POWER BACK to the PEOPLE

The indiscreet executive from the power company E.On, one Mark Owen-Lloyd, was only confirming what most of us already knew when he affably remarked at an Ofgem seminar that the current rip-roaring price hike for electricity and gas was fine because “it will make more money for us”.

Ministers attacked Owen-Goal with incandescent fury. Hilary Benn raged that it was “not funny”. Gordon Brown poured the full weight of prime ministerial scorn on the remark, coruscating it as “inappropriate”. Of course the post-Thatcher and –Blair Labour Party knows that the point of business is to make profits. That’s what business is for. That’s why these ministers were implicitly criticising the tone of the remark rather than the substance.

Because ‘New’ Labour wants to keep business sweet, it will not – there was never any chance that it would – impose a windfall tax on the power companies. Left-inclined backbenchers who have been ‘demanding’ such a tax are not living in the real world, on two counts. First, because they think the government still might be susceptible to arguments about social justice. Second, because a windfall tax would defeat the purpose that they intend for it. For the power companies would simply pass it on to the customers.

Gordon Brown, ever a man for a ‘package’, has come up with one supposed to alleviate the poleaxing rises in power bills. “Lag Your Loft” may not rank with “Workers of the World Unite” as a rallying cry for the proletariat but it is not an unworthy basis for a programme of action. But of course the power companies, inasmuch as they are expected to fund cavity wall and loft insulation schemes, will quickly find ways of preventing these costs from reducing the profits for their shareholders. Those of us who do not need help with insulation will surely find ourselves paying for those who do, just as we will be called upon to subsidize the bills of the 600,000 poorest customers. This is not quite the kind of redistribution of wealth that Marx and Engels had in mind.

Any government that had any kind of nodding acquaintance with Socialism would be resolving this issue in the only way that makes any sense: it would take the public utilities back into public ownership. Renationalisation need be no more fraught a process than was the original nationalisation. After all, the administration in Washington, about as far from a Socialist outfit as a government can be, has just taken into public ownership two of the biggest US businesses, the Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC), commonly known as Fannie Mae and Freddie Mac. Yes, these were failing concerns while the power companies are cash cows with the moo to fight any restraint of profit. But former utilities are in a special position, benefiting from the appearance (if not always the reality) of holding local monopolies. Private companies cannot construct a rival national grid any more than they can build their own rail network or telecommunications system.

The Tory governments of the 1980s and 1990s privatised British Airways, the British Airport Authority, British Rail, British Steel, British Telecom, the bus service, the coal industry and what remained public of British Petroleum as well as outsourcing gas, electricity and water. The Blair government accepted all this as a fait accompli, even resisting the overwhelming case made by the new rail operators’ inability to maintain a coherent service. The accepted bromide became ‘public-private partnership’ because, by leaving shareholders largely unscathed, Blair kept the support of an unprecedented proportion of business and the press.

I would venture that privatising the power companies would be the vote-winner that Gordon Brown so urgently needs. After all, only those who invested in them love the power companies and many of the companies that now own our utilities are based abroad. By taking these essentials back into public administration, Brown would demonstrate that his concern for the people’s welfare outweighs narrow party interest. And it would steal a terrific march on David Cameron.