In Favour of Freedom

Neil Clark writes:

For daring to deviate from the neoliberal script on the subject of energy company profiteering, Labour leader Ed Miliband was portrayed as a sinister hardcore Marxist whose dastardly plan was to fulfil his late father's dream and transform Britain into the old Soviet Union.

According to this dominant narrative, if you want to take any meaningful action against the "big six" energy giants, and interfere with market forces, you must be some kind of unreconstructed Bolshevik – or at the very least a misguided leftie who wants to take the country back to the nightmare 1970s, the decade when the gap between rich and poor in Britain reached its lowest level in history.

However, in another European country, a political leader has been getting far tougher with profiteering energy companies than Miliband has suggested. In this country, the government has imposed a cut of over 20% in energy bills – a 10% reduction came into force in January, a further 11.1% cut will be implemented in November. It is also drafting a bill that would ban utility companies from paying dividends to shareholders. 

The aim of the government is to return natural monopolies to the public sector, to operate on a non-profit basis. "We must once and for all bring an end to the era where energy providers can ride roughshod over people," the country's leader declared.

So where is this bastion of socialism in Europe, and who is the wild-eyed leftist who is leading it? Step forward Viktor Orbán, the prime minister of Hungary. The man who has declared war on profiteering energy companies is none other than the fiercely anti-communist leader of the centre-right Fidesz party.

In a recent interview with the Daily Telegraph, Orbán talked of his admiration for Margaret Thatcher. "Her role was very important: she was always in favour of freedom, always anti-communist," he declared. Yet ironically, it's this member of the Iron Lady fan club who is carrying out policies in Hungary that would be denounced as "communist" if anyone on the left in Britain was brave enough to suggest them.

With elections due next spring, we can, of course, question Orbán's motives in moving against the energy companies. However, the very fact that his government is prepared to act highlights sharply the contrast with the inertia of the UK's Conservative-led coalition.

Fidesz contends that there were 15 price increases in gas bills during the period 2002-10, when they were in opposition, and that urgent action was essential to ensure cheaper energy bills for households and businesses. Hungarian politicians have sneered at Orbán's populist stance on energy, but the government's policies have brought relief to ordinary people and made everyday life more bearable in a country where around 20% of the household budget was going on gas bills.

It's the government's interventionist approach on energy prices that helps explain its commanding lead in the opinion polls – a recent poll showed that the governing coalition was 15% ahead of its nearest rivals and it's likely that Orbán will be returned to power in next year's general election.

Conservatives in Britain could, if they were smart, learn a lesson from Fidesz's brand of economic Gaullism, yet their commitment to market forces and the financial backing the Conservative party received from the City, means that they're likely to stay wedded to the current unpopular and discredited model. That's even when Thatcherite figures from the 80s and 90s such as Sir John Major and Peter Lilley are calling for changes.

The hysterical reaction to Miliband's extremely modest plans for a price freeze demonstrates just how out on a limb the UK is. In the genuinely democratic postwar era it would have been unthinkable that our utilities would one day be privately owned (and for a large part owned by foreign companies), and would then hit households and businesses with above-inflation rises year after year, and that the UK government would simply sit back and do nothing.

But that's where we've got to.