#CostOfGreedCrisis: Starmer’s Pragmatic Freeze on Energy Prices Runs Cold

Sir Keir Starmer proposed his latest flop with the regurgitation of an old Ed Miliband policy from 2013

Sir Keir Starmer unveiled his pledge that families would not “pay a penny more” on energy bills this winter after unveiling a £29bn plan. Under the proposals, Labour would freeze the energy price cap at £1,971 for six months this winter, saving households £1,000.

The plan is remarkably similar to one that was proposed by Ed Miliband In 2013 when he stated if Labour won the next General election, they would freeze gas and electricity bills for every home and business in the UK for 20 months. Ironically, last week another Ed and leader of a centrist Party, Ed Davey also proposed the same policy of freezing the Energy hikes for a short period, again at an extortionate cost to the public.

Davey, a former energy secretary, said it would cost £36bn over a year and that there should be a new, broader windfall tax imposed on oil and gas companies’ profits, with fewer exemptions. He said he hoped it could bring in as much as £20bn.

He claimed the government could also find money from additional VAT revenues from higher than expected inflation.

Both proposals ensure one thing, that Energy companies will continue to profit.

Both proposals from both Labour and the Lib Dems will put a guaranteed extortionate amount of public money into the hands of Energy companies and the pockets of their shareholders.

It should also be pointed out that of the so-called Big five energy companies only British Gas is a British company, which also means the British public will be subsidising other EU countries with what will be an effective handout, a handout that will cost British workers dearly for the privilege, a handout of public money of £29 billion based on Labour’s own figures. This obscene amount would do nothing further to add to the coming deficit that will be an excuse for more Austerity.

The costs and burdens of soaring global gas prices have been passed through directly into domestic energy bills – hammering the finances of the poorest households. This adds to already unfair energy pricing mechanisms, where the poorer households pay a disproportionate part of their income for their basic energy needs.

@Keir_Starmer Freeze on Energy Prices Runs Cold
His latest flop is a regurgitation of an old ED Miliband policy from 2013
Of course, Mandelson lobbying company with Centrica plc as a client has no connection to Labour’s shift in policyhttps://t.co/D65jU4nSDG#CostOfGreedCrisis pic.twitter.com/RIVsma2wUF

— Labour Heartlands (@Labourheartland) August 16, 2022

There really is only one solution to this Greed crisis, which is of course nationalisation.

There is a model that could be adopted immediately and with greater advantage now we are out of the EU. Électricité de France more commonly known in the UK as EDF is a state-owned EPIC, meaning it is a state-controlled entity, it became the main electricity generation and distribution company in France, enjoying a monopoly in electricity generation, although some small local distributors were retained even under full nationalisation.

Full nationalisation is a keyword, it is worth noting France does not have a full nationalised energy system, what it does have is a nationalised energy company. Unfortunately for France EU legislation stops EDF from having 100% of the French Energy market.

This monopoly ended in 1999 when EDF was forced by a European Directive to open up 20% of its business to competitors. Now EDFs market has been reduced to 80 percent of the French energy markets to comply with EU law.

EDFs penetration into the UK mitigated that loss and added an exceptional amount of profit to the French government coffers with a thriving 20 percent of the UK’s energy market.

There are also some very striking differences in the way things are run here in the UK compared to its nationally-owned parent company in France, for example, Frances’s president Macron has ordered a cap on energy prices of 4 percent, leaving the UK as a golden goose for the French government’s treasury. The obvious fact the UK is no longer subject to EU directives would allow the UK to obtain full nationalisation of Energy.

Full Nationalisation would work out to be considerably cheaper than any alternative offered by any major Party, all of which can only go so far as to take a windfall tax from the energy companies and then give it back to them to part subsidise their extortionate price hikes.

The TUC estimates that nationalising energy would cost £2.85bn, while Labour’s policy would see £29bn spent subsidising energy companies. Polling shows 60% of voters support public ownership of energy.

Public ownership of energy retail companies would reduce bills, speed up energy efficiency improvements to UK homes, and cut carbon emissions faster, according to a new TUC report published

There will always be those that make claims on behalf of the energy companies advocating that by nationalising these rip of companies it will hurt the vulnerable, it won’t.

Britain’s main pension funds own less than 0.2% of Shell and BP shares, undermining claims that a windfall tax on big oil companies would harm the retirement incomes of UK savers.

A review of the oil giants’ shares by the Common Wealth thinktank shows the largest holdings are by US investment companies, including BlackRock and Vanguard, and the wealthy Norwegian pension funds.

The UK’s multibillion-pound defined contribution occupational pension funds, which hold the savings of tens of millions of workers, rank among the least important investors after decades of spreading their investments in different markets around the world.

Independent pensions consultant John Ralfe said most large final-salary retirement schemes were unlikely to hold BP or Shell shares after selling their holdings to buy safer bonds.

Research earlier this year by the TUC, Common Wealth and the High Pay Centre showed that UK pension funds accounted for only 2.4% of the total market value of UK-listed shares, down from 13% before the financial crisis in 2008. Indirect ownership via investment funds accounted for another 6%.

“The idea that BP or Shell are widows’ and orphans’ stocks, or that pensioners rely on income from the oil giants to make ends meet, is just risible,” said Ralfe. “As an argument against a windfall tax, it has no validity whatsoever.”

Costs of Public Ownership of Energy Retail

The TUC has conducted an analysis on the likely cost of compensation to the government for nationalising the retail divisions of the Big 5. This analysis shows a high-end maximum estimate for taking the Big 5 retail companies, with over 70% of household customers, into public ownership as costing £2.75 – £2.85 billion.

This is an equivalent sum to the £2.7 billion that the National Audit Office estimated that energy customers would need to pay to cover the costs of the 28 energy suppliers that have failed since June 2021.

Even Rachel Reeves could do the maths on that one.

The alternative is we keep subsidising the Energy companies using a mix of windfall taxes from their excessive profits, public money from the government and of course our own pockets, while all the time they will keep hiking their prices in this uncontrolled spiral of greed.

The escalation will only result in small to medium businesses going out of business, schools, colleges, universities and all civic buildings, including Hospitals, Fire and police stations having massively increased Energy bills. Bills that ultimately, we will pay for through the public purse.

It is very difficult to see this as anything other than extortion by the oligarchy, a revival of the Robber Barons.

Labour has no intention of leading the way on this, Starmer’s real ideological purpose is Globalisation and while ever he and his fellow Trilateralist Lord Mandelson are running the Labour power.

Then again, the fact Lord Mandelson runs a UK lobbying company, Global Counsel Ltd, a lobbying company that has British Gas Centrica plc as its client, obviously has no connection to Labour’s massive shift in policy when it comes to public ownership. With a direct line to the Labour leader’s ear, this lobbying guru surely wouldn’t have used his influence to bring any bearing on the Labour leader leading to his blatant shift of policy. A shift from nationalisation to handing out billions in public money to the energy companies, that’s just pragmatic, isn’t it?

Just to reiterate, Starmer’s special kind of pragmatic solution suggests we subsidise the Energy companies with a price freeze for the public over six months at this present increased rate while giving the Energy companies £29 billion for the privilege of doing so.

Alternatively, it would cost £2.75 – £2.85 billion to nationalise the energy companies bringing them into full public ownership where the government could reduce costs and bring down this present cause of inflation permanently, pragmatic must be one of those words that can be used for different meanings, in this case, I’m sure it means bullshit!

#CostOfGreedCrisis