Privatisation's 'success' story

We've heard the same old excuses time and again about wholesale prices rising, increases in operating costs, investment in infrastructure and subsidies for home insulation for the poorest consumers.

We've heard them, memorised them but we still don't believe them because we know that the energy oligopoly is making grotesquely obsessive profits and handing out cosy dividends to shareholders while workers, pensioners and people living on benefits are having to tighten their belts.

Many poor pensioners died last winter, forced to choose between eating and heating their homes after British Gas raised gas and electricity tariffs by 18 per cent and 16 per cent respectively in August 2011.

Its pleas of "sorry, we had no choice" were put into perspective when the company declared profits of £742 million, up 24 per cent.

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Its parent company Centrica, which has invested profits made from British energy consumers in exploration operations overseas, also made bumper profits of £2.4 billion, up 29 per cent.

Yet company apologists try to separate one end of the market from the other, even though both companies have the same root - the once publicly owned British Gas that provided gas throughout Britain at much lower cost than today.

Breaking up a single natural monopoly provides profiteers with scope for minimising taxation and maximising revenue for shareholders.

The spurious regulatory body Ofgem is as much use as a chocolate teapot. Its role is to monitor supposed "competition" and oligopoly spokespeople assert that Britain's energy market is the most competitive in the world.

The problem is that they compete to see which company can generate most shareholder value, not which of them can hold down consumer prices.

The latest 6 per cent rise in both gas and electricity prices announced by British Gas, to take effect at the onset of winter next month, will increase fear among people already wondering how to survive the government's austerity agenda.

The company's "competitor" or partner in crime SSE has already announced 9 per cent tariff increases for Southern Electric, Swalec and Scottish Hydro, which means that we can anticipate similar apologetic statements from EDF, Scottish Power and Npower in the coming weeks.

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Eon, which has guaranteed a price freeze for 2012, can be guaranteed not to lag too far behind.

The harsh basic fact, which politicians from all parties have to accept is that gas and electricity privatisation, among the first to be carried out by Margaret Thatcher's Tory government, has been a failure in the terms touted at the time.

It hasn't improved service efficiency or brought down costs to consumers. Quite the opposite.

Whatever the justifications put forward by the privateers, it is clear that consumer tariffs far surpass wholesale market prices and that higher tariffs follow immediately any wholesale price rise while reductions are partial and take months.

However, in terms of privatisation's real goals - the further enrichment of a small section of society to the detriment of the rest - it has been a rip-roaring success.

Public investment converted into private profits? Job done.

The only success for working people milked by this privatisation scandal will be when the entire industry is returned to public ownership.