MSE News: British Gas owner posts £1.3bn profit, so why the price hikes?

bengasman

eurmalian wrote: »

Ah yes. And all those big comanies in other industries only do it out of the goodness of their hearts and to see little children smile.

And where exactly did I say that?
The purpose of a business is to make a profit ( although some are only there to provide a high income to the directors, and other companies would die an instant death if it wasn't for the tax money pumped into them ). Nothing wrong with companies making profit, provided that:
1 They do so without getting taxmoney.
2 There is free competition.

The alternative is communism, and we all know that model doesn't work.

grahamc2003

VT82 wrote: »

Privatisation gives incentives to improve efficiency. If publically owned, there would be no incentive to keep prices low, as there would be no competition. There would also be no incentive to improve efficiency, as all managers would know their jobs were safe and the business would always be propped up by taxpayers. We would then either be paying for this inefficiency through higher bills or higher taxes.

Well, that's the theory anyway.

Do you really think in practice the electricity supply industry now, after decades of privatisation, reflects that theroy?

I don't at all. What I see is masses of effort expelled in doing non-core activities, many of them distastefully implemented like doiorstep high pressure selling, by the buisinesses themselves, and probably a much more costly, virtually everone in the uk switching suppliers every couple of years. The costs for your electricity in your bill is now only about 30%, the other 70% going on non-core activities and a bit of profit.

You're very brave if you think under the cegb, when nationalised, only 30% of your bill or less (as you indirectly imply) went on actual electricity.

To my mind, and I helped conceive and design many of the extra core systems necessary for privatisation as the then government required, privatisation of the industry has been a very retrograde step, even though I supported it at the time, my support waning as time goes on and the effects are there for all to see.

bengalknights

It would be nice to see a utility company that was "not for profit" and was there to always provide the cheapest when possible, although im guessing it would have to be a community run company in the same format as coops etc.

bengasman

bengalknights wrote: »

It would be nice to see a utility company that was "not for profit" and was there to always provide the cheapest when possible...

And what would be the reason for investing many millions of pounds with the risk of losing it?

bengalknights

bengasman wrote: »

And what would be the reason for investing many millions of pounds with the risk of losing it?

I would have thought the income derived would pay for any capital put up plus future investments in the business and interests on loans so the risk of losing it would be fairly low.

bengasman

bengalknights wrote: »

I would have thought the income derived would pay for any capital put up plus future investments in the business and interests on loans so the risk of losing it would be fairly low.

You clearly never ran a company yourself.

bengalknights

bengasman wrote: »

You clearly never ran a company yourself.

2 actually lol

bengasman

It seems rather unlikely that either of them was a success since you seem to know very little about the basics of investment in a company.
When I said: running a company, I didn't mean running them into the ground.

bengalknights

bengasman wrote: »

It seems rather unlikely that either of them was a success since you seem to know very little about the basics of investment in a company.
When I said: running a company, I didn't mean running them into the ground.

Acutally i understand it very well you seem to misunderstand the concept of a community interest company.

davidgmmafan

"Wthout going into the how and what of energy costs abroad, it does not matter hether our prices are higher or lower compared to other countries; the fact remains that all energy suppliers operating in the UK are only after one thing: maximum profit."

I often wonder whether or not it is relevent but I finally settled on the view that it probably is when most of the 'debabte' concerning energy prices consists of people jumping up and down saying we're being ripped off. That it a relative concept and so needs to basis for comparison.

I must say I was impressed by most of the comments on here, which were quite sensible, the BBC coverage of this was too a few days ago. They too stated that they couldn't subsidize one part of the business with the other, though MSE comments were better as the beeb didn't say why it could be a bad thing if they were allowed to cross subsidize.

I just wish I could be bothered to look through the rates to see how we're doing for petrol, elec and gas, the only one that stood out was Sweden which was 10p per Kwh of gas. Hope this was a misprint!

If there is a general point to consider here I would think why did most companies end up being foreign owned? Have the british just become utterly unable of running anything?