'Energy companies price hikes... they’re just doing their job!' blog discussion

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  • magyar
    magyar Posts: 18,909 Forumite
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    Why did we even privatise these industries. It's not like heating our homes is something we do for fun, it's something we do to stay alive.

    Privatised industries generally provide cheaper goods than nationalised ones. The French have a virtually nationalised electricity industry and pay lower electricity bills than we do. But the taxpayer is subsidising EDF massively in order to do so. Overall, the total cost of electricity is lower in the UK (and much cheaper than e.g. Germany, which is deregulated).
    Says James, in my opinion, there's nothing in this world
    Beats a '52 Vincent and a red headed girl
  • To be honest, we should have seen this coming.
    Our glories conservative government sold off the energy companies in the 80's with the promise of owning a share in those companies.
    And what did we all do when the shares went live on the FTSE?, yes, that's right, we saw the Pound signs in front of our eyes and the big jump in value they started trading at and cashed in, leaving multinational companies to pick up all those discarded shares and gaining a controlling interest.

    IMHO there are 2 sections to blame here,
    1, the government, for selling off an industry that received it's funding from people in this country and was spent on people in this country, instead of boosting the wealth of a company from another country as most of our energy companies are today and
    2, the people of this country for being hoodwinked into raising cash for the government by buying the shares and then selling them on almost immediately making a profit, allowing these foreign companies to buy up our industries and take money out of this country :(
  • I think as a previous poster mentioned, time to switch needs reducing. Is gas still something like 45 days to switch, I've switched last week but by the time its all done and dusted it will be into January and its chuffing cold now ! Plus there will be the xmas period at home with extra heating and energy usage.

    I also don't like the 12 month contracts now. Do you have to wait for the contract to finish before initiating a switch or is the contract based on supply date ceasing?
  • jamesd
    jamesd Posts: 26,103 Forumite
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    I'm currently getting quotes for refurbishing a flat. A key constraint is the limited amount of time during which I'll live there and my prospect of recovering any expenditure. I'd be more than happy to put in an even more efficient boiler, triple glazing, 1000mm of loft insulation and solid wall insulation if I could find some way not to make it a gift from me to a buyer or tenant. But the market doesn't price these things at their cost. So I won't do all of the things I'd love to do that would make it more efficient.

    Schemes that provide money for refurbishment loans and pay it back out of energy costs over many years have some prospect of success. A tenant who's paying the reduced bills would also be paying for the cost of the work to reduce those bills. Otherwise it's a gift of money from the landlord to the tenant and in the real world that's not going to happen.

    As an estate agent put it to me when discussing possible work: we look at it and you may look at it but buyers and tenants ignore it, so it's a waste of money.

    The energy company shareholders are us, via our pension arrangements. Even if you don't know that you own their shares, if you have a company pension or personal pension there's a good chance that you do/ Particularly if you're already retired and need the stable income streams that utility companies tend to pay.
  • Terri31
    Terri31 Posts: 45 Forumite
    magyar wrote: »
    My message of Ofgem has long been that they need to concentrate on
    (1) making bills easier to understand, and to make it simpler to compare two tariffs - I find it impossible and I work in the industry!
    (2) making the switching process simpler and quicker - there's no reason it couldn't be as easy as changing mobile phone or broadband supplier, which seems to be smoother to me.

    It is this lack of power which drives down competition which ultimately keeps prices higher than they should be. If with all this competition prices are still high, well then that shows the price was fair all along.

    Yes yes yes! I have been saying this too - I guess from what Martin is saying we need to lobby MPs and Ofgem... you know though, energy wanes in line with the stress people are under - and freezing cold weather adds to stress - so the time we become most aware of the need to act, the least we are able to... Martin, we so rely on you to help... yet I know we have to take responsibility ourselves and you are pressed for time and therefore energy yourself - could your team perhaps set up a simple poll on the desire for a fair, comparable baseline formula for tariffs - one that would be quotable to Parliament and Ofgem?? Or perhaps have some letters that could be copied and pasted to send to local MPs/Ofgem?
  • I blame lack of transparent pricing which has been a focus for Ofgem for some time.

    We have TripAdvisor because hotels will not tell us what we want to know about their facilities honestly enough so we have created a media to tell us what we want to know.

    The energy companies do not tell us what we need to know about how much energy costs from different suppliers and commercial interest has moved in, in the form of price comparison sites. Hundreds of millions of pounds is paid in commission by energy companies to price comprison sites for helping to keep transparent pricing from us.

    To instantly reduce prices for everyone if we all write to Ofgem and say what we want it transparent prices so 100% of our money buys gas & electricity and no money is wasted on price comprison sites.
  • http://www.bbc.co.uk/news/business-11696903

    Phil Bentley talks about pricing in this edition of The Bottom Line. He talks about switching and the importance he gives to home insulation in helping to reduce expenditure. According to Bentley we have some of the lowest prices in Europe but higher bills than other countries he says because we have such poorly insulated housing stock.
  • JimmyTheWig
    JimmyTheWig Posts: 12,199 Forumite
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    They are not state-owned companies; during privatisation we sold them to the markets. So their primary job is not to keep us warm, or save, or supply; it is to create value and make money for their shareholders
    I agree. The people who did the evil deed were the politicians who privatised the energy market.
  • magyar
    magyar Posts: 18,909 Forumite
    First Post First Anniversary Combo Breaker
    I agree. The people who did the evil deed were the politicians who privatised the energy market.

    Why is this 'an evil deed'? Food is no less critical a 'utility' but I don't hear people calling for nationalisation of Tesco's and Sainsbury's.

    The difference is that food supply has always been in private hands and so people are used to shopping around. I maintain that the problem is not 'evil utilities' but people simply doing very little about switching (and Ofgem not helping making the process easier).
    Says James, in my opinion, there's nothing in this world
    Beats a '52 Vincent and a red headed girl
  • magyar
    magyar Posts: 18,909 Forumite
    First Post First Anniversary Combo Breaker
    jamesd wrote: »
    I'm currently getting quotes for refurbishing a flat. A key constraint is the limited amount of time during which I'll live there and my prospect of recovering any expenditure. I'd be more than happy to put in an even more efficient boiler, triple glazing, 1000mm of loft insulation and solid wall insulation if I could find some way not to make it a gift from me to a buyer or tenant. But the market doesn't price these things at their cost. So I won't do all of the things I'd love to do that would make it more efficient.

    That's a very valid point. Energy saving has the potential to save us much more money than simply switching. Most of us could easily cut our energy bills by 20-30%.

    The madness is that the responsibility for encouraging energy savings sits with.... the energy companies! Who on earth thought that idea up? It's like Birds Eye being responsible for selling fewer fish fingers. Hardly going to be their top focus...

    The only way I can see this working is decent grants to install insulation etc. and for a separate authority (maybe local councils) being responsible for making sure people know about the grants and that the grants are taken up and used effectively.
    Says James, in my opinion, there's nothing in this world
    Beats a '52 Vincent and a red headed girl
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