Last week’s announcement about the research commissioned by the Local Government Association (LGA) on energy companies’ profits in the UK highlights not only the scandal of rising energy bills, but exposes the myth that privatisation brings benefits to the average householder. In the 1980s Mrs Thatcher’s government told us that ending state monopolies through privatisation would give consumers greater choice through competition, and the subsequent competition would result in better service and lower prices as suppliers fought for our business. The figures published last week seem to suggest otherwise. Indeed while ordinary people have seen a huge leap in domestic electricity and gas prices it seems that shareholders have been enjoying the benefits of ever bigger profits.

The LGA research shows the biggest suppliers increased their dividend payouts to shareholders by £257m last year, revealing that altogether the six biggest companies paid £1.635bn in dividends – a 19% increase on the 2006 total of £1.378bn. According to the research by consultants SQW, Centrica increased its dividend payout from £409m to £478m, EDF from £105m to £110m, RWE Npower from £37m to £250m, and Scottish and Southern Energy from £400m to £474m. My current fuel supplier (who sent me a letter about increased prices which arrived today), E.ON, paid no dividend in 2006, but paid out £240m in 2007. Scottish Power was the only one of the “big six” to cut its dividend payout with a reduction from £427m to £83m. The bumper payouts come as the average household fuel bill has soared by 42 per cent since January and it questions suppliers’ claims that they needed to maintain high prices to invest in new forms of energy for the future.

While Gordon Brown and his ministers work this week on measures to ease the pressure on families from increasing bills, it seems that the government has now decided against a one-off windfall tax on the suppliers. However the LGA wants the government to require the energy companies to finance a national home insulation programme to the tune of £500m-a-year for the next five years. “This would allow the energy firms to continue being profitable and provide the best long-term solution to cutting carbon emissions and fighting fuel poverty,” Sir Jeremy Beecham, the acting chairman of the LGA said. “There are 10 million homes in this country that still lack basic insulation. Making these properties more energy efficient would knock £2bn off fuel bills each and every year and also slash domestic household carbon emissions by a fifth. The government and Ofgem [the regulator] should seize the opportunity to take a long-term solution to encourage the energy companies to use their disproportionate dividend payments for a massive drive to insulate people’s homes.” Quite right.

Understandably there is anger at these rises especially in the climate of “inflation-busting” low annual pay awards. Public services union Unison said: ‘At a time when some people are considering whether to heat their homes or put food on the table, this is going to seem very unfair.’ Gordon Lishman, the Director General of the charity Age Concern, believes that the scale of the dividend payouts would anger elderly people struggling to pay their heating bills. He claimed: “Many of the poorest pensioners will be outraged that, whilst they are worrying about how to afford to heat their homes, energy companies continue to make significant profits and pay their shareholders increased dividends”.

The tragedy of the “selling the family silver” privatisation policies of the Thatcherite Conservative governments of the 1980s and 1990s has been compounded by the current Labour Government’s alignment with the needs of big business rather than the needs of ordinary working people. If it has any hope of obtaining a fourth General Election victory, and saving the country from the horror of the Conservatives, then Labour has to get back to its roots. Reassociate itself with the people the party was formed to represent, and fight for improving the economic and social conditions of Britain’s poorest and neediest members of society and not ritually kowtowing to big business.

[Based on reports in The Guardian, and Metro newspapers]

Despite what you might think, this isn’t a whinge about the dreadful weather we’ve been having. Although I am getting rather annoyed that Summer seems to be disappearing into perpetual rain and a need for stout garments. No the title of this blog is a play on the phrase “Winter of Discontent”, taken from Shakespeare’s Richard III but used to described the Winter of 1978-9 when Britain faced widespread strikes by Trade Unions demanding larger pay rises for their members. The actions of the Trade Union movement back then were blamed for the demise of the Labour Government in the 1979 General Election. A cruel twist seeing as the Trade Union movement actually gave birth to the Labour Party and was its primary fundraisers. Fast forward nearly thirty years and the current Labour Government is in trouble again in the polls. Now to add to its woes the Trade Unions are once again kicking up a bit of a fuss. History repeating itself?

It’s unlikely that the industrial action carried out by Local Government sector workers today and tomorrow will enter into political folklore like the disruption brought about in 1978/9. Rubbish will not pile up on the streets, the dead will not go unburried. Mrs Thatcher’s severe anti-union employment laws of the 1980s will mean that sympathetic workers cannot strike in support. However Gordon Brown can well do without this sort of irritation from his union allies if he is to turn around negative polls and win the next election. While I do not wish for a return of a Conservative government (18 consecutive years of Conservative rule is enough to put you off the bastards for life), I have little sympathy for Labour as they have brought this on themselves.

I am a member of UNISON the public sector union. The union’s 600,000 members were balloted about strike action over the recent pay offer, and the reponse was in favour of strike action if necessary. As a result I am on strike for two days this week. The employers have offered a 2.45% rise while UNISON have asked for 6%. This might seem greedy but consider this…

Mortgages up 8%
Petrol up 22%
Bread up 9%
Milk up 17%
Fuel bills up 15%
Inflation up 4.3%

But council workers are being offered a pay rise of just 2.45%. Take inflation into account and it’s a pay CUT. Coming on top of 10 years below-inflation pay rises, it’s no wonder UNISON think this is the last straw. So we are striking on 16th and 17th July, and possibly again in the future if necessary.

It’s not because we want to. Many UNISON members are low-paid, part-time women workers, struggling to pay the bills – losing two days pay for strike action is not something done lightly. We are striking because the employers won’t even consider talking to us about a better offer. We know that the services we provide are essential to our community, and that shutting them down for two days will cause disruption and we’re genuinely sorry if people are inconvenienced. We just can’t afford another pay cut.

Furthermore unless we get a fair settlement on pay, local communities will suffer too. Services will simply get worse as councils continue to lose committed staff and struggle to find new employees prepared to work for such low pay. My particular department has problems finding high calibre IT staff as it cannot compete with the private sector salaries. Short staffed the department soldiers on trying to provide the same service with fewer resources, putting extra pressure on those who remain. Local council employees empty your bins, clean your schools, conduct your marriages and civil partnerships, care for your parks, check the safety of your food and look after your children in nurseries, schools and in care. And so much more.

The Labour government is desperate to keep inflation down and to avoid an economic recession. That strategy includes keeping public sector pay rises to the minimum. While there is money for wars and bailing out failing financial institutions there is nothing for the very section of society that the Labour party was set up to represent. Get it sorted Gordon. Public services cannot be done on the cheap, quality cannot be rewarded by empty praise and thanks alone. Support a decent pay rise for low paid local government workers.