Following the Ofgem announcement raising the energy price cap, Chris Nineham looks at who's responsible for the crisis and how we fight back
The announcement that the energy cap will leap to £3,549 confirms what we already knew. Millions face a catastrophic situation in the months ahead. Typical bills will cost £2,000 more this year than last, money most households just don't have. Many simply won't be able to pay, thousands may be cut off. Meanwhile, the Prime Minister is missing and his want-to-be replacements are campaigning in some parallel universe in which the issues are tax cuts and the need for a balanced budget.
Here are five key points to understand the crisis and how we respond:
1The cost of living crisis is not an act of god
The causes of inflation include supply-chain breakdowns and labour shortages following the pandemic lay-offs. The rise in the price of oil is partly due to a lack of investment in renewable energy. But two things are absolutely key. First, massive profit-taking by big corporations. Energy and food companies have posted record profits, but profits are up right across the economy. Second is the Ukraine war. The war itself and the sanctions on Russia are major drivers of food shortages and fuel inflation. In the words of the Financial Times, ‘the grinding conflict is still casting a shadow over the global economy, keeping energy prices elevated and jeopardising the global food system’.
2Government action now could head off disaster
There are plenty of measures that could avert catastrophe. Even the energy companies are saying the cap should be frozen. Their proposal, like Keir Starmer's plan, is far too weak and involves using our money to subsidise the energy companies. Some economists are proposing a 30% bill reduction for poorer families. Much simpler would be to nationalise the energy companies and institute a tax on corporations and the rich to pay for cheap energy for all. The Resolution Foundation calls this a ‘solidarity tax’ and says it would be 'a practical solution to the reality facing families today'. Meanwhile Britain must stop pumping billions of pounds into escalating the war in Ukraine and discouraging negotiations. Instead urgent moves must be made to push for peace and end the sanctions.
3We will have to fight for a solution
Government and employers are trying to tough it out. Truss and Sunak have both rejected even the modest demands for a short term energy price cap which Truss says is 'irrelevant'. They are offering no plan B. Labour's proposals don’t go nearly far enough. Whoever wins the Tory leadership election will, however, have been elected by a tiny, privileged fraction of the population. They will be presiding over a weak, isolated and divided government. Over 70% of Tory voters support short-term nationalising of the energy companies. The rail strikes and other disputes have wide public sympathy going back to support for key workers during the pandemic, proving that there is a strong feeling that working people shouldn't be the ones who pay for the crisis.
4We have to step up the struggle
The strikes have been inspirational and action is spreading. New sections of the working class from teachers and lecturers to health workers and civil servants are balloting, barristers have called an indefinite strike and non-unionised Amazon workers have organised sit-ins at work. The bosses attacks, however, are fully backed by the government and the cost of living crisis is a society-wide issue. We need to turn this strike wave into a national movement against the government and the bosses which starts to raise the question ‘in whose interest should society be run’?
Separate, serial, one-day strikes are a great start but in themselves do not match up to the scale of the challenge. Strike action needs to be escalated and co-ordinated. United action by all the workers in dispute would electrify the situation and draw many other groups into the struggle. It would open up the possibility for rank-and-file co-operation across unions and workplaces.
Meanwhile the wider movement is needed to draw in unorganised working people and communities and link to the strikes with ambitious protests, rallies and demonstrations. This means the various different campaigning groups from the People’s Assembly to Enough is Enough need to work together to mobilise on a massive scale.
5No back to normal
The cost of living disaster is one of a series of overlapping crises. Public services, the transport system, the NHS, education, all are close to collapse as a result of underfunding and sell offs. An uncontrolled housing market is spreading homelessness and insecurity. The blind pursuit of profit is taking us to the edge of climate disaster and the great powers are turning to war to pursue economic competition. The ‘normal’ working of free market capitalism is pushing society to the point of breakdown.
As we fight for inflation-linked wages and nationalised energy, we need to develop demands across the board, on housing, on the NHS, on green energy, on cuts to the defence budget and taxes on the rich and the corporations. There is no going back. We need fundamental, irreversible change in the interests of working people, and we need to build a movement that can make it happen.
Before you go...
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Chris Nineham is a founder member of Stop the War and Counterfire, speaking regularly around the country on behalf of both. He is author of The People Versus Tony Blair and Capitalism and Class Consciousness: the ideas of Georg Lukacs.
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