But who is really responsible for high gas prices? You know whEU!
nick cowen, 31 July 2008
Commuters this morning faced the Metro’s frontpage screamline that British Gas has just put its gas prices up 35 per cent and its electricity prices 9 per cent. At the same time, MPs are calling for a windfall tax on energy profits. The price rises (and profits) are, of course, ridiculous but it would be nice if the news coverage more often dug below the surface of the issue to find out what is driving these rises.
As BurningOurMoney has documented meticulously for the last couple of years, it is the EU’s dysfunctional Emission Trading Scheme which gives Europe’s energy giants permission to act as if they were paying large costs for carbon permits (even though they are not) and charge consumers accordingly. The result is that consumers pay more (if they want cooked food and warm water at least), the energy companies get a windfall and the government expropriates its share of the winnings on the grounds that it is taking some of our money back into public hands. It would have been simpler to have just arbitrarily raided energy consumers’ current accounts, but that might have looked a bit too much like theft. Far better to use the alibi of the environmental movement to justify an EU-wide policy that just happens to bring an awful lot more money into the hands of energy companies and the government.
LibDem leader Nick Clegg was in the Metro quoted saying ‘For many families, and particularly for the elderly and the vulnerable, this will be a devastating rise. When winter comes, thousands will be forced to choose between heating their homes and cooking their meals.’ His sympathy, and those of other politicians, would be rather more appreciated if they answered some of the harder questions underlying these issues, like whether tackling the predicted future global warming (or climate change as it is being re-branded) justifies freezing pensioners in their homes in what remain, for now, rather cold winters. The good intentions of the Green movement hit hard reality as their policies are put into practice.
And we now learn that the French govt has capped electricity and gas prices to 2% and 5% which means, as the Times reports today, that UK consumers (hit by 22% price hikes from EDF) will be subsidising their French counterparts this winter.
How about a hard-hitting comment on the wonders of privatised utilities, and the inability of our govt to restrict prices to the CPI?
In your eagerness to heap blame yet again on the EU (and I don’t doubt you have a point) you may have forgotten other contributory factors to the hikes in gas prices.
Firstly, the absurd link between gas and oil prices.
Secondly, privatisation of utilities which means that dividends have to be paid to shareholders.
Thirdly, the takeover of these utilities by foreign companies whose principal aim is to screw the UK customer.
Fourthly, the lack of gas storage capacity. We have 13 days, France has 120.
Maybe you could explore these factors in a subsequent article.
[Nick Cowen adds: it is worth noting that the EU is also at the forefront of privatising energy utilities and it would be very difficult for the UK government to re-nationalise them under current EU law. However, I am not opposed to privatisation in principle, although the manner it has been done with energy utilities is highly suspect.]