Omg 18%

ComicGeek

Deleted_User said:

ComicGeek said:

Deleted_User said:

ComicGeek said:

Deleted_User said:

ComicGeek said:

Deleted_User said:

ComicGeek said:

Prism said:

sgx2000 said:

Grumpy_chap said:

sgx2000 said:

Tony Blair was the most successful PM im the last 50 years..

Electorally no more successful than Maggie.

Both succeeded in their time to address the challenges of the era.
Both implemented policies that were unpopular while carrying the populace with them.
Both set a vision and led (rather than managed) the country.

Maggie was only suceeded by, selling off all the family silver.... to the wealthy tory voters ....
We owned all the utilities
Now foreign companies own them

Who wants to own and run the utilities? We already control them pretty well with policy without having to run them. 

All profits are stripped from the utility companies and paid to executives and shareholders. Very small amount is reinvested into network maintenance and improvements, which is why 20-25% of water is lost through network leaks.

We have an ageing distribution system for all utilities - power outages and water supply issues are more to do with low network investment than anything else. 

I am always curious why people would be visiting a retirement/investment forum if they are  ideologically opposed to profits and shareholders.  

I'm not ideologically opposed - I just believe that certain things are too important to allow private investors to control for personal profit, utility companies being the main one. Security of energy supply is critical for any country, and the lack of investment in infrastructure is dangerous.

Part of my work is dealing with large scale utility infrastructure connections - people would be shocked to see how much of the current infrastructure is held together by temporary fixes, with major issues to come in the immediate future.

So no, I don't believe that people should profit from dividends that should clearly be used for national security investment.

The model you so desire has been implemented in Venezuela. Formally the richest country in South America. So beloved by the former Labour leader (currently suspended).  Worked great.  You should experience it in person. 

Not really, not sure why people have to work so hard to twist things on here. 

The Netherlands would be a better example of publicly owned infrastructure, although renewable energy provision is lagging behind.

There is a problem here.  I own shares in companies which own Dutch utilities. Like Eneco which produces and supplies natural gas and heat (owned by Mitsubishi). Or PWN water.  

They do have state ownership of gas storage facilities.  So? Right now Netherlands are experiencing soaring energy prices.  

Blaming energy inflation on shareholders is ludicrous. Energy policy in  the UK and the Netherlands is  determined by the governments.  It were successive governments who destroyed  diversity and security of energy supply by making themselves heavily reliant on Russian gas.  

You are just pushing your ideology even though the thread has nothing to do with it and energy prices are up everywhere. 

Again, why try and twist everything? I haven't blamed energy inflation on shareholders, I haven't suggested that state ownership of distribution networks results in low energy prices, I'm not driving any ideology.

There's a difference between bodies that run the major distribution infrastructure and those that create/sell energy. In the Netherlands the electricity distribution is owned solely by the government through TenneT, with all profits going back to government. In England & Wales the electricity and gas distribution is owned by National Grid plc with lots of shareholders to please.

I have no ideology - I just think it's a stupid position where a country has no control over its own major distribution systems, and where investment in the system is not kept up. I 

It's not about energy prices, but security of supply (that's reliability of infrastructure as well as procurement of energy).

You should re read what you said up the thread.

Your latest post is moving into a narrow argument which is different from where you started but still wrong. There are different ownership mechanisms for generation, transmission and distribution but in all cases security of supply is 100% government’s responsibility.  Having worked in the industry in 2 countries and under different ownership formats I have not come across any scenario with key decisions NOT being made by governments/regulators.  Wrong decisions impacting security of supply were made in Netherlands, Germany and Britain (both Labour and Conservative governments). 

Why? Because the lessons from the 70s crisis have been forgotten by the public and did not bring votes. 

Again completely missing the point of what I was saying, but happy for you to have the last word. I forget how frustrating these forums are, so won't bother to engage anymore. 

Moby

Grumpy_chap said:

Moby said:

Logically, domestic renewable energy and UK oil and gas production has not experienced excessive input cost inflation, (some cost pressures, but not huge) yet they are selling their output at the massively inflated unit costs set by global commodity markets. I can't see any reason why a sovereign government doesn't legislate to cap wholesale energy prices for UK produced energy to benchmark levels based on 2021 prices plus a modest inflation uplift 

I am not sure that would work.  Happy to understand if it would.

A company extracts oil from North Sea and will try to sell that for best price, which is the international price.  
If UK said we will only pay X fraction of international price, company would sell to international market and no oil to UK.

Then UK would have to impose some further constraint that compels the oil to be sold to UK.  Export limits or something.
Company may chose to simply not operate the North Sea extraction if they cannot sell at market rate unless the market rate is low.

It would certainly be more complex than the idea initially seems, however attractive the idea may be on the face of it.

In the US, that well known bastion the free market ethos, they have a law called the Defence Production Act (1950) whereby the president can direct production to meet national needs, regardless of any losses to companies. It was used during covid.

These things are only complicated if you place the interests of corporate business above the interests of the nation.

[Deleted User]

Industry means jobs, salaries, pensions and taxes.  I’d say all of that is in “nation’s” interests.

Oil and gas industry in the west hasn’t ramped up production because investors don’t fancy losing money. Taking US as an example… while US government told the industry to increase production, companies and investors have zero confidence that they won’t be screwed (again) given the “oil is bad” noises continuously emanating from the government. Situation is similar in Canada and several other oil-producing democracies.

Governments could help if they really wanted to.  Stopping the “oil bad” noises would be a start. Releasing reserves now could be complemented with a commitment to buy oil once the prices drop - to help stabilize them and give some confidence that today’s investments get a return next year.  Reversing pipeline bans would help. Facilitating investment in gas liquefaction and port facilities -ditto. All these projects are stuck because western governments won’t let them proceed. 

Licensing of and proactive support for refineries is another missing peace. Russia has a lot of world’s refining capacity. The war, and closures of older western facilities as a result of Covid created a shortage of refining capacity so costs went up. Given that governments (quite rightly) sanctioned Russia and caused demand drop during Covid, they should be proactive in helping to replace the lost capacity. 

NedS

In a bid not to be outdone, Goldman Sachs raise the stakes to a predicted 22% CPI inflation in January.

https://citywire.com/investment-trust-insider/news/goldman-sachs-warns-uk-inflation-could-hit-22-in-january/a2395976

As mentioned earlier in the thread, initially predictions constantly under-shot so we must equally accept that it is at least possible predictions will also overshoot the peak.

Lets play a game - predict the highest prediction

SouthCoastBoy

I think these predictions, illustrate the fact that we still have a little way to go on inflation. The problem is energy is a fundamental commodity used in everything so by definition most items/services will become more expensive. If we then add the wage demands and potential increases inflation could easily get embedded into our economy. 

Hopefully we won't get to 22%, but I can see double digit inflation for a few years, and everything that brings with it. The next govt needs to be bold and severe the benefits link with inflation. If they don't we could be in a lot more trouble and end up in a currency crisis

NedS

SouthCoastBoy said:

I think these predictions, illustrate the fact that we still have a little way to go on inflation. The problem is energy is a fundamental commodity used in everything so by definition most items/services will become more expensive. If we then add the wage demands and potential increases inflation could easily get embedded into our economy. 

Exactly - every business uses energy, and those are rising and are not capped. At some point those costs will be passed on to us as consumers of whatever those businesses produce or services they sell, all of which further drives inflation. Cost of fish and chips, the price of a pint, it's all going to go up driven by higher energy prices, and that will feed into next years figures.

arnoldy

18%, 22% inflation predictions; 10% + actual, and the Bank of England is messing around with a base rate of 1.75%. Time to tighten base rates up (100s of basis points) and hack back at Government spending; they have been throwing money around like a drunken sailor in a brothel recently.

bluenose1

arnoldy said:

bluenose1 said:

What I don’t understand is who is currently making the massive profits on energy? 

Solar, wind, nuclear, hydro, wood pellet producers. The price of sunlight or the breeze has not changed, they are coining it in. The EU very sensibly is making technical changes that decouple the market price of electricity from the market price of natural gas electricity. 

Seems mad to me. Not sure why the UK has  not urgently stopped the system whereby all other energy sources prices are increased to match the by price of gas. Surely something they could do immediately to help reduce the pressure on energy prices. 
So record profits for those industries while energy prices continue to spiral out of control.

Yes, think we will have to rely on the EU to lead the way for a solution as we clearly can’t or won’t.

QrizB

bluenose1 said:

arnoldy said:

Solar, wind, nuclear, hydro, wood pellet producers. The price of sunlight or the breeze has not changed, they are coining it in.

Seems mad to me. Not sure why the UK has  not urgently stopped the system whereby all other energy sources prices are increased to match the by price of gas.

(S)He's wrong on this but not willing to learn. I'm fed up of correcting him/her.

jimi_man

ComicGeek said:

Prism said:

sgx2000 said:

Grumpy_chap said:

sgx2000 said:

Tony Blair was the most successful PM im the last 50 years..

Electorally no more successful than Maggie.

Both succeeded in their time to address the challenges of the era.
Both implemented policies that were unpopular while carrying the populace with them.
Both set a vision and led (rather than managed) the country.

Maggie was only suceeded by, selling off all the family silver.... to the wealthy tory voters ....
We owned all the utilities
Now foreign companies own them

Who wants to own and run the utilities? We already control them pretty well with policy without having to run them. 

All profits are stripped from the utility companies and paid to executives and shareholders. Very small amount is reinvested into network maintenance and improvements, which is why 20-25% of water is lost through network leaks.

We have an ageing distribution system for all utilities - power outages and water supply issues are more to do with low network investment than anything else. 

Some short memories here. Before privatisation of the water companies, things were in a far worse state. Leaks are a lot less now, water quality is better, beaches (notwithstanding recent news) are cleaner, prices are still about the same (indexed) as before, rivers are cleaner. One of the things that was done right, I'd hate to see it nationalised again.