Monday, December 17, 2012

Renationalise now! : CPO Press Release on the 'spiralling' problem of Fuel Poverty

Monday 17th December 2012

New research by the Fuel Poverty Advisory Group has highlighted the "spiralling" problem of fuel poverty in the UK. As gas and electricity prices continue to rise way above inflation, the group has warned that around 300,000 extra households could be forced into fuel poverty within weeks, with around 9m people forced into fuel poverty by 2016.

The government seems to think that simplifying tariffs is somehow going to help solve this problem. Yet this policy is merely tinkering on the edges.

The Campaign for Public Ownership believes that the only long-term solution to the problem of energy company profiteering is to restore the energy companies to public ownership.

The problem lies in the ownership structure of the energy companies. Their overriding aim is to maximise profits for shareholders, (and in the case of EDF, to the French state). Instead of reacting with horror to the entirely predictable news that PLCs are putting the interests of shareholders before Britain's long-suffering energy consumers, we should instead be calling for the government to take the one step that will lead to lower energy prices in the long term. Restoring the energy companies to public ownership will mean that prices can be lowered, as there will be no shareholder dividends to pay.

It’s clear that unless the government acts, millions more Britons will be forced into fuel poverty. The great privatised energy rip-off  must be ended without any further delay.


Anonymous said...

The views I'm about to express come only from me, they aren't necessarily the views of any other person, living, dead or living dead or indeed any organisation whether that organisation is a sentient being with opinions, thoughts and feelings, or not.

I'm interested to find out, what is the best way of gauging and showing what the people of this country want?

I suspect the majority of people don't trust the companies that charge them for things which they need. They may view these companies as inflating the price in order to make a profit.

One response to this is "but we don't make that much profit, we only make £1 on every bill and profits are down from this time last year". £1 profit (I'm using £1 for the purposes of this only, it may be less!) on every bill when your main business is actually printing bills, millions of them!

That's right. Those companies that send you the electricity bills don't necessarily produce anything other than a bill most of the time.

What they do is buy data about fuel, on computers, pay for some of the transportation costs such as people's wages and distribution, add a bit on, print a bill and send it to you.

That's a simplistic view, there are a lot of things going on, I'm not suggesting that it's easy or that anyone is in any way, lazy. The point is that there are entire companies that exist ultimately to buy something that they won't ever touch or need to store, then sell it to the public, small business, local authorities and others for a profit.

To be fair, I think it's like this because when the energy industry was opened up to private companies, there were rules which meant that the companies doing the distribution and storage of the fuel and energy, and the companies that sold the energy generated from the fuel, had to be separate entities.

Anonymous said...

Back to the profit: When profit is at risk, the first reaction of these companies is obvious, increase the prices to the consumer. It can sound fair to say that wholesale prices went up and/or distribution charges went up. This has been the justification for a few years.

Here's something though: Some of them know they can't keep putting up prices so much, or indeed at all!

These companies have something called NPS scores (Net Promoter Score). It's linked to things like brand and advocacy (how likely people are to recommend your company). The scoring can go negative though! As is the case with, I think, the entire energy industry. They are all on negative net promoter scores. Some have lower scores than others. It's something to celebrate when your score goes from let's say -30 to -25. Who knows what will happen if they ever reach 0, I think several offices full of people might explode with joy!

Fortunately these companies do invest in people, they train people to be more positive, optimistic, psychologically resilient. Because they care about their employees' well being, and the employees are going to need it.

They have useful values around putting people first. So it's always good to see them helping employees rather than putting profit first, especially when those employees have had a pay freeze, many are already underpaid, and inflation has risen. The cost of living has risen and their existing pay doesn't stretch so far.

Thank heavens for being offered overtime, especially before Christmas and on top on the pay freeze. Some people would like to work more overtime, mostly those people who are most desperate for money, to pay their heating bills and other things.

I've heard there is something called the European Working Time Directive in which some people want to stop other people from being able to work more than 48 hours a week. Surely it's up to individuals as to how many hours they wish to work, right?

It's good that these companies are looking after their employees' well being by informing them that as research suggests that working overtime can contribute to shortening of the employee's lifespan through things like heart disease and stress, plus it can have an adverse affect on mental health, families and communities.

It is nice of them to warn people of that before offering them overtime on top of a pay freeze over inflation.

Sir Roger Carr is the head of Centrica (owners of British Gas) and also fortunately the head of the CBI, the UK's largest business lobbying group. Looks like the CBI and our government would like to fight for workers' rights to risk their own lives by making sure people can work as many hours as they want. How nice of them!

People go on about shareholders, but it's worth noting that most shareholders are probably just average people, hard up, hard working and putting their hard earned life savings into what should be a good means of making some money. Put some money in, the share price goes up, sell your shares and you've made a load of money.

It helps if you have a lot of money to put in, in the first place though. Also if you can pay for someone to buy and sell millions of shares every day in order to make lots of money off the small amounts of profit, that'd be useful. Otherwise most shareholders are very useful for padding out the system with their life savings. So don't be too hard on them. It's surely better than feeding a machine in the pub or playing the lottery, although not that different in a way!

So, Fuel poverty. It's terrible but companies have to make a profit and at least they give you good advice on energy saving. You can always get a discount on cavity wall insulation for your 1920s brick house which has no cavity walls and even if it did you wouldn't be able to do anything because you don't own the property and you can't even afford the discount. It's the thought that counts though.