Credit: Houses of the Oireachtas

Surprise from RBB: Nationalise the energy sector, I say!

One of these days, we may find a problem that Richard Boyd Barrett does not propose to solve by nationalising. But today, my friends, is sadly not that day:

It is not immediately clear what benefits nationalisation would bring. The most obvious theoretical benefit would be that a state owned energy company would, possibly, be answerable to the Government directly in terms of what prices it charged: Your bills could be halved by Government decree! No more profiteering!

But of course, a company selling you a product at, say, a fiver, still has to acquire that product before it sells it to you, no matter who owns it. And if the global price for the thing you’re being sold at a fiver is twenty quid, then someone is eating – and paying for – the fifteen quid difference. In this case, that “someone” is still you, except you’re now paying for the losses through taxes rather than through your bills.

And of course, you’d also bear the cost of buying out the shareholders of the energy companies, without solving the underlying problem at all. For all that it suits populists of both stripes to pretend otherwise, there is literally nothing that the Irish Government can do in the short or medium term to reduce energy costs. The things it could possibly do would only take effect in the long run. If we were, for example, to reverse ourselves on the nuttier elements of the green agenda, and permit more drilling in Irish waters, the rewards might not be felt for a decade. The same goes for building more wind turbines, or investing in nuclear, or whatever your particular energy hobby horse might be.

But of course, “nationalise the energy sector” is not a serious proposal, and nor is it intended to be. It is, rather, intended to signal to the public that there are easy and magical solutions to their energy bills, if only the Government would take them, as Richard Boyd Barrett would. It is designed to appeal to a certain kind of desperate person who will be susceptible to the belief that the Government and policymakers are deliberately, by choice, inflicting misery on them that could be removed by the waving of a magic wand. None of this is true.

One of the downsides to being, to use the preferred phrase, a “small, open, economy” is that it means the country is particularly vulnerable to global economic winds, and has almost no ability whatever to dictate the direction of those winds. About twice a week, we get emails in to Gript from readers appealing for some kind of peace settlement in Ukraine as a way to eliminate the gas price crisis. It should not need to be said, really, that even if this country was to adopt a unified national position tomorrow in favour of resolving the war in Ukraine one way or the other, that neither Presidents Putin and Zelenskyy, nor the European Union, nor the Pentagon, would notice or care much at all. We are at the mercy of events.

And in those circumstances, in the short term, the Government is planning to do just about the very most that it can reasonably be expected to do: In a few weeks, we will getting a budget with billions of euros in direct supports to families to aid with their electricity bills. All of this money, too, though, comes from our taxes. There are no free solutions.

But it might help the country, and social cohesion, if the biggest rabble rousers amongst us stopped pretending that there were magical or easy solutions to the problem in the short term. There simply are none. Energy prices are high as a result of decades of poor policy choices, combined with the economic shock of a war in Ukraine. There is nothing that can be done to reverse that, even by the most powerful countries in the world, in the short term.

And there is certainly nothing that Richard Boyd Barrett can do, except, as usual, to stir up feelings of desperation and anger.

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