Energy bills

 

Mr Miliband is right about one thing. Energy bills are too high.

He should know why. It was his Climate Change legislation which underwrote EU energy policies to push the price of energy up in the UK. The EU/UK policies of pricing and taxing carbon dioxide emissions, requiring substantial generation from very expensive renewables, and making it difficult to exploit local carbon based energy resources have helped force up domestic energy costs.

One of the architects of dear energy did not go  to Brighton to recant. He did not apologise for creating dear energy. He did not  say we should make it a priority to have affordable energy to heat our homes, and affordable energy to price industry back into business. He did not hail a shale gas revolution, so we could drive our energy prices well down as the USA is curently doing so successfully. Instead, he decided to blame someone else, and attack the energy companies forced to carry out his policy will.

It is all too easy to whip up popular hostility to large companies who report large profits. It may look inviting to suggest those profits should be given back to the customers, to hide the impact EU government policies are having on  bills. It does, however, reveal a fundamental misunderstanding of the role of profits.

Companies providing large scale facilities for electricity generation or for collecting and distributing gas need to generate profits so they have money to pay for the maintensance, renewal and expansion of their facilities. They also need to have some money to pay interest and dividends on the investment monies others have put into their businesses. Many of the providers of capital are the same people as the customers, placing their pension and insurance savings in to these companies.

Announcing  a long freeze in prices could do considerable damage to supply and future investment. If raw material energy prices rise – the gas/coal/oil needed to drive electrical plant for example – the companies could be badly squeezed and lose large sums, undermining their financial stability. The threat of frozen prices will put off anyone from making a new investment in energy provision in the UK, at a time when we badly need more capacity. The prime duty of government is to set an energy policy which can keep the lights on. The second duty is to help create a competitive market which can turn to the lowest cost solutions to keep energy affordable. Labour’s new policy fails on both these counts.

         It is difficult enough as it is with EU policy controls and Lib Dem renewable enthusiasts in the government. The UK needs to change energy policy by building a new generation of gas power stations, whilst bringing the plentiful gas supplies beneath our feet to the surface.  That may require both a majority Conservative government and a renegotiaiton of our relationship with the EU to bring about. Mr Miliband in office made sure we faced high and rising bills for the future.

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117 Comments

  1. Bazman
    Posted September 26, 2013 at 5:31 am | Permalink

    Not a mention of the smokescreen of tariffs and opaque accounting by billing companies. That for a start tells us this is apologist propaganda.

    • Edward2
      Posted September 26, 2013 at 9:33 am | Permalink

      I don’t know why you have this strange idea that the pricing and billing of gas and electric is difficult to understand Baz.
      It all on their websites in easy to read statements. Or if that is too difficult for you, why not try one of the many comparison websites that are available.
      The comparison sites have done all the hard work for you by listing all the competing companies and all their prices and show you the easy step by step process, on how to swop to a better energy provider.
      Mind you, this may well be getting more difficult to do when your power goes off in the UK in just a few years time.
      But at least you won’t be confused by Glorious Leader Milliband’s simple fixed price system, whilst you are sitting in the cold and dark.
      Every cloud..

      • Bazman
        Posted September 26, 2013 at 3:29 pm | Permalink

        It’s not to difficult for me by any means. I’m always on the cheapest tariff. They will play by some rules even if they are their own. Even if this means musical chairs. Which as a I remember one energy firm boss said this changing tariffs was the cause of high bills!? No even their own rules it seems.This is not the point many tariffs are a method of hiding high prices. No reduction in roaming charges on phone by voluntary means either has there?
        Now lets rewind a few years and think how much of the same blue murder was cried when anyone pointed out the flaws in the banking system and how some lost their jobs for pointing these flaws out, all we had to do was get out of the way and leave it to the banks or the financial system would collapse. Angela Knight was the banks chief cheerleader and is now the same for the energy companies. The rest is history.
        The Armageddon of business failure and poverty that would result in the bringing in of a minimum wage. That never happened either. You work for less than six quid No? and the state can’t afford it either.
        All of you fantasists beliefs lie in the belief in the trickle down effect and as we has seen there has been mainly a torrent to the top with the rest of the population facing living standard and wage cuts.
        You will never learn will you? Ram it

        • Edward2
          Posted September 27, 2013 at 5:45 pm | Permalink

          Baz
          Nice rant yet again.
          Use copy and paste it will save you time.
          I don’t know how you manage to get from a simple matter of energy tariffs to Armageddon and minimum wage and the banking system!
          But I notice as usual you fail to address any of the points I raised.

          • Bazman
            Posted September 27, 2013 at 5:59 pm | Permalink

            Is it rocket science for you? The tariffs are not clear and you know it. This is why there are comparison sites and why they rope you into a deal then put the prices up.
            The main point is that letting these companies do what they like in the name of competition is how we are getting higher prices and taxes and lower wages and living standards.
            You will never learn as I said.

          • Edward2
            Posted September 28, 2013 at 4:42 pm | Permalink

            I have my views and you have yours.
            I do not need education from you Baz.
            Presumably you find your dealings with the State always easy and pleasurable on things like taxation, pensions, housing, planning, parking rules, benefits, dvla etc
            Good customer service?
            No complicated rules and regulations?

      • Credible
        Posted September 26, 2013 at 6:03 pm | Permalink

        Well according to Which, it’s not easy.
        I found out today that I wasn’t on the best tariff although I thought I was. This information was never going to be volunteered of course.
        The profits of these companies have gone up hugely because they are essentially profiteering monopolies.

      • uanime5
        Posted September 26, 2013 at 7:52 pm | Permalink

        People need comparison websites because energy companies are making it as difficult as possible for people to determine which policy is the cheapest.

        • Edward2
          Posted September 27, 2013 at 7:28 am | Permalink

          I’m surprised you find looking on a website and then writing down the best deal as being difficult to do Uni.
          Presumably having just one State monopoly power company with no choice would make you content.
          If you ever tried working out income tax, NI,VAT, CGT, SSP, benefit entitlement and many other State systems you would soon realise what obscure and opaque really looked like

    • A different Simon
      Posted September 26, 2013 at 10:19 am | Permalink

      Bazman ,

      The answer is to sort out the tariffing and billing .

      Would be reasonable even to include an item for the cost of competition such as marketting and advertising on the bill .

      The previous Govt had an unspoken deal with energy retailers that it would not stand in the way of price gouging so long as they invested in infrastructure . Don’t think this has been entirely effective .

  2. David Hope
    Posted September 26, 2013 at 5:37 am | Permalink

    Very true. Given all the coal stations coming offline, and the fact we are running so close to capacity I find Mr Milliband’s policy terrifying.

    He should be apologising for his policies that will mean more low income earners and pensioners freezing in their homes and he should be promising to embrace shale and other cheap energy.

    It’s like setting fire to a building and then turning up in a broken fire engine pretending you are going to save the day

    • lifelogic
      Posted September 26, 2013 at 7:27 am | Permalink

      “like setting fire to a building and then turning up in a broken fire engine pretending you are going to save the day”

      Indeed but Cameron is no better, anyone who can pass legislation to enforce gender neutral insurance is clearly just as bonkers.

      • Mike
        Posted September 26, 2013 at 4:04 pm | Permalink

        Not to mention that Cameron and almost all of the tories voted strongly for Miliband’s tax.

  3. margaret brandreth-j
    Posted September 26, 2013 at 6:28 am | Permalink

    Which is why we should keep trying with alternative sources rather than focusing on fossil fuels. If we only get poor storage of electricity from solar power and HEP then why?
    We can’t blame those who are trying to do something about energy either , rather than complaining when science and action is needed . When I first was married many homes had storage heaters which used electricity and other materials to maintain heat, rather than burn fuel.
    I have seen Gas workers in their tens working in one area , sitting in vans for hours , being rude to the customers ,dictating their working terms and conditions to the public and generally bullying because they are that type. How about reorganising the companies with public friendly employees.

    • stred
      Posted September 26, 2013 at 9:04 am | Permalink

      Hydro Electric Power is actually one of the main ways that energy is stored. You just need a big reservoir.

      • lifelogic
        Posted September 26, 2013 at 3:07 pm | Permalink

        Yes but it wastes a large proportion of the energy in the process of storing and regenerating. Storing already very expensive wind and pv power in this way is even worse economic lunacy. Much cheaper and more efficient to produce, on demand, using Gas, Coal, Oil & Nuclear.

        • Bazman
          Posted September 27, 2013 at 6:07 pm | Permalink

          Nuclear is only cheap as the state underwrites the risk. State subsidised in effect like wind, but with no limit.

    • ian wragg
      Posted September 26, 2013 at 9:49 am | Permalink

      I too had storage heaters in the 70’s and they are as useless as the PV panels and Wind Turbines. They store heat at night and if the sun shines the following day you have to open the windows to cool the room down. When the ambient is low, by 3 pm the heaters are cold and the house is freezing when you return from work. These heaters fit well with present government policy of providing inefficient intermittent heat when its not required.

      • lifelogic
        Posted September 26, 2013 at 3:08 pm | Permalink

        Largely true they are a little better in offices used during the day than homes mainly used in the evening.

      • margaret brandreth-j
        Posted September 26, 2013 at 5:55 pm | Permalink

        So we are not bothered this time about being cold , it is the heat and the fact a window has to be opened is the excuse . what an argument!

    • M.A.N.
      Posted September 26, 2013 at 9:53 am | Permalink

      Have you been on the brandy again? How do you think storage heaters heat up? pixies?.

      • margaret brandreth-j
        Posted September 26, 2013 at 5:52 pm | Permalink

        Don’t be silly , the idea is to get the materials up to heat and then that heat is stored, whereas a gas fire burning gas well… need I say more think man!

    • Anonymous
      Posted September 26, 2013 at 4:17 pm | Permalink

      “I have seen Gas workers in their tens working in one area , sitting in vans for hours , being rude to the customers ,dictating their working terms and conditions to the public and generally bullying because they are that type. How about reorganising the companies with public friendly employees.”

      Which is why I don’t think they should get a job until they’re at least sixteen.

    • margaret brandreth-j
      Posted September 26, 2013 at 6:26 pm | Permalink

      I also had a van, but of course cars were not improved, I also had operations where I was ill for months , now there is 2 day recovery of course there isn’t any improvement there, I used to scratch ice of the window as a child, of course there is no improvement there, and so on and so forth .. so many fuddy duddies who havn’t got any faith in progress and improvement!!!

  4. Richard1
    Posted September 26, 2013 at 6:34 am | Permalink

    Miliband’s absurd policy on price fixing and property expropriation brings him out in his true colors as a neo-marxist. Not the kind that sent their enemies to slave labor camps but the kind who always believe politicians and bureaucrats can create a ‘fairer’ society by preventing people from spending their money as they wish and preventing businesses from operating and investing as they wish.

    The 20 month proposed freeze is neither here nor there, companies will react to it by putting prices up to compensate either before or after the period. But the policy indicates a way of thinking. None of these Labour politicians have any experience in the private, wealth-creating sector.

    I think miliband should now say what he thinks the right profit margin and return on capital is for all industries and companies. What about fixing food prices as well? Or house prices? To go with price fixing don’t we need income fixing as well? Shouldnt Mr Miliband say what a fair rate of pay is for each job and ban companies from paying more or less? Are there any leftists reading this who can spot the flaw, and work out where this might lead?

    • lifelogic
      Posted September 26, 2013 at 7:32 am | Permalink

      “Where this might lead” indeed back to Ted Heath, power cuts, three days weeks, collapse of the economy etc. But we are going to get Miliband it seems, with about an 80% probability, all thanks the the uselessness of Cameron and his Heathite approach.

    • A different Simon
      Posted September 26, 2013 at 10:30 am | Permalink

      Richard1 ,

      I posted simmilarly elsewhere and got a reply I wasn’t expecting .

      Some think Ed doesn’t want to win the next election because he has seen what the real politics and real politiks of his colleagues are and doesn’t want them getting near power .

      Take a look at the EU mining code , another article of fantasy dreamed up by students with no experience of industry and nice cosy pensions .

      The EU thinks that exploration licenses should not automatically lead to production licenses and that they should go up for tender with the explorer being rewarded for “geological documentation” .

      Given that most small and medium sized oil and gas explorers loose money hand over fist is the EU also proposing to compensate them when they produce documentation to show they found nothing ?

      Some industries are inherently high risk , high reward and others transient taking advantage of an opportunity which will only exist for a small window of time .

      Civil servants have mindsets for other things .

  5. Alte Fritz
    Posted September 26, 2013 at 6:40 am | Permalink

    It was interesting that members of the public who were interviewed for news programmes were not universally supportive of Labour’s announcement. Many gave the impression that they had no faith in the state to manage energy supply. Maybe the message is finally getting through?

  6. Mike Stallard
    Posted September 26, 2013 at 6:45 am | Permalink

    Labour has enormous strengths.
    The people who depend on government largesse – the “vulnerable”, those who cannot cope, those who are looking to make a lot of money, those who are doing state jobs – not all of them nurses and policemen actually – and those within the government itself (at all levels) look to the state for their livelihood. There are a lot of such people in UK at the moment. And Labour seems a soft touch. Mr Miliband has a record (he was at the heart of the Labour years) and so do several others too. 90% of his money comes from unreconstructed 1970s union people too.

    Meanwhile, the Conservatives are run by Mr Cameron and other people who seem to be totally at ease in the EU gatherings and rather too friendly with Europhiles.

    Which leaves UKIP…

    Just as “Vote Blair get Brown” (true), and “The Conservatives are run by Tory Toffs” (true) didn’t win elections, so “Vote UKIP get Labour” (true) won’t wash either.

    It is time for someone to climb down. Fast.

    • lifelogic
      Posted September 26, 2013 at 3:12 pm | Permalink

      Indeed Miliband is the man of the state sector unions. But he is only a little worse than Cameron, no real substantial difference. If he is anti war and anti HS2 he is perhaps better and if he promises anything on the EU he will be trusted too.

    • Anonymous
      Posted September 26, 2013 at 4:20 pm | Permalink

      Keep Dave – get Ed

      It could be Ed by default, which is most depressing.

  7. me
    Posted September 26, 2013 at 6:53 am | Permalink

    Three years in and it strikes me the Tories are just as guilty of supporting the CCA.

    • forthurst
      Posted September 26, 2013 at 11:03 am | Permalink

      “Three years in and it strikes me the Tories are just as guilty of supporting the CCA.”

      I don’t agree. The Coalition Government is far more reprehensible since they and everyone else now has been able to observe the dire consequences, fully intended, of the 2008 Climate Change Act. It is reasonable to anticipate that most politicians, being functionally innumerate and constitutionally unable to understand anything ‘techy’ would not have understood the dire predictions by people who do possess basic numeracy and intelligence, but now they have absolutely no excuse whatsoever.

      • lifelogic
        Posted September 29, 2013 at 6:17 am | Permalink

        Indeed even more to blame and they still have people like Ed Davey in place.

        We seem to be largely governed by complete fools or self serving (people ed).

  8. lifelogic
    Posted September 26, 2013 at 6:54 am | Permalink

    Indeed it was Ed Miliband as Secretary of State for Energy and Climate Change,
    October 2008 – May 2010, who is very largely responsible for the insane government energy policy – alas still idiotically continued by Cameron and Huhne and Davey.

    One wonders if the police will check for any insider dealing in power stocks, given that Miliband wiped off 5% of their value by Milibands vandalism.

    There are however problems in lack of competition in energy supply, we need a standard tariff format that can easily be compared and is fixed for a certain time. Rather than the absurd current confusion marketing.

    The main problem however, is clearly the renewable religion, the government interference and the back door taxes they impose.

    I see Lord Stern on Newsnight said “I think I undersold the story of global warming”.
    One is left wondering if he actually believes the nonsense he pushes. No warming since 1998 and one clearly cannot predict a chaotic weather system for 100 years even if you did have half of the input data that is missing. Hotter is probably better than colder anyway on balance all the evidence suggest. Many die now from lack of heat in winter.

    Spending billions now to reduce one factor in climate C02 to control the climate in 100 years is just bonkers, when so much more of value could be done with the billions with certain, quick, life saving and positive results as with the excellent Gates Foundation.

    For goodness sake get a rational physicist to review the position and not someone infected with the green or indeed any religion. Oh and not “BBC think” professor Brian Cox who was again pushing the catastrophic AGW religion for the BBC yesterday as he is clearly infected too.
    If the experiment does not agree the theory/model is clearly wrong! Anyway the model is clearly wrong as it is simply not possible the predict the future climate with a chaotic system and not even knowing many of the inputs. The butterfly wing creating a hurricane scenario is perfectly true.

    They are soothsayers, not scientists, perhaps they can tell us all the volcanic emissions, suns output, and all scientific & technical developments for the next 100 years – as they clearly need to know them to make their silly projections. Even if they were right, adapt as we go is clearly the best approach.

    It might well in fact be too cold in 100 years due to a volcano or reduced sun activity and we will have made matters worse. Anyway we might develop far better ways to control the climate using energy from fusions perhaps, to modify things if needed or crops that reflect more heat or countless other thinks we shall have to wait and see ……..

    • lifelogic
      Posted September 26, 2013 at 12:51 pm | Permalink

      Is seems very foolish of Miliband to put this clear water between himself and Cameron. He will win the election easily anyway, this just makes Cameron’s task easier. He can say well you all know I am a pro EU, quack green, tax borrow and waste socialist but at least I am not a completely mad socialist like Miliband.

      I see the government (and BBC) are getting very, very, desperate over HS2, the runaway global warming scam, the wind and PV nonsense and even the politically mad “bedroom tax”.

      Please can Labour kill HS2 stone dead now, release thousands from the pointless blight inflicted upon them and stop pissing any more money down the HS2 drain now.

  9. Peter Stroud
    Posted September 26, 2013 at 7:10 am | Permalink

    Absolutely right. But the UN IPCC are expected to ignore the 15 year global temperature hiatus, and tell us that warming is still going on. They will, as usual, claim that we must take action to decarbonise, even more urgently. There will be much arm waving; suggesting that the excess energy has disappeared into the deep oceans; even though surface temperatures have not increased. Miliband will use this pseudoscience to support his policy. But will Mr Cameron question the politics behind the IPCC’s claim?

    • lifelogic
      Posted September 29, 2013 at 6:20 am | Permalink

      “But will Mr Cameron question the politics behind the IPCC’s claim?” I doubt it, he never says anything very much on AGW, Energy or the EU they are vitally important subjects and yet he is trying to bury them both.

  10. stred
    Posted September 26, 2013 at 7:15 am | Permalink

    One of the most expensive changes to electricity generation is the change from coal to wood pellet fuel. The burning of US trees and replanting depends on accounting methods which have been questioned by the committee of scientists employed by the EU and probably fails to reduce CO2 after taking into account transport, land use and anyway takes 50 years to work. The process has been ‘grandfathered’ by DECC, so payment to the companies carrying out the work will have large subsidies, paid for on the bil,l and will be guaranteed for 25 years. For information, have a look at the DECC document on the subject. There is a picture of Mr Millipede beaming proudly on the first page.

    • lifelogic
      Posted September 26, 2013 at 7:36 am | Permalink

      Indeed the coal to wood pellet fuel and planting of trees is all nonsense in rational & scientific terms even if you accept you neat less C02 they do not work.

    • M.A.N.
      Posted September 26, 2013 at 9:56 am | Permalink

      Why is he on official government literature, he isn’t even in government. And where is Cameron & Cleggs response to this. Never mind Milliband, I want to hear my prime ministers official response.

      • A different Simon
        Posted September 26, 2013 at 3:21 pm | Permalink

        M.A.N.

        Why would they risk intervening ?

        Miliband is doing their jobs for them .

        If Miliband had wanted to offer up something new for accommodation he could have floated the idea of a universal location value tax and shifting taxation from employment onto land but no , instead we get threats of confiscation instead and mansion taxes .

        Party conferences are always silly season but Miliband is smart enough to know that the fallout from this will screw any chance his party has of winning the next election .

        He doesn’t want Labour to win the next election .

  11. Gary
    Posted September 26, 2013 at 7:16 am | Permalink

    Milliband is absolutely clueless. It will cost them the election.

    But , the Tories are no different. They splurge £130bn on economy distorting HTB, they don’t want to put the EU cap on bankers bonuses, even though the bankers are effectively paid by the state. Labour are beguiled by the bankers, the Tories are the bankers !

    Clegg sounds like a parody of a soviet apparatchik, reeling off a laundry list of state subsidies. Even Farage spoke of putting central bank printing on steroids.

    Whichever way you vote, you vote for a Leech.

    • lifelogic
      Posted September 26, 2013 at 7:41 am | Permalink

      Miliband is absolutely clueless. Yes

      It will cost them the election. No

      Cameron cannot win without some amazing sea change betting odds show he has a 20% chance. I can see no sea changes on the horizon that are large enough. Other than a deal with UKIP which he will not do. He will surely come third to UKIP in May 14 and the voting boundaries are against him (thank to his total incompetence in failing to get them changed).

  12. Horatio McSherry
    Posted September 26, 2013 at 7:21 am | Permalink

    John,

    By the reaction online, on the radio, and on TV, it seems the vast majority of the general public seem to have seen straight through Mr. Miliband’s cynical “policy” and unsurprisingly also seem to have a better grasp of the concequences.

    • lifelogic
      Posted September 26, 2013 at 7:47 am | Permalink

      Controlling energy prices, getting rid of the “bedroom tax”, attacking landlords and the rich, grabbing land of the rich will always be politically popular with the loopy left as will scrapping HS2. I see Sir David Higgins is to take over at HS2 Ltd well with the Olympics he has a lot of experience of building expensive white elephants.

      I do tend to agree with the Money Saving Expert chap Martyn Lewis that the “bedroom tax” is probably a false economy and certainly will be a political mistake.

      • Bazman
        Posted September 26, 2013 at 3:51 pm | Permalink

        Ripping off the poor and blaming them for their poverty by such things as the bedroom tax will always be popular for the loopy right. Your lack of comments on Labour and the rich post is noticeable. Is that loopy or just not being able to understand anything other than your own ‘think’. For someone with a lot to say you have nothing to say. What does that tell us?

      • zorro
        Posted September 26, 2013 at 5:32 pm | Permalink

        I suspect that it will be a bit of a ‘poll tax’ issue. It will cost them more politically than it is probably worth. I see that Sir David will be on a c£600k pa salary for HS2……. It will be interesting to see what effect Miliband’s policies will have on the votes. They are right on Syria and HS2 so it might negate their recent pronouncements……

        zorro

  13. Denis Cooper
    Posted September 26, 2013 at 7:36 am | Permalink

    I think I may have discovered the flaw in current climate models: they fail to take into account the effects of the phlogiston released during combustion.

    I expect that once the phlogiston is factored in, the models will work perfectly.

    • Atlas
      Posted September 26, 2013 at 4:49 pm | Permalink

      … and don’t forget the interaction with the luminiferous aether…

      That’s got to be worth a research grant or two at UEA.

    • lifelogic
      Posted September 27, 2013 at 6:11 am | Permalink

      It would not surprise me if Lord Stern worked that into any new report, it would make as much sense than his last one.

      Can we get back to some real science and real economics please. No more religion and the politics of the irrational fear. A new firery hell and the bat exploding and bird killing, sometimes even rotating, crucifixes that destroy the countryside pointlessly and expensively.

  14. Brian Tomkinson
    Posted September 26, 2013 at 7:42 am | Permalink

    JR: “to hide the impact EU government policies are having on bills.”
    Just what has your party, in or outside the coalition, done about this, other than to embrace it with gusto? Isn’t this the “greenest government ever”? This is another example of the three main parties in Westmister pushing the same agenda at the expense of the consumer. As in many things you are sensibly out of step with your party but totally ignored by your leaders.

  15. Mike Wilson
    Posted September 26, 2013 at 8:00 am | Permalink

    He did not hail a shale gas revolution, so we could drive our energy prices well down as the USA is curently doing so successfully.

    You have to smile. ‘ …drive our energy prices well down …’ – as if any government of the UK will ever let energy prices go down! If energy prices go DOWN, TAX will go UP! It is an inviolable political law! Remember all that cheap petrol from North Sea Oil? No, nor do I.

    And, Mr. Redwood, Tory nimbys in the shires will never allow fracking. Get used to it. It is not going to happen in this country. If someone said there was loads of gas below Cantley Park – can you see Wokingham people voting for you if you support fracking to get it out?

    That may require both a majority Conservative government and a renegotiaiton of our relationship with the EU to bring about.

    Okay, that’s easy then. We are not going to get a majority Conservative government – that is completely obvious and, even if by some stroke of fate we do, no meaningful renegotiation will take place and the ‘majority Conservative government’ (ha, ha) will put its weight behind a Yes vote (to stay in) in a referendum.

  16. Leslie Singleton
    Posted September 26, 2013 at 8:06 am | Permalink

    Unbelievable that in an advanced sophisticated learned country such as ours someone should be allowed to stand up and talk such crowd pleasing tosh. And when the fool doing the talking was actually the Energy Minister who brought in the Green baloney it’s hard to believe one’s ears. This must be very embarrassing for many Labour Ministers and supporters. It’s enough to put one off free speech. Bring back Attainder and Impeachment I say.

    BTW, did anyone ever work out why and how Germany can build Coal fired Power Stations whereas we have to destroy the ones we’ve already got? I have no idea as I write why our Coal Stations cannot be converted, which has to be cheaper than de novo. Even if the Coal Stations were reduced to car parks before starting it would have to be cheaper because of the infrastructure (rail lines. approach roads etc) already in place, not to mention the employment that would not need to be destroyed. Is it as I suspect just because of a few crazed obsessive individuals? Stand up the likes of Huhne and Davey (preferably to be criticised ed) . And nothing done about it by Cameron of course.

  17. stred
    Posted September 26, 2013 at 8:11 am | Permalink

    Another of the achievements of DECC is the Green Deal. Unfortunately, the number of assessments by ‘providers’ has greatly exceeded the number of customers going ahead with the ‘deal’. They have to pay around £120 for the advice and then then employ contractors approved by DECC to do the work. The cost is then added to the bill and paid for over a long period by whoever owns the house. If thick wall insulation, as advised and PV panels are chosen, this may cost around £25k and then the rate of interest is around 7%. Anyone buying the house will have to pay off the loan. Customers have worked out the effect on the house value.

    One way that customers may avoid the cost of the approved advice is to pay around £50 for an Energy Performance Certificate, which gives much the same information. Most of this is innacurate and useless but it is cheaper. We just had one done in order to sell a house. I had made changes to this house and reduced power bills to around £600 plus standing charges. My partner leaves 2 computers, a TV tunerand an amplifier on permanently and, if only she would turn them off, the bills would have been even less. However this work was not recognised by the EPC method and we only scored a medium rating.

    Interestingly, the main positive was ignored completely. There is a south facing conservatory which covers two thirds of the rear solid wall.It keeps the air about 10 deg C higher than outside, even in winter during the day and at night it insulates with triple ad double glazing and insulating block walls. On the front bays, I insulated the walls with foil which amount to 6 inches of fibreglass, but this was not allowed either. No mention of the double glazed draught proofed porch either.

    However there was plenty of advice about improvements and the costs and savings. The most effective was PV panels, which would give savings of £245 pa and cost £9-14k, giving a return as high as 2.7%. Not bad at 7% on the bill. And, unsurprisingly, the assessor also worked for an installer who could do it cheap. The next best measure was wall insulation by external foam and render or conventional insulation inside, which takes up 7 inches off the floorspace. The savings were £110 pa and the cost £4- 14k, giving returns of 0.7 – 2.9%. Other included floor insulation- 0.025% and solar water -0.65%. At least he managed to put her off spending £7.5k on new double gazing, which would only save £21 pa.

    Incidentally, my own draughtstripping, multifoil wall insulation and floor insuation cost a few hundred plus my time and paid for itself in the first two years.

  18. Roger Farmer
    Posted September 26, 2013 at 8:19 am | Permalink

    That climate changes is a fact, it has happened for millions of years and will continue for millions of years. Learn to live with it and block politicians using it as a “Nice little earner”. Ensure that those living off the back of it are blocked and ridiculed.
    That vehicle manufacturers should be encouraged to improve emissions is good for the health of the people. They have done, and should continue. If bottles, cans and any other waste can be recycled economically it is all to the good. Where practical waste should be used to produce energy. The green side of this paragraph I accept.
    If the production of electricity by wind, tide or wave cannot stand alone economically to the extent that private capital will not invest in it without subsidy then we should forget about it . I do not know sufficient about the economics of atomic power and it’s residue to state that it is the way to go. It has however served us well to date and it’s future should not be dismissed. Equally I do not believe that enough effort has gone into cleaning the effects of burning coal of which I believe we still have large amounts.
    Now we have the possibility of cheap energy via fracking. The noisy, thin lipped,(words left out ed), and verbose should not be allowed to stand in it’s way when their arguments prove groundless. Protest is allowed too much weight in the UK. Long term there may be fusion and energy there from.
    Where government could act is in the current energy market, where the suspicion is that there is too much emphasis on the profitability of the industry, it’s monopolistic state, it’s pricing smokescreen to the detriment of customers, and for me it’s foreign ownership element. Government also need to end now all subsidies to wind and solar farms, and I suggest using the money to ensure well insulated energy efficient homes.
    I await your diary contribution on the obscenity of what has happened in Kenya, and how to deal with it.

    Reply I have nothing original to say on Kenya at the moment. I am awaiting some proper analysis from journalists there of the response of the Kenyan security forces. We still do not know how many have died, how many terrorists were there, and how they cam to occupy the shopping centre for so long.

  19. Iain Gill
    Posted September 26, 2013 at 8:32 am | Permalink

    John,

    You are right of course. But from the consumers (and voters) point of view it is in need of a shake up.

    Price structures do need to be simpler and easier to understand and compare across suppliers. Fair enough allow some innovation here but not mega complex pricing structures primarily designed to stop anyone working out the real pricing comparisons.

    Customer feedback and ratings of the customer service experience do need to be readily available for customers to compare the standards of call handling and so on between suppliers.

    It does need to be simpler and easier to switch suppliers, and to complain to the regulator if a supplier breaks some fundamental rules (over charging direct debits for instance).

    If this were sorted then maybe competition would kick in and sort some of this out.

    Cheers

  20. English Pensioner
    Posted September 26, 2013 at 8:41 am | Permalink

    Perhaps Miliband should look at Venezuela. Retail prices have been frozen by the government and as a result there are shortages of everything. In particular there are no toilet rolls because the cost of making them is more that the price at which they can be sold.
    Does Miliband think our energy suppliers, who have to buy gas and oil on the world market, will continue to supply us with energy if the price they pay is more than the price for which they can sell it? Or will he then nationalise the industry, as in Venezuela and sell energy at his prices by using taxation to subsidise it? Only by finding new resources which are continually available (ie not wind), will any government be able to hold down fuel prices. Bring on fracking!

  21. Anonymous
    Posted September 26, 2013 at 8:46 am | Permalink

    Alas this sort of thing happens when 16 year-old boys are put in charge of political parties.

    Labour isn’t about *solving* problems but is about creating them. It needs poverty for its rich and spoilt senior politicians to be electable. Where there isn’t poverty they create it.

    They are a millstone around our necks.

    • Anonymous
      Posted September 26, 2013 at 8:50 am | Permalink

      PS, The reaction of the markets show that a Labour win is a serious possibility.

      • lifelogic
        Posted September 27, 2013 at 6:13 am | Permalink

        80% + change of Labour or a LibLab coalition the odds rather suggest.

  22. Acorn
    Posted September 26, 2013 at 8:47 am | Permalink

    Because my gang knows more about the energy industry than we care to remember, it is very amusing to see how politicians; pundits-for-hire and the media, handle a subject they obviously know little about.

    The UK currently has the third cheapest natural gas aggregate household price, in the EU, at 3.74 pence / kWh. Only Romania and Lithuania are cheaper. Household’s aggregate electricity 14.35 pence / kWh. Romania is about 9 pence and Germany 22.3 pence.

    UK Industrial natural gas at aggregate price, 2.55 pence is second cheapest, Germany 4.03 pence / kWh. UK industrial electricity at 8.64 pence is about average in Europe, Germany 9.72 pence; Italy 14.07 pence. (tax exemptions and subsidies not included).

    The UK’s renewable energy fraction of primary energy consumption is low compared to the EU average, but is increasing. Hitting the 2020 EU target will be tricky but may not matter after the referendum 😉 .

    Did you know that there is circa 20,000 MW of stand-by generators sat in hospitals, big buildings, supermarkets, industrial complexes etc. About a third of system max demand. Most are black start machines but some can auto synchronise to the grid and be modified to be centrally dispatched by NGC. There is no shortage of generation plant, that the government can instruct to run, if required.

    • Bazman
      Posted September 26, 2013 at 3:56 pm | Permalink

      At what cost? Some generators use large jet engines. The billions of profit given on a plate from the customers to the billing companies can be used to pay for it.

    • Mike
      Posted September 26, 2013 at 5:28 pm | Permalink

      Fair comment, though I feel the EU is on a one way road to poverty given the high and likely to increase prices of energy.

      Hence comparing EU pricing does not tell the whole story. Who would set up in the EU at all when you compare the cost of energy to the United States for instance?

      Also the government may be able to tap into emergency generation but they still have to fuel it, and seeing as though almost 60% of our energy comes from abroad that is going to be tricky unless they plan to run it at a loss.

      Power plants themselves are heavily logistics dependent, hence ferrying small amounts of fuel to very small generators will not be efficient.

      Given that as I type i am probably sitting on several million tonnes of coal ( in the Welsh Valleys) it amazes me that only one party has a policy which would even allow it’s extraction and use…

    • ian wragg
      Posted September 26, 2013 at 6:04 pm | Permalink

      Yes and the government is paying £47,000 per megawatt installed just for the privilege of them being on standby. Then if they are called upon they pay £200 per megawatt hour which is 4 times the normal cost. Most are owned and operated by foreign companies. I work in the industry. People are laughing all the way to the bank. Does Millipede think these generators will run if the companies are losing money.

      • Acorn
        Posted September 27, 2013 at 7:58 am | Permalink

        I don’t recognise your cost per MW price. but can I suggest for those interested in the pricing stand-by plant the following. The first two reports on the page particularly.

        https://www.gov.uk/government/organisations/department-of-energy-climate-change/series/energy-generation-cost-projections .

        • Mike
          Posted September 30, 2013 at 5:22 pm | Permalink

          Looks as though Ian Wragg is right…

          Coal and gas are only more expensive than they appear because of the ‘carbon cost’ which is a made up figure.

          Looks as though Coal and gas generate at roughly £60 / MWh, thought he taxes ( another word for carbon cost I guess) increase this to between £80 and £120 per MWh.

          So 9% directly from a consumer’s bill and between 33 and 100% on the generator’s bill.

          And…… Miliband is wondering why energy prices go up when he authored the whole shoddy mess.

  23. oldtimer
    Posted September 26, 2013 at 8:53 am | Permalink

    You are right in your analysis. The past and the present governments are responsible for energy prices being higher than they either need or should be. Miliband`s Climate Change Act and its related quangos and regulations are responsible.

    It remains to be seen whether the electorate will be duped by this latest offer of fools gold from Mr Miliband. If they take the bait and elect him to office then the outlook will be at least as dire as the 1970s, perhaps worse.

    It would not surprise me if energy companies decided to go slow on new investment until the political and legislative outlook indicated that such investments made sense. Even before Mr Miliband`s announcement, the energy market was in a mess because of ill-conceived meddling by government.

  24. Bert Young
    Posted September 26, 2013 at 8:55 am | Permalink

    It will be very interesting to see if David Cameron is able to take full advantage of Ed Milliband’s gaff speech ; he made no mention of Europe and the extent to which its policies have pushed up the price of energy . With UKIP “bruised” and the Labour Party severely wounded , Cameron has a marvellous platform to go to bat on . He would do well to heed the Tebbits and the Redwoods and to build into his speech a determination to distance our relationship with Europe .If he does this , he may retain some credibility . He would also be wise to spend some immediate time with Angela Merkel and persuade her protect the economic interests of both our countries ; if he does not , a German coalition will emerge favouring a more than ever centralised Europe .

    • lifelogic
      Posted September 27, 2013 at 6:17 am | Permalink

      “A German coalition will emerge favouring a more than ever centralised Europe” they already do and will continue to, as does Cameron.

  25. Denis Cooper
    Posted September 26, 2013 at 9:16 am | Permalink

    Off-topic, on the matter of “treaties” touched upon in an earlier thread, having a google alert set up for “european stability mechanism” this morning I got a reference through to a WSJ article which had been revised to correct earlier misrepresentations, from which it seems that even those most directly involved can sometimes get confused about whether they mean the EU treaties or the ESM treaty based on the new Article 136(3) TFEU in the EU treaties, and moreover there is disagreement about the correct interpretations; so I wonder how the ordinary citizen can possibly follow all these legal convolutions even if he is sufficiently interested to try; and yet it is the ordinary citizen who may or may not have to contribute towards the vast sums needed for an EU bank resolution fund. Then we see Osborne scurrying off to the ECJ to try to stop an EU law on bankers’ bonuses, when we were reassured by the government pamphlet for the 1975 referendum that “The Minister representing Britain can veto any proposal for a new law or a new tax if he considers it to be against British interests”; it would be ironic if the veto that Osborne is lacking now is one that Thatcher had abolished through her Single European Act some years later, as is very likely to be the case. Plus, more on the topic of this article, on November 4th 2009 when Cameron announced that he was going to swallow the whole of the Lisbon Treaty as a fait accompli, one of the many things he was agreeing to accept was the insertion of the new words “and in particular combating climate change” into the EU treaties, Article 191 TFEU; so he has accepted that under the EU treaties the UK has an obligation to combat climate change even if there is no climate change and/or we have no effective means to combat it and/or doing so would severely damage our economy and/or lead to thousands of additional deaths through hypothermia. One wonders why our politicians of all the main parties are so keen on this novel method of government, “internal government by external treaty”, and prefer it to the national democracy we once had; and the answer must be that they see it as means to effectively disenfranchise the people, who in their eyes were allowed too much power through the spread of universal suffrage.

  26. Richard
    Posted September 26, 2013 at 9:36 am | Permalink

    It is not possible to have a properly working and competitive market for energy whilst our government supports CCA and pushes for green energy to be developed by the competing energy companies. Massive subsidies distort the market and the extra costs borne by the energy consumers are wasted.

    Even for a politician, Mr. Miliband has an unbelievably high embarrassment threshold as it was he who was one of the main proponents and architects of green energy, which he proudly told us at the time would lead to higher energy bills.

    The solution is to repeal most of the CCA and the current unrealistic targets for green energy and allow true competition to take place between the energy companies.

    At the same time, the enormous sums of money that the tax payer and energy users are using to fund the current inefficient wind farm schemes should be used instead to fund large scale research into viable green energy solutions.

    Furthermore, all these new ideas should be developed by and belong to the UK so that we own the technology.

    For instance, the government is currently negotiating a deal with the French to build an out-of-date type of nuclear reactor which necessitates guaranteeing an extortionately high price for the electricity produced by this reactor over the next 25 years or more.

    Instead the UK should be funding research into new, cleaner, less dangerous types of nuclear fission, such as can be provided by the use of thorium, and building own reactors just as we did in the past.

    • uanime5
      Posted September 26, 2013 at 8:05 pm | Permalink

      At the same time, the enormous sums of money that the tax payer and energy users are using to fund the current inefficient wind farm schemes should be used instead to fund large scale research into viable green energy solutions.

      What about all the money the tax payer is giving to oil and gas companies? Should that also be used to fund viable green energy solutions.

  27. Neil craig
    Posted September 26, 2013 at 9:48 am | Permalink

    I have previously compared politicians blaming the bankers for a recession the politicians caused with the way German nationalists, shortly after WW1, blamed the socialists and Jews for losing the war.

    The same applies to Miliband’s claim that rising electricity prices are in any way the fault of producers. He simply cannot have never been told that the vast majority of the cost of electricity is state parasitism – which, with the CC Act, he personally is responsible for greatly increasing.

    He knows that 90% of the current £1400 average domestic bill is political theft And he personally is committed to increasing that bill to £3,000. And he personally knows that that parasitism is why we are in recession.

    But so do the ConDems, who voted through that act and have no slightest intention of removing it – or even of apoligosing to the relatives of the 25,000 pensioners a year they deliberately freeze (etc ed)

  28. John Eustace
    Posted September 26, 2013 at 10:02 am | Permalink

    It is perhaps fortunate for the Government that this row has distracted attention from the collapse of the Centrica gas storage projects, leaving the Centrica boss reportedly unable to even speak to the minister concerned, so despairing is he of the minister’s deep ignorance and inability or unwillingness to understand the issues.
    Our energy infrastructure is inadequate as a result of the failure of successive governments to plan beyond the next election or take controversial decisions, instead passing the parcel to their successors.
    This government has shamefully done nothing about that legacy. I see this Labour policy as a way of destabilising the system further in order to create a crisis to justify eventual re-nationalisation.

    • A different Simon
      Posted September 26, 2013 at 3:37 pm | Permalink

      Regarding politicians taking controversial decisions , perhaps this is because they are terrified of the drubbing they get when they get it wrong .

      E.G. Blair and the preemptive strike on Iraq .

      One could also say our politicians were brave 10 years ago to commit us to their renewable targets .

      That was when the trend for energy prices was rising .

      Since the the facts have changed and it’s clear that with the advent unconventional hydrocarbons and underground coal gasification , many countries previously dependent upon World energy markets can produce their own and that there is the capability to create a glut for a long time .

      Difficult to make money out of a glut .

      Probably the reason the City of London and CBI has relentlessly promoted carbon credits and CCA .

  29. Atlas
    Posted September 26, 2013 at 10:02 am | Permalink

    Well, now is Cameron’s opportunity to put clear blue water between himself Miliband and Davey by getting the itemisation of energy bills to show just how much is being wasted on both Green wishful thinking and social support (ie those who don’t pay their bills). Perhaps Cameron could also explain how is he going to fix the broken market that we presently have.

    • Bazman
      Posted September 26, 2013 at 3:59 pm | Permalink

      This will include the cost of generation and how much the power company sold this to themselves and how much profit per unit as well I presume. All clear above board and independently verified? Thought not. RWC.

  30. MickC
    Posted September 26, 2013 at 10:06 am | Permalink

    But this government is doing nothing at all to bring down the cost of energy!

    As Miliband correctly surmises, most people liken the situation to the banking scandal-where nothing whatsoever was done about the fraud which was perpetrated. There were no prosecutions, no jail sentences, -nothing! Those who carried out the fraud got rich, the rest of us got poor.

    The energy companies are seen as greedy, uncompetitive and a private cartel.

    Miliband says he will do something-well, why not give him a chance?

    The alternative proposed by this government seems to be to do nothing at all to help people-apart from spend our money to protect bankers bonuses!

    The Party being led by rich people who do indeed “not know the price of a pint of milk” was always a recipe for disaster-and being labelled the party which only looks after the rich.

    And so it has transpired.

    But as the slogan has it- “don’t blame me, I voted DD”!

    • Mark B
      Posted September 26, 2013 at 3:53 pm | Permalink

      Much of what you have written and blamed the present coalition government for, if not by name then certainly by inference, was actually carried out under Labour. It was alleged that the Financial Services Authority, an EU and Labour Quango was told to be ‘soft’ on regulation of the industry by Gordon Brown, as it was bringing in much needed monies at the time.

      The financial crash happened in 2008. Cameron did not get the keys to Number 10 until 2010. So why did Labour not prosecute the Bankers ?

      People were prepared to give John Major, Tony Blair, and David Cameron a chance, as you put it. They took their chance and our trust, and abused it. I did not count Gorden Brown, as he usurped the throne of Prime Minister.

      The Energy companies are there to provide a service and to make a profit for their investors. That’s Capitalism ! If they are greedy, it is because the government and its officials are either corrupt or incompetent. You do not enter into negotiations solely to make sure they get a fat profit and the consumer/electorate get screwed.

      Currently, a large French energy provider wants the British Government to guarantee, yes guarantee, them their profits before they build any new power stations. I would never continence such an arrangement, would you ?

      As for the Party for the ‘Rich People’, I think you might want to do a little research on many of those on the opposition front benches. I can assure you, they are not short of a bob or two themselves.

      Labour, despite what you may think, is NOT the party of the people.

  31. They Work For Us
    Posted September 26, 2013 at 10:10 am | Permalink

    One solution would be to itemize energy bills to clearly show the effect of green and other taxes on the total bill in money and as a percentage. The supplier could have a headings for fuel cost and – Govt. Taxes. (both in money and percentage terms).
    Humorously why not make the green taxes an opt in for customers who really believe in the green religion, a bit like Labour and the Unions!

    Similarly all motor fuel bills at service stations could state the fuel cost, Govt. Taxes and a total.

    A rapid move to combine once and for all Income Tax and so called National Insurance would again make clear to the voter that it was all taxation and there is no insurance scheme as such.

    These would be vote winners and help to explain why a smaller Govt is better and “Transparency” is a good buzzword when exposing Socialist inspired taxation.

    We still seem to be moving towards the state deciding what you can have/ keep and not the voters being able to make an informed decision on what we are prepared to pay for from taxation.

  32. peter davies
    Posted September 26, 2013 at 10:10 am | Permalink

    I have had conversations with people who were unaware that Millband was Energy Secretary when he steered the Climate Change Act through leading to 15% being put on energy bills…….

    I think that the Tory spin machine need to make it more clear the reasons why we are where we are. In any case UK energy prices are just over half what they are in Germany and Denmark though they are still too expensive.

    For me the solution is as follows:

    – Legislate to require that all energy bills show the climate change levy as an addition like VAT.

    – Modify competition rules so that more suppliers are bought into the market thus diluting the ‘big 6’

    – MPs need to have a serious grown up discussion about the merits of following EU/IPCC Climate Change Policy given that we know that there are far more inputs into climate behaviour than just man made CO2, like the sun and undersea volcanoes for starters. It seems certain that IPCC are all a long way from understanding the science, maybe they don’t employ enough geologists and even historians who might like to explain what the climate was like at the time of the Romans and the freezing periods in the last 1000 years – having a govt policy based on flimsy evidence seems to be the work of lunatics.

    • peter davies
      Posted September 26, 2013 at 10:18 am | Permalink

      I read a laughable report in the Telegraph showing world temperatures have increased a whole 1.1% since 1880. Wow!

      • peter davies
        Posted September 26, 2013 at 10:18 am | Permalink

        sorry i meant 1.1 celcius

        • Edward2
          Posted September 26, 2013 at 4:48 pm | Permalink

          Indeed Peter, not very “catastrophic”.
          Further predictions of doomsday if temperatures go up by one or two degrees in a hundred years from now seem very much over the top.
          Humans are very adaptable creatures and the less than one degree rise in the whole of the 20th century has been quietly managed by us and we seem to have survived after all.
          Travel to other countries shows me we humans adapt quickly to very hot and very cold climates without too much problem.
          Better to be spending the money currently wasted on climate change on eradicating malaria, reducing pollution and giving all humans access to clean water.

      • livelogic
        Posted September 26, 2013 at 7:36 pm | Permalink

        Great two more degrees C would be perfect for me.

    • uanime5
      Posted September 26, 2013 at 8:11 pm | Permalink

      MPs need to have a serious grown up discussion about the merits of following EU/IPCC Climate Change Policy given that we know that there are far more inputs into climate behaviour than just man made CO2, like the sun and undersea volcanoes for starters.

      Scientists have already shown that neither of these have been causing the average global temperature to increase for over a century. So there’s no point having MPs discussing the merits of climate change, especially since they’re not experts on it.

      It seems certain that IPCC are all a long way from understanding the science, maybe they don’t employ enough geologists and even historians who might like to explain what the climate was like at the time of the Romans and the freezing periods in the last 1000 years – having a govt policy based on flimsy evidence seems to be the work of lunatics.

      Just because you don’t like the results of these scientific studies doesn’t make them wrong. Also it’s difficult to know exactly what the climate was like during the time of the Romans as they hadn’t invented thermometers or barometers.

      Reply If only experts can discuss things Parliament will not do much talking. Parliament is designed for well informed generalists to discuss, sift and respond to expert advice. Expert advice in most areas is divided and needs weighing.

  33. backofanenvelope
    Posted September 26, 2013 at 10:38 am | Permalink

    Yesterday I paid £600 for a thousand litres of Domestic heating oil. Five years ago I paid £614. In between the price has ranged from £600 to £664, but usually within twenty pounds of £600. So, the price has been more or less stable for 5 years. On the other hand, a tankful of auto diesel has increased from about £50 to about £80. Given that the raw material and processing is more or less the same, the difference must be the government. If the government froze the tax element then we would have stable auto diesel prices as well as domestic.

  34. A different Simon
    Posted September 26, 2013 at 10:58 am | Permalink

    UK energy policy up until this year was based on the assumption by the spectrum of the political establishment that fuel prices would keep increasing .

    They thought fuel prices would rise towards parity with renewables and that they would therefore never have to confront the public with the costs of “decarbonisation” .

    They were taken by surprise by US shale gas and even more by UK shale gas and of course the surplus coal on the market sent prices through the floor .

    Post Fukashima , Uranium prices are so low that it’s not even worth removing it from phosphate fertiliser before spreading it on the fields . Maybe there will be a rebound when we’ve finished burning through decommissioned nukes .

    On the one hand Osbornes talk of “tax breaks” for shale sounds inflamatory but given the unprecedented level of political obstruction UK shale faced and the attempted dirty tricks to strangle it at birth , the Govt cannot do too much to convince investors that it is in favour .

    As an investor in onshore E&P both here and abroad including “unconventionals” , I am grateful to Gasland , Frack Off , the Greens and the political establishment for propogating the misinformation and hysteria which has enabled me to back the truck up at what I hope are depressed share prices .

    Don’t get mad , get even .

    Lifting costs in Saudi Arabia and other Opec countries might only be $5 – $20 barrel but the cost of running the House of Saud and ensuring stability in these regions etc means they need $80 oil – at which better unconventional resources are competitive .

    Labour on the other hand have not come down off the fence with shale and decided whether they are going to sit with Sinn Fein the BNP and most of the Greens or with the mainstream .

    I can’t see them rebuffing a new industry but I can see them taxing it too hard , too early on and thus stifling it’s growth towards supplying a significant proportion of our energy needs .

    Profit cannot become a dirty word as it has over the channel in France .

    One of the reasons Italy and Spain are uninvestible is because transfer payments from the UK and Germany mean they never have to get their act together and get moving . How altruistic of us to kill them with kindness .

    Turning methane it into electricity is not the best use for it when we’ve got homes to heat and could be running our commercial vehicle fleet on compressed natural gas thus giving it a competitive advantage for domestic haulage over foreign fleets which won’t invest in dual fuel lorrys .

    Within 24 months the Govt is likely to be faced with another new for the UK source of energy ; in situ coal gasification , first of all under estuaries and other inshore regions . Be interesting to see whether they repeat the same mistakes they made with shale .

    The differential between summer and winter gas prices makes it non cost effective to build fast retrieval gas storage in for instance salt caverns so if this is deemed a requirement for security it will have to go on top of the bill .

    Ed talks about both commiting to 2030 decarbonisation targets and cheap energy .

    The whole cross-spectrum political establishment need to be honest with the electorate and admit we can’t have both .

  35. Bill
    Posted September 26, 2013 at 11:08 am | Permalink

    Is any progress being made with replacing our ageing power stations? Is any progress being made in reducing our dependency on imported fuels like gas?

    We note, of course, that Milliband wants further regulation to control energy prices, thus spawning another bureaucracy.

    We also note that this policy is aimed at marginal seats and that the Conservatives need to make sure that their policies are going to find support among voters.

  36. A.Sedgwick
    Posted September 26, 2013 at 11:13 am | Permalink

    Yes, as harebrained as belonging to a club where one of its members wants to annexe our territory i.e. Gibraltar.

    • livelogic
      Posted September 26, 2013 at 7:37 pm | Permalink

      Indeed will Gibraltar be the price for leaving this dreadful “EU club”. If so it will be a price well worth paying alas.

  37. cosmic
    Posted September 26, 2013 at 11:49 am | Permalink

    Yes, it’s outrageous for Miliband to complain about high energy prices when policies he championed are the direct cause. It’s even more outrageous to come out with this sticking plaster solution which attempts to push all the right buttons, rapacious large companies and the poor. A pity he didn’t think about the poor when he was helping put the CCA in place.

    Unfortunately, there does not appear to be a majority in Westminster for repealing the CCA. Your own dear leader was as enthusiastic as anyone and still is, “The greenest government ever”. The CCA was passed with five nayes.

    Looks like we have another of those little posers where the sensible course is clear, but Westminster as a whole just happens to disagree. So we have party jousting over some peripheral issue such as Miliband’s pointless Band Aid, while the fundamental problem goes unaddressed.

  38. Terry
    Posted September 26, 2013 at 12:08 pm | Permalink

    After their disastrous 13 years in government, Labour still do not understand how markets work. They conveniently forget that to provide any handouts, it has first to be taken from someone else, who then goes short.
    This is how it works with our green energy bill taxes. They take our earned money (after tax) and provide it to a company (usually foreign) to build windmills, costing around £2 Millions EACH. Our disposable income falls and we have to cut back on our high street purchases to balance our household accounts (we, legally cannot replicate QE and print our own cash). Consequently, the high street shops lose sales revenue and close down. You cannot make the poorer, richer by making companies and their workers, poorer. Remove those household damaging green taxes and solve the problem overnight.

    In a previous posting I mentioned the EU still controlling retired MEPs in our parliaments, through their pension conditions. No doubt this is why many of the EU executive orders pass through seemingly unchallenged.

    Reply If the MEPs have retired I don’t wee how they can help the EU with its orders.

  39. Terry
    Posted September 26, 2013 at 12:17 pm | Permalink

    Further to my last here is more evidence of EU tampering with the UK’s parliamentary processes. http://www.telegraph.co.uk/news/politics/labour/4996440/Lord-Mandelson-must-remain-loyal-to-EU-to-guarantee-pension.html

    • peter davies
      Posted September 27, 2013 at 11:04 am | Permalink

      I havent read it but I understand Mr Clegg is in the same boat is he not?

  40. Gordon
    Posted September 26, 2013 at 12:54 pm | Permalink

    Mr. Redwood,
    as almost always ‘spot on’ I have been waiting for some of these media people, (I’d settle for one actually), interviewing Mr. Milliband, draw the the connection between prices and the subsidies extorted from the suppliers, and consumers, by the last Labour Government and still not discarded by Mr.Cameron. I do not want to hear that ‘we are in a coalition and cannot.’
    To quote Jacob Rees Mogg from the referendum debate “if the Libdems want to go the country on this issue let them jolly well try and see where it gets them.”

    Slightly off topic, Mr. Redwood you have a wicked sense of humour, you know full well why the BBC did not use your article that they had commissioned, did they expect you to lie?
    Best wishes

  41. Lindsay McDougall
    Posted September 26, 2013 at 12:58 pm | Permalink

    Profit is the cornerstone of capitalism, the very basis of our liberty. There is no need to apologise for it. The Socialists are up to their old tricks. Control prices, deny profits to the suppliers, then nationalise them after the inevitable collapse.

    Stephen Byers did it to Railtrack by capping track access charges. Harold Wilson regularly tried it, using the National Plan as his chosen vehicle – what a fiasco that was. Edward Heath would have done it if anybody had taken any notice of his Counter Inflation Act. Now Ed Miliband and Ed Balls are trying it on with our energy industry, which delivers competition and among the lowest energy prices in Europe, in spite of EU meddling.

    Money supply is far too loose and inflation is the result. I wonder which is worse, the Coaltion government that pretends inflation is good for us, or the Labour opposition that pretends it doesn’t exist.

    • Bazman
      Posted September 26, 2013 at 4:02 pm | Permalink

      Profiteering at the expense of the state and its citizens via communism for the rich and their apparatchiks like yourself is not.

  42. Dan
    Posted September 26, 2013 at 2:46 pm | Permalink

    Interesting, but is there any data to show that energy prices were not so high before the EU/New Labour’s climate change legislations (in the 80s and 90s for example)?

    • Bazman
      Posted September 26, 2013 at 4:09 pm | Permalink

      1999 was 4p per unit for electricity and 1.8 for gas in my house. My gas/electricity bill was £23 and now is £85. Same usage. Went sky high after privatisation. Green issues have not added that much thats for sure and you all know it. Oh (s0) dear..Ramming it again.

      • Edward2
        Posted September 27, 2013 at 7:17 am | Permalink

        Add nearly 15 years of inflation, then add vat increases, then add a much greater demand caused by huge Chinese and Indian industrialisation, then add the costs created by forcing the energy companies to invest in green low carbon methods of generation and you have your new prices.
        Look at return on capital employed numbers not cash profit headline numbers.

      • Lindsay McDougall
        Posted September 27, 2013 at 2:48 pm | Permalink

        Just tell us the last year(s) in which gas and electricity were publicly owned and we’ll do our own research. Also, when did British Gas’s monopoly on household gas appliances disappear? That monopoly facilitated cross subsidies.

    • Neil craig
      Posted September 26, 2013 at 4:51 pm | Permalink

      Yes, an enormous amount. More importantly the overwhelming majority of countries worldwide have lower prices.

      Then bear in mind that our own nuclear costs are about 40% of the average of the basket of power we use; that nuclear reactors can cost about £800 million but ours are going to cost £5bn – and the £800m is based on our system of bespoke building – mass production would be far less per unit.

      All in all at least 90% of our electricity bills are state parasitism.

    • Bazman
      Posted September 26, 2013 at 7:42 pm | Permalink

      Here’s something a bit more scientific.
      https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/244580/qep_sep_13.pdf
      All there for ya.
      Green cost? Do tell us now you can’t fantasise and lie. Oh (not so) Dear.
      Ram it.

  43. Mark B
    Posted September 26, 2013 at 4:02 pm | Permalink

    Good Article.

    One thing though. As has been mentioned by other posters’, why have you not amended or repealed this legislation ? You have been in office 3 years now.

  44. sjb
    Posted September 26, 2013 at 4:26 pm | Permalink

    JR wrote: He [Miliband] did not hail a shale gas revolution, so we could drive our energy prices well down as the USA is curently doing so successfully.

    “Much US shale gas has come up with associated liquids, effectively as a by-product of these higher value products, which covers the cost of production. The shale gas is effectively ‘free’, and if there is no pipeline nearby it is simply flared. It is the production of large quantities of this ‘wet’ gas that has caused the US gas price to fall, to levels that make gas there uneconomic to produce unless it accompanies liquids.

    The UK’s shale gas is thought to be predominantly ‘dry’ gas. It would need to cover its costs itself. It is still very uncertain whether it could do so, especially as the costs of wells are likely to be higher than in the US, and new local infrastructure would be needed to get the gas to market.”

    Source: The Fracking Battle: No way to conduct energy policy – by Prof Paul Ekins, UCL

  45. Leslie Singleton
    Posted September 26, 2013 at 4:30 pm | Permalink

    I am reading about Richard II’s time, as one does: First, “The Government attempted to impose artificial controls. The Statute of Labourers of 1351 aimed to hold down…..prices, but the market has an inevitable tendency to reassert itself….”, Secondly, in the “……initial storm [of the Peasants’ Revolt] through the City a main target was the houses of foreigners, specifically {the} Lombards [who} were probably picked as representatives of the alien rich, since [they] were bankers”, Thirdly, Richard promised that “….Land was to be rented at a fixed rate of fourpence per acre per year”.

  46. Sue
    Posted September 26, 2013 at 5:16 pm | Permalink

    I believe the EU are in the middle of a price fixing probe http://www.mondaq.com/x/244144/Antitrust+Competition/EC+Energy+PriceFixing+Probe

    I believe Mr Cameron is aware of this http://www.bbc.co.uk/news/uk-politics-22540650

    What I don’t understand is why nobody has mentioned it?

    • Bazman
      Posted September 28, 2013 at 1:52 pm | Permalink

      If the EU and Dave do not stop investigating and the companies are not free to rip us off in a free market as much as they like, how do they expect the lights to stay on?

  47. wab
    Posted September 26, 2013 at 7:56 pm | Permalink

    The Lib Con government has done nothing to reduce energy prices and everything to keep them high. Did any (current) cabinet minister vote against the CCA? Mr Redwood, of course, likes to blame the EU but most of the UK energy policy is home grown. Is the next Tory manifesto going to call for the removal of the CCA? No, didn’t think so.

    A majority Tory government would do nothing differently than the current government is doing or the previous government did, except to reduce the number of wind turbines in rural (Tory) areas, and possibly let a few polluters pollute a bit more.

    Rumour has it that Osborne, in his usual way, will respond to the Labour gimmick with his own energy gimmick (in between his marriage tax break gimmick and his other gimmicks). None of this addresses the real issue. The humanities graduates who run the country have no clue.

  48. uanime5
    Posted September 26, 2013 at 8:14 pm | Permalink

    It was his Climate Change legislation which underwrote EU energy policies to push the price of energy up in the UK.

    Care to explain why water rates and train fares also rose. Could it be because privatised industries aren’t very competitive, which is why they can keep putting the prices up.

    The EU/UK policies of pricing and taxing carbon dioxide emissions, requiring substantial generation from very expensive renewables, and making it difficult to exploit local carbon based energy resources have helped force up domestic energy costs.

    Given that the world is currently running out of carbon based fuels we will have to switch from carbon based energy resources to renewable based one sooner rather than later.

    He did not hail a shale gas revolution, so we could drive our energy prices well down as the USA is curently doing so successfully.

    The companies involved with drilling for shale gas in the UK have stated that shale gas will not drive down UK energy prices in the same way as it has in the USA. Given that shale gas didn’t reduce the price of gas in Poland, leading to many of these gas companies leaving Poland, it’s entirely possible that shale gas won’t have any effect on energy prices.

    Instead, he decided to blame someone else, and attack the energy companies forced to carry out his policy will.

    Given how the profits of these energy companies have continually been increasing, despite having to carry out these policies, it’s quite clear who is benefiting most from the current energy prices.

    Companies providing large scale facilities for electricity generation or for collecting and distributing gas need to generate profits so they have money to pay for the maintensance, renewal and expansion of their facilities.

    I thought profits were what was left over after paying for all of these expenditures (net profit). So the energy companies ever increasing profits mean they already have enough money for maintenance, renewal, and expansion.

    If raw material energy prices rise – the gas/coal/oil needed to drive electrical plant for example – the companies could be badly squeezed and lose large sums, undermining their financial stability.

    By that logic you may as well make it illegal to raise the minimum wage since this increased cost will also cause a company to lose money. Also losing money and making a loss aren’t the same thing.

    The threat of frozen prices will put off anyone from making a new investment in energy provision in the UK, at a time when we badly need more capacity.

    We lack capacity because these companies aren’t investing. That’s why there’s nothing to replace all the coal power stations that are being shut down, despite several decades of forewarning.

    The prime duty of government is to set an energy policy which can keep the lights on. The second duty is to help create a competitive market which can turn to the lowest cost solutions to keep energy affordable. Labour’s new policy fails on both these counts.

    The Conservative policy is also failing as the markets haven’t been made any more competitive and energy costs are rising at a time when wages are falling in real terms.

  49. Bazman
    Posted September 27, 2013 at 6:09 pm | Permalink

    Why we should not just do a massive deal with Russia? Some areas float on oceans of oil and gas. In the Samara region there are rigs as far as the eye can see with massive flares. Like oil/gas platforms and nodding donkeys all around, but on land drilling is not even necessary in some cases. Just scoop it up by hand! They are selling we are buying! Job done for the next century and beyond and trebles all round.

    • Bazman
      Posted September 28, 2013 at 1:04 pm | Permalink

      Where are the replies fro the fantasists on thsi most excellent idea!? A low tax economy that looks after its rich and has no ruck with any regulations green isues or ‘uman rights. Perfect!

      • Edward2
        Posted September 28, 2013 at 4:51 pm | Permalink

        Because Baz we already buy huge amounts of the gas Europe burns from Russia
        Their oil is sold through the world oil market at a market barrel price for anyone to bid on

        You need to check your facts first before launching into another fantasy post.

  50. Edward2
    Posted September 27, 2013 at 10:44 pm | Permalink

    I cannot let your post of propaganda go unchallenged Uni
    1. “the world is currently running out of carbon based fuels” Total and absolute rubbish
    2. “I thought profits were what was left over after paying for all of these expenditures (net profit). So the energy companies ever increasing profits mean they already have enough money for maintenance, renewal, and expansion.” Ask any Accountant, totally wrong.
    3.”losing money and making a loss aren’t the same thing.” One is short term the other is based on the accounting year but both lead to the same end game ie business failure.
    4.”We lack capacity because these companies aren’t investing” Wrong. huge investments are being made but the State has a very long planning process which is the reason for delays.
    5.”energy costs are rising” first one you have got right Uni. Reason the Climate Change Act

    • Bazman
      Posted September 28, 2013 at 1:01 pm | Permalink

      We will never run out of fossil fuels this is true. The capacity to use them may be limited without massive reform or advances in technology though.
      This is the cost per KW to large users of power because of the climate change act. Small users do not pay.
      http://www.unescap.org/esd/environment/lcgg/documents/roadmap/case_study_fact_sheets/Case%20Studies/CS-United-Kingdom-climate-change-levy.pdf
      Interesting that in the energy generating industry ever higher commodity prices mean ever higher profits. In any other industry this is a major problem sending suppliers to the wall so your blind and naive belief in the honesty of energy supplies selling to a captive market are naive at best. These threats to blackout Britain need to be listned to as we do not respond to threats do we? It is interesting to now note that they are after the threats of Milliband introducing their own freezes. In an other industry such as supermarkets and the oil industry they do not ask for subsidies to build shops or refineries or at least not as blatant as these largely foreign owned companies does in the case of gas storage capacity, so if we are paying for the equipment we might as well run it too and put any profits back into the country via cheaper cleaner greener energy and not into shareholder accounts abroad.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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