Make no mistake, the ESB is being fattened up for the private sector

The Government is raising the cost of electricity to consumers as part of a scheme to privatise the ESB, writes Michael O'Reilly…

The Government is raising the cost of electricity to consumers as part of a scheme to privatise the ESB, writes Michael O'Reilly

The next time you open your ESB bill, know this: a hefty portion has nothing to do with the cost of producing electricity. It is a hidden subsidy to private-sector investors. In effect, you are paying for the eventual privatisation of the ESB.

Some prefer to blame public-enterprise workers, regardless of the facts. So let's begin with these.

The ATGWU is not demanding a special 18.5 per cent pay increase as alleged by Marc Coleman in "Pampered Public Sector is Bad for the Economy." The ATGWU has no wage claim with the ESB. The ESBOA has wage claims, but not the guys who climb the poles and produce the electricity.


Workers holding the ESB to ransom? The most recent EU figures show that Irish labour costs in the energy sector are about average, ranking ninth in the EU-15. Labour costs in the privatised British energy sector are 8 per cent higher.

The total ESB wage bill increased by less then 1.5 per cent in real terms over the last two accounting years. During that same period, prices increased by more than 24 per cent, with more increases granted this year. So where is the alleged link between wage and price increases?

A "pampered" workforce? Again, according to the EU, Irish employees work longer than almost any other European workforce in the energy sector.

In the last five years the ESB has gained more than 350,000 new customers, while the number of ESB employees has declined. That's the kind of productivity enterprises would die for.

Remember the TV advert with the soaked guy up the pole in a storm fiddling with high-voltage cables and giving light to the smiling mum and her worried child? He wasn't an actor. These are network technicians, fully skilled craft accredited workers, and their pay starts at less than €32,000 a year, or about the average industrial wage.

The illusion of a pampered, overpriced, inefficient workforce may play to some prejudices, but reality is different. So why are electricity prices going through the roof?

One reason is the cost of imported fuel, specifically oil and gas. This is a long-term process and will continue until the Government puts forward coherent and viable strategies to develop renewable and conservation technology.

But there is another big reason. It is the Government's blind determination to create so-called "competition" in the energy sector regardless of the cost to business and consumers.

This is how it works. The Government wants private-sector companies to produce electricity. But ESB prices have been historically so low that private companies can't turn a decent profit. So the Government increases energy costs - through price rises, stealth taxes and levies - to entice private operators into the market.

In other words, to create competition in the electricity market, the Government has to raise prices to "uncompetitive" levels. It is an absurd logic.

Three of the last four ESB price increases had nothing to do with economic cost of producing electricity. They were granted in pursuit of the Government's futile policy of wooing private-sector investment. That's why electricity prices are so high. But there's more.

Consumers pay an invisible "investment levy" in their electricity bills. Despite the fact that the grid is a resource of vital national importance, the Government - unlike in most other countries - does not provide the capital investment. Instead, the cost is paid through higher electricity bills.

Even the Government's own Department of Enterprise and Employment attacked this policy, stating that it "unnecessarily adds to energy costs and undermines our commercial competitiveness".

And as if energy costs weren't high enough, the Government adds on a public obligation levy (again, criticised by Enterprise and Employment) and more on to the VAT rate.

Businesses lose competitiveness and householders face higher living costs, all because of the Government's ideological obsession with privatisation.

Last January ESB tabled proposals to sell off their own power stations, the effect of which would be to undermine the company's own competitiveness. The unions opposed these proposals.

Noel Dempsey is now paying the consultancy firm Deloitte and Touche (whose expertise ranges over everything from energy to health, science, finance, agriculture and, don't forget, computer software) over €1 million to give him a report on what to do with the electricity industry. I predict the private consultants will propose the sell-off of some of the power stations to give private investors still another subsidy in this supposedly "free market".

If reforming social partnership is a euphemism for reproducing the privatising fiasco of Eircom, which resulted in a degraded communications network, or the attack on wages and conditions in Irish Ferries, then we will end up damaging our competitiveness while lowering living standards. This "reform" of social partnership, in effect, means no social partnership at all.

The ATGWU and the trade union movement oppose the privatisation of a successful, efficient and competitive ESB and price increases, stealth taxes and levies that have nothing to do with the cost of producing energy.

Rather than selling off a successful, efficient and competitive public enterprise we will need to harness the skills, productivity and experience of the ESB workforce to make the necessary transition to renewable and conservation technologies while maintaining competitive prices.

Michael O'Reilly is regional secretary of the Amalgamated Transport and General Workers' Union