Power Companies - service providers or mafioso hoods?

Using a family death to try and demand 100% increases in monthly Direct Debits

Those of my age (late 50s, born in the mid 1960s) were brought up during an era of ‘nationalised industries’. Gas, electricity, water utilities and railways were state-owned. They may have been inefficient, sometimes they may have been incompetent, but they were run to provide a service, not to fleece consumers.

To die-hard dogmatic right wingers, nothing should be owned by Government. That is a faith, it is not a policy based on pragmatism.

To true capitalists, capitalist markets are appropriate when:

1. Genuine competition can exist between suppliers.

2. Market power of any individual provider is highly diluted.

3. Barriers to entry and exit of the market are not significant.

4. Purchasers have no a priori reason not to switch between providers if appropriate.

5. Choosing not to participate at all in the market is not a threat to life and liberty.

This is the ‘free market’ of the Small-Medium-Sized Enterprise ecosystem - and often that of the sole traders. We as consumers take advantage of such markets when purchasing services like hairdressing services, plumbing repair services, computer repair services, seed purchasing, fruit and vegetable purchases, gardening services etc etc.

The reality of the world however, is that those obsessed with ‘making money’, as opposed to providing good services, always seek to move toward private cartels/monopolies, as in such situations, sellers have much greater pricing power and barriers to entry become much, much higher. We are all aware of the global power of the Big Accounting firms (whose honesty and probity have on several occasions been called into well deserved question); that of the global pharmaceutical majors (now rapidly descending into mafia crime families); the oil majors etc etc. Whole economies can be decimated when such players deliberately introduce ‘market shocks’: my generation lived through the 1973 oil shock and the runaway inflation that it produced for near on a decade.

The biggest question that must always be debated concerns how ‘markets’ are regulated when essential services are bartered.

It is pretty much indisputable that, north of 30N, denizens of countries existing at such latitudes have little choice about their need for housing, winter heating, daily electrics/gas for cooking. These are not services you can easily choose to ‘go without’. Your choices for doing that are ‘off-grid living’; living an itinerant life without children and receiving board and lodging as part of that life; or living on the streets in a tent/in a thermally insulated bivouac bag.

As a result, the ability to ‘not participate’ in basic markets where power services are concerned is significantly, if not absolutely, constrained.

Where water is the case, things are even more extreme, as you will die within a week at most if you cannot access healthy drinking water.

It’s therefore arguable that, if gas/electricity/water services are to be provided by the private sector, then they need to be regulated to a significant degree. It’s simply unacceptable in societal terms to ‘cut off the least profitable customers’, which would indeed maximise profits for shareholders.

I have recently experienced the death of both my parents (my father in 2020, my mother in July 2023) and was brought face to face with how one UK ‘utility’ company behaves. That company had received monthly direct debits for decades from my parents, but within 2 weeks of my mother’s death, the property received a claim that ‘you are behind on payments’ and ‘we propose increasing your monthly direct debit payments from £200 a month to £400 a month’.

This made me very, very angry indeed. If there is one thing that should cause societal shunning it’s ‘don’t talk family death, talk business’. Threatening those already under stress with outrageous charge increases is mafioso behaviour at best. It’s not the behaviour of decent, honest citizens, nor is it the behaviour of any Board of Directors fit to be in post. Finally, it is not the behaviour of any private company whose major institutional shareholders take their responsibilities as societal citizens seriously.

Of course, when I took actual meter readings for the recalcitrant company in question, it turned out that, far from us being behind, we were in fact in credit.

So the entire mafioso threats were based on spurious ‘modelling data’. That’s inexcusable, it’s unacceptable and it should be incompatible with the continued employment of a whole swathe of senior managers.

Of course, what we then did was to create a ‘new account’ for the property, in the name of the executors and agreed to pay future bills ‘based on usage’ i.e. we would provide quarterly readings and they would bill us for what we used, rather than trying to rip us off through overcharging.

Of course, in a corrupt country where MPs do not give a damn about the welfare of those they fail to represent, you get the economy shut down to reward Amazon, Microsoft, Pfizer, BionTech, Blackrock, Vanguard and a few other entirely criminal organisations. The ‘regulation’ of monopoly energy companies is utterly toothless and the need of CEOs, finance directors and COOs to resign without a multimillion pound payoff is entirely absent.

A few lessons:

1. Never, ever again assume that utility companies are run by honest Board of Directors.

2. Never, ever assume that institutional shareholders care how the profits are made, assume rather that all they care about is that profits are indeed made.

3. Think very carefully about removing monthly direct debit payments as the mechanism of payment for utilities.

4. Start asking hard questions about whether such utilities should be mutually owned nationalised industries.

5. Prevent foreign ownership of national utilities, in particular make it illegal for organisations not domiciled for tax purposes in the UK to be owners of essential public utilities like water, gas, electricity.

The cycles of nationalisation, privatisation, rip-off, predatory mafia gouging and outraged response is reaching the fifth phase.

It’s not the job of the public to protect the reputations of Board Members who have sanctioned behaviour like I have described. It’s the job of the public to have them sacked and declared Not Fit and Proper people to ever hold Board Level positions again.

And it’s certainly not the job of MPs, who are paid for by taxpayers, to be fawning before multimillionaire wideboys who think they can rip off the public with impunity and never have to answer for their misdemeanours.