Could Energy Prices be Linked to the Average Wage?

Could Energy Prices be Linked to the Average Wage?

The Tory reaction to Labour’s proposed freeze on energy prices has been remarkably hostile. Bills are rising, cases of hypothermia are growing and preventable deaths are increasing. If the debate starts here, the price freeze looks entirely reasonable. But, according to David Cameron, it isn’t reasonable, it’s “a con” and Ed Miliband is “a conman.” They are the words of a frightened leader losing control of the political agenda.

Given the circumstances, the word “con” seems like a very strong condemnation of a plan that might save a few lives. However, the energy market is notoriously volatile. Most of what we burn is finite and we are still using it at a wholly unsuitable level. The value is determined by complicated and unpredictable geo-political and economic trends outside of anybodies control. So to simply freeze prices would be very difficult, but it should represent the start of change and investment in our energy infrastructure. But if the alternative is a freezing grandmother, something drastic must be done. There are awkward implications and a strong chance of some economic blowback but this is true of almost every ambitious political idea, so why has the reaction been so hysterical?

As we all know, the word ‘con’ could be applied very liberally in Westminster. In 2010 tuition fees were trebled, last week the student loan book was privatised and somebody somewhere stands to make a massive profit from a toxic legacy of student debt and compromised ambition. In October, Royal Mail was floated against the judgment of the general public, postal workers and even Tory party members. The share price was undervalued following ‘independent advise’ from Goldman Sachs, the bank’s clients quickly made millions as the value of shares bolted, all at the expense of the taxpayer. The government even gambled our economic safety for the sake of few extra votes with the ‘help to buy scheme’ as if everything that happened before, after and during September 2008 was some kind of science fiction fantasy plot from a Douglas Adams novel.

A con is when deception is used for personal gain. In Tory politics, the definition of a con is any popular political initiative that might slow the movement of capital from the general population to the top 1% while every other political effort is undertaken to speed this up.

The problem with the labour plan is that it leaves all the attention on the energy market, which, for all its gluttony and dysfunction is not the primary driver of inequality and lower standards of living. As humans pillage the planet of resources, the prices of fossil fuel will inevitably increase and there is nothing we can do about it. The dark heart of our falling living standards, as many in the labour party already know, is the scourge of low wages and as long as they are allowed to fester, the alleged economic recovery will remain captive in the gardens of the upper middle classes.

The days when a full time job granted you immunity from poverty are over. Meanwhile, all over the world, a small elite are drowning in useless profits. In America, six unproductive heirs to the Walmart fortune (of whom Asda is a lucrative subsidiary) have more wealth then the bottom 30% of American citizens. Make no mistake, there is more then enough excess capital in the (on and off-shore) bank accounts of the wealthy to, if properly used, make work worth while for everybody.

Here, socially responsible politicians must shift the focus to where it really matters. One idea could be to use policy to highlight the relationship between wages and the price of living. Higher prices on energy bills, food, rent and transport make your salary shrink in real terms but they are rarely considered in tandem. What if, instead of simply freezing energy bills, they were locked to rise no faster than the average wage? The plan isn’t much easier and the impact on the consumer would be similar, but the debate would be right where it belongs.

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