PMQs Round-up: Energy prices, the trains debacle and the free market solution

By Fatuma Ukwaju

Andrew Mitchell’s resignation and the not-so-Olympic whiff-whaffing of the recent Energy Bill announcement, led me to believe that Ed Ball’s famous Levelling Hand would make a star appearance in PMQs today. Alas, The Hand did not get the limelight we all know it was yearning for.

As predicted, Ed Milliband started off with Energy. He wanted to know how the PM would “guarantee that everybody in the country [gets] the lowest tariffs”

The Prime Minister replied by explaining the bill would “ensure customers get the lowest tariffs….last year there were over 400 tariffs, this is completely baffling for customers….we need to go further…we need to use the law”

The only way government can directly impact on costs is through price fixing, which is completely the wrong approach. In addition to tax and inflation, our energy prices are high because 6 Major Big companies dominate our market, creating corporatist rather than capitalist prices.

On average, electricity costs 10p/ kilowatts over an hour(kwh) in the UK (http://www.energy.eu/#domestic)

In Turkey, where there are currently 34 Energy companies, electricity costs 8p/kwh.

Canada has a whopping 20 electricity companies, resulting to average electricity costs being a mere 6p/kwh http://tinyurl.com/8uyn3xk

China has over 25 companies that supply Electricity, which has lead to their electricity costs to be a mere 3p/ kwh (http://english.sz.gov.cn/ln/201205/t20120517_1914423.htm)

These are great example of how this government should tackle rising energy prices. We do have several Energy companies in the UK, however, 6 control our Market, if any government intervention, or legislation is to take place, it should be to enable smaller energy companies to enter the market, and create greater completion and choice for consumers. Unfortunately, although Ed Miliband is right to criticise the Prime Minister on this particular announcement, Ed Miliband failed to introduced these steps when he was Energy secretary in the last government and neither seem to be heading in that direction today.

Ed Miliband moved on to the Westcoast mainlines, where the problem is similar to that of energy companies, but even worse, because our rail industry has only been partially privatised, with the tracks still controlled by government. Many European Countries have completely privatised their rail system and they run far more efficiently than ours. Part privatisation has enabled Virgin to introduced faster trains. Full privatisation would only improve service for customers.

Maragret Hodge, Backbench MP, stated “Apple, Google, Facebook, Ebay and Starbucks, have between them avoided nearly £9m [of tax] – will the PM take the opportunity to condemn their behaviour, as morally wrong?”

The Prime Minister replied “[it’s] an international problem that all counties are struggling with” and that he wanted companies to pay their fair share.

If a (highly questionable) notion such as morality should come into the debate, then surely, by legislating tax so high, it is Parliamentarians who are morally wrong, as this steers investment and potential jobs away from this country.

We have developed a culture of Banker Bashing and there was a general consensus amongst the protestors on October 20th that if we punished the rich, our economy could be fixed (http://www.iansunitesite.org.uk/2012/10/len-mccluskeys-speech-at-october-20th.html) This is not true.

Instead we should celebrate success, as they do in Switzerland. Corporation tax is approximately 24% in the UK, however, In Switzerland, profits made from commodities linked to international trade, such as coffee, can be taxed as low as 5% (http://uk.reuters.com/article/2012/10/15/us-britain-starbucks-tax-idUKBRE89E0EX20121015)

The coffee that we drink in UK Starbucks, is purchased via Lausanne (Switzerland-based firm, Starbucks Coffee Trading Co). The beans are prepared in Amsterdam, where the unit has made approximately 154 million Euros annually over the past three years alone. This is vital business that Britain is missing out on. On top of that, Switzerland has a VAT rate of 8% where as in the UK its 20%! I know which country I’d rather operate production costs in.

Business creates demand in the economy by giving people jobs, and in turn money to spend on goods and services. By lowering cooperation tax (and various others), Britain will have greater opportunities, which is desperately needed in this rocky recovery; It’s simple logic, we don’t even have to bring morals into it!

Europe boiled to the surface again, first by Sir Peter Tapsell on the Euro, then by a Labour MP on Prisoner’s votes. There was a cheer in the house (and on my twitter feed) when Cameron responded to question, by declaring “prisoners would not vote in this Parliament”. It was a macho position for the PM to take, which Backbenchers loved, regrettably, we are constitutionally bound to a supranational institution, and the only sovereign move Britain could make is to leave, without such action, I expect Prisoners to be voting conveniently in the European elections.

The New Chief Whip was put on the spotlight when a Backbench Labour MP attacked both the former and new Chief Whip for going to Private schools. What he chose to ignore is that the Labour Chief Whip, Rosie Winterton, went to Ackworth School (an independent boarding school) and Danum Grammar School for Girls (http://www.guardian.co.uk/politics/person/5627/rosie-winterton).

Frankly a persons, age, religion, sexuality, class, gender or background is irrelevant, however it shows that Ed Milliband’s opposition lacks material, and have to stoop to the low level of personal rather than professional attacks, which gives more substance to BBC 2 at 9:30pm on a Saturday night, than they do in constructing any credible policy.

Generally, Cameron did not perform as well as last week, mostly through his own doing. Ed Miliband, picked up on tensions within government, and appeared confident, however, unemployment, inflation, and crime are falling under this government, which may aide Cameron in the long run.

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