Coal power plant photo: X1klima/CC
Coal power plant photo: X1klima/CC

Duncan Moore, Plymouth Socialist Party

The energy price cap will rise to £3,549 per year as of 1 October. This is more than three times its level this time last year; and prices are set to rise further. Energy consultancy firm Cornwall Insight predicts a price cap rise to £5,389 in January and to £6,616 in April.

But we can’t afford these bills. Millions of us will be in fuel poverty by January, forced to choose between “heating or eating”; for some it will be a case of neither. The NHS warns that thousands of the most vulnerable, the elderly and those with long-term health conditions, will die avoidable deaths this winter.

Energy suppliers are alert to this danger too – the danger to their profits due to millions of customers being unable to pay. Their proposal for a ‘deficit tariff scheme’ is designed to keep them and their broken system afloat, while the rest of us pay for it.

The idea is for the banks to create a deficit fund, backed by the state, which the energy suppliers would draw on to cover the difference between the current consumer price cap and wholesale electricity and gas prices. The price cap would be frozen at its current level of £1,971 a year; at a cost of £100 billion over two years. The energy suppliers’ debt to the banks would be paid off gradually, either through a surcharge on energy consumers or by taxes.

This works fine for the capitalists! The energy suppliers like ScottishPower and Centrica stay in business with their CEOs paying themselves seven-figure salaries; the big energy producers carry on coining it, with BP and Shell set to make a combined profit of £40 billion this year alone; and the bankers cream off the top. All of it paid for by the working and middle classes.

Who pays?

The price cap rise is going to cause destitution and misery for millions. Energy prices should not merely be frozen, they should be drastically reduced. But a £100 billion bailout for the energy companies is not the way to do it.

The government bailed out the banks in 2008 and handed us the bill; then gave a £400 billion bung to big business when the pandemic hit. Now we are being asked to do the same for the energy giants. But why should we keep taking a hit to prop up a failing system?

Instead, the entire energy industry should be nationalised, with compensation to shareholders paid only on the basis of proven need. Publicly owned and democratically controlled, the vast amounts of money currently wasted on share buybacks and bloated executive pay could instead be used to invest in renewable energy production and home insulation, with prices decided by service users, communities and the trade unions.

  • Bring bills down. Reverse the energy price cap hikes, and cut prices, including for pre-payment meters. Cancel all debts caused by inability to pay
  • Open the books of the energy companies to trade union and community scrutiny. For democratically elected committees to enforce price controls
  • Seize their profits. No to bailouts or phony nationalisation that leaves the capitalist bosses in place. For nationalisation of suppliers and producers under democratic workers’ control and management, with no compensation for the fat cats – so investment can be planned to meet the needs of people and the environment, securing the jobs, and terms and conditions of workers in the energy sector
  • Resist energy cut-offs. Build a democratic mass movement that mobilises working-class people in local communities to resist attempts to cut off a household’s services, forcibly convert to prepayment meters, or collect utility debts
  • For councils to use their own financial powers to provide emergency support to households and small businesses, and to demand the money back from the government
  • Unite the strikes to resist price rises and win real pay rises
  • Build a new mass workers’ party based on the trade unions, that fights for socialism as an alternative to the capitalist profit system that is run in the interests of a super-rich minority