So much for the so-called virtues of the free market. The
Coalition government, desperate to maintain energy supplies at any price, has
abandoned its previous policy and will now offer nuclear generating companies
cash to build new power stations.
French-owned global energy giant EDF has demanded – and is
going to get – 40-year's worth of subsidies in what amounts to an outright
state bribe to run new plant in the UK .
The ConDems swore after the election that new nuclear
expansion would have to pay for itself. But now the government is frantic
because the dash for gas has left the UK frighteningly dependent on a
global market where a dwindling supply is meeting a growing demand.
The on-shore dash for gas opened up by the government will
allow fracking and coal-bed methane capture. Even fully exploited, however,
these deposits are small potatoes, leaving the UK reliant on ever-more expensive
gas imports.
There are new sources of gas from wholesale fracking in the US but this
won't reduce prices, only temporarily fill the gap left by giant north European
fields that are now running down.
Two of the major energy corporations have decided not to bid
for the UK 's
new nuclear plants, so EDF is the last firm standing. From that monopoly
position they are demanding "contracts for difference" that guarantee
a minimum price. If the market price falls below that, the government will pay
the balance.
So as youth centres close, and elderly and sick people die
lying in their own excrement, and months of austerity stretch into years to
appease the financial markets, EDF will be shouting "Vive l’Entente
Cordiale" as they rake in taxpayers’ money.
Alistair Buchanan, head of energy regulator Ofgem, is
warning that UK
customers face higher bills for years not as a result of subsidies for
renewables (Tory Neanderthals take note) but because of reliance on expensive
imported gas.
So what the 15 nuclear energy staff currently seconded to
government departments (according to campaign group Nuclear
Spin), are whispering in ministers' ears is something alone the lines of "come
on you might as well agree a subsidy price, because it will probably never kick
in. Prices will go on soaring for years, and we'll make a fortune, but the
guaranteed minimum will help us borrow the £16 billion we need to build the new
plants."
Now the gas plant owners are not happy. If nuclear is
getting subsidies, they are demanding the same to build new gas plants to replace
the older coal-fired stations that are closing.
And the oil industry – well that is already floating on a
sea of tax breaks. A briefing
published by Platform shows that BP's pre-tax profits tripled in 10 years
from 2001 to 2011 but its UK
tax payments stayed more or less the same. Profits went from $13.1bn in 2001 to
$39.8bn in 2011 – tax payments from £707 million to £730 million. If the
corporation tax payments had risen in line with profits that should be $2.1bn.
Shell actually paid less tax - down from £958 million in
2006 to £783 million in 2011. This despite global pre-tax profits rising from
$44.6 billion in 2006 to $55.6 billion in 2011. So profits up 25% - tax to HMRC
down 18%.
The energy market delivers nothing but a lose-lose scenario
for ordinary people. They pay ever-higher fuel bills, subsidise energy
corporation profits through their taxes, get no help to make their homes more
energy efficient, and suffer the effects of climate change and pollution. And
they watch as the nuclear industry leaves deadly waste lying around in
canisters for our grandchildren to worry about. It is, as Buchanan said, a
"car-crash of an energy policy".
Access to energy at an affordable price should be a basic
right. Profiteering corporations have all but converted that right into a
privilege, like so much else in Britain .
Lower fuel bills and a transition to a clean, green energy future demand democratic
ownership and control of the industry. That’s a goal we’ll have to achieve
ourselves.
Penny Cole
Environment editor
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