Energy prices.... consumers need to get a grip.

Cardew

chris1973 wrote: »

But just like you i'm fed up, fed up of people cherry picking poorly researched facts and only getting half a story, why don't you come back with more sources giving answers to the points which i've made above, and THEN do the comparison to the average family in the UK, and see if we are still better off.

Chris,

Surely we are discussing if energy prices are too high in UK and the Utility companies making excessive profit.

In that context it doesn't matter if the income of the average family in UK is sky high or below the poverty line; the question is are we being ripped-off or not by the Utility Companies and are their profits excessive.

The energy prices in many of the old Eastern Bloc countries(including Russia) outside of the EU are very low because they are subsidised. However I think few would dispute that the standard of living of those countries is below that of UK.

So the UK better off, or worse off, than Sweden doesn't seem to me relevant to the charges/profit of UK Energy suppliers. i.e. say the average cost of gas/electricity in UK is approx £1,300, and the average household income is £26,000pa, that is 5% of income.

If £1,300 is an excessive charge, it would still be an excessive charge even if the average UK income was £52,000pa and energy costs only 2.5%.

IMO of course!

spot1034

chris1973 wrote: »

Those figures are completely meaningless on their own. Are you also going to post other relative statistics such as average year 'round temperatures including those of Spring and Autumn, average income per family / household and any other fuel used for heating and cooking (I believe kerosene is a popular choice for these activities in some areas of France.

For example, if the average salary in Germany, Austria or Norway is 2 or 3 times that of the average / minimum wage in the UK, and unemployment is lower then there will be less instances of fuel poverty.

In addition, what type of pay rises does the average Swedish employee get every year?, are they like a lot of UK workers who perhaps haven't seen a pay rise in 3 to 5 years!. This point is also relative, because if the Swedes have had a 4% pay rise, then a 2% increase in utility bills isnt going to be noticed, whilst if you haven't had a payrise for several years, bills which increase twice a year, are going to be noticed.

The same applies to the average temperatures in these countries, often in the UK we have to have our heating on for far longer during Spring and Autumn, whilst some European countries are seeing warm or hot days and so their peak periods of heating requirement are generally far shorter than those seen in the UK, resulting in a much reduced annual energy consumption figure.

But just like you i'm fed up, fed up of people cherry picking poorly researched facts and only getting half a story, why don't you come back with more sources giving answers to the points which i've made above, and THEN do the comparison to the average family in the UK, and see if we are still better off.

All perfectly reasonable points of-course, but if we're having to buy a lot of our energy on international markets we have to pay the going rate. There's no reason why the Russians should sell us their gas for less than they could get for it from the Swedes.

Of-course that's why the government is so keen on wind farms and other renewables, because it's power we can generate ourselves without having to pay anyone else. The trouble is that the cost of installing and maintaning the infrastructure is so high that we are having to pay more than the cost of gas (at present) so our long term insurance is being bought with some fairly hefty upfront premiums, and of-course we'll still have to rely on the gas when the wind doesn't blow, or blows too hard! As for solar panels, thanks to Mr Miliband's generosity when he was Secretary of State for Energy in the last government, we are committed to pay their owners way in excess of the value of the power they generate for 25 years, and we are committed to doing so even if they use the electricity themselves - how bizarre is that! It's a bit like offering to buy gas from the Russians at several times the price they are asking, and then telling them that having taken our money, they can keep the gas - we're happy to pay for nothing!

All these things are pushing up bills. The economic health of the nation is irrelevant to the fact that we're doing all these things and have to pay for them . We could go back to burning coal and not worrying about emissions, which might cost a bit less but would probably land us in a lot of trouble. We could abandon all maintenance and upgrades to infrastructure and then look forward to shivering in the cold and dark in five or ten years from now when it all fell apart.

The only realistic way to lower bills would be for the government to subsidise them but we all know they don't have the money, and if they tried to borrow the sums involved interest rates would almost certainly rise which would harm the rest of the economy and push up mortgage repayments, etc, which would hardly make people feel better off. There is no easy solution I'm afraid.

Cardew

I don't think that the Government(or the last one) are particularly keen on renewables, but they have treaty commitments; and being seen to be 'Green' is mandatory to win votes of some people.

The cost of these Green subsidies is paid for by a levy on our electricity bills and not from the Treasury. So the Utility companies take the flak.

The problem with Wind and Solar generation is that it doesn't reduce the UK's requirement for gas/oil/nuclear/coal power stations in any way. Our peak consumption period in UK is on a winter's evening when there will be no solar, and possibly no wind, so we still need our full 'conventional' power generating capacity; plus imports from France's Nuclear power stations.

zagfles

The OP has a point, in general things are more expensive in the UK, the "rip-off Britain" syndrome. But energy is one of the exceptions, it's one of the few things which is cheaper in the UK compared to most other countries.

As mentioned the cost in Sweden is horrendous, but then housing is incredibly cheap compared to here - you can get a large family house in a nice area for around £25,000!! They can't believe how much we have to pay for houses here!

YorksClare

The problem is that the OP had a false argument. By looking at the prices relative across Europe, it made the UK price look fairly reasonable, for gas at least. But for electricity, being "7th cheapest" really just puts us kind of mid-table. (And by the by, look at the petrol and diesel prices - ouch!)

The reason people are complaining about the big six putting their prices up is that British Gas in particular made a half-year profit of 23% having already put prices up this time last year, then reducing it very slightly in spring, and now it is going up again in another huge percentage way more than inflation, and certainly a heck of a way more than most wages are going up. This can only have the effect of pushing far more people into fuel poverty.

It is a good idea that we should aim for less polluting energy supplies, and be more self-sufficient. And it is right that if a company makes a whopping profit then they are required to plough some of that back into renewables/low carbon alternatives, or helping customers to insulate their houses to reduce their usage and assisting those who simply cannot afford the basics like heating.

Worst of all, we are talking about "the big six", as if they are a kind of exclusive club. There have been other businesses such as supermarkets with their milk prices and airlines with certain ticket prices that have been found to be behaving like this. Maybe it is time to investigate the way the utility companies are setting their prices, too. Because it is blummin' suspicious...

Cardew

YorksClare wrote: »

The reason people are complaining about the big six putting their prices up is that British Gas in particular made a half-year profit of 23% having already put prices up this time last year, then reducing it very slightly in spring, and now it is going up ...

What do you mean by a 'half-year profit of 23%.'?

Profit on what?

Your post makes it sound like BG are making profits on £hundreds per customer instead of £tens

If BG became a not for profit company(like Ebico) how much do you think prices would reduce?

spot1034

This is part of the problem - people seeing what they perceive to be huge profits when in fact the numbers are big because the businesses are very big, serving millions of customers. The actual profit per customer is modest.

I haven't looked at the figures in question, but this came up on another forum I post on and I believe the 23% referred to above was an increase of 23% on the previous year, when there had been a very sharp drop, and these fluctuations were due to different weather conditions which can easily have quite a dramatic effect (one way or the other) on results reported by energy suppliers.

Cardew

spot1034 wrote: »

This is part of the problem - people seeing what they perceive to be huge profits when in fact the numbers are big because the businesses are very big, serving millions of customers. The actual profit per customer is modest.

I haven't looked at the figures in question, but this came up on another forum I post on and I believe the 23% referred to above was an increase of 23% on the previous year, when there had been a very sharp drop, and these fluctuations were due to different weather conditions which can easily have quite a dramatic effect (one way or the other) on results reported by energy suppliers.

Yes it was a 23% increase in profits to £354million for 6 months. So with around 18 million accounts that is approx £20 each.

Of course Centrica the parent company make more, but they are not allowed to subsidise BG and in any case they gain from the worldwide increase in energy prices.

Just to put BG's 'obscene profits' of £354 million into context:

Tesco said pre-tax profits fell 11.6pc to £1.7bn in the half-year to August 25 2012,

MillicentBystander

Far easier to change allegiance when it comes to grocery shopping, of course, so the market is far more transparent. And I do find it laughable that energy industry apologists have to look to a company like Tesco to justify the energy companies' actions. They are probably even more hated than any of the Big 6 lol.


Plus Tesco grocery customers will spend many thousands more over the course of a year than they will on energy. Typical spin there....

Cardew

Not apologists, but simply trying to put profits into perspective.

Like you, I question the whole concept of energy and water privatisation, they are in a win/win situation - which reflects in the performance of their share price over many years.

However the 'hysteria' over greedy energy companies creates the impression that energy prices are hundreds of pounds too expensive.

If the Government are so concerned, they could abolish the 5% VAT charge.