MSE News: British Gas profits 'to keep prices down' – for now

DragonQ

Cardew wrote: »

Or the companies were forced to operate without making a profit - like Ebico?

Ebico are different because they buy from Southern Electric, thus there is an extra "link in the chain".

dude89

Butterfly_Brain wrote: »

Do you have shares in these cartels by any chance?

I don't. I haven't even got a pension that may be linked to any of the companies. I'm barely old enough to remember the gas and electric boards but everything I have heard about the nationalised industries were that they were highly inefficient using the cheapest short term options with no plans for the future.

The only thing a government run industry would be interested In was keeping prices down when approaching an election.

Every time a price rise announcement is made or a profit is announced, everyone comes out of the woodwork with the same remarks but no one has yet to give proof that nationalising would work

Cardew

DragonQ wrote: »

Ebico are different because they buy from Southern Electric, thus there is an extra "link in the chain".

Yes I am aware of that fact - but what if Southern Electricity(and every other Utility company) made zero profit; how much would prices reduce?

DragonQ

Cardew wrote: »

Yes I am aware of that fact - but what if Southern Electricity(and every other Utility company) made zero profit; how much would prices reduce?

I guess that would depend on how much money the government wanted to put aside for research & development. It probably makes more sense to look at shareholder dividends and company worth, rather than pure profit.

JSR

The biggest risk from nationalisation is not that the government will borrow money to keep prices low but that they'll forego investment in new infrastructure. Our rail networks suffered decades of under-investment whilst nationalised and today we are suffering the consequences of that in terms of high fares and inadequate and overcrowded routes.

Despite that there are nationalisation models that do work. Day to day decision making, including price setting, is kept far away from any department of state. The job of ministers is to set long-term objectives whilst being protected from short term storms. If a politician thinks he is going to be voted out of office because of a price hike, no matter how necessary it is, there is a lot of pressure on him to do the easy thing and sacrifice the long term interests of the country for short term political advantage.

MillicentBystander

JSR wrote: »

The biggest risk from nationalisation is not that the government will borrow money to keep prices low but that they'll forego investment in new infrastructure. Our rail networks suffered decades of under-investment whilst nationalised and today we are suffering the consequences of that in terms of high fares and inadequate and overcrowded routes.

Despite that there are nationalisation models that do work. Day to day decision making, including price setting, is kept far away from any department of state. The job of ministers is to set long-term objectives whilst being protected from short term storms. If a politician thinks he is going to be voted out of office because of a price hike, no matter how necessary it is, there is a lot of pressure on him to do the easy thing and sacrifice the long term interests of the country for short term political advantage.

Interesting theory. Only problem being the track record of infrastructure investment by the privatised Big 6. Not great. And then of course we have the spectacle of npower being given huge tax reductions because they are investing in green energy (which the punter is paying for in higher prices anyway). The present system is the economics of the madhouse. I don't think anyone is claiming that re-nationalisation would solve all the problems in the industry we are currently experiencing, but it's an absolute fact that it would, at a stroke, get rid of the current massive duplication/huge related parasitic industry we have. Plus any profits made should (by statutory regulation if necessary) be invested in the infrastructure that may then give us cheaper prices (6 multi million £ businesses in the industry at the moment and can someone remind me again - how many week's worth of gas storage do we have in this country?).