Yesterday, I listened with interest to Ed Milliband’s speech at the Labour Party Conference in Brighton.
In case you’ve been outside the news bubble for the last 24 hours or so, he stated that, if the Labour Party were to get back into power after the next general election, they would enforce a price freeze on all energy companies. This would mean that gas, oil and electricity prices would be unable to rise for the average householder, by law.
The consequences of this for the general population would be huge. For so many people, the latest energy bill stands between them and homelessness. Or they have to choose between heating their house and feeding their children. Our local Foodbank (for which I volunteer) frequently sees people coming to their door because the last bill left them unable to support themselves at all.
Of course, the energy companies have immediately leapt onto the offensive, claiming that if the government were to do this, then it would soon be the case that the price of the energy they buy would exceed the price at which they were allowed to sell it, leading to mass blackouts, death and the end of the world (OK, so I made the last two up, but the tone of their responses was exactly this hysterical!)
However, what really amazed me was this. The leader of the opposition party in the House of Commons stated that, if his party get elected in two years time then they may well introduce legislation that would freeze energy prices for an unspecified time period. And what happened? The share prices of all the major energy retailers went down.
This, for me, simply highlights the total ridiculousness of our world being controlled by market fluctuations. It has been said many times that the media helped to cause the recession in 2008 because all their standard over-the-top reporting of the run on Northern Rock etc led to instability in the markets, as people panicked and started trying to get rid of their shares in all the major banks, thereby causing the value of those banks to decrease and the economy to shrink as a result.
How is it still possible, given this obvious cause and effect, that these markets still dominate our lives and economic policy so much? Surely we need some joined-up thinking here. Let’s face it, the chances of our next government being a Labour one are pretty small. Instead it seems more than likely that we will have another coalition. This makes the chances of Mr Milliband’s plans coming to fruition even more infinitesimally small. Yet, even this tiny chance has caused the energy companies to be devalued at the stock exchange.
We desperately need some coherent policy changes and regulation to stop this kind of dangerous and patently ridiculous speculation, or this cycle will continue to repeat itself far into our future.