Plundering consumers

It insists that global wholesale prices, linked to the soaring price of oil, leave the suppliers without any alternative.

This is nonsense. The members of this oligopoly are plundering consumers' pockets, secure in the knowledge that they face no challenge from either the toothless Ofgem watchdog or government.

Neither is prepared to confirm what the opponents of privatisation forecast - namely, that the privateers would exploit their market dominance to produce rocketing profits at the expense of consumers denied any real choice.

The government insists that its priority is to fight inflation, which is why it rejects any improvement in the 2.45 per cent pay rise offered to local authority workers. Yet increases in gas and electricity prices have a huge effect on the rising living costs of low-paid workers.

The energy companies pass themselves off as victims of higher prices demanded by anonymous wholesalers, but they are part and parcel of the same operation. They are vertically integrated.

The wholesale arm of these energy transnationals sets an arbitrary price and then its customer-supply arm passes that price on to consumers and adds a surcharge to guarantee its own rising profits.

The big six companies - British Gas, E.ON, npower, EDF, Scottish Power and Scottish & Southern Energy - are milking consumers because they are free to do so.

They cite the need to link wholesale gas prices to those of oil, but why? Simply because they are going through the roof. If they were going in the opposite direction, the link would be abandoned.

Their combined profits in 2006 were £3.7 billion, which jumped to £4.9 billion in 2007 - a leap of 30 per cent.

Within those figures, British Gas combined profits for gas and electricity zoomed from £95 million in 2006 to £640 million in 2007, an increase of 570 per cent.

The big six have already increased their prices to consumers this year by around 13-17 per cent for both gas and electricity and are preparing to impose even higher rises in the coming months, which is likely to double fuel poverty.

Government ministers parade their impotence, wringing their hands, talking about difficult times, suggesting ways that households can reduce energy use and hoping that something will turn up.

Understanding that the privatisation of these natural monopolies is what has led to this crisis ought to point them in the direction of taking them back into public ownership.

But, even short of that, there are short-term responses that could make the profiteers bear the brunt of the current situation and reduce inflationary pressures on those least able to bear them.

The government could order a price freeze until 2009. It could impose a windfall tax on the profiteers and, in the interests of social justice, it could order abolition of the surcharge imposed on meter users, which weighs most heavily on the poorest in society.

It won't do that without a mass campaign that insists on it. The government must be told that failure to act is not an option.