UK energy company seeks funds to stay afloat

Image thanks to Your Money

There is something wrong with the UK energy market. Wholesale prices of gas and electricity are rising leaving those companies which have many customers on fixed tariffs selling energy at a loss. Reserves of cash, just like reserves of gas, are running low and many companies are threatening the prospect of bankruptcy.

Such things happen all the time in business. Companies start, companies grow and companies fail. There is something different about energy provision however. It is one of those products that people cannot live without (at least in the modern sense of the word live). Energy supply is of national importance and cannot be allowed to be put in jeopardy. 

I believe in the private sector, indeed I work in it, yet only to a point. There are some things that are so important to the running of a nation that they cannot be left to the vagaries of the market. This is not a profit before people issue but rather the ability to think in terms of national requirements. Such things are not the responsibility of the private sector but are the responsibility of the government. 

The liberalisation of the energy provision sector has gone too far, with too many companies trying to differentiate themselves, pushing prices down and seemingly with nobody keeping an eye on the global picture. The repeated shocks of the last few years have caused disruption that is severely testing supply.

The affected companies are clamouring for money. The government is being asked to step in and so it must, eventually. Yet if a company cannot be allowed to fail and requires public money to keep it afloat then it should be in the public sector.

There are products and services that cannot be allowed to fail, products and services that can and a grey area in between. Those in the first category should be in public ownership and those in the second should be in private ownership. The last category we can argue over.

The problems with the energy supply sector are not the fault of the private sector but the problem of the government and its neoliberal ideologies.

Please switch the light off on your way out.

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