British Gas could be broken up

Graham_Devon

Due to the amount of profits it's making and the "monopoly" it may have on the UK.

The Energy Secretary has questioned the profit margins made on gas by Britain’s biggest energy companies, going as far as suggesting that the UK’s biggest supplier, British Gas, could be broken up.

In a letter to regulators, Ed Davey estimated that margins on gas bills are up to five times those made on electricity, citing data published by Ofgem in November.

He pointed to evidence indicating that British Gas was using its grip on the market to boost profits, and said the company could face a market investigation.

Politics on the back of labours price fereeze pact? Or something that could actually be done?

http://www.telegraph.co.uk/finance/newsbysector/energy/10627814/Energy-firms-profit-margins-under-scrutiny-by-minister.html

wotsthat

Graham_Devon wrote: »

Politics on the back of labours price fereeze pact? Or something that could actually be done?

Politics. Every single one of British Gas' customers is able to switch to a company making a lower margin on gas supply should that be an issue to them.

Ed Davey will be showing off to his missus when he gets home tonight about how Centrica's share price fell 3% because of his awesomeness. In the meantime the UK energy sector becomes a less attractive place to invest as both main parties seem intent on !!!!!! swinging.

Generali

The AT&T telephone company in the US was broken up in the early 80s because of monopoly abuse so there is form here. The smaller companies became known as the Baby Bells.

I don't have a problem with it personally. Competition is good and a failure to produce competition is a market failure as so liable to be regulated.

michaels

But do you really need to legislate just because people are too lazy to shop around?

(Although I guess you could claim BG do some sort of predatory pricing perhaps with 'new customer only' tariffs designed to make it unprofitable for new entrants/exisiting competitors to enter the market with more competitive tariffs paid for out of xs profits made from those too lazy to shop around and perhaps also exploitaton of their purchasing power to source gas more cheaply than smaller competitors. However personally if I get cheaper gas subsidised by the lazy then is it really a problem? )

CLAPTON

wotsthat wrote: »

Politics. Every single one of British Gas' customers is able to switch to a company making a lower margin on gas supply should that be an issue to them.

Ed Davey will be showing off to his missus when he gets home tonight about how Centrica's share price fell 3% because of his awesomeness. In the meantime the UK energy sector becomes a less attractive place to invest as both main parties seem intent on !!!!!! swinging.

Is that so?


I thought that people in rented property often can't switch because the landlord controls the main contract

purch

I guess the perceived problem is that British Gas is part of Centrica, and the idea is to separate it from the generating/production side.

But they are not the only supplier that is part of a bigger group that also generates or produces energy, and I don't see the moronic politicians telling the French Government to break up EDF

wotsthat

CLAPTON wrote: »

Is that so?

I thought that people in rented property often can't switch because the landlord controls the main contract

If you're a tenant receiving bills direct from a utility company then it's your choice.

If your rent is 'all-inclusive' then no you don't have a say - probably a tiny proportion of the population and unaffected by any BG breakup anyway.

Loughton_Monkey

Surely the debate should be less about breaking up any company, but abolishing "Offgen" who were set up - as I understand it - with the total brief to prevent and deal with any anti-consumer interest!

Since they cost £75 million a year and are worth less than a chocolate teapot, shouldn't they be scrapped, and replaced with a forensic accounting operation with freedom to roam over all energy company's books, and prevent hanky panky and put transgressors into jail where they belong?

Kennyboy66

michaels wrote: »

But do you really need to legislate just because people are too lazy to shop around?

Probably more that they employ complex tariffs that require an intermediary to compare prices.

It is classic confusion marketing that discourages the majority from making optimal purchasing decisions.

I find it incomprehensible that some Tories and people who believe in the free market are against the break up of British Gas (likewise Lloyds banking group).
It's pretty clear they are enjoying excess profits from a monopoly like position.

It's not remotely like tech companies like Microsoft or Facebook who were in monopoly positions that are fairly quickly eroded by change.

There really isn't much of a substitute for using gas (other than more expensive electricity) to heat your home.

wotsthat

Loughton_Monkey wrote: »

Surely the debate should be less about breaking up any company, but abolishing "Offgen" who were set up - as I understand it - with the total brief to prevent and deal with any anti-consumer interest!

Since they cost £75 million a year and are worth less than a chocolate teapot, shouldn't they be scrapped, and replaced with a forensic accounting operation with freedom to roam over all energy company's books, and prevent hanky panky and put transgressors into jail where they belong?

Utilities are flavour of the month for a bit of bashing.

There's no reasoned debate going on here. Labour are going to fix prices and the tories are trying to get in on the act.

For all we know Ed Davey is talking out the top of his hat and the reason Ofgen aren't highlighting this market abuse is because there isn't one.

cells

The old fashioned way of heating your home in the winter, ie heating just one room, has gone out of fashion but it is probably the easiest way to reduce your heating bills if they are a concern.

Your winter gas bill would be 80% cheaper