Wednesday 25 September 2013

Those Whom The Gods Would Destroy, Haha !

More than a year before the 2010 Labour leadership race we identified Ed Miliband as the man to watch - based on a cunning piece of energy policy he hatched when in power.  He seemed to know the score back then.

But his new 'energy price freeze' ?  The man is barking mad !
"It is probably the sort of pledge that Mr Miliband would have preferred to keep under wraps but was forced to reveal because of his poor poll ratings. But it is a thoroughly healthy political move to confront energy market manipulation. ..."
Thus opines the Grauniad's leader-writer, proving that leftist journalists know as little about the real world as leftist politicians.  Miliband will come to wish he'd kept it under wraps, period.


Update: Raedwald punctures the whole Milibubble very nicely here


Jonas Lampeter said...

It grabs headlines.

But behind it seems to be a big push to increase costs by decarbonisation and presumably massive taxpayer support to make this happen. The price freeze could mask the reality of soaring energy costs.

Anonymous said...

So they recognise that lower energy bills would be attractive to voters but this is their solution? I don't know what to say, it reminds me of Venezuela.

Strange that the Daily Mail comments seem to support the policy yet the BBC site is full of sensible comments identifying the real issues.

The Tories better come out swinging. Perhaps this can kick start the real debate.

Ryan said...

Cost saving £140p.a for the average family for 2 years (followed by a massive hike in prices in the third year when the freeze is removed)

Tax take on average family: £10,000p.a.

It's not the energy companies (running on margins of 7% according to Pesto) that are ripping us off.

Played well to the unions which Ed wanted to keep on side. Last week he was telling us he wanted to get shot of them (which handily warned the Blairites how much Labour needs them). He's a sneaky little shit - don't underestimate him. He'll be telling fresh lies in 2015 when the lies of 2013 are forgotten.

@Anon: Daily Mail comments are always left-wing. Real fans of the Daily Mail BUY the paper.

dearieme said...

"to confront energy market manipulation. ..." by even cruder manipulation.

Blue Eyes said...

Milivolt seems to be speaking out of both sides of his mouth on this. He says that the reason that customers are being "ripped off" is because of a lack of competition, which seems fairly sensible and almost pro-market to me. Yet his solution is a price freeze while he spends two years implementing a new regulatory regime.

Idea: why not work out what he wants the regulatory regime to look like between now and the election, stand on a platform to implement it immediately after a Labour win, see what happens.

blue Eyes said...

Ryan, you are probably right, but does he think he can fool enough people to secure a majority in 2015? People who speak to different audiences in different speeches eventually get found out. As others have pointed out, even the BBC are sceptical of this energy nonsense!

Ryan said...

"He says that the reason that customers are being "ripped off" is because of a lack of competition, which seems fairly sensible and almost pro-market to me"

But it isn't born out by the facts. British Gas runs with margins of 7%. Gas is cheaper here than anywhere else in the EU. Leccy is cheaper here than anywhere in Western EU. What the little shit has focussed on is the price rises of 20% in 3 years. The people that vote Labour hate those price rises - but they were caused by Labour screwing up the economy so bad that the pound fell 25% against the $ in which energy prices are set!

Seriously, this guy makes me want to vomit. Same old evil socialist lies to get their dirty little thieving hands on power.

Blue Eyes said...

A more competitive market is *always* a good idea. 7% margins? In a true free market, margins on commodity items such as gas and elec should approach zero.

Then again, if we had a free market we wouldn't be turning off the cheap power stations and replacing them with fucking windmills.

Nick Drew said...

Jonas - welcome to C@W!

tax-payer support must indeed be the backstop because there is no saying the utilities could afford to hold their prices (if, for example, wholesale gas prices were surging)

anon 11:38 - I agree, this could be the very issue to sink Mili once and for all, if the Tories get their boots on: almost everyone in the media has spotted it's a complete dud

dearieme - yes, though the interventionist habits inculcated by Mili when energy minister (and gratefully battened onto by the civil servants who just love getting their fingers on the switches) have carried over into coalition energy policy, and then some: the so-called 'electricity market reform' is a dirigiste charter and it gets worse with every new regulation

Ryan - I really like your summary @ 3:51

BE - where energy is being sold wholesale, i.e. commoditised as you say, margins are indeed much less than 7%

but retail energy has some quite serious added value (breaking bulk, balancing supply & demand in very extreme circumstances, loads of social obligations etc) so you wouldn't expect de minimis returns

I don't think most utilities would acknowledge 7% even there, either - but I have to accept their accounting is not always wholly transparent ...

Blue Eyes said...

One of Labour's "cunning" plans in office was to make running the rail franchises painful. So much so that the government *still* hasn't re-let the East Coast route. Is this really just part of the plan? A Labour MP twitted earlier that if firms didn't want to be in the supply market anymore then so much the better. Was this stupidity or the cat being let out of the bag?

Other countries manage, indeed thrive, when the fuel is bought by the state and then retailed at set prices. Has Ed Miliband been getting his policy inspiration from Hastings Banda?

Blue Eyes said...

ND, I wasn't suggesting for a second that the energy retailers do not add value! Just that competition may not be as cut-throat as it could be - and mainly in my view because of regulatory burdens. There is never a correct return/profit margin in any industry. If Apple was a British company Ed Miliband would be demanding its nationalisation!

Botogol said...

it's all very strange to me.

- anyone who wants to fix their gas/electricity prices for 20 months can already do so. What's the advantage for consumers of banning variable-tariff pricing?

- I wonder if the utilities will give notice that everyone currently on a variable tariff will be forced to opt for a fixed tariff before the election.

Anonymous said...

A lunatic idea, but they lapped it up - anyone else spot the dead ringer for Addison's Thick of It character behind Ed?

Tackling energy bills is a good vote winner, so perhaps enough people will swallow this rubbish. The Tories may want to counter with energy credits for every household, which whilst a cost has the benefit of not chasing the people keeping the lights on out of the country.

Anonymous said...


It's like he's campaigning for an end to big game hunting, when he dresses in a safari jacket, carries a Remington 50 and has a home filled with zebra rugs and lion heads on the wall.

The Tories really need to stand up and just SHOUT "2008 climate change act" in a REALLY loud voice. A lot.