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Should the energy industry be renationalised?
Comments
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Absolutely NOT. Capitalism works perfectly well if it left to just get on with it. The free market needs to be free to operate and that is the fundamental problem: it isn't free. Massive amounts of overbearing government interference and regulation make a fairly simple business proposition of generating and supplying energy, into a massive fragmented nightmare of bureaucracy and red-tape.
De-regulate, allow the market to determine prices based on genuine competition amongst suppliers. Remove the tax burden on companies as well as the levies and then judge them on price and performance.
These industries when nationalised relied on massive supplies of natural resources (gas and coal) which simply are not there any more. The more we have to import, the more it will cost. Green energy is a waste of time as it cannot meet needs. The nationalised industry did not re-invest profits, did not plan for the future, did not create new solutions. It suffocated itself. The same happened to most nationalised industries steel, coal, shipbuilding, railway, roads transport, etc. - they simply stop working as no-one has enough vested interest in them to make them work, they were answerable to no-one, they were crippled by unions and eventually all but nearly collapsed in on themselves.
If the energy industry had remained nationalised, we would be dealing with even worse infrastructure than we are now. Prices would be very similar though OR they would be artificially cheap and subsidised by the tax payer, which in turn would have led to a massive increase in the deficit as a nationalised industry would not alter the fact the the wholesale price of energy, especially imported energy, has risen sharply.
The last figures I saw showed overall that energy companies have 5% profit. Nearly 50% was wholesale costs, and a whopping 13% was made up from government tax and green levies - the state takes more than the companies make yet it is the alleged 'fat cats' that are the problem...?
The answer really is in a free-er market not a more regulated one and re-nationalisation is a step back into the dark-ages, quite literally regarding energy.0 -
southerndave wrote: »Absolutely NOT. Capitalism works perfectly well if it left to just get on with it. The free market needs to be free to operate and that is the fundamental problem: it isn't free. Massive amounts of overbearing government interference and regulation make a fairly simple business proposition of generating and supplying energy, into a massive fragmented nightmare of bureaucracy and red-tape.
De-regulate, allow the market to determine prices based on genuine competition amongst suppliers. Remove the tax burden on companies as well as the levies and then judge them on price and performance.
These industries when nationalised relied on massive supplies of natural resources (gas and coal) which simply are not there any more. The more we have to import, the more it will cost. Green energy is a waste of time as it cannot meet needs. The nationalised industry did not re-invest profits, did not plan for the future, did not create new solutions. It suffocated itself. The same happened to most nationalised industries steel, coal, shipbuilding, railway, roads transport, etc. - they simply stop working as no-one has enough vested interest in them to make them work, they were answerable to no-one, they were crippled by unions and eventually all but nearly collapsed in on themselves.
If the energy industry had remained nationalised, we would be dealing with even worse infrastructure than we are now. Prices would be very similar though OR they would be artificially cheap and subsidised by the tax payer, which in turn would have led to a massive increase in the deficit as a nationalised industry would not alter the fact the the wholesale price of energy, especially imported energy, has risen sharply.
The last figures I saw showed overall that energy companies have 5% profit. Nearly 50% was wholesale costs, and a whopping 13% was made up from government tax and green levies - the state takes more than the companies make yet it is the alleged 'fat cats' that are the problem...?
The answer really is in a free-er market not a more regulated one and re-nationalisation is a step back into the dark-ages, quite literally regarding energy.
So do you think Cameron's review of competition will make a difference?
I'm a bit confused as some posters say wholesale costs are up and some say they aren't.
Re: the profit margin, they make more than 5% on the whole business- the 5% is just retail margin.0 -
This statement is laughable. It may work perfectly well for the companies but not necessarily for the populace or environment.southerndave wrote: »Absolutely NOT. Capitalism works perfectly well if it left to just get on with it.
Just imagine no regulations on business practices. No restrictions on monopolies, no recourse for being fired unfairly or due to discrimination, no recourse for when banks fail and people's savings disappear, no rules on quality of services (rather important for things like water...), no regulators to hold companies that lie, steal or cheat to account (without expensive lawyers anyway), etc.
I completely agree that too much regulation is a hindrance to progress but you cannot be serious in suggesting that absolutely no regulation is better. A reasonable balance must be struck.
Making a profit on what is an essential service is always a dicey subject.0 -
southerndave wrote: »Absolutely NOT. Capitalism works perfectly well if it left to just get on with it. The free market needs to be free to operate and that is the fundamental problem: it isn't free. Massive amounts of overbearing government interference and regulation make a fairly simple business proposition of generating and supplying energy, into a massive fragmented nightmare of bureaucracy and red-tape.
De-regulate, allow the market to determine prices based on genuine competition amongst suppliers. Remove the tax burden on companies as well as the levies and then judge them on price and performance.
These industries when nationalised relied on massive supplies of natural resources (gas and coal) which simply are not there any more. The more we have to import, the more it will cost. Green energy is a waste of time as it cannot meet needs. The nationalised industry did not re-invest profits, did not plan for the future, did not create new solutions. It suffocated itself. The same happened to most nationalised industries steel, coal, shipbuilding, railway, roads transport, etc. - they simply stop working as no-one has enough vested interest in them to make them work, they were answerable to no-one, they were crippled by unions and eventually all but nearly collapsed in on themselves.
If the energy industry had remained nationalised, we would be dealing with even worse infrastructure than we are now. Prices would be very similar though OR they would be artificially cheap and subsidised by the tax payer, which in turn would have led to a massive increase in the deficit as a nationalised industry would not alter the fact the the wholesale price of energy, especially imported energy, has risen sharply.
The last figures I saw showed overall that energy companies have 5% profit. Nearly 50% was wholesale costs, and a whopping 13% was made up from government tax and green levies - the state takes more than the companies make yet it is the alleged 'fat cats' that are the problem...?
The answer really is in a free-er market not a more regulated one and re-nationalisation is a step back into the dark-ages, quite literally regarding energy.
:eek::eek:
Blimey, are you on the wind up?0 -
Say they do renationalise the energy market. One company for gas and electric. Ok all probs solved. Prices will reduce overnight. Energy crisis sorted. Dont think so. .
Just a few questions 1) the power companies between them own all the distribution infrastrucure between them. Whos going to pay for the government buying them back into public ownership? - taxpayer.
2) The infrastructure in itself has a shelf-life. Who is going to pay for the upgrading and replacement of it? correct - taxpayer.
3) Gas has to be bought from a world market where demand dictates prices. The government still have to pay commercial prices like everyone else so.
4) Look at the last time the various industries were under government control. Too many layers of red tape. People at the top who actually know nothing about how to run a business.
Easy to call for nationalisation but it would cost millions to organise, millions to maintain and improve. At the end of the day who would finance it. Yes the taxpayer.0 -
Who paid for it all the first place? Oh yeah, the taxpayer and then energy customers, i.e. everyone.flyingjock1 wrote: »Just a few questions 1) the power companies between them own all the distribution infrastrucure between them. Whos going to pay for the government buying them back into public ownership? - taxpayer.
Who pays for it now? Energy customers, i.e. everyone.flyingjock1 wrote: »2) The infrastructure in itself has a shelf-life. Who is going to pay for the upgrading and replacement of it? correct - taxpayer.
This is a valid point but it's possible the government will get cheaper prices since they'll be buying in larger quantities. Obviously more energy independence helps with this (e.g. new nuclear reactor, fracking).flyingjock1 wrote: »3) Gas has to be bought from a world market where demand dictates prices. The government still have to pay commercial prices like everyone else so.
Look at the current time when the industry is in the hands of profit making companies. It's so brilliant, right? This is the same argument used for the railways - they're so much better now than they were when nationalised. So? They also cost a lot more! Who's to know if the government couldn't have provided what we have now with a similar huge increase in revenue? We already know the East Coast line is doing great in government hands...flyingjock1 wrote: »4) Look at the last time the various industries were under government control. Too many layers of red tape. People at the top who actually know nothing about how to run a business.
This idea that profit is the only possible motivator is seriously depressing. You don't have to run a for-profit company to be competent or successful.
Who already pay for it indirectly. You seem to have a firm grasp of how nationalised industries are funded at least.flyingjock1 wrote: »Easy to call for nationalisation but it would cost millions to organise, millions to maintain and improve. At the end of the day who would finance it. Yes the taxpayer.
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Who paid for it all the first place? Oh yeah, the taxpayer and then energy customers, i.e. everyone.
Who pays for it now? Energy customers, i.e. everyone.
This is a valid point but it's possible the government will get cheaper prices since they'll be buying in larger quantities. Obviously more energy independence helps with this (e.g. new nuclear reactor, fracking).
Look at the current time when the industry is in the hands of profit making companies. It's so brilliant, right? This is the same argument used for the railways - they're so much better now than they were when nationalised. So? They also cost a lot more! Who's to know if the government couldn't have provided what we have now with a similar huge increase in revenue? We already know the East Coast line is doing great in government hands...
This idea that profit is the only possible motivator is seriously depressing. You don't have to run a for-profit company to be competent or successful.
Who already pay for it indirectly. You seem to have a firm grasp of how nationalised industries are funded at least.
Ok so youre an expert in the energy industry seeing as youve got a comment for everything i said, so where is all the money going to come from to fund this buyback when the countries in the state it is.0 -
I have no idea. What did we do with the money made from selling it in the first place?flyingjock1 wrote: »Ok so youre an expert in the energy industry seeing as youve got a comment for everything i said, so where is all the money going to come from to fund this buyback when the countries in the state it is.0 -
flyingjock1, I've already suggested earlier where the money could come from - by scrapping the future white elephant and prime example of political willy waving - HS2! Surely as these energy suppliers are forever stating their profits aren't anything special and it's such a hard business to be in they would be only too willing to be bought out?
edit: joking aside it probably wouldn't cost as much as many people imagine. The UKs biggest energy supplier, British gas, is part of Centrica, which is capitalised at £18 billion. British Gas contributes approx 20% of Centrica's group profits.0 -
Here is a related e-petition that aims to get the problem of wrong billing properly addressed.
Please consider signing it as it will get discussed in parliament.
epetitions.direct.gov.uk/petitions/56280
I can't post a link as a new user, so you'll have to copy and paste the address above.
I signed the one above as the current companies seem incapable of even running simple administration.0
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