Rising energy bills and a drop in trust has led to a situation where the majority of the UK public want to see the big six providers renationalised.
The Independent reports that 68% of respondents to a YouGov survey want to see the companies nationalised, with calls to hand control back to the government as profits spiral out of control.
Earlier this week, npower chief executive Paul Massara said that deterioration in levels of trust among the public meant that energy companies now enjoy trust on par with the likes of bankers.
Would the renationalising of the biggest providers really bring changes to the sector, though? According to the Independent, it is a debate that is splitting opinion throughout the market.
Govt ‘could not do better’
Although he admits that energy companies are currently charging the maximum that they can get away with for gas and electricity, Ovo Energy head Stephen Fitzpatrick said it is not likely the government would do a better job.
“I don’t think the government is likely to be any better at running the energy sector than private companies. If you asked people how they would feel about nationalisation if it meant higher bills and more red tape, then I don’t think they would be so keen.”
He added that in order for the energy sector to flourish moving forward, it is vital that there is a strong, private-run model.
With £110 billion needed to be invested in infrastructure in the next seven years, Fitzpatrick told the news provider that there is a need for profits to be high to keep bills from spiralling in years to come.
Ann Robinson of uSwitch agrees, saying that nationalising the energy sector would mean that there was no longer an incentive for customer service and innovation, which would be damaging to the market.
And while Labour’s Ed Miliband has been one of the main advocates of freezing energy bills, he also spoke out against renationalising the big six earlier this month, stating that it would cost the country too much to buy them back.
But with Ofgem’s latest report stating that profits made per household by the big six have risen from £30 to £53 in the last year, many customers want to see changes made in the sector.
Nationalising could negate inflated profits
According to Dr Robert Gross, director of the Centre of Energy and Technology at Imperial College London, nationalising is an option that could see bills cut.
He said the government would be able to borrow money far more easily than the big six to make the changes in infrastructure that are required moving forward, while adding that it would have the ability to “prevent any excess profits”.
Gordon Morgan, a researcher at the Jimmy Reid Foundation think tank in Scotland, backed nationalising, telling the Independent that “taking energy back into public ownership and control is vital to ensure businesses can be supplied affordable energy and thousands of customers do not die from the effects of fuel poverty”.
However, he does not want to see the big six bought by the public purse, instead insisting that the government should make all new power stations publicly owned.
One of the biggest criticisms that has faced the government recently has been the strike price it afforded to the new Hinkley C nuclear plant owner EDF, which many fear will see bills rise for 35 years.
Cameron calls for big six to freeze energy prices