Peter Kellner: Are the energy companies in the wrong?

The arbiters of popular culture would surely have been unsurprised by the recent furore over gas and electricity prices. A thousand films and TV series make heroes out of doctors and detectives, spies and soldiers, even, occasionally, politicians (thank you, West Wing); but the most prominent fictional boss of an energy company is the greedy, uncaring Mr Burns in The Simpsons.

This month’s YouGov poll for Prospect suggests that Britain’s big gas and electricity companies are not merely unpopular—we knew that already—but that their reputation may be harming the prospects for a sensible long-term energy strategy for Britain.

We started by summing up the recent debate about this winter’s jump in energy prices. Britain’s major energy companies are raising the price of gas and electricity this winter by 8-10 per cent. They say that their prices are determined by (a) general energy prices in world markets over which they have no control, (b) “green” rules and levies imposed by successive governments to reduce carbon emissions and (c) the need to find money to invest in future power supplies and avoid blackouts in years to come. Critics of the companies say that the real reason they are putting up prices is to protect excessive profits, and that they could well afford to keep prices down and still buy energy on world markets, meet their “green” obligations and invest in future energy.

A clear majority sides totally with the critics. A mere 3 per cent think the companies are right, while 30 per cent think the companies have a case but are raising prices more than they need to. However, the next question shows that most people are reacting against the storytellers rather than the three elements of their story. We asked respondents to imagine that our energy was supplied by not-for-profit companies owned by their customers. In those circumstances, big majorities recognise that our gas and electricity prices would need to reflect world energy prices, include “green levies” and generate money for investment—and even add more to our energy bills in order to limit our reliance on imports in the long term.

The figures relating to green levies are particularly striking. All else being equal, people would prefer cheaper energy bills. But there is a broad consensus that embraces young and old, men and women, north and south, rich and poor, that such levies would be justified if they were part of a long-term plan operated by companies they respected. This is a specific example of the wider point, that our horror at the bills we will face this winter flows from our perception of corporate greed more than price rises per se.

If energy companies have a story/storyteller problem, so does Ed Miliband. His plan to freeze energy prices has captured the public imagination and set the post-party conference political agenda. Yet, while two-thirds of voters regard a freeze as a good idea, most people who like it in principle think it “risky in practice given the volatility of energy prices in world markets.”

When we add together those who regard the idea as nice-but-risky (36 per cent of the total electorate) and those who think government price controls a bad idea (24 per cent), then six out of 10 voters are sceptics. If Miliband is to win the next election, he must convince more voters not only that his policies are attractive but that he knows how to make them work. Above all, this means persuading many more people that he is up to the job of Prime Minister.

Voters are less sceptical about the other main energy announcement of recent weeks: the government’s decision to allow a new nuclear power station to be built at Hinkley. Our poll suggests that public concern about nuclear power has largely evaporated. While wind farms at sea are the most popular form of new power generation, nuclear power comes second, with supporters outnumbering opponents by more than two-to-one. Nuclear power now comfortably exceed coal- and gas-fired power stations in popularity.

This may be an example where large numbers of voters have taken their cue from a clear shift in sentiment among MPs. Not long ago, Liberal Democrats opposed nuclear power, Labour was cool towards it and many Conservatives fretted over the likely cost to the taxpayer. Today, the parties back them in principle, and so do their supporters. Net support figures are plus 56 among Conservatives, and plus 21 among Labour and Liberal Democrat supporters.

However, the government’s insistence that British taxpayers should not foot the bill for the new nuclear power station led to a separate controversy about the nature of the consortium. It is being led by EDF, a French state-owned company; the consortium includes two Chinese companies.

Voters are relaxed about EDF; 57 per cent either support its role or don’t mind; just 25 per cent are against. Opinions are more divided about the involvement of Chinese companies. Forty-seven per cent approve or don’t mind, while 37 per cent are opposed. However, were the two Chinese companies to end up as majority shareholders, which could happen under the current plan, then voters say they would be unhappy, with 55 per cent opposed, and just 30 per cent supporting the idea or not minding.

Too bad: it seems likely that Chinese investment will play an increasing role in funding big new infrastructure projects in Britain, so we may have to learn to live with it.