Editorial first published in the March issue of Socialist Alternative
According to statistics from the Joseph Rowntree Foundation, many households could see more than half of their incomes go to energy bills, and with food prices also on the rise it may no longer be a question of ‘eating or heating’ as many will struggle to do either.
The crisis has also given an excuse for the hard right of the Tories, in the form of the ‘Net Zero Scrutiny Group’, to put pressure on Boris Johnson to remove green levies, used to fund renewable energy schemes. This is an attempt to tap into the feelings of many who worry about paying for soaring energy bills, but the reasons for the price increase are in reality much more complex, and go to the heart of the problems facing capitalism today. The solutions have to be more far-reaching than simply abandoning some fairly feeble levies.
A perfect storm
As usual, the ruling class is trying to explain away this crisis as ‘exceptional’. There are undoubtedly a number of factors compounding the current crisis – ranging from the effects of the more-or-less ‘natural’ disaster that is Covid, to earthquakes in the Netherlands, to the political maneuvers of Russia restricting supply, to the under-regulation of the British energy market leading to smaller providers failing en-masse. But these factors are only exacerbating underlying weaknesses already present in a system.
Energy supply and demand fluctuates widely – this is not unusual. A cold-snap will see demand soar while supply may dwindle at the whims of the leaders of oil and gas producing countries (be they Russia or OPEC) or of the elements (Dutch earthquakes aside, Europe saw an unusually un-windy year, which hit the UK especially hard with wind contributing about 20% of the country’s power). These fluctuations have traditionally been smoothed out by keeping reserves of gas, but consecutive governments have failed to maintain these supplies. Most recently, the shutdown of the Rough storage facility, off the east coast of England cut the UK’s storage capacity from 15 days of winter demand to at most five.
The myth of gas as a ‘green alternative’
While being symptomatic of the Tories’ general failure to invest in the infrastructure needed for society to function, it is also indicative of the shambles that is the plan to transition to green energy – in the UK and internationally. Natural gas has for a long time been prescribed as a ‘bridge fuel’ to help the green transition – this is little more than a way to let the fossil fuel companies keep profiteering under a green veneer. What is really needed is a fundamental change in both how we produce and consume energy.
This is of course at odds with the basic mechanics of capitalism, which is based on ever-increasing production to satisfy ever-increasing consumption – completely disconnected from what is actually needed for society to function.
Another place where vast amounts of energy could be saved is heating – about 40% of UK gas goes to heating and reducing this would not only be good for the environment but for the living costs of working class people. The scrapping of green policies by successive Tory governments has added almost £2.5bn to the UK’s energy bills. The number of homes installing cavity wall insulation fell by 97% after the Cameron government scrapped the grant scheme, and a recent study shows that the average UK home loses heat on average three times faster than German ones. But grants are an ineffective way to address this crisis – just as with the suggested ‘discount’ the government is offering to help people pay their energy bills it is still the working class that is paying for this crisis.
Who pays for the crisis?
Because it is certainly not the energy giants who pay. Both Shell and BP have recently made public their annual profits of £14.3bn and £9.5bn respectively, and are forecast to make even more this year. This is where the money from our energy bills is going, as well as the tax money that the UK government in effect pays them to extract oil and gas in the North Sea: they pay no corporation tax and claim the cost of decommissioning their rigs and platforms against their nonexistent tax bills.
A simple ‘windfall tax’ on these profits, as has been proposed by Starmer’s Labour Party, does not go nearly far enough; in order to ensure that our money doesn’t simply leak into the pockets of oil executives, and to ensure that we can actually control how the green transition happens, we need to take the energy companies into public control. The energy sector should be run in a transparent manner, under the direction of the workers themselves, with guidance from the community which rely on these services, and from research conducted outside the sphere of influence of big oil and gas. Similarly, in order to reduce the amount of energy that goes to waste in heating our houses, housing should be taken out of the hands of landlords so that a programme of mass insulation can be conducted in an effective and structured way – rather than as a means for public grants to siphoned into the pockets of landlords and construction companies as has been the case in the past.
These will be some of the first steps, but it is becoming increasingly clear that the capitalist class – and the capitalist system – is unable to provide for even the most basic of needs of society, let alone oversee the fundamental changes that will be required to avert climate disaster. Under capitalism ‘green policies’ will always be driven by the profit motive rather than any concern for humanity or the planet, and it is the working class which will have to pay for it. This runs the risk of alienating people from environmental policies and it is crucial for socialists to explain that the climate crisis is the making of capitalism, not working class people; that there are enough resources to actually increase our standard of living while decreasing the impact we have on the environment. The problem is the chaotic capitalist system, where enormous resources go towards pointless things just because it makes profits for a small minority who hoard all the wealth.
We need to fight for an end to this capitalist system, and for a socialist one – democratically run and planned for the interests of the people and the planet.