The market is broken

22nd October, 2013 9:11 am

Britain is currently in the throes of an energy crisis. The decision by British Gas and N Power to dramatically hike their prices will only increase the number of families choosing between heating and eating this winter. Last year the Independent estimated that 7,200 people in England and Wales died from not living in warm homes. The government’s advice so far has been for people to wear more jumpers.

Ed Miliband, on the other hand, is promising to freeze energy prices. It’s a policy that’s earned him the opprobrium of the Daily Mail and energy companies, which reacted by threatening black outs. I’m not surprised: the consensus that markets must be trusted and cannot be tampered with has remained unquestioned for thirty years. Even mild deviations from that consensus, such as Miliband’s, are met with fury from the establishment.

The public, however, have responded with approval. I don’t think it’s a coincidence that Ed has enjoyed a healthy bounce in the polls since he accused energy companies of ripping off customers. The public get something that the government doesn’t: the energy market is broken and it’ll take more than jumpers to fix it. Unlike David Cameron, who likes to accuse anyone who questions market dogma of communism, most people don’t see things in ideological terms. They just recognise that when something is broken, it needs to be fixed. The market is broken: a body, which isn’t the market, needs to fix it. People can remember as far back as 2008. They know what happens when you leave big companies to regulate themselves.

But what I’m wondering is: if the Labour Party is willing to intervene when it comes to energy prices, why stop there? On the same day as British Gas announced its price hike, property firm LSL released research showing that rents have soared to record levels. It seems bizarre that Labour is willing to regulate people’s heating bills, but not the cost of the homes that are getting heated. What good is cheap energy to someone who can’t afford a house to heat? Or for that matter – when they can’t afford to travel to work?

On 2nd November, the Centre for Labour and Social Studies (CLASS) is having its first policy conference. There, I hope there will be a consensus that the market cannot be trusted to provide us with basic necessities, and that the Labour Party must go further with its promises to intervene in the markets to keep costs down. We simply cannot afford for the government not to intervene, when so many working people can’t afford transport, rent and heat. This week Alan Milburn said that work is no longer a route out of poverty. That’s partly because of a decline in wages (a scandal which frankly deserves its own article), but it’s also because simply living is just too expensive for thousands of British people. When a government stands by as companies put people into poverty, you have to ask yourself: who does it really represent?

Millions of people in this country are working day and night to provide for their families. The very least those people can expect is to be able to pay their rent, heat their homes and travel to work without being destitute. The very least they can expect from a government they elected is intervention when private companies make destitution inevitable. At CLASS’s conference I will be making the argument that Labour should not be afraid to step in when the living standards of ordinary people are being trampled on – not just in terms of energy, but for a whole raft of basic necessities. If we want to improve living standards, we know we can’t rely on the free market to do it. So it’s up to the government. As David Cameron might say; there is no alternative.

Len McCluskey is the General Secretary of Unite. 

The Centre for Labour and Social Studies is having its first conference at TUC Congress House on Saturday 2 November. You can find out more about the conference and purchase tickets here

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  • Lewis Coyne

    Len talks sense, yet again, about issues which normal people face.

    That’s precisely why the Right constantly try to drive a wedge between Labour and Unite – they know what some in the Labour leadership apparently cannot see: that the unions are Labour’s greatest asset. Hence why the Tories, the Liberals, the Right-wing press, and even – shamefully – the Cleggites now running the Guardian, are all desperate to see Ed cut the union link. Without it, the party will lose not only millions in funding, but millions of supporters, as the leadership will become devoid of what little sense of reality it has.

    It’s time Ed realised as much. He was bounced into making an appaling decision to cut the link over the Falkirk ‘scandal’, which turned out – surprise, surprise – to be nothing of the sort. Ed – defy the Right: apologise to Unite, quietly shelve the ‘reforms’, and let’s all move on. We need to win in 2015, together.

    • treborc1

      Believe me if the Unions said tomorrow the political levy will be paid in full to the Labour party, the labour party would have no more to say, it seems like the Unions are going to give in on this. Now the issue is of course how many people will want to opt in or opt out of this tax on being a Union member.

      This has been been an ongoing war zone since the GMB said the levy would be used by the Union for other political issues.

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  • Sheila

    Well said, Len. Keep on urging Ed to do the right thing for us all!

  • MrSauce

    Unite should really take charge of Grangemouth.
    Just put in an offer to the liquidators and it is yours.

    • seebee

      This is not a new dabate about Labour and the Unions. Funding for the Labour party has been an old chestnut since Thatcher wanted T.U. Members to ‘opt in’ ‘rather than opt out of thPolital levy/ penny – whatever.
      Let’s have a debate organised by TUC Members about where we go from here. Let’s have it soon – before the next Election campaign kicks off proper.


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