Another out of touch politician

  john 52 09:49 12 Jun 11
Locked

1 -If customers are on a prepay meter trying to move supplier is no easy task

2- They are usually on a prepaid meter because the are in arrears with there power bills

3-Many people have exit charges for coming off a tariff to change company and this will cost them more money to change.

4- It is expected that all the major energy companies will raise there prices so you move supplier pay the exit fees and it still goes up unless you go for a fix price which will cost more and which if you are struggling to pay on the tariff you are on how are you going to afford it .

5-Many people do not want the hassle of changing supplier

6- After the winter bills many people are in arrears and are playing catch up during the summer on there utility bills

7-In a further attempt to ease pressure on prices by increasing competition, the energy secretary will this week announce new measures to make it easier for smaller companies to compete in the market by easing the costs and red tape that prevent them from doing so.

So have they finally admitted the big plan to sell off our infrastructure does not increase competition or lower prices

consumers should vote with there feet

  Forum Editor 10:47 12 Jun 11

"So have they finally admitted the big plan to sell off our infrastructure does not increase competition or lower prices"

I didn't notice any such admission in the article you linked to. You've made the assumption.

I think few people can seriously suggest that nationalised utilities would lead to lower fuel costs; it's ludicrous to suggest otherwise. The only way that a government can influence the price of a nationalised utility in favour of the consumer is by subsidy from the public purse - in effect we would all still pay in the end. Nationalised industry is traditionally wasteful in terms of labour costs, and riddled with inefficiencies, a nationalised power industry would be a paradise for militant union leaders. The argument in favour of public ownership was always 'it means you don't have to make a profit, so there's a benefit over ordinary companies.' The argument doesn't stand up however, the profit margin is eaten up by waste and inefficiencies, and the world is a very different place to that of 50 years ago. Nationalising the power industry would be a disaster.

The simple fact is, fuel costs will rise in the short,medium, and long term as mineral fuels continue to dominate the industry. It's the reason why governments should be vigorously developing the nuclear power industry instead of faffing about telling us to switch suppliers.

We don't need a government Minister telling us that consumers should "vote with their feet and switch to a different supplier", we're intelligent enough to work that out for ourselves, although for many people it isn't quite as straightforward as the Minister seems to think - as you've pointed out.

I am on a consumer panel for one of the big power suppliers, and they have recently asked me to look at their various suggestions for improving their service - one of which is making it much easier for consumers to switch suppliers. These companies are well aware of the pressures from the market, but they need pushing. Additional competition from smaller suppliers will ramp up the pressure.

  natdoor 11:55 12 Jun 11

"It's the reason why governments should be vigorously developing the nuclear power industry instead of faffing about telling us to switch suppliers".

The government is unable to develope nuclear fuel. It is down to a French-owned company to decide whether to invest here or elswhere, depending upon the subsidies and guarantees offered. We are in a very exposed position with basic essential utilities in the hands of foreign companies. If you believe there is real competition in the energy market why are there moves for Ofgen to hand over investigations to more competent authorities?

  Forum Editor 12:18 12 Jun 11

natdoor

I acknowledged the need for greater competition towards the end of my post. Surely you aren't suggesting that a nationalised power industry would magically provide us all with cheaper power?

As for developing nuclear fuel, the government has already given the go-ahead for the development of a new generation of 8 nuclear power stations, but that will obviously take time. Meanwhile we're faced with the prospect of increasingly higher costs for electricity and gas.

  john 52 12:44 12 Jun 11

FE

I think few people can seriously suggest that nationalised utilities would lead to lower fuel costs

We were sold privatisation on the basis of more competition would lead to lower costs to the consumer

With regards the I didn't notice any such admission in the article you linked to. You've made the assumption.

The other link on the BBC web page says

In a further attempt to ease pressure on prices by increasing competition, the energy secretary will this week announce new measures to make it easier for smaller companies to compete in the market by easing the costs and red tape that prevent them from doing so.

But the main point was it is not that easy for many people just to move energy suppliers and to suggest it smacks of being out of touch .

  spider9 13:12 12 Jun 11

Perhaps this is just Mr Huhne attempting to garner some favourable publicity by showing he is a 'man of the people'. How long before the jokes of "it's easier to swap electric suppliers than driving licences" start to appear?

Swapping suppliers can only be a short-term panacea, all suppliers will change their tariffs shortly and I'm taking bets there won't be much difference between any of them, in the end.

As for, "get a fixed", now - do we really believe we can get ahead of the market? The suppliers will already have built their 'fixed' charges accordingly. Cynical? Suppose I must be!

  Forum Editor 13:58 12 Jun 11

"We were sold privatisation on the basis of more competition would lead to lower costs to the consumer"

Actually we were 'sold' privatisation because the nationalised industry was making huge losses and the Unions were exploiting their collective bargaining power. There were far too many people employed, but if anyone showed signs of trying to reduce overstaffing and the inefficiencies that abounded, the unions played the work to rule card. Every time a big engineering project came along the nationalised industry insisted on project-managing it. This resulted in yet more inefficiency, overspending, and delays.

The whole thing was a complete shambles. That's why it was decided to privatise. If we still had nationalised power we would probably be paying even more in real terms, but some of the costs would be hidden from us by a reversion to the old 'keep the power turned on at all costs' principle, which would involve public money being pumped in. The bill that came through the door might look OK, but the real cost would be recovered in taxation.

  john 52 14:24 12 Jun 11

Fe

Actually we were 'sold' privatisation because the nationalised industry was making huge losses and the Unions were exploiting their collective bargaining power

It did not seem to deter Mrs Thatcher taking on the miners

If I remember correctly the shares were over subscribed with many large institutions making large profits from the sale !Financial institutions do not invest in projects unless its a sound money making project ! what about railtrack and the risks to passenger safety ? I am sure you will not agree with my opinion but any service which is an essential service to the public should be controlled by the government and its up to the government to ensure it is run correctly

  shellship 15:10 12 Jun 11

john 52 What makes you think that the government can ensure that anything is run correctly? Track records of most governments over the decades seem to prove that they cannot run anything.

  john 52 19:09 12 Jun 11

shellship

Are you trying to say that both Labour or Conservative governments have never achieved anything over the years and yet our standard of living and what we expect from life goes up in each generation it does not happen by accident .

  natdoor 19:22 12 Jun 11

FE

Granting permission to build nuclear power stations is one thing. Getting them built by private companies is another.

Perhaps you will recall the situation in California, where capacity was inadequate to meet peak demand. None of the suppliers was interested in building new power stations because the siruation enabled them to control demand by raising the price. This was far more profitable than providing an adequate service.

It is the nature of utilities such as power generation that there needs to be an element of redundancy in the provision. This could be to cope with increased demand during exceptional weather or to cover for breakdown ofone or more power stations. Private industry has no interest in carrying such spare capacity.

For an alternative view on state control click here.

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