THIS time of the year is usually known as the “silly season” in the capitalist media. Frivolous stories appear in the press, as newspapers seek to maintain sales while families take holidays and news is “slow” due to Parliament being in recess.
The policies — or the lack of them — being proposed by Truss and Sunak in the Tory leadership campaign could certainly count as frivolous, since for working-class people it will make little difference who wins. The tax-cut pledges would most benefit those on high incomes; but even the Institute for Fiscal Studies reckons that the pledges look implausible as “public finances are already on an unsustainable long-term path.”
However, right now the cost-of-living crisis means that this season is deadly serious. In July the retail price index hit 12.3 per cent annually, while the consumer price index reached 10.1 per cent, both driven by the rising cost of food, which has an even higher percentage impact on poorer families.
Inflation is now predicted to hit 18 per cent in 2023. Ofgem, the domestic energy regulator, is due to announce the October price cap this coming Friday, and it is expected to rise by 80 per cent, with further increases due in January, to as much as £4,650, and then in April to £5,816.
Even now, in summer, people are wondering how they are going to pay their fuel bills. As the year goes on we can expect many people to default.
Both Tory candidates have hinted, without giving details, at further cash support for struggling families, but even some bosses in the energy industry know this is not enough.
Philippe Commaret, EDF Energy UK’s managing director for customers, has said that without further support, people face a “catastrophic winter”, with more than half of households likely to be in fuel poverty.
Greg Jackson, head of retailer Octopus Energy, has called for the government to double its financial support or freeze the amount suppliers can charge for energy. “You can’t expect the energy customers, or indeed the retailers, to carry the cost of a war,” he said to the BBC. Dale Vince of Ecotricity and Bill Bullen of Utilita have echoed these comments.
Russia’s invasion of Ukraine has been blamed for the high gas prices. But actually they were already rising globally before that, due to increased demand after the end of Covid lockdowns.
The situation has been compounded by Western sanctions on Russia — a political decision in which the Tory government has been one of the driving forces.
Vince cited two other reasons fuel prices are so high in Britain. Firstly, the price of electricity is set by that of gas, even if electricity is generated renewably. Secondly, he said: “We let global commodity markets set the price that we pay for gas from our own North Sea and we are paying up to 10 times more for that right now.
“Half of the gas that Britain uses comes from our North Sea,” he added. “If we price cap that we take away half the problem.”
It would be a start if the government were to follow his advice. But without mass campaigning it is unlikely to happen because it would mean standing up to big transnational corporations.
Our privatised energy industry has become a jungle. We have competing energy retailers who in turn have to buy their gas or electricity from the big private suppliers, and then both the gas and electricity grids are in private hands.
The smaller retailers are at the mercy of the big suppliers, and it is no wonder that several retailers went bankrupt earlier this year.
Labour’s “warm homes” and six-month price cap freeze plans do not go nearly far enough. We need to return the domestic energy industries to public ownership so that bills can be affordable while we transition to renewable energy sources.
