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.