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politicalbetting.com » Blog Archive » Why EdM thinks he’s on to a winner with energy prices
politicalbetting.com » Blog Archive » Why EdM thinks he’s on to a winner with energy prices
Thanks to James Plunkett of the Energy Foundation and George Eaton of the New Statesman for highlighting this.
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What is important is the impact on the country, the energy industry and its investors, and energy consumers.
What it tells us is that:
- investors in the future development of the UK's energy infrastructure and industry have decided to sell their holdings and invest their money elsewhere;
- the energy industry will find it more difficult and costly to raise funds investment funds in future;
- the rising cost and diminishing availability of investment funds will retard the development of the UK's energy generation and distribution infrastructure thereby reducing quality of service and increasing risk of interrupted supply;
- consumers will end up paying more for energy supplies than they otherwise would have done, due to constrained supply resulting from reduced investment;
- taxpayers will end up paying more as the government is forced to step in to provide investment funds which are no longer available at acceptable costs from the financial markets;
- public sector borrowing and expenses will increase due to government interventions into the energy market.
Pleased to see though that you are solely worried about the impact on Ed.
Seems thoroughly patriotic in the circumstances.
If the public prefers reduced prices to environmental protection, politicians should respond to the public's wishes.
http://www.express.co.uk/news/uk/428271/We-ll-slash-cost-of-living-vows-George-Osborne-in-pledge-on-living-costs
"He [George Osborne] added: “Of course, there are important improvements we can make to the scale of energy and water bills, the cost of housing, the fees paid for everyday financial services, the expense of rail and road travel.”
The Chancellor said Britain was poorer today because of economic decisions by Labour while in government. And he warned switching to a Plan B would “add hugely to the cost of living”."
So I wonder what will be unveiled next week, at which point we'll see numerous voltes faces on both sides of the fence about the appropriateness of populism in this area.
Can we now be seeing labour up above 40% in the next few polls and staying there ? the tories better be careful how they handle this,the british public are angry with these energy companies and for me,ed's played a blinder.
It's up to the tories to show how ed's new policy would be a disaster and have they own plans that would help the british people with the cost of energy bills and the cost of living.
Fiddling around with utility bills in an attempt to assuage people's anger at how fast they've risen since privatisation is hardly a novel idea in British politics.
However, it is easy to eliminate unnecessary taxes on both areas. (Energy/Green taxes and VAT where applied).
However, reducing taxes on income and on employment would mean that people would be able to bear more easily fluctuations in world commodity prices.
But this is taking it to dangerously irresponsible levels.
That said, the Cons had better play this one carefully. It is popular and that means they are better off with a "you can't trust Labour" meme than arguing the intricacies of UK's energy policy.
I await the day when we find it impossible to find an energy company willing to service a market of 60m in a wealthy country. As I say, by the same token we'd have no-one running our railways as we intervene in pricing there too.
Rail intervention good
Energy intervention bad
You miss the point, again.
Private sector energy companies can only service a market if financial investors are willing to provide them with funds.
When investors decline to invest and/or sell their shares, the consequence is that the government has to step in to provide funding. This increases government borrowing, reduces financial discipline and investment efficiency, increases taxes and pushes up prices.
Intervention exists in the railway industry only insofar as the markets are unwilling to provide funding, i.e where there is no prospect of a commercial return on investment. It is a necessary evil.
You want that necessary evil to be visited upon the energy industry too?
If you really think voters are that stupid, then good luck.
Secondly, what do you think of the policy?
My views are that in the scheme of things the energy companies will probably suck it up and, taking EdM's lead today, will look for a way to work with him so that there is a voluntary element included (there are already multi-year fixed term deals from utility companies).
However, the consequential increased regulatory and political risk will push up the cost of capital which in turn will affect future investment decisions.
The developing countries are deserving of and demanding a bigger slice of the cake which they are belatedly receiving.
This country and the rest of Western Europe will become a great deal poorer in relative terms over the coming years - get used to the idea.
Ed Miliband has merely suggested freezing prices on systematically, deliberated overpriced energy for a couple of years, until the regulator can be overhauled. As I read it, he is not launching Sputnik IV from Doncaster Robin Hood Airport, nor erecting an Islington Wall, nor insisting tractor-makers are nationalised.
There are countless examples of politicians intervening in "markets" (by the way, energy is not a well functioning market – it isn't working for the consumer). Even Ozzy produced a near-perfect £50 bung to punters in the West Country, I read below.
Come back sensible Richard - there are enough Tory nutters on here already.
http://www.telegraph.co.uk/finance/personalfinance/10068657/Nearly-half-of-consumers-overcharged-for-utilities.html
By the way, I think your analysis below is spot-on. Funny how working class Tories get it.
(S)he's bang on.
Whether or not the Tories were planning big policy announcements before this last week, there'll almost certainly be one or two now, to counter Miliband's gambit. I'd also expect them to be the sort of things the Lib Dems will find hard to support, to ensure that they can't be implemented before the election (and hence the public will have a choice at the election rather than being able to bag both). Green Tax cuts might well be high up the list, contrasting with the statist, interventionist approach Labour's taking.
The figure quoted is £120.
Now the transferrable marriage tax allowance to be announced in a few weeks is going to save those affected £150 and it's been described as so trivial it's not worth bothering with.
Yet the energy price freeze (even assuming it happens) will save people even less.
Yes, it is very eye catching. Yes, it will be very popular. But how big a deal is this actually?
Cameron could potentially announce a Council Tax freeze for 2 or 3 more years from 2015 which would be worth just as much.
But Osborne's motives in restraining administrative and regulatory cost increases will have a broader macro-economic goal than crowd pleasing consumers.
Full and sustained economic recovery and, more particularly, the UK continuing to lead its global competitors in both the timing and velocity of recovery, will depend on the country's ability to keep interest rates low for as long as an output gap remains (spare capacity and low productivity).
The biggest threat to sustained low interest rates is consumer price inflation. For this reason any short term fiscal easing adopted by Osborne is more likely to be weighted towards cost deflation than reduction of direct taxes.
As pursuing these macro-economic goals will have the coincident effect of increasing standards of living then Osborne will be able to align his policies with the Conservative Party's political priorities and voter concerns.
It is Osborne not Miliband who is holding the winning cards.
There must be some arrangement: otherwise there would be absolute chaos, and the media wouldn't want to be in five places at once.
The fact that the big six energy companies have stalls at the Conservative conference will not exactly be seen as helpful by the Conservative spin doctors. Not that they knew what was coming this week so couldn't do anything about it anyway.
Rather than saving people £120 as a one off, he'll save everyone £145.50 per year indefinitely - by abolishing the TV licence.
Instead, BBC will be funded centrally by Government grant (advertising / subscription would be too difficult / unpopular).
There will be a significant savings from no longer having any licence fee collection costs and no more prosecutions blocking up the Courts. On top of those he then funds it at a lower level for just "true public service broadcasting" - ie no more spending £22m for the rights to a singing competition format.
If I want to be all Tom and Barbara Good - fine, let me buy my power from a supplier that offers it - as the Coop Bank used to offer *ethical banking* whatever that was or the Body Shop etc.
The market will adapt to alternative energy sources because it must innovate, we don't need to hand it wodges of cash - that just creates wasteful spending. Today we'd be offering subsidises to iceberg ships to make fridges.
Why not do both? Why is everybody so against people having their own money?
One of the great criticisms of the UK power grid is the amount of energy lost from the system. Because of the relatively short distances this runs at about 2.5-3% during high powered transmission with a further 5% lost at local transmission.
On a continental scale such as the United States (or the EU) this is much higher with the high powered grid losing between 6.5 and 7% before the addition of local power losses.
If we truly have a concern about energy resources it strikes me that we should be looking far more at local power generation with the grid only exiting as a backup to the local system. Certainly the idea of a pan EU grid system seems very wrong headed if it could mean us losing 10-12% of all the power generated.
I like it :^ )
Let's face it Plato, ordinary people are paying through the nose to salve the consciences of wealthy political elites - here in Britain and elsewhere
On green energy and other things. The EU. Foreign aid. Charity. Media. The list goes on and on.
Thing is, all the main parties are in it together. And Ed may look a little less comfortable if the costs of some of his pet projects are frozen.
"Senator Ted Cruz’s marathon speech was aimed at President Obama’s reforms to the healthcare system. He is making his lengthy case to deny funding to implement the President’s overhaul of the system, calling it the country’s “biggest jobs killer”.
But nearly six hours into his address he announced to a nearly empty chamber that it was his daughters’ bedtime and he would like to take the opportunity to read to them.
So began his performance of Green Eggs and Ham. When the story finished, Mr Cruz addressed his children directly through the TV. “Brush your teeth, say your prayers, and daddy’s going to be home soon.”
Well, not that soon because the Texan firebrand is still on his feet in Washington..."
Ed Balls seemed happy to don a 'National Grid' sponsored shirt earlier in the week. Perhaps it was a protest of some kind.
http://www.ft.com/cms/s/0/6f307ff0-245f-11e3-8905-00144feab7de.html#slide0
AIUI, AC is better for short-distance transmission; DC is better for very long distance or underwater transmission.
http://en.wikipedia.org/wiki/High-voltage_direct_current
Maybe Bell will get the last laugh over Tesla ...
Hardly surprising that he is prepared to place the future of the country's economy in jeopardy.
But hold on a second: how did we get here? Might the 13 years of a Labour government have had anything to do with it? What about the Competition Act 1998, the Utilities Act 2000, the Enterprise Act 2002 and the Energy Acts of 2004, 2008 and 2010, all passed under Messrs Blair and Brown? Might they have helped to push up energy prices?
Come to that, didn’t Ofgem remove price controls between 2000 and 2002 under a Labour government? And wasn’t the Secretary of State for Energy and Climate Change in 2008-10 one E. Miliband? Correct me if I’m wrong, but I don’t recall these radical policy ideas coming from him when he had the chance to put them into practice. http://www.telegraph.co.uk/news/politics/labour/10333499/Ed-Miliband-has-given-us-a-masterclass-in-dishonest-populism.html
Why don;t the energy companies employ an ad agency to spell all this out? give the public the truth?
It's why AC is everywhere, and DC is only in a few niche applications.
This stupid idea sums up the pathetic economic illiteracy of these cretins.
He is currently doing light tests on the wind farm offshore from Villeneuve-sur-mer.
There is no need for the Tories to try and defend the power companies. It should be easy enough just to point out the reality of what Miliband did when he was in control of energy policy and say that he is a back-stabbing politician who will promise anything to get into power. People are already cynical of politicians so it shouldn't be too difficult to push this line.
Still, it'll prove to be a popular announcement,
I would be loathe to misunderstand your posts.
Another link:
http://www.dciinsulator.com/shownews.asp?id=155
It's not a case of a HVDC backbone replacing local AC; it will be in addition to the local transmissions. Think of it as a motorway compared to a local road network.
You have to look at the whole picture, not just one item, the loss on the network.
On the resilience, it's not so much fewer larger generators as a larger number and a more diverse range of generators.
Of course, much depends on the costs and also the environmental impact - pylons are a blot on the landscape by any standard.
If Ed is really serious about helping consumers with their cost of living, and not merely indulging in gimmicks as all politicians do, he'd ensure we had control of our own energy needs. Green methods are an expensive, next century solution which can be fed in gradually (bugger the polar bears). He needs to unleash the dogs of fracking, burn waste, and bring nuclear back.
But he's a greeny who isn't worried about the bills. So a gimmick it is. And after twenty months, if the lights don't go out, the bills will soar to make up for the lost revenue.
I think there was always a case for nationalising fuel supply, despite the associated downsides. But that might be a vote-loser. Principles? Wot's them?
Isn't engineering fun
But it`s businesses which would gain a big share of the 4 billion pounds the energy companies lose because of the freeze.Remember while households gain only 120 pounds,businesses save 4800 pounds.
'That is hilarious. Ask people what they want, and then promise to pass a law saying they can have it. Job done. I'd never realised that being a party leader and winning elections were so easy.'
I'm just surprised the polling isn't better.
Would you like £120 ?
http://news.sky.com/story/1146341/hs2s-new-boss-appointed-on-591k-salary
If you think Ed is Red you should hear the questions in this Q&A. They want free electricity, rail nationalisation and more union rights
@paulwaugh's Tweet: https://twitter.com/paulwaugh/status/382868621485428738
Plus, it isn't scaremongering, there are real world examples (California being the most recent) that show how introducing a price ceiling leads to blackouts.
What's the lib dem strategy on power prices at the next election going to be, Mark?
'Our policy is beggaring you, but don;t the trees look nice?'
He would now be at the crease taking guard against Tory spinners on rent rises.
And he would have found the ball didn't spin at all; every one straight as a Cameron referendum pledge.
The ONS published their experimental "Index of Private Housing Rental Prices, June to August 2013" this morning. It was their second release in this new series.
Here are the cover points:
• In the 12 months to August 2013 private rental prices paid by tenants in Great Britain rose by 1.2%. Private rents in Great Britain excluding London rose by 0.8% during the same period.
• In the 12 months to August 2013 private rental prices grew by 1.1% in England, 1.3% in Scotland and 1.3% in Wales.
• In the 12 months to August 2013 rental prices increased in all the English regions, with rental prices paid increasing the most in London (1.9%) and the South East (1.1%).
So not a single region where rental prices increased by more than rate of inflation and an average rise well under half the CPI rate. This is clear indication that rent prices are falling in real terms.
The regional breakdown is as follows: Between August 2012 and August 2013, rental prices grew by 1.1% in England, 1.3% in Scotland and 1.3% in Wales. The underlying rate in England excluding London was only 0.8%.
And what is even more significant is that rate of annual growth in private rental prices has started to fall. From around spring of this year, coincident with capital values of homes rising, the growth rate in rents has begun to fall. It does make you wonder which party is better at reducing living costs.
Scheme: Maybe. Lose at marbles: Undoubtably....
Is Tim banned?
'Ha, Kay Burley skewering Luciana Berger on why Milliband did feck all about it when he was in government.'
Energy costs up 85% over 12 years of which 10 years were under a Labour government.
''Last week it emerged energy bills have almost doubled since 2000, turning up the heat on Britain’s already hard-pressed families.
Households last year spent an average of £1,339 on gas and electricity – 85 per cent more than the £710 at the turn of the century, research shows.
The figures – adjusted to 2012 prices to take inflation into account – show that gas bills went up by 119 per cent and electricity bills by 47 per cent between 2000 and last year.
Read more: http://www.dailymail.co.uk/news/article-2430497/Labour-conference-2013-Ed-Miliband-speech-claims-Britain-better.html#ixzz2ftVlkPFD
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Well seems Ed has truly picked a fight with the energy firms. Could be politically disastrous or genius.
Reactions seem mixed. Would like to see some opinion polls forthwith.
Perhaps you should be concerned as well? Or do you think that Miliband's plan has no potential downsides?
It is interesting that Labour feels it must exclude @Nigel_Farage from TV debates - suggests they as vulnerable as Tories to UKIP.
I'm not defending the energy companies, I don't know whether the price freeze is a good or bad thing, but it'll certainly be a popular policy,if it works out.
It is a valid point, though, to compare Milliband's time in office, with his stance now, given it was only 3 years ago.
Plus, I love seeing politicians of all flavours squirming under the lights.
Simple and effective, if he can do it.
BTW, I'll do it for £59,000. I've got no experience or particular knowledge, but I love the subject and it'd be fun. Best of all, I'd get to go down loads of tunnels. ;-)
"If you really think voters are that stupid" personally I'm betting they are
Then I couldn't remember what it was.
If we did that then - maybe - Eds Balls & Militwunt would require face-flanels to cover there 'what-evers'. With the TV-tax we have "Moll" Flanders straight-front-end-[censored]! Izzinit...?
wrt @tim - he's coming down your way. He thought an outside broadcast from the brazier would carry more man-of-the-people import for his 10,000th.