ireland’s constitutional status to a head and deal decisively with the matter once and for all.

In short, ministers have no easy options, however time is now a factor and they will soon have to draw the line on, well, drawing the line.

Kevin Meagher is a former special adviser at the Northern Ireland Office and author of "A United Ireland: Why unification is inevitable and how it will come about"

Kevin Meagher is associate editor of Labour Uncut and a former special adviser at the Northern Ireland office.