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article imageOp-Ed: Is there a power monopoly in Britain?

By Alexander Baron     Oct 18, 2011 in Politics
The British Government is taking on the big electricity and gas suppliers. Are the companies at the mercy of global energy prices, or are they operating a cartel?
Over the past few weeks, there has been much concern in Britain over a new and disturbing phenomenon: fuel poverty. Politicians often come in for criticism over their dealings with big business, but both Prime Minister David Cameron and Energy Secretary Chris Huhne have been on the ball with this one.
Cameron in particular has been widely quoted on this subject, and earlier this week said he was determined to do all he can to bring bills down, even meeting with consumers.
Until the Thatcher Government there was a state monopoly of energy in Britain; British Gas was privatised in 1986, and electricity four years later. It was hoped this would lead to both lower prices and better service for consumers. The telephone privatisation certainly did. The General Post Office controlled both the postal and telephone systems. Although the Post Office is now a lame duck, this has been due largely to the rise of alternative communications, in particular e-mail. Conversely, the telephone arm, British Telecom, has performed extremely well including as an ISP, even though many other companies including foreign competitors have entered the market.
Energy though has been a different kettle of fish. One complaint, which Chris Huhne in particular has addressed, is the plethora of different tariffs, but the big question is are the "Big Six": British Gas, NPower, Southern Electric and others operating a cartel?
Obviously they claim they are not, that if their prices rise with suspicious unanimity, the cause is not dirty deals behind the scenes but world prices. While this argument does hold water up to a point, others have suggested Britain would be better off renationalising the energy industry, a sentiment that was naturally endorsed by the Morning Star. Drastic and unpalatable though that sentiment may be, to the Coalition Government at least, it is difficult in the present economic climate for anyone to postulate a solution that is both less drastic and more palatable.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
More about Gas, Electricity, Cartels, Monopoly, Chris huhne
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