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Is it time to re-nationalise energy firms?
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# 1
MSE Debs
Old 29-10-2012, 5:56 PM
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Default Is it time to re-nationalise energy firms?

Poll started 30 Oct 2012
Five of the big six have now announced price hikes. The average bill will hit £1,390/year, but if you switch provider the cheapest’s just £1,054.

Until 1986, energy firms were Govt-owned, then privatised into companies with shareholders to try to boost competition and bring efficiencies. World energy prices have gone up enormously and demands for green investment add to costs, though many are angry at rising household bills.

Which of the options in this week's poll is nearest to your view?







Did you vote? Why did you pick that option? Are you surprised at the results so far? Have your say below. To see the results from last time, click this

Last edited by MSE Debs; 30-10-2012 at 11:30 AM.
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# 2
Coveredinbees!!!!
Old 30-10-2012, 11:29 AM
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and the buses, railways and water.

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# 3
stevemcol
Old 30-10-2012, 11:30 AM
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I know it sounds old fashioned but unless anyone can think of a way of causing the companies to actively compete with each other then re-nationalisation is the only way forward.

Price regulation could have uninteded consequencies (would probably increase the costs of some tariffs).

Perhaps if companies had to offer shorter term contracts that actually terminated at the end of a fixed term and had to be positively renewed or switched by the consumer that might make the market more competitive?

Last edited by stevemcol; 30-10-2012 at 11:32 AM.
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# 4
Squirrel2000
Old 30-10-2012, 11:37 AM
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We do not need to re- nationalise, we need more transparency and better standards so that the market economy can work correctly. Tariff structures are so obscure and complicated that it is difficult without a phd in Maths to fathom the best deal. If we can sort this out, customers will vote with their feet and competition between companies will operate more effectively.
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# 5
stevemcol
Old 30-10-2012, 11:44 AM
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Quote:
Originally Posted by Squirrel2000 View Post
We do not need to re- nationalise, we need more transparency and better standards so that the market economy can work correctly. Tariff structures are so obscure and complicated that it is difficult without a phd in Maths to fathom the best deal. If we can sort this out, customers will vote with their feet and competition between companies will operate more effectively.
Does it matter that the tariffs are obscure and complicated if the comparison sites can cut through it all on our behalf?

The companies are now forced to tell you your annual consumption in straight forward KWh and the comparison site do seem to handle that value quite well.
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# 6
Squirrel2000
Old 30-10-2012, 11:49 AM
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I think it matters because there is inequity in the access of consumers to information for a commodity we all need. Some do not have access to comparison sites and even on these sites, there is small print that can catch you out. It needs to be more straightforward to make it fair for all customers.

Last edited by Squirrel2000; 30-10-2012 at 12:01 PM.
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# 7
Wizo
Old 30-10-2012, 11:58 AM
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Nationalisation is a very bad idea. We know from many many failures that having civil servants and/or politicians run business simply does not work. The West Coast Rail Franchise is a recent example of why Government and business should not mix.

Government can look to control industries where there is a national interest and clearly utility companies fit this bill. They also need to look at the incestuous wholesale / retail supplier chain and how this impacts costs.

Regulate by all means but nationalise absolutely not !!!

Government can do much more in terms of green issues where they can legislate new house builds must have solar power or alternatives energy systems installed.
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# 8
Squirrel2000
Old 30-10-2012, 12:05 PM
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Nationalise or re nationise, I think in a civilised society these pay as you go meters are scandalous and exploitative of the most needy. I think some form of electronic system using a credit card type thing should replace 50p coins so people can keep their family warm in the winter and argue about it in the summer.
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# 9
WestonDave
Old 30-10-2012, 12:11 PM
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Not sure it would gain us much - allowing for the energy "boards" to contribute as much to government funds as the current companies do in tax, we'd cut around 4% off energy bills. The prices going up are really only a reflection of global market prices for energy which we cannot alter - a nationalised company would still have to pay world market prices for gas which would in turn dictate the minimum selling price - the only variable is whether a small profit is made or not.

I do wonder whether forcing companies to only have one core tariff (i.e. one price per kWh for gas and the same for electricity) maybe coupled with some regulated options such as a fixed charge for non DD payment etc would force companies to be more focussed on driving down admin costs because they would find it harder to hide behind vast numbers of tariffs. Admin costs and profits are the only parts of the energy price which can be altered - assuming the green charges are not open to being altered.
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# 10
stevemcol
Old 30-10-2012, 12:16 PM
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Quote:
Originally Posted by Squirrel2000 View Post
I think it matters because there is inequity in the access of consumers to information for a commodity we all need. Some do not have access to comparison sites and even on these sites, there is small print that can catch you out. It needs to be more straightforward to make it fair for all customers.
If customers don't have access to comp sites, it's unlikey they'll be able to compare tariffs, no matter how simple they are.
Not sure of the stats but I'd guess 90% of the population have internet access and for the remainder there are (or should be) support mechanisms and charities to assist.

Personally I'm really bad at reading small print but have switched 10 times and never had a problem.

It's within the consumers collective power to sort this out by switching regularly to force competition. If that doesn't come to pass then my vote remains nationalise (loose reigns like Northern Rock / RBS).
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# 11
C_Mababejive
Old 30-10-2012, 12:18 PM
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No..the British whinged..so now they have made their bed,they can lie in it.

Anyway im not selling you my shares in BG,CNA,NG,BT
Feudal Britain needs land reform. 70% of the land is "owned" by 1 % of the population and at least 50% is unregistered (inherited by landed gentry). Thats why your slave box costs so much..
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# 12
weegie.geek
Old 30-10-2012, 12:23 PM
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Necessities should be nationalised, and run at fair prices. Enough profit to reinvest, but not the levels of profits companies need to keep shareholders happy.

If you force private companies to drive down prices, customer service will suffer, and that means putting staff out of work. They'll strive to still deliver the same profits to their shareholders, they'll just cut corners in other ways to make up the shortfall.
They say it's genetic, they say he can't help it, they say you can catch it - but sometimes you're born with it
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# 13
Gaberdeen
Old 30-10-2012, 12:44 PM
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Quote:
Originally Posted by Wizo View Post
Nationalisation is a very bad idea. We know from many many failures that having civil servants and/or politicians run business simply does not work. The West Coast Rail Franchise is a recent example of why Government and business should not mix.

Government can look to control industries where there is a national interest and clearly utility companies fit this bill. They also need to look at the incestuous wholesale / retail supplier chain and how this impacts costs.

Regulate by all means but nationalise absolutely not !!!

Government can do much more in terms of green issues where they can legislate new house builds must have solar power or alternatives energy systems installed.
Sorry to rain on your parade Wizo, but privatisation has been proven to be the worst idea in a generation of bad ideas.

You cite the West Coast Rail Franchise as an example - when all that it shows is that civil servants who are not experts on Rail Franchises should not be writing the rules on tendering contracts for rail franchises.

Railtrack on the other hand, the private company that took over from British Rail to maintain the national rail infrastructure sat on their arses collecting bonuses for 20 years while doing NO preventative maintenance on the infrastructure up and down the country. It wasn't until The Hatfield and Potters bar rail disasters that this was revealed. 20 years of creaming profits from passengers to private owners, yet no maintenance was done and the end result was 11 deaths and over 140 injured fare-paying passengers who DESERVED BETTER than what Thatchers privitisation gave them.

As far as energy is concerned, only a disingenuous person, or simple idiot would suppose that the divestment of energy infrastructure like Dinorwig, Cruachan - engineering marvels that collectively cost the Taxpayer £1bn to build in 1984, would be given away to the private sector with nary a thank you in return.

If privatisation works, explain why in 2007 the Forties pipeline had to shut down due to an industrial dispute between the workers at Grangemouth Oil Refinery and the INEOS company owned by latent Thatcherite Jim Ratcliffe. INEOS stole £40m of the workforces pension money it inherited from former owners BP to refinance petrochemical plants in China - when the workers found out (after INEOS tried to change the terms of their pension scheme) They went on Strike, forcing the Kineal Terminal adjacent to Grangemouth to shut down and with it, the Forties. That stunt directly cost the Taxpayer £1m an hour for every hour that Forties was shut down (a fortnight), because it facilitated the throughput of 1/3rd of the UK's Oil production. No government in its RIGHT MIND would condone or allow a course of action that would lead to nationwide fuel shortages and pressure on an already volatile hydrocarbon wholesale market. I have no problem with private companies selling or producing energy - but how it's distributed and controlled needs strong government control.

Energy security & affordability, safe and reliable transport infrastructure and clean water provision are essential facets of life on these isles. They should NEVER have been divvied up to create profit. I don't give a crap if a newly nationalised Rail Board or water authority only ever broke even for the duration of it's life - I'd rather have stability and safety than allow private companies to undermine the fundamental rights we as citizens are entitled to and profit richly from doing so.

Last edited by Gaberdeen; 30-10-2012 at 1:04 PM.
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# 14
wiggers
Old 30-10-2012, 1:00 PM
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Privatization is probably the best model provided the regulation doesn't tie the companies up in knots and distort the market. So the poll needs another option, 'Privatised but with sensible regulation.' Remember that many of the suppliers are mainly retailing a product bought at wholesale, so prices reflect fluctuations. Trying to legislate to sidestep market forces opens it up the the law of unintended consequences. Everyone thought the huge subsidies for FIT for solar was a Good Thing, until they realised it was simply pushing up electricity prices for everyone else.
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# 15
Wizo
Old 30-10-2012, 1:14 PM
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Gaberdeen

Nationalisation will not ever resolve the issues you raised below. It will simply become an over manned tax burden. I'll also ask you to give an example of any nationalised industry that has ever worked and/or has benefited the customer or society? Nationalisation is a 'pie in the sky' ideology that will always fail because you have the wrong people with the wrong mentality driving it.

Off Topic - but I have a strong view that there should be no-strike clause laws in any essential service. I don't have any information on the strike you mention but no business leader (or government) with a backbone should ever give in to strikes.

Your example of Rail Track is directly related to poor regulation.
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# 16
Gaberdeen
Old 30-10-2012, 1:21 PM
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Quote:
Originally Posted by wiggers View Post
Privatization is probably the best model provided the regulation doesn't tie the companies up in knots and distort the market. So the poll needs another option, 'Privatised but with sensible regulation.' Remember that many of the suppliers are mainly retailing a product bought at wholesale, so prices reflect fluctuations. Trying to legislate to sidestep market forces opens it up the the law of unintended consequences. Everyone thought the huge subsidies for FIT for solar was a Good Thing, until they realised it was simply pushing up electricity prices for everyone else.
I'm sorry - but if energy companies were selling on a product at the cost of wholesale, explain why all energy companies are reporting record profits? It doesn't make sense if you're breaking even on the cost of wholesale gas or kerosene - you still have staff and maintennace / investment costs to cover.

I suspect there is a cartel at work here. Adam Smith, the father of modern capitalism admitted as much when he said;

"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public"

I work in the oil & gas industry as a measurement specialist & it always surprises me how readily people will accept the notion that increasing oil prices mean increasing gas prices. They are two completely separate hydrocarbon products - there is NO correlation between the cost of producing oil and gas - except in the instance where you consider the companies that produce them. Demand for oil doesn't inherently mean an increase in demand for Gas - yet this country blithely accepts this to be the case.
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# 17
Gaberdeen
Old 30-10-2012, 1:36 PM
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Wizo

I'm not allowed to post links, so I cannot cite them directly but you can google them if you are interested.

"name a nationalised industry that has ever worked"

That's easy - Defence i.e. The Armed Forces. Argyle & Sutherland highlanders, The Gordon Highlanders, The Black Watch et al were private armies before becoming intrinsic parts of the British Armed forces. You may Scoff, but I consider national security to be as important as the provision of clean water, fairly priced energy & safe / efficient public transport.

Your "no strike clause" clearly shows your ideological drive. From what I can gather, A private company could wifully change the terms and conditions of someones employment without consultation and you would condone forcing them to either accept that or face destitution?

The right to withhold labour is the last resort of any person - when they are forced to do that, they really have no other choice.

You'd have been right at home in the era where the bourgeois got away with treating the working classes with utter contempt.
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# 18
Squirrel2000
Old 30-10-2012, 1:39 PM
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Yes, I agree there appears to be a cartel at work and this is another issue that needs to be regulated in order to make the market work correctly. A return to nationalisation is an ideal that is not pragmatic. We do not have the resources in exchequer coffers to buy back shares and in any case it would not be a desirable move in today's global economy. We are also facing an energy crisis in this country and if we do not want the lights to go off in the next few years we need to invest in this sector in the form of renewables but also nuclear capacity. Again, we need private and foreign investment to achieve this unless the chancellor has a secret piggy bank. I would embrace nationalisation if I believed it would have the desired effect of fair pricing for the consumer and investment in future capacity but it is just not a viable option. We need to examine options that make the market work.
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# 19
BNT
Old 30-10-2012, 1:57 PM
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Quote:
Originally Posted by Squirrel2000 View Post
Nationalise or re nationise, I think in a civilised society these pay as you go meters are scandalous and exploitative of the most needy. I think some form of electronic system using a credit card type thing should replace 50p coins so people can keep their family warm in the winter and argue about it in the summer.
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# 20
Squirrel2000
Old 30-10-2012, 5:13 PM
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By a type of credit card electronic system, I meant replacing coins with cards that could be regulated by statutory bodies to ensure that people who do not pass the credit checks and so can not get their meters removed will have some collective statutory protection to ensure they can get a fair tariff rather than the rip off rates currently exacted. Also, in the event of crisis, the card could be a mechanism for negotiating leniency from the supplier e.g. in times of excessive cold or economic hardship. The ideal ofcourse, would be to outlaw meters altogether.
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