The Big 6 are ripping us off: Why are our politicians not backing a fairer system?
27 June 2016
Buried under the referendum results last Friday was the final report from a two year inquiry by the Competition and Markets Authority (CMA) into the energy market, carrying a set of recommendations for making a fairer system -or so it was hailed. The inquiry was hoped to tackle the growing problem of fuel poverty in the UK, which currently affects millions of people. It’s estimated that one in four families make the choice between eating or heating their homes in winter, while the National Grid rakes in £2.6bn in profits and the Big Six’s domination of the market leaves little choice for struggling households.
It was hoped the CMA’s report would be the green light for the government to finally make the drastic policy changes to tackle the mass rip-off caused by these energy giants’ control over the market. But as, over the last two years, stages of the CMA’s report were dripped out, it became evident that this wasn’t going to be the golden ticket many had hoped for.
Lobbying from the big energy companies has taken its toll on the CMA’s final report. Their recommendations are at best underwhelming, at worst, a betrayal of the struggling families facing punishing energy bills. It’s a glaring example of corporate profits taking precedent over the needs of ordinary people. In the face of corporate lobbyists and pressure from big business, the government body bowed and bent. Despite the best efforts from charities and social movements to fight the corner of those most in need of energy market reforms, it was the corporations that had their ear.
The whole thing stinks of injustice - we’re paying over the odds for dirty energy that destroys the environment, while handing over power to a privileged few. It comes down to a lack of democracy - the energy system is one that we all have to be a part of, but that cuts out our right to have a say over prices, production or planetary impact.
The movement for “energy democracy” is trying to address this; pushing for clean production, progressive pricing and public ownership of our energy, in the UK and across the world. It’s ordinary people saying “we’ve had enough, we want our power back”. But while there are sparks of hope popping up all over the country in the form of local energy co-ops and council-backed schemes, we are yet to see a real political driving force behind it.
Last week's CMA report was launched because of public outrage over the UK’s broken energy system - for years we’ve known that the private sector, and the Big Six energy giants in particular, are not going to provide the solutions we need. And based on the disappointing outcome of this report, hand in hand with deep cuts to feed-in tariffs and subsidies for solar energy, it seems the sitting government aren’t willing to provide those solutions either. It’s time for the opposition to step up to the mark when it comes to energy.
There are already whispers in Labour ranks about municipal energy being an election winner. Nottingham now has it’s own energy company, “Robin Hood Energy”, which provides power to the city’s residents at the “lowest possible price”. While the company proudly runs “not-for-profit, but for people”, it’s not run by those people. In fact, the energy comes from the National Grid - the corporate giant monopolising the sector - so does little to address the power play at the heart of the pricing problem.
Where the energy system is owned by the people using it, it works for them - not just the pockets of big business. In South London, Brixton Energy co-op is tackling local issues of unemployment and fuel poverty by providing local solar power generation systems on top of housing estates; creating local jobs and reinvesting profits into energy efficiency schemes for residents. It’s hard to argue with this sort of scheme: it works for people and it works for the planet.
Surely a system that tackles fuel poverty, unemployment, air pollution and climate change all in one fell swoop should work for politicians too. So why aren’t there more of them working towards a system of real energy democracy?
In London and Manchester, the Switched On campaigning group is asking the cities’ respective Mayors to set up a sustainable public energy company. It’s a perfect opportunity for two big cities to lead by example and pioneer a new model for municipal energy, and it’s a perfect opportunity for Labour to be the driving force behind this.
Labour have been quick to speak out about the unfairness of the system. Lisa Nandy last week spoke about the unfairness of the CMA report “putting the onus on customers to switch rather than preventing energy companies from ripping people off.” But as yet, there have been no real alternatives offered; no real movement towards the change that we need.
That change goes beyond regulation of the market, it needs to put power back into the hands of ordinary people. It’s a movement already taking shape: with councils of all colour supporting community-owned energy, and trade unions joining forces to promote energy democracy, the time is ripe for Labour to add some clout.