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Here’s something many people may have missed: German energy company E.On has cut its standard gas tariff in response to “mounting political pressure”, according to the Telegraph.
Don’t get too excited – the 3.5 per cent reduction is less than one-eighth of the 27 per cent drop in wholesale gas prices over the last 12 months, but it does mean that around two million customers will save £24 on their gas bills if the reduction stays in place for a year. That’s equivalent to two weeks’ worth of usage.
E.On will lose £48 million of what it would have had if it had kept the tariff at its previous level – but if prices stay the same, it will gain £322,285,710 in comparison with its profits before the wholesale price dropped.
In any case, E.On has a lower tariff with an annual bill of £923, more than £200 less than the £1,145 post-cut cost of its standard rate.
So it seems Labour was right to call the cut “pretty measly”.
Some commentators have tried to claim that E.On’s move will signal a price-cutting war between the so-called ‘Big Six’ suppliers, but nearly a week has gone by with no further announcements.
The day after E.On cut prices, a Labour motion for regulator Ofgem to force energy companies to pass on the benefits of wholesale price cuts to their customers was defeated when the Tories and Liberal Democrats voted to support the energy companies rather than their constituents.
Despite voting against a move that would make it compulsory, Tories have hypocritically called on energy firms to pass on such savings willingly, and George Osborne has asked fuel companies to do the same with the prices of petrol and diesel.
There’s one more thing to say about this. Take note of the fact that E.On is a German company. This is what happens when you allow rampant privatisation of national utilities like gas and electricity – foreign companies get a chance to take those utilities away and run them for their profit, rather than for the good of the country.
E.On will make more than £300 million in profit from UK citizens, even after cutting its prices – and that’s on top of the profit it was already making before wholesale prices dropped.
Foreign firms own our energy companies and water suppliers. Foreign healthcare firms now have their claws firmly embedded in the English National Health Service. Hedge funds now own a large part of the Royal Mail as a result of Vince Cable’s botched sham of a sale last year. Who knows what will happen to the UK’s share of Eurostar, if the Coalition succeeds in selling that off before the election?
These travesties were all made possible because the public allowed the Conservative Party into government, giving its members an opportunity to strip the country of any assets that had value.
We must not make that mistake again.
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