And various Labour bigwigs seem to see it as an opportunity to look like they know what they’re doing while proposing patently inadequate ‘plans’. The whole establishment, in fact, is simply fiddling while Rome burns, even as its media are filled by increasingly frantic warnings that the whole lot might be brought down if something isn’t done.
On Friday 26 August, the energy industry ‘regulator’ Ofgem announced that the October ‘price cap’ will be raised by a further 80 percent, meaning that average energy bills could rise to £5,000 a year or more, plunging millions more families into poverty.
Not only that, but further hikes are expected in three and six months time. Hikes that no-one living on a daily, weekly or monthly wage packet (even those who are used to considering their wage packets to be pretty generous and perfectly sufficient for a decent life) has any idea what they will do about. Clearly there’s only so far you can go with extra jumpers and fewer hot meals.
‘Regulator’ is in quotes because in reality it acts as the mouthpiece of the privatised energy industry rather than its watchdog, and ‘price cap’ is in quotes because the cap does not impede but rather legitimises maximum profit-taking by the energy monopolies at the expense of the consumer.
Inflation continues to grow faster and faster, outpacing wages, driving up prices and hollowing out savings. Only days ago, the hot news was that the rise in inflation had hit double figures, racking up 10 percent. Yet now predictions are that inflation could hit as much as 18.6 percent by January.
“Rapidly increasing prices for natural gas have left economic projections out of date. At the start of the month, the Bank of England forecast that higher gas prices would push inflation above 13 percent towards the end of this year. Bank of America said last week that it expected UK consumer price inflation to peak at 14 percent in January, while Goldman Sachs and EY projected it to hit 15 percent.
“But with Europe’s gas crisis escalating in August, Citi predicted on Monday that inflation would reach 18.6 percent in January.” (UK inflation projected to hit 18.6 percent as gas prices surge by Chris Giles, David Sheppard and Jim Pickard, Financial Times, 22 August 2022)
For those who are wondering why Britain is so badly affected by rising energy prices when we don’t actually buy much Russian gas (whose supply disruption is one of the exacerbating factors in the present inflation crisis), it’s because total privatisation of all energy supply means that we pay world market prices and are totally at the mercy of the big energy cartel.
The problem is compounded by the lunatic decision back in 2017 to close the Rough storage facility in the North Sea, owned by Centrica. Rough had provided 70 percent of Britain’s gas storage capacity, helping to smooth over peaks and troughs in gas supply.
The government stopped subsidising its expensive maintenance and Centrica shut it down – a particularly egregious illustration of the congenital failure of capitalism to plan beyond the end of its nose.
Former chancellor Gordon Brown has urged the government to temporarily nationalise the British energy industry, following the same model that he adopted with the banks in 2008. Under his direction, banks were bailed out at vast public expense, nursed back into solvency and then returned to the private sector, leaving successive governments crippled with debt and ushering in vicious austerity policies to make workers pay for the crisis.
Now Brown, having convinced himself that bailing out the banks was his finest hour, proposes to repeat the same trick with the private energy companies.
What is required, however, is not temporary state intervention to shield the energy monopolies from the growing public backlash caused by the glaring disparity between the obscene profits of the companies and the crippling bills of consumers.
What is required is the permanent and complete nationalisation of the energy industry, expropriation of the energy monopolies and subordination to a national plan that serves social need, not corporate greed.