The big price freeze: 20 months is not enough, we need affordable energy and a safe climate for the long term


Labour leader Ed Milliband announced on Tuesday that Labour would seek to freeze energy prices for 20 months from 2015 and introduce a new energy regulator if the Labour party win the general election in two years time.
The Big Six energy companies were quick to rubbish the idea, with Centrica, parent company of British Gas, claiming that the policy could lead to ‘economic ruin’ for big energy companies and would result in power cuts. While Fuel Poverty Action welcome the long overdue recognition by politicians that affordable energy is a major issue in the majority of people’s lives, a twenty month price freeze isn’t a real, long-term answer to the stranglehold held by the big six energy companies. Freezing prices at their current level wont help the thousands of people who already die each winter due to fuel poverty: our bills are already at deadly highs.
Fuel Poverty Action promotes a combination of community owned and publicly owned renewable energy as an affordable, sustainable and democratic alternative to the current energy system. Decentralised renewable energy would shift power from big companies to communities, bring down the bills and help tackle climate change. We’re sure Ed Milliband is aware that recent polls show that almost 70 percent of people want energy put back into public hands, but this was completely absent from his speech.

The Big Six: Showing their true colours

The Big Six’s immediate response to this morning’s announcement shows that they very much expect to continue raising their prices at life-threatening speed over the coming years. And on top of that, they’re outraged by the idea that political power over our energy choices should lie with anyone but them.
The response from the energy companies varied from threats to stop trading and leave in the UK (Centrica) to companies going bust (SSE) to the lights going out (Energy UK- who represent big energy companies). A price freeze would not alter the big six energy companies grip over our lives in the long term; even Ed Miliband admitted this morning that energy companies may well ‘collude’ and put up prices even more before the election, leaving people in the same position as if there was no price freeze at all. We should also be asking, what happens in 2017 when the prices aren’t frozen any more? Will the prices shoot up further to ‘recuperate’ profits the money-hungry Big Six ‘missed out on’ during the freeze? The Big Six have made it clear that if we leave it up to them we’ll either struggle to pay their high bills or they will leave us in the dark.

Clean energy = cheap energy

Whilst spiralling prices are in large part due to shameless profiteering by the Big Six (you only need to look at a graph like this one to see that consumer prices are not pegged to wholesale prices i.e. they don’t just put the prices up to stop ‘economic ruin’!), the Big Six will be forced to increase prices further and faster to keep up with the rising costs of fossil fuels. This trend can only worsen as these fuels deplete, and remaining fossil fuels become harder to access.
Labour’s announcement indicated a recognition that affordable energy matters to people, but their proposal doesn’t tackle current high energy prices, and at the same time is short-sighted in terms of affordable energy in the future. Labour admits it would still pursue fossil fuel extraction through methods such as fracking, even though fracking firms have admitted that this hard to reach fossil fuel will not bring down the bills, and multiple reputable surveys show that a majority of the public is in favour of increased investment in renewable energy.
To bring down the bills, we need to fundamentally change the source of our energy. Renewable energy would save us hundreds of pounds on our fuel bills over coming decades. We need to leave behind expensive fossil fuels and make a rapid shift to clean energy, generated from sun, wind and waves.

Time to replace a broken system

Access to affordable energy and warm homes is a matter of life and death. There were 24,000 ‘excess winter deaths’ last winter; the World Health Organisation estimate that over 30 per cent of these – that’s at least 7,200 deaths – were due to cold homes. Fuel poverty deaths will be on the increase this year as energy companies hike prices again. Similarly, the ongoing refusal by companies like this to move away from damaging fossil fuels contributes to at least 150,000 deaths from climate change each year.
But we can’t really be too surprised. The Big Six exists to make a profit, not to value people’s lives. That’s what big private companies do. If we really want an energy system that exists to fulfil our needs, rather than make endless profits, it has to be one which is democratically controlled – not left in the hands of greedy energy companies. This should go hand in hand with cheap, clean energy and guaranteed affordable and well insulated housing for all.
There is another way. There is clear support for increased investment in renewables and for putting energy back in public hands. Fuel Poverty Action think that communities should control their own renewable energy. We don’t need the profit hungry Big Six energy companies, but we do need warm homes and a safe climate. Simply tinkering at the edges of the control that six big energy companies have over all our lives is not enough.