Silence from big six energy firms is deafening

If this were a competitive market, our fuel bills would be £850 a year instead of £1,100

Patrick Collinson in The Guardian


 

UK consumers are not seeing their tariffs cut despite the fall in wholesale gas and oil prices. Photograph: Alamy


You cannot hope to bribe or twist the British journalist (goes the old quote from Humbert Wolfe) “But, seeing what the man will do unbribed, there’s no occasion to.” Much the same could be said about Britain’s energy companies. You cannot call them a cartel. But seeing what they do without actively colluding, there’s no occasion to.

Almost every day the price of oil and gas falls on global markets. But this has been met with deafening inactivity from the big six energy giants. Their standard tariffs remains stubbornly high, bar tiny cuts by British Gas last year and e.on, this week.

If this were a competitive market, which reflected the 45% fall in wholesale prices seen over the last two years, the average dual-fuel consumer in Britain would be paying £850 or so a year, rather than the £1,100 charged to most customers on standard tariffs.

But it is not a competitive market. The energy giants know that around 70% of customers rarely switch, so they can be very effectively milked through the pricey standard tariff, which is, itself, set at peculiarly similar levels across the big providers. The advent of paperless billing probably helps the companies, too, with busy householders failing to spot that they are paying way over the odds.

The gap between the standard tariffs and the low-cost tariffs is now astounding – £1,100 a year vs £775 a year. Yes, the 30% of households who regularly switch can, and do, benefit. But why must we have a business model where seven out of 10 customers lose out, while three out of 10 gain?

The vast majority would rather have an honest tariff deal where their energy company passes on reductions in wholesale prices without having to go through the rigmarole of switching.

Instead, we have a regulatory set-up which believes that the problem is that not enough of us switch. It thinks that it will be solved by getting that 30% figure up to 50% or more. Unfortunately, too, many regulators have a mindset that is almost ideologically attuned to a belief in the efficacy of markets, and the benefits of competition. If competition is not working, then they think the answer is simply more competition.

What would benefit consumers in these natural monopoly markets would be less competition and more regulation. We now have decades of evidence of how privatised former monopolies behave, and what it tells us is that they are there to benefit shareholders and bonus-seeking management, rather than customers.

In March we will hear from the Competition and Markets Authority about the results of its investigation into the energy market. Maybe it will conclude that privatisation and competition have failed, but my guess is that it won’t. The clue is in the name of the authority.

• A final word about home insurance. Last week I said every insurer is in on the game, happy to rip-off loyal customers, particularly older ones. I received a letter from a 90-year-old householder in Richmond Upon Thames, who, for 20 years has bought home and contents cover from the Ecclesiastical Insurance company.

After seeing my coverage, he nervously checked his premiums, as he had been letting them go through on direct debit for years without scrutiny.

To his delight, he discovered that Ecclesiastical had, unprompted, been cutting his insurance premiums.

One company, at least, doesn’t think it should skin an elderly customer just because it can probably get away with it. We should perhaps praise the lord there is an insurer out there with a conscience.

Is Ecclesiastical the only “ethical” insurer, or are there any others who are not “in on the game”, asks our reader from Richmond. Let me know!

Why is Apple so shifty about how it makes the iPhone?

The paragon of modern tech risks losing its shine by dodging queries about Indonesia, and an orgy of unregulated tin mining

BETA

• 
• • George Monbiot
  • The Guardian, Monday 23 September 2013 20.30 BST

‘When asked where it obtains its minerals, Apple looks arrogant, lumbering and unaccountable.' Photograph: Eduardo Barraza/Demotix/Corbis

Are you excited about the launch of Apple's new iPhones? Have you decided to get one? Do you have any idea what you're buying? If so, you are on your own. When asked where it obtains its minerals, Apple, which has done so much to persuade us that it is deft, cool and responsive, looks arrogant, lumbering and unaccountable.

The question was straightforward: does Apple buy tin from Bangka Island? The wriggling is almost comical.

Nearly half of global tin supplies are used to make solder for electronics. About 30% of the world's tin comes from Bangka and Belitung islands in Indonesia, where an orgy of unregulated mining is reducing a rich and complex system of rainforests and gardens to a post-holocaust landscape of sand and acid subsoil. Tin dredgers in the coastal waters are also wiping out the coral, the giant clams, the local fisheries, the endangered Napoleon wrasse, the mangrove forests and the beaches used by breeding turtles.

Children are employed in shocking conditions. On average, one miner dies in an accident every week. Clean water is disappearing, malaria is spreading as mosquitoes breed in abandoned workings, and small farmers are being driven from their land. Those paragons of modernity – electronics manufacturers – rely for their supplies on some distinctly old-fashioned practices.

Friends of the Earth and its Indonesian counterpart, Walhi, which have documented this catastrophe, are not calling for an end to tin-mining on Bangka and Belitung: they recognise that it supports many people who would not find work elsewhere. What they want is transparency on the part of the companies buying the tin extracted there, leading to an agreement to reduce the impacts and protect the people and the wildlife. Without transparency there's no accountability; without accountability there's no prospect of improvement.

So they approached the world's biggest smartphone manufacturers, asking whether they are using tin from Bangka. All but one of the big brands fessed up. Samsung, Philips, Nokia, Sony, BlackBerry, Motorola and LG admit to buying (or probably buying) tin from the island through intermediaries, and have pledged to help address the mess. One company refuses to talk.

Tim Cook, Apple's chief executive officer, claimed last year: "we want to be as innovative with supply responsibility as we are with our products. That's a high bar. The more transparent we are, the more it's in the public space. The more it's in the public space, the more other companies will decide to do something similar". Which would be fine, if Apple did not appear to be pursuing the opposite policy.

Mobilised by Friends of the Earth, 25,000 people have now written to the company to ask whether it is buying tin from the ecological disaster zone in Indonesia. The answer has been a resounding "we're not telling you".

I approached Apple last week, and it felt like the kind of interview you might conduct with someone selling televisions out of the back of a lorry. The director of corporate public relations refused to let me record our conversation. He insisted that it should be off the record and for background only, whereupon he told me ... nothing at all. All he would do was direct me back to the webpage I was asking him about.

This states, with baffling ambiguity, that "Bangka Island, Indonesia, is one of the world's principal tin-producing regions. Recent concerns about the illegal mining of tin from this region prompted Apple to lead a fact-finding visit to learn more." Why conduct a fact-finding visit if you're not using the island's tin? And if you are using it, why not say so? Answer comes there none.

Today I asked him a different set of questions. In a previous article, in March, I praised Apple for mapping its supply chain and discovering that it uses metals processed by 211 smelters around the world. But, in view of its farcical response to my questions about Bangka, I began to wonder how valuable that effort might be. Apple has still not named any of the companies on the list, or provided any useful information about its suppliers.

So I asked the PR director whether I could see the list, and whether it has been audited: in other words, whether there's any reason to believe that this is a step towards genuine transparency. His response? To direct me back to the same sodding webpage. Strange to relate, on reading it for the fourth time I found it just as uninformative as I had the first time.

While I was tearing out my hair over Apple's evasions, Fairphone was launching its first handset at the London Design Festival. This company, formed not just to build a genuine ethical smartphone but also to try to change the way in which supply chains and commercial strategies work, looks like everything that Apple should be but isn't. Though its first phone won't be delivered until December, it has already sold 15,000 sets: to people who want 21st-century technology without 19th-century ethics.

The Restart Project, which helps people to repair their own phones (something that Apple's products often seem designed to frustrate) was at the same show, pointing out that the most ethical phone is the one you have in your pocket, maintained to overcome its inbuilt obsolescence.

This isn't the only way in which Apple looks out of date. Last week, 59 organisations launched their campaign for a tough European law obliging companies to investigate their supply chains and publish reports on their social and environmental impacts. Why should a company be able to choose whether or not to leave its customers and shareholders in the dark? Why shouldn't we know as much about its impacts as we do about its financial position?

Until Apple answers the questions those 25,000 people have asked, until it displays the transparency that Tim Cook has promised but failed to deliver, don't buy its products. Made by a company which looks shifty, unaccountable and frankly ridiculous, they are the epitome of uncool.

Fleeing the light - Political Parties and The Right to Information Act

ARUNA ROY

NIKHIL DEY in THE HINDU

  

 

Political parties have acted as judge, jury, supplicant and advocate in their move to amend the RTI Act and exempt themselves from its purview. Their rhetoric on transparency is more hollow than ever

A friend called the other day, and said: “I want to congratulate all of you in the RTI community, because you have managed to do what no one, and nothing else has managed to for a long time: bring about unity and unanimity in the political class.” His comment, laced with irony and sarcasm was not far from the truth.

The Central Information Commission (CIC) decision to classify political parties as public authorities and bring them under the RTI Act has kicked up a storm in our democratic polity.

The reaction of the parties to the Central Information Commission order that political parties will be considered public authorities under the RTI has been poor in content and abysmal in form. It is a pity that the opportunity provided for the politician to transform into a statesman is lost in the muddle of apprehension and self-interest. For a country that is unanimous in its opinion that electoral politics and democratic governance are being perverted by the undue influence of money, and vested interests, both the content and the form of reaction are important.

Let us understand the content first. Through the one line amendment, political parties in parliament are seeking to carve out an exclusive space for themselves beyond the reach and purview of the RTI Act. While all other associations or bodies constituted by law, can come under the purview of the RTI Act, an insertion “explains” that by law, this will exclude any association of persons registered under the Representation of Peoples Act.

Here are a set of implications that arise from this quick and potentially decisive amendment: The representatives of the people, have made it clear that they do not want to be answerable to the people. By removing themselves completely from the purview of the transparency law, they are preventing any obligation they might have to directly answer any query from the citizen on any issue.

This amendment dramatically exposes the extent of doublespeak. Many politicians have shared their concern with the growing influence of money, and even political parties have expressed distress that the use of unaccounted money is completely perverting the democratic political system. While parties across the spectrum have publicly reiterated their commitment to full financial transparency, the content of this “consensual” amendment has revealed the truth. By proposing a blanket exemption for themselves from the RTI Act, it is clear that they are not willing to answer questions of the citizen on anything- even financial matters.

Credibility gap

The yawning gap between ‘statements submitted’ and real expenditure during elections is no secret. Recent statements by politicians have exposed dramatically what real election spending to "secure" a seat means. This does not end with party issues but also determines key appointments in government. Is it surprising that the citizen wants to know where the money comes from and where it goes?

This amendment would negate one of the biggest opportunities we have had to identify, and fight the misuse of money in politics. Let us not have any illusions. Fighting corruption, and corporate/commercial influence in politics is only possible with the help of the ordinary citizen. The RTI has evolved into a decentralised process that allows an ordinary person to interface at her own expense and with her constitutional legitimacy as a sovereign citizen. The multiple uses of the Act to improve government functioning are so many that they defy enumeration. Accepting applicability of the RTI is therefore seen as the one stated intent of any structure to lay itself open to scrutiny and accountability. It is the many questions that citizens will pose, in a million places across the country, that will shine the torch, search, probe, expose, audit, and actually help regulatory institutions like the income tax department, and the election commission to eventually bring about real change and political reform.

Legitimate objections

This is not to say that we do not understand the complexities of political activity, and the need to keep some internal discussions out of the public domain. We do not feel that every question that is asked by every citizen needs to be answered under this, or any other law. The technical reading of the Act by the CIC brought political parties under the purview of the RTI Act as public authorities. The technical implication of being classified a ‘public authority’ has led to many legitimate objections from party leaders. Even with the current CIC decision, the concerns could have been “technically” addressed without amending the act – even through some amendments to the rules, perhaps. After all, even the defence establishment keeps strategy and internal matters out of the public domain while subjecting itself to, and benefiting from the purview of the RTI Act.

The nature of the political response has been even more disappointing and unacceptable. When a privileged class closes ranks to impose its decision, it is “technicalities” with the inevitable fallout that will determine the outcomes. Politicians know that substantive constitutional principles override technicalities of law. That is why perhaps in this case alone they were not willing to take the risk of taking the CIC decision to court.

And now the likelihood is that they will pass this amendment in their own court without even allowing the matter to go to the Standing Committee of Parliament. Can any institution be judge, jury, supplicant, and advocate, in a matter in relation to itself? Is this interpretation of privilege constitutional? Is it ethical or logical?

Eventually, none of us want to weaken the political system, or burden it with questions that will not allow it to function. But a blanket exemption can surely not be the means to make a political system strong, transparent, and accountable. This has led to the belief that freedom in internal matters and strategy like candidate selection is only a red herring to take the attention away from the real worry of financial disclosures.

If there had to be an amendment, it was incumbent upon parliamentarians to show that the political class was going to overcome technicalities to improve the scope of the law, not curtail it. People focus on substantive issues- not the technicalities. They want parties to live up to their rhetoric of transparency, and their stated desire to fight corruption in politics. This was in fact a historic opportunity lost to the exigencies of obvious and immediate self- preservation. It could have been used to enforce greater transparency not only amongst the political class, but also to expand direct coverage of the RTI to all institutions and organisations who spend public funds. In finding the substantively correct way of broadening coverage of the RTI, the political class, would not only have created a standard for themselves, but for the whole fabric of Indian society.

That would have been a huge quantum leap towards a healthy and ethical society.

NIMBY - the death of altruism

With little but economic gloom on the horizon, David Cameron likes to appeal to Britain's better instincts, insisting: "We're all in this together." Whether the average citizen is listening to the Prime Minister's entreaties is open to doubt: Britons appear to be more selfish and less interested in the common good than ever before.

The latest British Social Attitudes report suggests that levels of altruism are falling in these straitened times. People are hostile to housebuilding in their neighbourhoods, less likely to make personal sacrifices to protect the environment and increasingly resistant to paying more for hospitals and schools.

They are also sceptical about the Government's ability to change things for the better, with a growing belief that is down to individuals to sort out their problems for themselves. Support for tax rises to boost spending on services such as health and education has fallen to 31 per cent – half of the 63 per cent of people in favour just nine years ago.

The number willing to pay higher prices to safeguard the environment, such as by buying Fair Trade goods, has fallen from 43 per cent in 2001 to 26 per cent today, while the proportion prepared to pay more tax for the same reason is down from 31 per cent to 22 per cent.

Researchers also uncovered evidence of an entrenched "not in my backyard" mentality over housebuilding, with 45 per cent of people opposing any new development near them, compared with 30 per cent in favour. Opposition is strongest in areas where property is in shortest supply – 58 per cent in outer London and 50 per cent in the South-east of England.

The survey, now in its 29th year, acknowledged that three-quarters of the public believe the income gap between rich and poor is too large. Yet only 35 per cent believe the Coalition should redistribute more to lessen the disparity.

Paradoxically, 54 per cent of the public believe jobless benefits are too high and discourage the unemployed from finding work, up from 35 per cent in 1983, the first year of the survey. And although people were concerned about child poverty levels, 63 per cent pinned some of the blame for the problem on parents who "don't want to work".

The survey, by the independent social research institute NatCen, found Britons increasingly relaxed about private healthcare. In 1999, 38 per cent said it was wrong; today the figure has fallen to 24 per cent.
45 Percentage of Britons who oppose any new development near their homes. In outer London the figure is 58 per cent.

26 Percentage of people willing to pay more for ethical goods to save the environment – down from 43 per cent 10 years ago.