Regular readers of my rantings will know that I have argued strongly against a windfall tax on the energy companies, which I felt was, in effect, a tax on enterprise. I also arguedthat Ofgem should either do its job or if doesn’t have the powers, then it must be provided with them, given they appear to be acting as the energy companies lapdog, not its regulator.

However it is a two way street, the energy companies were quick to announce large scale price increases, in virtual unison, yet they are deliberately vague about when the prices will come down, even though wholesale prices are now precisely what they were, before we had to accept price hikes of around 40%. Apparently at their regular meeting Energy Minister Malcom Wicks and Energy Secretary Ed Miliband “demanded” that prices should be brought down. But the boy Ed, and that excuse of a minister Malcom Wicks, accepted assurances from the energy companies that they would “bring prices down as soon as they can“. Pathetic, weak and completely unacceptable, the ministers should be completely ashamed of themselves, that is not progress, it is the energy companies telling government ministers to bugger off and the minister accepting it, the ministers should be sacked, here and now.

Energy companies argue that the reason prices have not fallen already is that they purchase at ‘forward’ prices, fair enough, I can completely understand this logic, however, it also means that they know exactly when the new prices will kick in, so to tell government ministers and for the ministers to accept, that they can only provide a vague indication is nothing short of a scandal and a con.

Energy is an essential service, not an optional commodity that the people of this country can elect not to purchase, therefore, any company choosing to invest in our energy sector should act reasonably and responsibly at all times. That is the nature of the investment, a guaranteed flow of business whatever the economic picture, in return for a measured and consistent return for investors. Clearly they are not acting responsibly and that is why a regulator was put in place, but Ofgem is nothing short of pathetic, either in terms of their leadership and/or as a lack of meaningful powers, either way, they are a complete waste, in their current form, of taxpayers money. The only other support the public can expect is political pressure from the energy ministers, but Ed and Malcom could not negotiate their way out of a paper bag, they are nothing short of useless. Sending boys in to do a mans job at a time when the cost of heating is going to be critical to the well-being of millions of British citizens is so shameful, I genuinely cannot express it in words.

Gordon Brown should replace Ed Miliband and Malcom Wicks, here and now and replace them with people that will negotiate hard, not act as the industry’s whipping boy. The energy companies have be told, that they must produce evidence of what their current wholesale prices are and when they expect them to come down, the they must be ordered to provide an immediate and proportional reduction in consumer energy costs. If they fail to do so, they must be informed that they will face future price caps and/or a windfall tax, for any amount that exceeds their previous years profits. Ofgem must be given the powers and a management team that is willing to regulate the industry, not capitulate. I do not believe in state intervention, however, if the energy companies will not play ball and legislation won’t work, then we must nationalise this industry. It is simply too important to ignore and the public most certainly deserve better than Messrs Miliband and Wicks representing our interests.

Without wishing to be melodramatic, the reality is many people will freeze this winter because they can’t pay their energy bills, by abdicating their responsibility to the public, this government and their ministers will have to ask themselves whether they did as much as they could have done in the circumstances. By their current record, I would argue they have not.

Yet again, Gordon Brown fails to grasp the nettle, coming up with a weak package of measures, that once again, lacks real detail and as always, with any money pledged by this government, it is more ‘jam tomorrow’. If Brown was running a business he would have been fired long ago.

This government claims that they have been “negotiating” with the big six energy companies, if that is the case, why are they having to threaten to legislate to ensure that the energy companies and energy producers cough up the £910m? That notwithstanding, Gordon Brown says “I do not expect the £910m that we raise to be passed on to the consumer by the energy companies“. Really? That sounds like a typical politician’s answer, the statement should have read, “The energy companies will not be permitted to pass on the £910m in the form of higher bills”.

So, let’s sum up, the government says that following negotiations, the energy companies will put up £910m over the next 3 years. But, this is not guaranteed, because the government, by their own admission, may have to legislate to force them and, there is no guarantee that we will not be faced with higher bills as a consequence of this investment. It is estimated that we are already paying an extra £35 per annum for existing energy saving measures employed by the big six. So there is a precedent for passing on the cost. Well done Gordon, great job.

The government have announced that the package is worth £1bn. Okay, lets get this straight shall we? The Warm Front programme has had £250m sliced off its grant, but the government now offer an extra £30m per year over the next 3 years as part of its measures to reduce those suffering from fuel poverty. On this basis, Gordon Brown has announced £910m that he hasn’t got agreement on and put back £90m of the £250m he removed from Warm Front. Where, exactly, is the big news here? Also, does the extra £90m the government are putting in, include the extra winter fuel payments referred to in the same announcement. As they invariably say, whenever Gordon makes an announcement, the devil is in the detail.

It is estimated that the energy companies received their own windfall of some £9bn in the form of free pollution permits under the European Emissions Trading Scheme. Was there no quid pro quo when this was gifted to the energy companies, who agreed this figure?

The government has indicated that they have no wish to legislate regarding energy prices because they believe that competition will result in lower prices. Really, where is the evidence that this is so? The energy companies may raise their prices at different times, but, for the most part, they have all increased their prices more or less in line with the other energy suppliers. This does not look like competition. But regulation is not just about price increases, it is about preventing companies that are in a dominant position, with a product that the consumer needs to buy, abusing their position.

If Ofgem were given the powers through legislation they could prevent the big six energy companies imposing a penal charge on consumers who do not or cannot pay by direct debit. It is estimated that there is a difference of £144 per year between those that pay by direct debit and those using a prepayment meter, of which there are estimated to be 5m. Ofgem claim that it costs £85 per year to run a prepayment meter with 5m in use, this sound extremely unlikely and who’s side are they on anyway? At best, this charge is excessive and undoubtedly, Ofgem demonstrate how gullible they are by accepting this claim at face value. Given some 50% of the people with prepayment meters are likely to be on fixed or low incomes, it is appalling that they should be further penalised by the energy companies, who claim to be helping many of the same people with social tariffs, it really smacks of duplicity.

It is also worth remembering that the European Trading Emissions Scheme is a tax, therefore the government are also profiting from people’s misery. They can tell us until they are blue in the face that they “care”, but whilst they are effectively taxing essential commodities such as heating and lighting they are acting like hypocrite’s. Furthermore, our caring energy companies spend a tiny fraction of their revenues on social tariffs, just £50m per annum.

The bottom line is the initiative put forward by Gordon Brown & co in a very sensible one, certainly preferable to subsidising the fuel bills of those in fuel poverty, year in and year out. However, it is, seriously underfunded and as in commonplace with this government, spread over a long period, which means that some people will have to wait two or three years before they can take advantage of the savings.

As is usual, the opposition parties are, for the most part, silent on this issue. Critical, but offering no tangible solutions. Predictably, Cameron’s conservative party says little of any value, instead of seeing it as an opportunity to demonstrate what they would have done. As I have said before, Cameron doesn’t want to win the election, he just wants Labour to lose it, as they surely will. But it does clearly indicate that Cameron lacks backbone, new ideas, or more likely, both. At least Vince Cable comes up with some suggestions.

The government needs to be far more bold in their approach. They already collect more in green taxes than they invest back in ‘green initiatives’, they should substantially increase the amount of money invested in these energy saving measures, offering to match the energy companies pound for pound. They must also go back to the energy companies and renegotiate the current “agreement”, which needs to be doubled to have any serious impact.

Ofgem should have their powers increased to allow them to cap prices and restrict the energy companies from imposing unreasonable charges such as direct debit penalty payments and high premiums on pre-payment meters. The government should provide an undertaking that a fixed percentage of the income generated in green taxes imposed on the energy companies should be set aside and used for energy efficiency measures. By all means priorotise the most needy, but the government should not exclude everyone else.

The government must introduce legislation which requires the energy companies (producers and suppliers) to invest a minimum amount in infrastructure (based on their turnover), in the same way that the water companies are required to invest in infrastructure. This will avoid a situation where the energy companies can blackmail the government into submission by threatening not to invest in new power stations and so on. The government should investigate the generous £9bn windfall the energy companies received in carbon credits and if it was incorrectly assessed, then the difference should be clawed back. The Competitions Commission must launch an enquiry into competition in the UK market and publish their findings, based on which, the government must legislate if necessary.

The government should not be persuaded to introduce a windfall tax, this is far too crude and serves only to punish. There are other, more subtle ways of dealing with these types of challenges, such as suspending the carbon credits, whilst the initial £9bn is investigated and introducing emergency measures to increase the powers of the regulator. If the energy companies were to face a suspension of the credits they have priced into their share prices, a risk of price caps through the offices’ of the regulator and a Competition Commission enquiry, they will see a fall in their share prices and nothing is guaranteed to make them sit up and listen, than a fall in shareholder value.

This government is happy to fleece, bully and bellow at the people in this country, exercising ever more draconian powers over the individual, yet when it comes to big business, they seem at best impotent and more likely, incompetent and complacent. Come on Gordon, get you act together and fast.

Once again, labour party MP’s are looking to raid the coffers of big business. This time, it is to counteract the economic and social impact of the increase in fuel prices, through the imposition of a so-called “windfall tax”. This is so typical of new labour, if they can’t employ a stealth tax or borrow it, they simply steal it. Yes, how else can you describe a direct raid on the profits of the energy companies?

Now don’t get me wrong, I am not advocating that we take no action, but simply applying a one-off windfall tax is not the answer. This would act as a massive dis-incentive for other international companies considering a move to the UK, assuming there are any left. That notwithstanding, this country faces another potential energy crisis in the next 10 years, or more accurately, an energy shortage and that is because many of our existing power stations are due to be replaced. With a build process of 10 years or so and the delay in the decision to utilise nuclear stations, if the existing companies refuse to invest, we could be in a lot of trouble.

It is possible to make the energy companies pay their fair share, by reducing the substantial windfall they received, as a consequence of the free carbon credits. Energy companies would find it more difficult to argue against this particular aspect of their business that a blatant raid on their profits. It may amount to the same thing, but arguably it is all in the presentation.

Using any money gained simply to reduce people’s bills is also not the answer; it is a short-term fix and would have to be repeated year on year, most likely rising year on year to take account of further rises. This is a massive burden on the taxpayer that would have to fund future shortfalls; after all, the government couldn’t simply turn to the energy company’s year on year.

What is needed is a joined up approach to the problem. Existing government and energy company initiatives need to be extended to put in place a programme designed to reduce the energy usage of those in fuel poverty, rather than simply subsidising energy costs. The introduction of low energy bulbs would make a significant difference to energy costs and if purchased in bulk, would cost the government pennies. This could be completed as a project, much the same as smoke alarms were some years ago. Similarly, looking at more efficient energy use, for example, a modern boiler will often use 35% or more, less fuel than an old one. I know the government already has a programme in place, but why not expand it, put more money into this initiative, rather than subsidise bills every year.

We all know of the various, well publicised methods of reducing home energy usage, most experts have suggested that there could be a saving of as much as 35% on annual bills, with a the adoption of commonsense approach to usage and a relatively small, targeted investment. Given the exponential savings in so called greenhouse gases, perhaps the government could consider transferring some of the revenues’ gained from ‘green taxes’ directly into this project.

I don’t have all the answers and I am neither an expert on energy nor the carbon trading scheme, but I know this, we cannot afford to introduce an ongoing form of fuel subsidy for those in fuel poverty and not expect it to hurt the majority. Surely it is better to invest a larger amount of money now, in fuel saving measures, rather than fuel subsidies? The government does not need to employ expensive consultants to come up with a commonsense approach to this problem. I don’t have all the answers and my suggestions may be over simplistic, but then I won’t cost the government hundreds of millions of pounds of taxpayer’s money in consulting fees either.