THE chief executive of E.ON UK, one of the “Big Six” British energy firms, told Tory conference it was “imperative” the government step in this winter because people are “struggling to pay” for heating as “a section of our customers cannot pay their energy bill.” 

A UK director of EDF also told the same fringe meeting the government had to act as people are “struggling.”

It was a grim message, delivered to Treasury Minister Gareth Davies at a fringe meeting of the Thatcherite Centre for Policy Studies (CPS). 

Davies, the CPS and 70-strong audience seemed confused: the Thatcherite approach of asking big business to take charge was breaking down as the representatives of big business argued the government needed to step in because the crisis was too big for them.

The CPS got E.ON and EDF to fund and address its fringe meeting, optimistically titled How Do We Make Energy Cheaper? The firms responded with a gloomy message.

E.ON UK chief executive Chris Norbury said: “This winter we have people in society who are really struggling to pay.”

He explained that the company’s “debt book” shows “people’s resources are exhausted” and “a section of our customers cannot pay their energy bills.” His firm has “one hundred thousand customers who have paid nothing this year.” Norbury argued it is “imperative for government to do more this year.”

Phillipe Commaret, the UK customer managing director of EDF, was equally clear. He said energy suppliers “have got to have a segmented approach to prices,” especially “for people who are struggling.” EDF is “calling for the government to act.”

Commaret proposed two solutions. The “introduction of a social tariff” — special low prices for the poorest customers — and increased “energy efficiency.”

E.ON’s Norbury agreed. On energy efficiency, he said Britain “has some of the worst-quality housing stock in Europe” so “we need a programme of home insulation, to help those struggling with bills” and to “insulate society and insulate the Treasury from future shocks.”

While insulation is a mid-term strategy, social tariffs are needed right now.

These big corporations are asking government for action — but who should pay? EDF and E.ON were very clear — their customers needed lower prices, but the government should pay.

Norbury said: “We don’t believe it should be funded through energy bills” — meaning funding a social tariff for the poorest by higher bills for the rest because “we think that is regressive.” Instead, Norbury said the social tariff “should be funded through general taxation.” Commaret also said social tariffs should be funded by general taxation.

Both firms’ representatives argued that the answer to this deep crisis is the taxpayer should bail out poor customers — which also means bailing their firms out. 

At the very most a social tariff should be “co-funded” by the state and energy firms, according to Norbury, as is in some European nations.

The firms see their customers in crisis, but aren’t willing either to sacrifice profit or cut off their poorest customers, so demand a government bailout.

Minister Gareth Davies seemed frozen like a rabbit in the headlights from this corporate lobbying. Davies said the government had stood by “the most vulnerable in society,” showing that “when there’s a shock in the system the government’s got your back,” and that it had already paid out £40 billion in energy bill support, “effectively paying half of people’s energy bills,” but that there could be “no blank cheque” now, so proposed nothing at all for this winter beyond existing support.

The Thatcherite CPS representative struggled for a market solution, “dynamic pricing,” like perhaps prices that changed price every half an hour so people could try find cheaper electricity — but admitted customers were “disengaged” from the existing market and didn’t really switch that much.

Energy firms are saying the market doesn’t work and are demanding a bailout. It does not compute for free-marketeers who think the market solves everything. This pro-big business Tory fringe meeting was left confused that big business was demanding government action. 

With Covid, the oil price shock and inflation crisis, we have seen big corporations demand bailouts. The government, fixated on deregulation and cuts and expecting the market to work it out, has been blindsided, first resisting support, then throwing out big sums in a panic. These big market failures have left the Tories confused, groping for “culture war” themes to cover up their economic failure.

It’s an opportunity for Labour, but also presents a danger — there is every chance Labour will step in and back corporate bailouts more swiftly and surely than the Conservatives. 

But there is also a danger that it won’t get the cash back via redistribution. It won’t tax big corporations to fund these bailouts. It’s a danger that Labour will let crisis-hit corporations nationalise their problems, while keeping their profits private.  

Labour and Zilch

ZILCH, The “buy now pay later” firm that paid for the Tories to party at their conference, will also be paying for one of the official Labour Party receptions.

Zilch are one of the firms offering short-term credit-free purchases. Download its app, buy goods with it and it won’t charge you interest if you pay off in six weeks. 

After that, interest piles up. Buy-now-pay-later businesses like Zilch and Klarna are accused of encouraging people into unaffordable debt. Zilch was notably criticised for offering free credit on buying takeways and groceries.

Zilch paid for the “FinTech” reception at Tory conference, where delegates could party with Business Minister Paul Scully, Tory MP Bim Afolami, and Zilch boss Philip Belamant.  

The London Labour Party has also invited Labour delegates to its Liverpool reception on Saturday, saying: “This year we are pleased to be supported by our fantastic sponsors, Zilch.”

Thanks to Zilch, delegates will drink and “hear speeches from a host of leading Labour figures from across London and beyond.” 

The government is currently considering tightening regulations on buy-now-pay-later, hence the shmoozing.

Zilch is represented by lobbyists Hawthorn Advisers, a heavily Tory firm, that has been trying to increase its Labour influence by hiring people like shadow minister Pat McFadden’s former assistant. Hawthorn may well have brokered both these conference gigs.