The Impact of the Regulator on Pay and Conditions of Members in Utility Companies

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2013 Energy Service Group Conference
25 February 2013

Conference notes the critical role that both Ofwat and Ofgem play in regulating the privatised utilities. It also notes that despite the role of the regulator, profits within the utility businesses have increased to record levels making the owners and key executives very wealthy.

Despite the increased profits members have seen their pay and conditions attacked over a number of years. This is most evident in the pensions that members in the industry receive. Most members in the industry will have in the past received a defined benefit scheme as standard giving a degree of certainty for them when they retired. Today very few DB schemes in the industry remain open for new starters and some are now closed altogether. This is a deplorable situation which will lead to considerable insecurity for members when they approach retirement.

The difference between a defined benefit scheme and defined contribution scheme is immense. Companies make huge savings when they switch from a DB scheme to a DC scheme. This saving is actual money not paid to members and in reality reflects s a huge wage cuts for thousands.

This situation we note is being encouraged by the regulators who see attacking pension provision and wider pay and conditions as quick wins to make savings and drive down cost to energy consumers. This is clearly the preferred approach rather than tackling the profiteering by the owners.

This green light to the utility companies has not delivered any real gain to consumers as costs to them have continued to increase.

This conference calls on the Service Group Executive to:

i) Formally raise these concerns with the regulators in a robust manner. It should be made clear to them that UNISON members are not the reason why energy prices have risen so much and driven so many households into fuel poverty.

ii) Raise this issue with Energy Minister to ensure our concerns about the regulators actions are registered.

iii) Via labour Link and other appropriate channels within UNISON, raise this issue with opposition spokesperson to ensure our concerns about the regulators actions are registered.

iv) Co-ordinate our concerns with other trade unions in the utility sector to ensure that any response is as effective as it can be.