This article was first published on Labour Vision.
One of the few Conservative statements on policy since the calling of the General Election confirmed speculation that the Tory manifesto will include an energy price cap.
Essentially a variation on Ed Miliband’s price freeze, the cap will set limits on the standard variable tariffs that two-thirds of customers pay. As Miliband noted wearily, the right’s appropriation of the idea is shameless.
When the ex-Labour leader announced the freeze at the party’s 2013 conference he was accused by David Cameron of wanting to ‘live in some sort of Marxist universe’ and in need of ‘a basic lesson in economics’. The Daily Mail, which condemned Miliband’s freeze as a return to ‘the bad old days’, championed the Tory version as an overdue ’crackdown on energy rip-offs’. And The Times, which once considered any suggestion of a cap as ‘flawed in practically every detail’ now regards the proposal as a pragmatic bid for the political centre ground.
But, quite apart from the political noise, what continues to puzzle me is an energy pricing mechanism engineered to ensure loyal customers get the worst deal, and that can only be reformed by meddling with the logic that drives it. A cap on standard tariffs will prompt energy providers to protect their profit margins by increasing the price of the special offers they introduce to attract new customers, thus penalising the ‘active switchers’ the whole thing is designed to encourage.
Indeed the very premise that underpins the system is peculiar: that it is reasonable to ask customers to continually check comparative energy prices, ever ready to hop from tariff to tariff and provider to provider. Might it be that the feckless majority ‘who can’t be bothered to shop around’ actually have better things to do with their time?
Rail users are burdened with similar expectations, encouraged to relish the prospect of scrutinising the spectrum of prices offered by different providers when seeking to make a simple journey from A to B. The days when you simply showed up at the British Rail ticket office are gone: a 2014 Telegraph investigation found that customers often pay twice as much as they need because each operator’s ticketing machines and websites tend to surface only the most expensive options, obscuring cheaper deals.
It seem that changes are afoot promising that passengers will be offered the cheapest available ticket for a through journey without having to check whether it would be cheaper to buy the individual tickets for each section of the route offered by multiple operators. (Got that?) As even a spokeswoman for the Rail Delivery Group conceded:
There are more than 16 million different train fares, many of which nobody buys. This also makes it more difficult to give passengers the right, simple options on ticket machines.
Of course, if idle customers would only care to explore the world of ‘split-ticketing’ they may be able to purchase a jigsaw of tickets from multiple operators that, when pieced together, offer cheaper fares. One enterprising Newcastle United fan showed how it’s done, ending up with 56 separate tickets after using a split-ticketing website to source the least expensive option for a four hour journey to Oxford.
Accessing other privatised utilities presents similar complexities. Consider, for example, the calculations involved in posting a parcel, encompassing the technical differences between ‘letters’, ‘packets’ and ‘parcels’, and the varying criteria for size and weight used by different operators. Or think of the issues involved in navigating the fares, timetables and routes of competing bus operators.
From citizens to consumers
These and other complexities are the consequence of an unnatural determination to remodel natural utilities – energy, rail, postal, bus and others – as commercial enterprises. The common sense intuition that they might better be provided as public services offering a simple and affordable set of pricing options has been occluded by the insistence that they can only be made to work if they are re-engineered to incorporate market mechanisms. We, the users, are envisaged, and encouraged to envisage ourselves, as customers making a purchase, rather than citizens accessing a public service.
The sceptical assumption is that human cooperation can only ever operate through the medium of exchange and competition. We cannot be trusted to deliver a public utility without the spur of market incentives. The outcome is to corrode our sense of a shared investment in the quality of those services. As Tony Judt writes in his beautiful chapter on the railways in Ill Fares the Land:
If we cannot see the case for expending our collective resources on trains, it will not just be because we have all joined gated communities and no longer need anything but private cars to move around between them. It will be because we have become gated individuals who do not know how to share public space to common advantage.
Instead, we enter a world of energy tariff switching and split-ticketing websites. The marketisation of public services, we were told, would cut ’red tape’ and set users and providers free from the ‘dead hand’ of the socialist state. In fact, shoehorning them into commercial frameworks has made them much more complicated to access and administer.
Education is a particularly egregious example of a public service that has become entangled in a forest of performance metrics precisely because its value cannot be quantified.
The transactional mindset driving education reform seeks to reclassify pupils and students as ‘consumers’ and teachers as ‘providers’, and conceives of skills and knowledge as the ‘commodity’ being ‘supplied’. The quality of ‘product delivery’ is policed and quantified by inspection regimes such as OFSTED, school and college league tables, and mechanisms like the Research Excellence Framework (REF), a system for assessing the research output of academics.
The administrative machinery and intricate enforcement systems necessary to deconstruct public services and reconstruct them according to commercial logics has complicated life for both users and providers. We need to spend more time checking our energy tariffs and surfing rail price comparison websites. Pupils sit more exams. Parents fill in more application forms. Teachers and lecturers are subject to more performance reviews, inspections and self-assessments. Academics quantify their research in accorance with ever more complex frameworks.
There is indeed new flexibility, but in the field of employment rights, particularly in higher education: short term contracts have proliferated, benefits have been cut back and holiday entitlements reduced.
Democracy and imperfection
The left’s response, I suggest, should be to reassert the social democratic principle, which now appears sublime in its simplicity by comparison with the complexity of our current arrangements, that public services should be supplied by public providers subject to democratic scrutiny.
That scrutiny is vital: the complaint that state-run public services were vulnerable to capture by self-interested bureaucracies was used as justification for their deconstruction. Privatisation was the neoliberal answer to the legitimate frustrations with the accountability of public services that began to accumulate in the 1960s and 70s.
But, in the end, democracy is the only effective check on how a public service should be delivered. Marketisation, like patrician managerialism, avoids the answering the hard question of how to ensure complex public services are run in the public interest.
The attempt to create artificial market conditions denies agency both to the public who use utilities and the professionals who provide them, and gives it to the consultants who design delivery mechanisms and the corporations to which services are contracted out. Users get no say in how services are organised, only in how they are consumed: this tariff or that? this school in the OFSTED rankings or that one?
A genuinely public service can only be designed and guided through a decision-making process in which users and providers participate, a process – like any democratic mechanism – that requires commitment, compromise and delicate political negotiation. It will require public representatives with the time and energy to stand up to vested producer interests, and producers able to assert their professional expertise when necessary. The social democratic ideal of accountable public services, designed and overseen by all stakeholders, is simple to state, but hard to realise.
But it is surely better than the alternative to which the logic of ongoing public service reform points, a future in which public provision is simply handed over to the private sector, and the burden of navigating and securing the range of services that used to be provided by the state falls upon us.
Referring to the increasing complexity of navigating American insurance schemes in which ever more responsibility is delegated to individuals, Corey Robin, in a classic Jacobin article, writes:
In the neoliberal utopia, all of us are forced to spend an inordinate amount of time keeping track of each and every facet of our economic lives … our gazillion individual accounts – one for retirement, one for sickness, one for unemployment, one for the kids, and so on…
We’ve a long way to go here in the UK before we get there. But that is our direction of travel. There’s never going to be an easy way of delivering properly accountable public services. But we can make the energy and time we need to invest in getting them to work well seem worthwhile. As Robin puts it:
Cribbing from Freud, and drawing from my own anti-utopian utopianism, I think the point of socialism is to convert hysterical misery into ordinary unhappiness. God, that would be so great.
Indeed.