Ed Miliband’s Price-freeze policy

For

For thirty-five years it has been the received political wisdom that business knows best and government should leave well alone. This has particularly been the case in the privatised utilities, where people have been making a fast buck on basic needs since the 1980s. Then, as soon as a political party leader tries to do something about this, there is an outcry.

You could tell by the hysterical reaction of the right-wing press that Ed Miliband was doing something right. ‘Blackouts!’ ‘Red Ed is back!’ they screamed at the Labour leader’s quite reasonable proposal to freeze energy prices for two years after 2015, after years of precipitous price rises and shameless profiteering.

the real risk of blackouts is very low, because the energy companies will blink first.

Of course, the real risk of blackouts is very low, because the energy companies will blink first. As Damian Carrington has argued in the Guardian, this has only happened because they know they have overplayed their hand. The public’s tolerance of the rather bizarre set-up of the privatised utilities is based upon an unspoken deal that the companies will not charge extortionate amounts, whilst vastly improving the service. However, after taking home huge profits as Britain suffers a cost of living crisis, with pensioners and the poor having to choose between heating and eating, and real wages falling almost constantly, their protests are likely to fall on deaf ears.

So used to not having their cosy worldview challenged by the neoliberal revisionism of New Labour, the right-wing establishment has panicked at the sight of a Labour leader coming up with policies that put ordinary people first and challenge the supremacy of big business. The right has had its way with populism for too long; here at last is its left-wing counterpart.

The biggest of the “Big Six”

The other important point to make is that this is only one half of the Leader of the Opposition’s plans. The other is to end the cartel of the ‘Big Six’ energy companies. At the moment, only they have the capacity to generate power. However, it is these same six who dominate the selling of power to customers, making it impossible for new companies to come in and challenge them, driving prices down through competition. It is ironic that the Conservatives, supposedly the party of the free market, are defending this stitch-up whilst Miliband aims to cut prices for good by breaking the link between production and sales. The freeze is meant to be imposed whilst this second part finds its way through the Commons.

Ed Miliband has often been accused of being weak and light on detail. With this big, bold move that will help ordinary people and challenge big business, he has proved he is neither.

Against

My problem with Mr Miliband isn’t that he wants to hurt the big companies or make life a little easier for British people. My problem with Mr Miliband is that he is encouraging British people to expect everything to be made easy for them.

If I were to list everything that’s wrong with Britain today, the unsustainable lifestyle of which we’re all guilty would be one of them. Scaremongering statistics are much abound: I’ve read variously that within two decades, we will need two Earths to sustain our population; Jimmy Carter said in 1977 that “we could use up all the proven reserves of oil in the entire world by the end of the next decade.” I’ve also everyone seen reports that if all seven billion humans crawling around Earth consumed like an average American, we’d need over four Earths today.

Surely there’s a lot of exaggeration here, but what’s almost too simple for the layman to grasp is that we live on a planet of finite resources. If seven billion people each expect to watch a big television while microwaving a pizza from a fridge-freezer for only five pence per kilowatt-hour, energy companies can only provide such a huge amount of cheap energy by burning the easily mined coals and natural gas. Such fossil fuels provided over 50% cheaper energy than onshore wind farms and nuclear power plants in the UK in 2011, and last year they still provided 88.7% of Britain’s total energy usage.

Many who remember 1978 have expressed doubt that Governmental price controls are a good idea at all and the hugely grotesque ‘big six’ energy companies have of course criticised the labour leader’s plan to fix energy prices from 2015 through to 2017. They forewarn blackouts, by which they presumably mean that they refuse to operate at a loss. Even if Labour are successful in inflicting energy companies with this price-freeze, the cost to Steve and Gary and whichever other men-on-the-street have given him these policies could be far greater.

the cost to Steve and Gary and whichever other men-on-the-street have given him these policies could be far greater

By and large, I was quite impressed by Ed Miliband’s keynote speech. His lampooning of George Osborne for choosing short-term economic policy over environmental responsibility was especially refreshing. Unfortunately that flagship price-freezing policy he introduced in his speech contradicts that beautiful message and, furthermore, it is unworkable, downright stupid and implies party-wide acceptance of an incredibly dangerous idea. Had the man followed “we can’t afford not to have an environmental commitment at a time like this” with “therefore you’re all going to have to suck it up and pay for the energy you use” I’d be signing up as a member of his party right now.

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What’s your opinion on Ed standing up to the Big Six? Tweet us @boarcomment with your thoughts!