Trying to freeze utility prices - can a labour supporter please explain how?

AndyGuil

More donations to the Conservatives after this now. I guess Labour really want to make it hard for themselves to get even remotely close to getting into power. Not sure we need a part time electric supply with no one to invest in it and less competition because of the companies leaving.

wotsthat

Fella wrote: »

Yes, the control of the party that Brown's clique of Milliband, Balls & his wife has, puts Labour in a far weaker position than they should have been. It gives the other parties a very easy way to attack them in the run-up to the next election: put simply, you know exactly what you'd get from Labour if they got in because it'd be the same Labour party that were ousted in 2010. Labour are banking on people being literally too stupid to realise/remember that these are the self-same individuals who created the policies that bankrupted the country. Hopefully people will not be that stupid.

I've only heard this argument for the first time in the last few days. Some bright spark in the conservative party must have thought it up, run it through a focus group and found it resonated. I expect to hear more of it in the coming months.

The conservatives are overspending just as labour were. Labour were holding the baby when it went t**s up and took a huge credibility hit. People don't look too deeply though - if a financial crisis hit right now the same thing would be said about the conservatives.

Remember when labour and conservatives were trying to out trump each other based on how little they were going to spend? What happened to that?

CLAPTON

the European prices are interesting but without knowing how much tax each country chooses to levy the comparisons don't tell us anything about the relative efficiency of profits of the utility companies


in any event it's very difficult to see how undifferentiated 'stuff' coming out of the same pipe/cables can really have much price differential except at the margins.

wotsthat

ILW wrote: »

Prices seem to be roughly European average and way more expensive than the US. Strange definition of competitive.

Below European average for gas and electricity helped by just about the lowest rate of VAT on fuel in Europe.

Probably a better benchmark than the USA.

Ask anyone who thinks this is a good idea who pays the most for gas & electricity in Europe and you can be sure you'll get a version of the 'rip off Britain' story. Why let some data get in the way?

Kennyboy66

ILW wrote: »

Prices seem to be roughly European average and way more expensive than the US. Strange definition of competitive.

Try reading the table again, UK prices look a fair bit cheaper for gas and electricity then either of the 2 euro averages.

What possible relevance does USA prices have, bearing in mind they are extracting shale gas and are between 3 and 6 thousand miles away ?

kabayiri

There are some fundamental issues which need dealing with in the energy market.
I'm not sure populist ideas like this help much.

A family member is involved in the generator side of the business. There are plants which came on stream as recently as 2010, which are now technically non-competitive. This is difficult for a provider to cope with; they need some level of price guarantee, especially when we are faced with coal plant decomissioning by 2015.

Long term, everyone has to face up to the fact that energy will be expensive. Energy security and a measure of price stability, I think they would be better goals to aim for.

michaels

Kennyboy66 wrote: »

Wholesale prices make up roughly 47% of consumer energy bills.

Retail profit margins are in the region of 5-6%.

Labour have estimated that this will save domestic consumers £2.5 bn (based on them saying that it will save £120 per household) - they also claim that companies have made £3.9 billion in "excess" profits since 2010.

It is a profoundly depressing policy / idea but you could argue its no different to a windfall tax (if it was capped at some kind of level).

Its populist idiocy but I honestly thing the 2 Ed's have no chance at the next election.

They have gambled everything on the economy flat-lining and the deficit not being cut in a meaningful way. It looks like the will be wrong on both counts, hence a rush to bring out policies.

They have also decided to just target roughly just over 37% of the vote which would mean they could scrape a majority (due to the bias in the electoral system at the moment), and probably don't need to appeal to many floating voters.

I can see how you can make a 'central estimate' but suppose there is a cold winter or supply problem and wholesale prices spike, 2.5bn could become 10bn...

Kennyboy66

CLAPTON wrote: »

in any event it's very difficult to see how undifferentiated 'stuff' coming out of the same pipe/cables can really have much price differential except at the margins.

Electricity can be generated from many different sources each with a different short and long run cost. It can't be stored and is both expensive and inefficient to transmit long distances.
Some countries made the decision to go nuclear in a big way decades ago (france) with the state paying, some countries are 'going green' and loading the cost onto current consumers.

It's hardly "undifferentiated stuff".

There shouldn't be quite as much variation in Gas prices.

kabayiri

wotsthat wrote: »

...
Ask anyone who thinks this is a good idea who pays the most for gas & electricity in Europe and you can be sure you'll get a version of the 'rip off Britain' story. Why let some data get in the way?

There is no doubt it is hurting a lot of people on low incomes. I can imagine it being one of the biggest moans when the canvassers come to peoples' doorsteps.

Ed & friends are just trying to redirect the blame at those 'nasty energy companies'. It's a populist move.

Kennyboy66

michaels wrote: »

I can see how you can make a 'central estimate' but suppose their is a cold wnter or supply problem and wholesale prices spike, 2.5bn could become 10bn...

Which begs the question why suppliers would then supply (particularly for Gas which can be sold anywhere & we are now a net importer I think).

It's a proper looney idea.