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A former British Prime Minister has called for the nationalization of energy utilities that cannot offer their customers lower electricity prices.
In an op-ed for The Guardian, Gordon Brown wrote that the energy cap on electricity bills needs to be removed before it is updated later this month, and energy firms’ “windfall profits and bonuses have to be properly taxed now before the money flees the country.”
The “government should pause any further increase in the cap; assess the actual costs of the energy supplies being sold to consumers by the major companies; and, after reviewing the profit margins, and examining how to make standing charges and social tariffs more progressive, negotiate separate company agreements to keep prices down,” Brown argued.
If any energy companies failed to comply with these requirements, he continued, they had to be nationalized, as a last resort, “until the crisis is over”.
A growing number of Britons are facing energy poverty as the price of electricity continues climbing. CNN reported earlier this week that annual bills could before long hit the equivalent of $5,000, or over $400 per month.
This would be a threefold increase in prices from the start of this year, which would push a third of the UK’s population into energy poverty. That’s about 10.5 million households.
Meanwhile, British energy companies are being pressured into using their windfall profits from higher electricity prices to invest in more low-carbon energy, the Financial Times reported.
Indeed, Chancellor Nadhim Zahawi threatened to level more windfall taxes on the energy sector if companies do not pour more money into wind and solar instead of using it to return cash to investors.
“The government continues to evaluate the extraordinary profits seen in certain parts of the electricity generation sector and the appropriate and proportionate steps to take,” a government spokesman said earlier this week.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.