What is obviously true though is that in every privatised industry (Royal Mail will be the same) profits are taken out and not used to improve services or invest. In most cases prices have risen ahead of inflation while this is happening and this will continue if unchecked as quoted companies need to be seen to be growing their divis.
There is a legitimate case to be made for an amount of re-nationalisation of essential industries like energy and, in particular, railways. A Labour Govt could set up UK Energy and buy up assets that the Big 6 don't want to invest in any more. Only problem is they wouldn't have the first clue how to run it and would preside over a shambles.
Network rail record profits, fares going up constantly, one of there trees falls on the roof of my car denting it and costing me £750 and they tell me they can't cover my losses as there not liable for THEIR tree as it was a freak gust of wind that caused it. Absolute joke what is £750 out of there huge profits
Network rail record profits, fares going up constantly, one of there trees falls on the roof of my car denting it and costing me £750 and they tell me they can't cover my losses as there not liable for THEIR tree as it was a freak gust of wind that caused it. Absolute joke what is £750 out of there huge profits
The best bit for me was I said to them ok so what about if it fell on my head and killed me is that what you would tell my family it's tuff it's not your fault and the head of the claims department said yes.
As an EDF Employee myself I can tell you that this price freeze is un-realistic and it won't happen at all.
All of the Energy companies are starting to install Smart Meters which cost about £200 each. Compared to the normal meters we got in our houses the smart meters are very expensive to produce and all are targeted to install these to every household by 2020. You then have the nuclear and the useless wind farm program, new softwares are being installed, more staff are needed etc etc which is going to cost billions for this to be completed.
Ethier Ed Miliband is trying lie from his backteeth to win votes and or he is a complete idiot. Afterall, he is just another college kid with no experience of running a business so he will never get a job in the real world so what does he know?
I think Energy programme is going to turn into a huge disaster anyway, I can see blackouts soon.
I suggest you watch this video, this guy has more of an idea to sort this energy problem out that will see us producing energy significantly and reduce the energy price.
The fact that you can see blackouts, as part of the industry, suggests it needs sorting out. It is clear that market forces don't apply to these industries in the same way as they do to say Sky or Tescos so why should they have the same margins when there is less risk? If Milliband puts in place a system where x is maximum profit, y is minimum infrastucture spend and has a body with teeth to prevent unreasonable profiteering - what isn't there to like.
It would still be impossible to make a loss - but the profits would be smaller! Perfectly reasonable and doable and it doesn't make it more likely government will be deciding how much supermarkets charge for a tin of beans. As long as there is a profit - companies will do it - might not be Centrica but they will be replaced if they don't like! But I suspect less profit is better than no profit.
The recent financial crisis tells us we need a new form of capitalism - not socialism or communism - but one where markets can't always be trusted and sometimes their excesses need to be stopped when they work against the good.
Offgem costs an arm and leg but fails miserably. Energy companies don't enter into long term contracts but raise prices when global costs falling. No real competition. Same with so many industries. I could be CEO of these companies and be successful.
The one that pisses me off more than anything is Thames Water. The energy companies may be profiteering bastards, but at least you 've got the option to switch to a different one if they can do you a better deal. Thames Water has a private monopoly, rakes in the profits, has an utterly shit leakage record, and was trying to get an extra £25 added to our bills to fund their flaming "super sewer" (though I think the regulator slapped them down on that one).
Apple BTW pulls in close to 30% profit ratio on t/over. But we're all quite happy paying their prices presumably? It makes me laugh that people quite cheerfully spend the equivalent of their annual fuel bill on that essential item, a mobile phone, while wingeing about gas prices. Where's the logic in that?
I think the main point is that you can choose not to buy an iphone but you can't realistically choose not to use energy.
That as may be but how many of the people who posted above, adamant that energy companies are ripping us off, aren't paying more to their mobile provider or Sky than they do to their gas company?
Another spurious argument, to back up an ill-thought out point. As people have posted above, we're not necessarily talking about people who can afford to spunk 700 quid on an iPhone, or 20 grand on a car. We're talking about essentials that people quite simply cannot live without - and plenty of those people will be unable to afford ANY of life's luxuries. It's called 'profiteering' - and it's illegal.
Are you guys deliberately missing the point I was trying - obviously badly - to make? I'm not discussing lifestyle choices or whether people can afford a product, in this case energy. I am trying to look at it from the companies' point of view because they have choices too.
The question asked was are energy companies ripping us off? I said they were not and tried to explain that they are making a reasonable turn on vast sums of money by way of capital investment on heavy duty infrastructure. We can all agree, can't we, that this country is rapidly running out of power generation ability? And that we fairly desperately need new power stations which cost a vast amount of money over many years to build before they start making any money at all?
You are the German or French boss of a power company. You make decent money - not great but decent - from UK energy provision. The quid pro quo for operating in a heavily-regulated industry is that you have, pretty much, captive consumers and therefore a reduced risk that your consumers will not suddenly go off your product and buy something else.
Now, you run a power company and you have a decision to make. Do you risk vast sums of your shareholders' funds building new UK power generation capability or do you suggest to your shareholders/bondholders that something else would be very much more profitable? Like running a supermarket, building cars or mobile phones? Or building a power station in the much more profitable Germany? Well, if some idiot UK politician suddenly says you are not going to be allowed to charge the market rate for the product, I'd suggest that investors in European energy companies are going to find something else to do with their money. I know I would - I am not a bleeding charity bailing out the hapless and feckless UK consumer and I don't expect a German executive would see himself that way either - not if he wanted to keep his job for much longer.
Now, I don't know if this is accurate but it suggests that UK energy prices are actually pretty good value. The UK ranks 12 out of the 28 member states of the EU in average electricity prices, with the average UK household paying €0.18 per kWh in 2012 – far less than Germany, for example, where the average household paid €0.27 per kWh. The UK ranks 18 out of 25 member states with comparable data for gas prices in 2012, with the lowest prices in western Europe.
Edward Milliband might think he's the King Canute of energy price inflation but a short-term freeze is not going to work is it?
BTW, from the consumers' perspective, I believe the average energy bill per household per annum is about £1300 quid. I don't pay that on a 4-bed detached house and I'm at home all day during the winter so quite what people do with their energy is beyond me. But it is merely £3.56 a day - less than a pint of beer. I'd call that pretty good value to heat and light your property and recharge your iPhone and tablet. If people can't afford it they need help but that should surely be from the Govt by way of benefits? Which, of course it is with the £200 or £300 winter fuel payment for the elderly for example.
All Miliband should actually promise to do is reduce the per centage profit margin that the energy companies are allowed to make, which is regulated at something like 5% (look on the back your utility bill someone? It has the "breakdown" at least it does on EDF)
Apple BTW pulls in close to 30% profit ratio on t/over. But we're all quite happy paying their prices presumably? It makes me laugh that people quite cheerfully spend the equivalent of their annual fuel bill on that essential item, a mobile phone, while wingeing about gas prices. Where's the logic in that?
I think the main point is that you can choose not to buy an iphone but you can't realistically choose not to use energy.
That as may be but how many of the people who posted above, adamant that energy companies are ripping us off, aren't paying more to their mobile provider or Sky than they do to their gas company?
Another spurious argument, to back up an ill-thought out point. As people have posted above, we're not necessarily talking about people who can afford to spunk 700 quid on an iPhone, or 20 grand on a car. We're talking about essentials that people quite simply cannot live without - and plenty of those people will be unable to afford ANY of life's luxuries. It's called 'profiteering' - and it's illegal.
Are you guys deliberately missing the point I was trying - obviously badly - to make? I'm not discussing lifestyle choices or whether people can afford a product, in this case energy. I am trying to look at it from the companies' point of view because they have choices too.
The question asked was are energy companies ripping us off? I said they were not and tried to explain that they are making a reasonable turn on vast sums of money by way of capital investment on heavy duty infrastructure. We can all agree, can't we, that this country is rapidly running out of power generation ability? And that we fairly desperately need new power stations which cost a vast amount of money over many years to build before they start making any money at all?
You are the German or French boss of a power company. You make decent money - not great but decent - from UK energy provision. The quid pro quo for operating in a heavily-regulated industry is that you have, pretty much, captive consumers and therefore a reduced risk that your consumers will not suddenly go off your product and buy something else.
Now, you run a power company and you have a decision to make. Do you risk vast sums of your shareholders' funds building new UK power generation capability or do you suggest to your shareholders/bondholders that something else would be very much more profitable? Like running a supermarket, building cars or mobile phones? Or building a power station in the much more profitable Germany? Well, if some idiot UK politician suddenly says you are not going to be allowed to charge the market rate for the product, I'd suggest that investors in European energy companies are going to find something else to do with their money. I know I would - I am not a bleeding charity bailing out the hapless and feckless UK consumer and I don't expect a German executive would see himself that way either - not if he wanted to keep his job for much longer.
Now, I don't know if this is accurate but it suggests that UK energy prices are actually pretty good value. The UK ranks 12 out of the 28 member states of the EU in average electricity prices, with the average UK household paying €0.18 per kWh in 2012 – far less than Germany, for example, where the average household paid €0.27 per kWh. The UK ranks 18 out of 25 member states with comparable data for gas prices in 2012, with the lowest prices in western Europe.
Edward Milliband might think he's the King Canute of energy price inflation but a short-term freeze is not going to work is it?
BTW, from the consumers' perspective, I believe the average energy bill per household per annum is about £1300 quid. I don't pay that on a 4-bed detached house and I'm at home all day during the winter so quite what people do with their energy is beyond me. But it is merely £3.56 a day - less than a pint of beer. I'd call that pretty good value to heat and light your property and recharge your iPhone and tablet. If people can't afford it they need help but that should surely be from the Govt by way of benefits? Which, of course it is with the £200 or £300 winter fuel payment for the elderly for example.
You are completely correct. The issue with power and utilities is that these industries require vast amounts of infrastructure. Vital services that need to reach everywhere eg water electricity and to some extent rail are so expensive because of this investment. We could freeze all investment now in these major utilities and see our bills drop significantly but will eventually become defunct.
And for people who say they want things to be renationalised or say it shouldn't have been nationalised, talk sense. If there's one thing the government can't do, its procure major projects at anything vaguely sensible. Look at the Olympics, many public buildings (Scottish parliament). It just doesn't happen. At least the private sector, when it comes to these projects have an eye on cost because it effects profits. But profits are evil aren't they? If the government would bring a project in at £400m but another company would bring it in for £350m but make a profit of £50m there are plenty of people in this country who would rather the government do it just so those "rich bastards" many of whom are old people benefitting from pension funds etc don't get a payout. Cutting off your nose to spite your face.
Your bills wouldn't go down if it comes from "Victory power" or if it does, the tax bill will rocket because they will take more money than they currently do for infrastructure spending out of taxes.
I suppose that (say) £5 a day (£1825 a year), which would be a high bill, is not overmuch to pay for instant light, heat, cooking, washing machines, TV, radio, fridges, vacuum cleaners, computers and all the other gas and electric appliances that are a part of modern living. £5, the price of the expensive central London pint or nearly a packet of cigarettes.
As to nationalised utility companies, EDF is at least part owned by the French government. It makes a tidy profit .. how? .. nuclear power.
Apple BTW pulls in close to 30% profit ratio on t/over. But we're all quite happy paying their prices presumably? It makes me laugh that people quite cheerfully spend the equivalent of their annual fuel bill on that essential item, a mobile phone, while wingeing about gas prices. Where's the logic in that?
I think the main point is that you can choose not to buy an iphone but you can't realistically choose not to use energy.
That as may be but how many of the people who posted above, adamant that energy companies are ripping us off, aren't paying more to their mobile provider or Sky than they do to their gas company?
Another spurious argument, to back up an ill-thought out point. As people have posted above, we're not necessarily talking about people who can afford to spunk 700 quid on an iPhone, or 20 grand on a car. We're talking about essentials that people quite simply cannot live without - and plenty of those people will be unable to afford ANY of life's luxuries. It's called 'profiteering' - and it's illegal.
Are you guys deliberately missing the point I was trying - obviously badly - to make? I'm not discussing lifestyle choices or whether people can afford a product, in this case energy. I am trying to look at it from the companies' point of view because they have choices too.
The question asked was are energy companies ripping us off? I said they were not and tried to explain that they are making a reasonable turn on vast sums of money by way of capital investment on heavy duty infrastructure. We can all agree, can't we, that this country is rapidly running out of power generation ability? And that we fairly desperately need new power stations which cost a vast amount of money over many years to build before they start making any money at all?
You are the German or French boss of a power company. You make decent money - not great but decent - from UK energy provision. The quid pro quo for operating in a heavily-regulated industry is that you have, pretty much, captive consumers and therefore a reduced risk that your consumers will not suddenly go off your product and buy something else.
Now, you run a power company and you have a decision to make. Do you risk vast sums of your shareholders' funds building new UK power generation capability or do you suggest to your shareholders/bondholders that something else would be very much more profitable? Like running a supermarket, building cars or mobile phones? Or building a power station in the much more profitable Germany? Well, if some idiot UK politician suddenly says you are not going to be allowed to charge the market rate for the product, I'd suggest that investors in European energy companies are going to find something else to do with their money. I know I would - I am not a bleeding charity bailing out the hapless and feckless UK consumer and I don't expect a German executive would see himself that way either - not if he wanted to keep his job for much longer.
Now, I don't know if this is accurate but it suggests that UK energy prices are actually pretty good value. The UK ranks 12 out of the 28 member states of the EU in average electricity prices, with the average UK household paying €0.18 per kWh in 2012 – far less than Germany, for example, where the average household paid €0.27 per kWh. The UK ranks 18 out of 25 member states with comparable data for gas prices in 2012, with the lowest prices in western Europe.
Edward Milliband might think he's the King Canute of energy price inflation but a short-term freeze is not going to work is it?
BTW, from the consumers' perspective, I believe the average energy bill per household per annum is about £1300 quid. I don't pay that on a 4-bed detached house and I'm at home all day during the winter so quite what people do with their energy is beyond me. But it is merely £3.56 a day - less than a pint of beer. I'd call that pretty good value to heat and light your property and recharge your iPhone and tablet. If people can't afford it they need help but that should surely be from the Govt by way of benefits? Which, of course it is with the £200 or £300 winter fuel payment for the elderly for example.
Excellent and well thought out post.
ed milliband is a blithering idiot and has no relevance to positive, humane and sustainable socialism. Typical politician, says whatever sounds good today and to hell with tomorrow. No 5 year mandated authority will ever make serious inroads into a better redistribution of resources.
tories equally to blame... the state should have an interest in all pillars of society. The idea that capital is the only factor in innovation and development is outdated and continues to be preached by the capital holders themselves. I believe we will see another 5 or so readjustments over the next 50 years as emerging economies realise that their assets, namely essential resources for human existence, dont have to be priced by some little lord fauntelroy on the ftse or dow jones.
There is one barrier to a brave new world and that is the over riding human nature of greed. Without corruption, i see no reason why a more neo-communist approach to distribution cannot work. However, i realise that my hopes.are unrealistic and borne.out of idealism.
The 1% of society that makes such decisions do not care about the well being of the other 99%. and it seems that those that manage to rise to positions of power on their own merits quickly become part of the corrupted system that is free market economics in 2013. None of the free market theorists considered how wasteful the capital owners would become, or at least not to the extent we now witness.
i dont know what the solution could be but I do know that nice but dim milliband hasnt a clue.
yes to socialism. No to the champagne rhetoric spouted by new labour
i also.forgot to highlight what a brilliant image naming him as the King Canute of energy price inflation was.
like to see that as a satirical cartoon, perhaps with an attempt to roll back those tides through a hydroelectric generator.
technology can save the planet but not if its mandated by the self serving interests of the "american dream" class...wasteful consumerism as a way to happiness is not sustainable
California adopted price caps on energy costs. The result was no investment and they endured 3 years of blackouts. Its a flawed idea and will create major problems.
As for renationalisation of railways and utilities no thanks I am old enough to remember this country when it was run by the unions it was a miserable place. Not saying things are perfect now but change should be for the better. Only an idiot thinks that doing something that failed before will work second time around. And no I am not a Tory!
California adopted price caps on energy costs. The result was no investment and they endured 3 years of blackouts. Its a flawed idea and will create major problems.
As for renationalisation of railways and utilities no thanks I am old enough to remember this country when it was run by the unions it was a miserable place. Not saying things are perfect now but change should be for the better. Only an idiot thinks that doing something that failed before will work second time around. And no I am not a Tory!
The best way we can control energy prices is by being more self-sufficient, so that we don't have to rely on the volatile middle east and similar countries. We should therefore, at least be looking into the possibility of using the considerable reserves of gas and oil in our rocks by fracking. If done properly, there is no reason why it should cause too many problems.
I know that we're a much smaller country than the USA and there will be some inconvenience, but it could lower our energy bills, provide jobs and create more manufacturing in this country as we would be better able to compete with the rest of the world.
Sorry CAFCFAN utter bollocks! Because of an incompetent yet highly funded regulator, we have energy companies operating in price fixing by using complicated tariff systems which allows them to pay shareholders nearly £7bn in dividends, not to mention enormous bonuses to senior managers. This is not capitalism, this is legalised theft. OFGEM should be disbanded, senior members sacked through incompetence and a new watchdog created with set criteria and a simple brief which doesn't need to employ hundreds of people to tell us what we already know, we are being ripped off by rising prices in a falling market.
Apple BTW pulls in close to 30% profit ratio on t/over. But we're all quite happy paying their prices presumably? It makes me laugh that people quite cheerfully spend the equivalent of their annual fuel bill on that essential item, a mobile phone, while wingeing about gas prices. Where's the logic in that?
I think the main point is that you can choose not to buy an iphone but you can't realistically choose not to use energy.
That as may be but how many of the people who posted above, adamant that energy companies are ripping us off, aren't paying more to their mobile provider or Sky than they do to their gas company?
Another spurious argument, to back up an ill-thought out point. As people have posted above, we're not necessarily talking about people who can afford to spunk 700 quid on an iPhone, or 20 grand on a car. We're talking about essentials that people quite simply cannot live without - and plenty of those people will be unable to afford ANY of life's luxuries. It's called 'profiteering' - and it's illegal.
Are you guys deliberately missing the point I was trying - obviously badly - to make? I'm not discussing lifestyle choices or whether people can afford a product, in this case energy. I am trying to look at it from the companies' point of view because they have choices too.
The question asked was are energy companies ripping us off? I said they were not and tried to explain that they are making a reasonable turn on vast sums of money by way of capital investment on heavy duty infrastructure. We can all agree, can't we, that this country is rapidly running out of power generation ability? And that we fairly desperately need new power stations which cost a vast amount of money over many years to build before they start making any money at all?
You are the German or French boss of a power company. You make decent money - not great but decent - from UK energy provision. The quid pro quo for operating in a heavily-regulated industry is that you have, pretty much, captive consumers and therefore a reduced risk that your consumers will not suddenly go off your product and buy something else.
Now, you run a power company and you have a decision to make. Do you risk vast sums of your shareholders' funds building new UK power generation capability or do you suggest to your shareholders/bondholders that something else would be very much more profitable? Like running a supermarket, building cars or mobile phones? Or building a power station in the much more profitable Germany? Well, if some idiot UK politician suddenly says you are not going to be allowed to charge the market rate for the product, I'd suggest that investors in European energy companies are going to find something else to do with their money. I know I would - I am not a bleeding charity bailing out the hapless and feckless UK consumer and I don't expect a German executive would see himself that way either - not if he wanted to keep his job for much longer.
Now, I don't know if this is accurate but it suggests that UK energy prices are actually pretty good value. The UK ranks 12 out of the 28 member states of the EU in average electricity prices, with the average UK household paying €0.18 per kWh in 2012 – far less than Germany, for example, where the average household paid €0.27 per kWh. The UK ranks 18 out of 25 member states with comparable data for gas prices in 2012, with the lowest prices in western Europe.
Edward Milliband might think he's the King Canute of energy price inflation but a short-term freeze is not going to work is it?
BTW, from the consumers' perspective, I believe the average energy bill per household per annum is about £1300 quid. I don't pay that on a 4-bed detached house and I'm at home all day during the winter so quite what people do with their energy is beyond me. But it is merely £3.56 a day - less than a pint of beer. I'd call that pretty good value to heat and light your property and recharge your iPhone and tablet. If people can't afford it they need help but that should surely be from the Govt by way of benefits? Which, of course it is with the £200 or £300 winter fuel payment for the elderly for example.
Excellent and well thought out post.
ed milliband is a blithering idiot and has no relevance to positive, humane and sustainable socialism. Typical politician, says whatever sounds good today and to hell with tomorrow. No 5 year mandated authority will ever make serious inroads into a better redistribution of resources.
tories equally to blame... the state should have an interest in all pillars of society. The idea that capital is the only factor in innovation and development is outdated and continues to be preached by the capital holders themselves. I believe we will see another 5 or so readjustments over the next 50 years as emerging economies realise that their assets, namely essential resources for human existence, dont have to be priced by some little lord fauntelroy on the ftse or dow jones.
There is one barrier to a brave new world and that is the over riding human nature of greed. Without corruption, i see no reason why a more neo-communist approach to distribution cannot work. However, i realise that my hopes.are unrealistic and borne.out of idealism.
The 1% of society that makes such decisions do not care about the well being of the other 99%. and it seems that those that manage to rise to positions of power on their own merits quickly become part of the corrupted system that is free market economics in 2013. None of the free market theorists considered how wasteful the capital owners would become, or at least not to the extent we now witness.
i dont know what the solution could be but I do know that nice but dim milliband hasnt a clue.
yes to socialism. No to the champagne rhetoric spouted by new labour
I think the post is guilty of doing exactly what it is accusing others of. People have got caught up in the 20 month freeze - without looking beyond it and what Milliband is saying. The policy isn't primarily about the freeze- the freeze is the period where the Government of the day will look into the broken market and work out something that works better. Michael Gove was critical of the behavior of these companies last night on question time, and whilst he differed on what he thought should be done, he accepted the issue was a real one.
As for the profit margins being reasonable - they are broadly in line with project margins of companies that are operating in real competetive, not captive markets - how is that reasonable - they should be much lower.
And apart from the increasing bills - the fact that infrastructure is so poor is another inditement of the these companies. As part of the new fixed market - I would imagine this would be factored into the requirements.
My view is a dim person is somebody who tries to be clever - looks for the facts that make them sound clever and doesn't really look beyond the headlines. Another thing people have latched onto is that Milliband has said that the freeze would be reviewed if there was a massive spike - this is obvious common sense as Milliband doesn't want them to stop making profits - just stop ripping us off. And as long as there is a profit to be made, there will be people doing it.
I love the way politicians are criticised for not having significant substantial policies and when they come up with a big one, clever dicks try to shoot it down. Of course there is much detail that needs to come before the election but surely accept the feasibilty of theidea in the meantime!
Interesting that you managed to avoid any of the big social themes i was addressing but have instead selectively chosen certain parts to emphasis an entrenched position
guilty of hopeless idealism - yes. Guilty of hypocrisy - i dont see how
you may not agree and i welcome the discourse. Internet forum after all. The nice but dim comment was a reference to the harry enfield character, who mr miliband reminds me of when talking about social concepts
Your position is so clearly not entrenched! I'd be supportive of this policy if it was Clegg's or Cameron's! Sometimes you need what you would class as dim people - the self appointed experts always tell you why you can't do this and can't do that but the 'dim' people don't listen to them and do it!
Of course Milliband is a lot cleverer than me and I'd wager most of us.
But why did you think they had been ripping us off? What did you think Ofgem had been doing all this time? In case you and the buffoon Milliband don't know it's this: "Ofgem, as the regulator, sets price controls for the companies that operate Britain’s gas and electricity networks." They pass on those rigidly controlled tariffs to the energy suppliers who make a small turn on the deal.
Here's a few comparisons: Centrica (owners of the British Gas franchise) Turnover £23.9bn, Profit £1.4bn. A profit ratio of about 5.85% Tesco Turnover £72.4bn, Profit £3.5bn About 4.8% (But a poor year for them.) VW Turnover Euro 192bn Profit Euro 25.4 bn. About 13%.
So, if Red Ed wanted to do actually do something useful, he'd be thinking about freezing the price of new German cars not gas and electricity prices!
Let's assume Milliband The Stupid does become Prime Minister and freezes prices as promised. First. it will probably not apply to prices charged to businesses and government (both local and central) whose power costs will increase hugely. Those extra costs will be passed on to, yes that's right, consumers, who will quickly see price inflation and extra taxation eating into any savings they might make. (And heavy power users, the car manufacturers, etc might consider shifting their production elsewhere.) Second, the power companies' (currently not unreasonable) profit levels will drop (possibly disappear) and dividends to shareholders will drop. In the main, shareholders are fund mangers, so we'll all see our pension pots reduce in value. Third, Centrica (and the others) will shed some staff who will not therefore be paying tax and the Govt, will lose around a £1bn a year in corporartion tax from Centrica alone. It is, I suppose also possible that some companies will say stuff this and refuse to do business in the UK any more. Don't forget that four of the big six players are foreign companies. EDF is French, Npower and Eon are German and Scottish Power is Spanish.
Edward's scheme has disaster written all over it.
The problem with this argument is that the supermarket business is highly price competitive, and of course you don't have to buy a car let alone a VW - although if you don't you'll probably be at the mercy of the train companies and even less choice than the utilities.
You're somewhat screwed with the energy market. You have zero choice as to the network distributor, which is the only part price-controlled by Ofgem. Energy suppliers can set their own prices, and whilst in theory this should introduce a good level of competition, in reality the low ratio margins mean there is very little difference between the most suitable products - if you can work out what they are, of course, it's a very dark art indeed - and of course there is the age old suspicion that they fix the prices among themselves.
The reality of price freezes is that you and I won't benefit a great deal. Prices will rise ahead and after, and even if they didn't we're not talking big money savings here (a 6% rise on £125 per month is £7.50 per month). Makes Nick Clegg's £600 a year tax saving look a positive fortune. And of course the energy companies will reduce their tariff options, pull back on their innovation and investment budgets, and no doubt make people redundant to maintain profits.
Whilst I do think the energy companies are overegging things a little - I imagine the focus will be on the retailers rather than the network distributors - this strikes me as a media soundbite from a desperate opposition, and it has very little real substance. If this is Labour's best thinking, we're in coalition land again next election. That may be no bad thing, of course.
BTW, from the consumers' perspective, I believe the average energy bill per household per annum is about £1300 quid. I don't pay that on a 4-bed detached house and I'm at home all day during the winter so quite what people do with their energy is beyond me. But it is merely £3.56 a day - less than a pint of beer. I'd call that pretty good value to heat and light your property and recharge your iPhone and tablet. If people can't afford it they need help but that should surely be from the Govt by way of benefits? Which, of course it is with the £200 or £300 winter fuel payment for the elderly for example.
I long for the days I could get a gas supply into my property. I'm in a rural area and it's oil for me. Cost me a bleeding fortune last winter and I've yet to find a local supplier with a sensible budget plan. My semi-detached in London cost me £1500 a year, but I like to be warm and I have various computer equipment on all the time. (Must work out how much that is costing me...)
Your position is so clearly not entrenched! I'd be supportive of this policy if it was Clegg's or Cameron's! Sometimes you need what you would class as dim people - the self appointed experts always tell you why you can't do this and can't do that but the 'dim' people don't listen to them and do it!
Of course Milliband is a lot cleverer than me and I'd wager most of us.
im not calling him dim. Im saying be reminds me of the characteristics of a comedy character. Please at least read before responding muttley...where did i say my position was entrenched? I actually was referring to your summary of what i said. I completely agree with 99% of what you say otherwise... i just dont rate mr miliband as anything other than an aspirant career strategist.
Scott Adams introduced the word confusopoly in his book "The Dilbert Future". The word is a portmanteau of confusion and monopoly (or rather oligopoly), defining it as "a group of companies with similar products who intentionally confuse customers instead of competing on price". Examples of industries in which confusopolies exist (according to Adams) include telephone service, insurance, mortgage loans, banking, and financial services.
The same could quite easily describe utilities, they don't want to compete, so where they can't price fix they simply make the product so complicated customers have no idea whether an competing companies services and tariffs are better or not, nor whether they could be on a better tariff with their own provider. The confusion is only increased by limited time offers, tariffs with unnecessary complex eligibility criteria, etc. etc.
Bad policy (if implemented), good politics in my opinion. Miliband really needed something which was both populist and appealed to the party faithful and this was it.
If he did somehow get elected with a majority, there woudl be no law passed. A deal would be done with the energy companies which gave the headline price freeze sweetened with subsidies/tax breaks from the Govt for new infrastructure.
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What is obviously true though is that in every privatised industry (Royal Mail will be the same) profits are taken out and not used to improve services or invest. In most cases prices have risen ahead of inflation while this is happening and this will continue if unchecked as quoted companies need to be seen to be growing their divis.
There is a legitimate case to be made for an amount of re-nationalisation of essential industries like energy and, in particular, railways. A Labour Govt could set up UK Energy and buy up assets that the Big 6 don't want to invest in any more. Only problem is they wouldn't have the first clue how to run it and would preside over a shambles.
All of the Energy companies are starting to install Smart Meters which cost about £200 each. Compared to the normal meters we got in our houses the smart meters are very expensive to produce and all are targeted to install these to every household by 2020. You then have the nuclear and the useless wind farm program, new softwares are being installed, more staff are needed etc etc which is going to cost billions for this to be completed.
Ethier Ed Miliband is trying lie from his backteeth to win votes and or he is a complete idiot. Afterall, he is just another college kid with no experience of running a business so he will never get a job in the real world so what does he know?
I think Energy programme is going to turn into a huge disaster anyway, I can see blackouts soon.
I suggest you watch this video, this guy has more of an idea to sort this energy problem out that will see us producing energy significantly and reduce the energy price.
It would still be impossible to make a loss - but the profits would be smaller! Perfectly reasonable and doable and it doesn't make it more likely government will be deciding how much supermarkets charge for a tin of beans. As long as there is a profit - companies will do it - might not be Centrica but they will be replaced if they don't like! But I suspect less profit is better than no profit.
The recent financial crisis tells us we need a new form of capitalism - not socialism or communism - but one where markets can't always be trusted and sometimes their excesses need to be stopped when they work against the good.
I'm not discussing lifestyle choices or whether people can afford a product, in this case energy. I am trying to look at it from the companies' point of view because they have choices too.
The question asked was are energy companies ripping us off? I said they were not and tried to explain that they are making a reasonable turn on vast sums of money by way of capital investment on heavy duty infrastructure.
We can all agree, can't we, that this country is rapidly running out of power generation ability? And that we fairly desperately need new power stations which cost a vast amount of money over many years to build before they start making any money at all?
You are the German or French boss of a power company. You make decent money - not great but decent - from UK energy provision. The quid pro quo for operating in a heavily-regulated industry is that you have, pretty much, captive consumers and therefore a reduced risk that your consumers will not suddenly go off your product and buy something else.
Now, you run a power company and you have a decision to make. Do you risk vast sums of your shareholders' funds building new UK power generation capability or do you suggest to your shareholders/bondholders that something else would be very much more profitable? Like running a supermarket, building cars or mobile phones? Or building a power station in the much more profitable Germany? Well, if some idiot UK politician suddenly says you are not going to be allowed to charge the market rate for the product, I'd suggest that investors in European energy companies are going to find something else to do with their money. I know I would - I am not a bleeding charity bailing out the hapless and feckless UK consumer and I don't expect a German executive would see himself that way either - not if he wanted to keep his job for much longer.
Now, I don't know if this is accurate but it suggests that UK energy prices are actually pretty good value.
The UK ranks 12 out of the 28 member states of the EU in average electricity prices, with the average UK household paying €0.18 per kWh in 2012 – far less than Germany, for example, where the average household paid €0.27 per kWh.
The UK ranks 18 out of 25 member states with comparable data for gas prices in 2012, with the lowest prices in western Europe.
Edward Milliband might think he's the King Canute of energy price inflation but a short-term freeze is not going to work is it?
BTW, from the consumers' perspective, I believe the average energy bill per household per annum is about £1300 quid. I don't pay that on a 4-bed detached house and I'm at home all day during the winter so quite what people do with their energy is beyond me. But it is merely £3.56 a day - less than a pint of beer. I'd call that pretty good value to heat and light your property and recharge your iPhone and tablet. If people can't afford it they need help but that should surely be from the Govt by way of benefits? Which, of course it is with the £200 or £300 winter fuel payment for the elderly for example.
And for people who say they want things to be renationalised or say it shouldn't have been nationalised, talk sense. If there's one thing the government can't do, its procure major projects at anything vaguely sensible. Look at the Olympics, many public buildings (Scottish parliament). It just doesn't happen. At least the private sector, when it comes to these projects have an eye on cost because it effects profits. But profits are evil aren't they? If the government would bring a project in at £400m but another company would bring it in for £350m but make a profit of £50m there are plenty of people in this country who would rather the government do it just so those "rich bastards" many of whom are old people benefitting from pension funds etc don't get a payout. Cutting off your nose to spite your face.
Your bills wouldn't go down if it comes from "Victory power" or if it does, the tax bill will rocket because they will take more money than they currently do for infrastructure spending out of taxes.
As to nationalised utility companies, EDF is at least part owned by the French government. It makes a tidy profit .. how? .. nuclear power.
ed milliband is a blithering idiot and has no relevance to positive, humane and sustainable socialism. Typical politician, says whatever sounds good today and to hell with tomorrow. No 5 year mandated authority will ever make serious inroads into a better redistribution of resources.
tories equally to blame... the state should have an interest in all pillars of society. The idea that capital is the only factor in innovation and development is outdated and continues to be preached by the capital holders themselves. I believe we will see another 5 or so readjustments over the next 50 years as emerging economies realise that their assets, namely essential resources for human existence, dont have to be priced by some little lord fauntelroy on the ftse or dow jones.
There is one barrier to a brave new world and that is the over riding human nature of greed. Without corruption, i see no reason why a more neo-communist approach to distribution cannot work. However, i realise that my hopes.are unrealistic and borne.out of idealism.
The 1% of society that makes such decisions do not care about the well being of the other 99%. and it seems that those that manage to rise to positions of power on their own merits quickly become part of the corrupted system that is free market economics in 2013. None of the free market theorists considered how wasteful the capital owners would become, or at least not to the extent we now witness.
i dont know what the solution could be but I do know that nice but dim milliband hasnt a clue.
yes to socialism. No to the champagne rhetoric spouted by new labour
i also.forgot to highlight what a brilliant image naming him as the King Canute of energy price inflation was.
like to see that as a satirical cartoon, perhaps with an attempt to roll back those tides through a hydroelectric generator.
technology can save the planet but not if its mandated by the self serving interests of the "american dream" class...wasteful consumerism as a way to happiness is not sustainable
As for renationalisation of railways and utilities no thanks I am old enough to remember this country when it was run by the unions it was a miserable place. Not saying things are perfect now but change should be for the better. Only an idiot thinks that doing something that failed before will work second time around. And no I am not a Tory!
I know that we're a much smaller country than the USA and there will be some inconvenience, but it could lower our energy bills, provide jobs and create more manufacturing in this country as we would be better able to compete with the rest of the world.
As for the profit margins being reasonable - they are broadly in line with project margins of companies that are operating in real competetive, not captive markets - how is that reasonable - they should be much lower.
And apart from the increasing bills - the fact that infrastructure is so poor is another inditement of the these companies. As part of the new fixed market - I would imagine this would be factored into the requirements.
My view is a dim person is somebody who tries to be clever - looks for the facts that make them sound clever and doesn't really look beyond the headlines. Another thing people have latched onto is that Milliband has said that the freeze would be reviewed if there was a massive spike - this is obvious common sense as Milliband doesn't want them to stop making profits - just stop ripping us off. And as long as there is a profit to be made, there will be people doing it.
I love the way politicians are criticised for not having significant substantial policies and when they come up with a big one, clever dicks try to shoot it down. Of course there is much detail that needs to come before the election but surely accept the feasibilty of theidea in the meantime!
guilty of hopeless idealism - yes. Guilty of hypocrisy - i dont see how
you may not agree and i welcome the discourse. Internet forum after all. The nice but dim comment was a reference to the harry enfield character, who mr miliband reminds me of when talking about social concepts
Of course Milliband is a lot cleverer than me and I'd wager most of us.
You're somewhat screwed with the energy market. You have zero choice as to the network distributor, which is the only part price-controlled by Ofgem. Energy suppliers can set their own prices, and whilst in theory this should introduce a good level of competition, in reality the low ratio margins mean there is very little difference between the most suitable products - if you can work out what they are, of course, it's a very dark art indeed - and of course there is the age old suspicion that they fix the prices among themselves.
The reality of price freezes is that you and I won't benefit a great deal. Prices will rise ahead and after, and even if they didn't we're not talking big money savings here (a 6% rise on £125 per month is £7.50 per month). Makes Nick Clegg's £600 a year tax saving look a positive fortune. And of course the energy companies will reduce their tariff options, pull back on their innovation and investment budgets, and no doubt make people redundant to maintain profits.
Whilst I do think the energy companies are overegging things a little - I imagine the focus will be on the retailers rather than the network distributors - this strikes me as a media soundbite from a desperate opposition, and it has very little real substance. If this is Labour's best thinking, we're in coalition land again next election. That may be no bad thing, of course.
The same could quite easily describe utilities, they don't want to compete, so where they can't price fix they simply make the product so complicated customers have no idea whether an competing companies services and tariffs are better or not, nor whether they could be on a better tariff with their own provider. The confusion is only increased by limited time offers, tariffs with unnecessary complex eligibility criteria, etc. etc.
If he did somehow get elected with a majority, there woudl be no law passed. A deal would be done with the energy companies which gave the headline price freeze sweetened with subsidies/tax breaks from the Govt for new infrastructure.