Yesterday’s meeting on energy

The proper topics of conversation were availability of supplies and prices. Gordon Brown’s attempt to hijack the agenda with a proposed nationalisation of parts of the energy  industry was bizarre. His own purchase of RBS shares during the banking crisis at an elevated price bailed out shareholders and left the taxpayer nursing large losses. It was  not the right answer to a disaster in the banking sector and over the regulation of banks which he made worse. The last thing taxpayers need now is the requirement to find billions of pounds to acquire shares in energy companies, with a view to then running them at  a large loss to keep the prices down.

The answer to scarce and dear energy has to be the supply of more and cheaper energy. That requires plenty of private  sector investment, and sensible regulation where there are monopoly elements. If the only aim of regulation is low prices we will end up with less energy, losses for the taxpayer to pay and an eventual larger price hike from weak supply. Look what happened to Bulb. The state interventions did  not keep the general price of power down but we have losses to pay.

The Lib Dem idea of simply freezing the prices we pay answers nothing. Who then buys in and provides the energy and who covers the losses on doing that? Why indeed would a company volunteer to supply at a large loss?

163 Comments

  1. Peter Wood
    August 12, 2022

    Good Morning,
    Wake-up and smell the burning fuel. I’m not in favour of exceptional taxes BUT, the energy/oil companies are making huge ‘unexpected profits’, not through their own brilliant management but because there is a war going on and we are helping to fund it.
    Let’s see some balance; sure let the energy companis keep their expected profit levels, as per their projections, but the exceptional profit should to go towards defraying of fuel bills for the most deserving in our society and for buying weapons to give to Ukraine.

    Reply What is an exceptional profit? If it is determined by a high price level of traded gas or oil , why not then subsidise these companies when Oil and gas prices are very low? BP and Shell lost £20 bn on 2020 when prices slumped. My view is they pay the losses so they can keep the profits. They pay 40% on the profits anyway.

    1. Ian Wragg
      August 12, 2022

      Get fracking with a condition that the company supply locally at a substantial discount.
      Get the Cumbrian coal mine open with the smell condition.
      It’s not difficult.
      Stop this net zero crap before you have a revolution on your hands.

    2. Lifelogic
      August 12, 2022

      Windfall taxes are always profoundly wrong. When you invest in business you are taking risks sometime you win and sometimes you lose. But if government taxes the wins unexpectedly it deters investment in say the oil/energy sector and causes shortages and does huge harm. Government should however try to ensure the markets and free and have fair competition. In the UK they fail at this in schools, energy, transport, housing, healthcare, banking… with damaging results like personal overdrafts all at 39% – thank to the FCA & Andrew Bailey.

      We now see a huge shortage of properties to rent (with some rents doubling) as the government is destroying the letting industry with many & various regulatory and fiscal attacks.

      1. Hope
        August 12, 2022

        And yesterday we saw stupid Wallace and his govt insist on helping prolong the war in the Ukraine with our taxes! Do any of the ministers actually care about our taxes or making us all poor?

        Socialism is the road to poverty and this socialist Tory govt has been exemplary in its task. Highest taxation, worst disposable income, highest inflation etc etc. No world event or anyone else is to blame other than this party. Same for mass immigration. You cannot import 10 million people with the same infrastructure. ALL public services are a complete mess, education, health,etc.

        1. No Longer Anonymous
          August 12, 2022

          Reply to Hope

          Indeed. The biggest saving to the taxpayer would be the scrapping of the Lords and two thirds of seats in the Commons.

          Border security – gone, energy security – gone, food security – gone and law and order security – gone. Some forces reporting no burglaries solved, 70% of Met officers making not a single arrest last year.

          Just what is the point of Government ? Think of the money that could be saved if we gave up on this charade they call democracy.

          Their only purpose seems to be to tax and oppress the working man.

      2. Lifelogic
        August 12, 2022

        Government largely causes the energy crisis with the net zero religion, blowing up coal fired power stations and the childish war on beneficial plant food, crop and tree food CO2.

        As JR says “The answer to scarce and dear energy has to be the supply of more and cheaper energy.” Similarly for the shortages of supply of properties and most other things. A bonfire of red tape, scrap net zero, cull the vast numbers of essentially parasitic jobs in the state sector and in compliance, cull all the loans for worthless or nearly worthless degrees, relax planning, stop the war on motorists and the OTT green crap building controls too.

        Not much point in insulating properties at all if people cannot afford to heat them anyway! Just insulate the one room they can perhaps afford to heat! Or insulate the people.

      3. Peter2
        August 12, 2022

        Great post LL
        Thank you

      4. jerry
        August 12, 2022

        @LL; What exactly do you not understand about the words “unexpected profits”, especially when coupled to unacceptably low (past) re-investment, there are dividends and there is (effective) asset stripping…

        It is also very objectionable how some shareholders all to often expect to keep any profits but expect the losses to be socialized by either customer or general taxpayer. How much are our energy bills already being loaded even before new power stations etc come on line, if the shareholder is always to be King then surely it is for the shareholders to be putting up the finance to build, and it should be the shareholder who guarantees any loan repayments should a project prove uneconomic, not load consumers across the board with such above market debt -be that renewable, fossil fuel or nuclear?

        1. Peter2
          August 12, 2022

          Jerry
          Tell us the return on capital for these companies over say 5 or 10 years.
          PS
          When did these energy companies actually have their losses socialised as you allude to in your post?
          I can’t recall that happening.

          1. jerry
            August 13, 2022

            @Peter2; Is the Green levy not a taxpayer like subsidy?…

          2. hefner
            August 13, 2022

            All the numbers you are asking for are available in annual reports of companies registered on the Stock Exchange. For once do something useful P2, do a bit of research instead of trolling.

            I will help you with one utility company: I expect you’ll do the others.
            United Utilities UU. 5 year return 19.9%, average revenue £1,800 m, average profit £400 m, average dividend 40 p on a £11 share ie 3.6%

          3. Peter2
            August 13, 2022

            You are so grumpy heffy
            Now defining asking a polite couple of questions as trolling.
            Hilarious.

          4. hefner
            August 13, 2022

            It is trolling when your comments are always after the same people, which is particularly ‘hilarious’ as some other contributors also put more or less the same arguments as the people you are trolling. But keep on the good work P2, you are the useless funny one on this blog.

          5. Peter2
            August 14, 2022

            Usual abuse from you heffy.
            Very sad.
            Hilariously it is you that keeps attacking anything I post
            PS
            You need to look up what trolling is heffy.

          6. hefner
            August 21, 2022

            Abuse, which abuse P2, are you not useless and funny?

            As for a definition of trolling. Easy peasy P2. A troll is someone who practically never puts a primary contribution only comments negatively behind some particular people like you usually do with jerry, acorn, NHL, some others and me.
            ‘A troll is a person who posts .. extraneous, digressive or off-topic messages in an online community with the intent of provoking readers into displaying emotional responses or manipulating others’ perception’.
            So you have here a definition, which nicely describes your behaviour … otherwise you might be some kind of an online exhibitionist who loves seeing his name on the screen and getting a proof of his ‘wits’.

      5. Your comment is awaiting moderation
        August 12, 2022

        +1

      6. rose
        August 12, 2022

        Not only is there a shortage of properties to let, but those that exist are further diminishing because of the new regulation forbidding landlords and landladies from giving tenants notice. If landlords and ladies face a year’s litigation and attendant worries and expense in order to retrieve their property, they are not going to let it in the first place. Instead they will go in for holiday lets or similar. This is what happened in the sixties and seventies except that then they stopped letting altogether – unless they were Rachman. Why do the politicians never learn?

        1. Lifelogic
          August 12, 2022

          +1

        2. jerry
          August 13, 2022

          @rose; Well sell-up and cash-in on the value, after all there is far more a shortage of properties to buy too!

        3. hefner
          August 13, 2022

          As recently pointed out by the Centre for Research on Socio-Cultural Change, those with ‘too much money’ don’t go in for investment in Research and Technology but much prefer speculation, asset-stripping or into the property market. In the UK, this results in an economic model that prizes its past _ its elderly people and its asset-owners _ more than its future.

          1. Peter2
            August 14, 2022

            How do they define someone who has ” too much money heffy?
            Do you fall into their definition?
            PS
            I rather admire investors who go for the more risky option…speculation, property markets or even asset stripping…a 70s cliché if very there was one.

          2. hefner
            August 21, 2022

            Someone with ‘too much money’ is the type of persons who invested in BTL when the interests on loans were deductible (this BTL mortgage interest tax relief being a nice gift from the rest of the ‘hard working’ taxpayers) and now that this perk has decreased/almost disappeared not only has not rejigged their portfolio but keeps complaining every other day about the 39% cost of overdraft.
            What is even more incredible is that the tax relief which could be at 45% for a landlord at the very top of the tax scale has not completely disappeared as it is still possible to get a 20% tax credit. Furthermore if you own a BTL not as an individual but as a business there are other twists and turns in the tax code that can be exploited.
            Satisfied, P2?

    3. formula57
      August 12, 2022

      @ Reply “They pay 40% on the profits anyway. “ – and might face 65% if Sunak’s bad measure (albeit temporary, supposedly) is enacted.

      Squeeze them for tax until the pips squeak, as D. Healey would say. It always ends badly.

      (The bad Sunak measure (inevitably adding wretched complication) is explained @ https://www.gov.uk/government/publications/the-energy-oil-and-gas-profits-levy-bill/energy-oil-and-gas-profits-levy )

      1. jerry
        August 13, 2022

        @formula57; Actually the UK’s economy was already picking up by the end of 1978, and it was that recovery which lead to the collapse of the so called ‘social contract’ and thus the winter of discontent, so Mr Healey’s (IMF approved) policies were not ending so badly, had only the TUC kept a lid on their militants. Indeed Thatcher in ’79 inherited far less of a basket case economy than did Wilson in Feb ’74, which is what both Callaghan and Healey were dealing with during their six years of office.

    4. Peter
      August 12, 2022

      Closing the stable door after the horse has bolted.

      We are in a right mess with energy firms owned by overseas interests and a government committed to Net Zero.

      Private sector investment and ‘sensible’ regulation aren’t working. Regulators are hopeless anyway. I hope sensible is not code for indulgent. We have already been down that road and that got us nowhere.

      That’s what happens when you flog off the family silver. We have politicians in thrall to global interests not leaders. Mitigating the damage is a big task and two candidates are just not up to it.

      1. Mickey Taking
        August 12, 2022

        it seems all Regulators are paper tigers.

      2. Mitchel
        August 12, 2022

        Watch the welcome President Xi gets in Saudi Arabia next week-and compare it to that received by Biden recently.A concise tweet from The Sirius Report this morning:

        “Xi is not going to Saudi for a photo opportunity.”

        Petroyuan?

      3. No Longer Anonymous
        August 12, 2022

        +1

        We need watchdogs with real bite. The current situation in which energy providers are Direct Debiting people for thousands in advance of energy used amounts to interest free loans at the expense of consumers.

        We hear of water company bosses getting £1.2 million a year in salary and performance bonuses when there is no water, no new reservoirs, no repaired leaks, sewage being dumped in rivers and hosepipe bans.

    5. glen cullen
      August 12, 2022

      Energy companies are and will continue to squeeze and maximise every penny of profit it can until they are effectively thrown out of business by the policies of western world governments – imposing a ban on fossil fuels 2030-50 with the sanctioned policies of net-zero under the UN
      I don’t blame them….and just think of all those going to lose their jobs in the fossil fuel energy sector !

      1. glen cullen
        August 12, 2022

        Thats why the oil & gas futures markets are so high….and will continue to climb higher year on year until 2050 when they are force to go bust or until governments reverse net-zero
        Make no mistake energy prices going to continue to get higher

        1. Lifelogic
          August 12, 2022

          Misguided government (and crony capitalism) is as usual is the main cause.

        2. Mitchel
          August 12, 2022

          Tweet from Holger Zschaepitz(mkt analyst at Die Welt) this morning:

          “OUCH!German power prices just hit another ATH.I yr ahead electricity price jumps to more than 450 Euro/MWh;has now gained 280% ytd.”

          Another interesting,unrelated tweet from Ziad Daoud,Chief Emerging Markets Economist at Bloomberg:

          “Turkey risk of sovereign default fell sharply this week.After reaching a 19yr high last month.Reason:Russia-
          -cash transfer boosting Turkish reserves
          -Turkey may be able to pay in rubles instead of dollars for imports.”

          De-dollarisation continues apace.

        3. Mitchel
          August 12, 2022

          And India has been buying large quantities of Russian coal recently and appears to have been paying for it in a mixture of Chinese yuan,HK dollars and UAE dirhams.

    6. Ralph Corderoy
      August 12, 2022

      Hi Peter, I was going to point out that there was no rush to windfall-handout in recent quarters of large losses, but I see Sir John has already made that point so instead point out Andrew Lilico’s brief series of tweets on the issue, including lower supply causing higher prices helps ration supplies: https://twitter.com/andrew_lilico/status/1557665040022503425

      1. X-Tory
        August 12, 2022

        The real issue is not the profits that are made, but the investment. We need more supplies, so we need companies to invest more in production. So the question which neither of the candidates is tackling is how to achieve that. As always the are two approaches: (i) the carrot and (ii) the stick. You can either offer companies generous tax breaks for investment or you can threaten them with severe penalties for non-investment. I have repeatedly argued here for the ‘carrot’ approach, with 100% tax breaks for ALL investment (both in buildings and equipment, as well as in R&D) as this would lead to an industry-wide investment boom (not just in energy, but all industries), but frankly even a ‘stick’ approach at this stage would be better than nothing. But we need tens of BILLIONS of pounds of investment in energy production (of ALL types), so get a move on. Instead, when it comes to increasing energy production, both promise to do NOTHING – in their different ways. truss promises to not increase corporation tax (ie. do nothing new) and Sunak promises to, well, just do nothing. What a useless pair they are. An ex-Tory I shall remain.

    7. jerry
      August 12, 2022

      @JR reply; Have you not kind of answered you own question, the issue here is not that of usual market forces but of exceptional circumstance, war in the Ukraine and the Western alliances response (coupled to the distortion of the market due to the Net-zero nonsense), that has distorted the market. No one other than the far-left and Greens are suggesting companies such as BP or Shell should be forced to make a operating loss, but surely it is not right that they profit from Russian aggression any more than Russia does. Or indeed profit from politicos wish to be popular and thus ‘achieve’ an unnecessary Net-zero, even more when these days it seems to be the oil companies, such as Shell, who have jumped on the Net-zero bandwagon!

      Anyway, there are three parts to the energy industry in the UK, Exploration; Distribution; Supply (Billing of the end user), most or the debate is about the latter two. What excuse is there for Distribution and Supply companies to also see “exceptional” profits, in excess of their costs, during the current circumstance?

      The 2023/4 election cycle is fast approaching…

      1. Peter2
        August 12, 2022

        The Government already gains a windfall by taxing those higher profits Jerry.
        Would your policy agree to also cover any losses companies make in tougher times?
        How are you going to define profits which are too high?
        How will companies be able to plan their investments and growth when at any time a government playing to the voters could sequestrate part or all of that profit?

        1. jerry
          August 12, 2022

          @Peter2; “Would your policy agree to also cover any losses companies make in tougher times?”

          The tax system already does that, hence why some companies employ tax experts to legally minimize the companies liabilities to HMT. What is more at least some energy companies seem to expect the customer/taxpayer to act as guarantors against losses made when investments turn out to be uneconomic white-elephants, hence the subsidies that keep allowing so called renewables such as wind farms and PV arrays to be built!

          “How are you going to define profits which are too high?
          How will companies be able to plan their investments and growth when at any time a government playing to the voters could sequestrate part or all of that profit?”

          What exactly do you not understand about the definition of the word “Windfall” when used in a context of sudden extra profits caused by outside events, such as war? As for calculating the windfall, given that the market price for a barrel of Brent Crude is known from previous trading years, what it started the year back on 2nd January this year and for every trading day since, it is quite possible to track the windfall caused by such outside events (the war in Ukraine) against average prices.

          No one is suggesting the energy companies will have any less money than they had forward projected, and made investment plans etc on, back this time last year for the 2022/3 tax year, just that they perhaps should not end the year with vastly more.

          1. Peter2
            August 12, 2022

            para1
            the tax system does allow corporation tax to be set off against certain defined previous losses versus current years profits but you want a different treatment.
            Where today’s profits are declared abnormal and are then sequestered from the company outside current corporation tax rules by the state.
            para 2
            that isn’t a definition of abnormal profits.
            which is the key to your argument
            ps
            where were you when companies like BP posted billions in losses.
            no call from you to socialise their losses in those bad years.

          2. jerry
            August 13, 2022

            @P2; But such losses were socialized via the tax system! Company tax liability is surely based on trading income or loss, not necessarily the book/market value of a companies assets, unlike say UBR that simply values the buildings and expects the full UBR to be paid whatever.

            As for your claim there is no definition of “abnormal profits”, nonsense, as I said one only has to look at averages within (the price per barrel of oil, in this case) market trends over the last X number of years, the same type of calculations that are made when investors decide to invest or divest stocks. I doubt many (successful…) investors make their decisions base on just one tax year, and what could well be a blip on the spreadsheets, they will look back at other year results to make their decisions.

          3. hefner
            August 13, 2022

            Characteristic of you P2: when you are shown to be wrong, you change the topic. Be explicit and explain why jerry wants a different treatment. Go on, for once, make a proper and and argued point instead of your vacuous troller’s sentences. Show how good a businessman you are supposed to be.
            As pointed out by jerry there is a history of revenues, profits and investments by all these utility companies over years, so it is quite easy to define what an extra profit is. The present situation, particularly the war in Ukraine is not a normal situation.
            Do you really not understand that? Or are you as dishonest as a politician?

          4. Peter2
            August 13, 2022

            You want windfall taxes Jerry.
            That is the sequestration of what you define as abnormal profit.
            Over what period…one year…or a five year average?

            Corporation tax is pretty stable and well understood tax and is very different to what you want Jerry.
            PS
            Heffy
            How have I been shown to be wrong and how have I changed the subject?
            More ridiculous rude abusive trolling from you.

        2. hefner
          August 21, 2022

          Could you take one of the utility companies or an oil and gas company, look at its annual report and tell us all about its investment in the UK. For example a water company, how much was invested in fixing leaks, how much was invested in potential new reservoirs. Similarly for an oil and gas company.

          BTW I hope that you know that any true investment by such o&g company might possibly benefit from the Covid-related super-deduction (gov.uk, 05/03/2021 ‘Super-deduction’ but only till 2023) or more likely from the 91 p to the pound Investment Allowance (brodies.com, 09/06/2022 ‘The windfall tax: what is it and what does it mean for business.’ See ‘what does it mean for oil and gas companies?’).

      2. Mickey Taking
        August 12, 2022

        someone always makes ‘unexpected’ fortunes out of war…

        1. jerry
          August 12, 2022

          @MT; Yes indeed, and some are very quick to defend their own or others actions in doing so! 🙁

          1. Peter2
            August 12, 2022

            Try looking more long term Jerry
            Say 5 years.

          2. jerry
            August 13, 2022

            @P2; Indeed, very good advice! Just as investors (and tax officials) often also look back
            Say 5 years, to detect trends, norms and what were just unexpected, abnormal, windfalls… 😛

          3. Peter2
            August 13, 2022

            Well I’m glad we can agree on looking more long term on the current demands by some to steal the profits of companies when they have an exceptional years trading.

    8. Christine
      August 12, 2022

      I’ve owned BP shares for many years and they are currently 0.33% in profit. Hardly a great return. Shareholders take the risk and get no financial support when things go wrong (unless you are bankers of course). Why do people and governments think they can steal someone’s income when there is a short period of profit? Many shares are owned by pension schemes which have had a hard time in recent years.

      1. Peter2
        August 12, 2022

        Well said Christine.
        One news report counted the profit as £X per minute.
        Where as your statistic shows a very different perspective.

        1. hefner
          August 20, 2022

          P2, interesting, BP. shows a 55.62% growth over one year, and indeed a 1.04% averaged over five years. Over a year, 21Q3-22Q2, it distributed 22.4 p per 440 p share, so a 3.5% dividend. So not as bad as Christine says, except if her financial adviser takes an undue fraction of her profits.

          £X per minute is not the same as the 0.33% profit that Christine quotes, specially if you take it from ‘one news report’. Anybody sensible would look at the original information, ie the Annual Accounts Report. There one would see how much of the profit/loss from this particular company is distributed into capital expenditure, divestment programme, dividend payment, future investment, share buy back, top executive bonuses, … all explained for BP in the 2021 356 p report this year called ‘Performing while Transforming from IOC to IEC’.

      2. Lifelogic
        August 12, 2022

        Exactly hence government causes the under investment in energy.

      3. MWB
        August 12, 2022

        Because government are insulated from the economic cycle, being public workers and feather bedded with index linked salaries and pensions.

      4. dixie
        August 12, 2022

        This is an excellent point which is lost on many who forget, or are simply ignorant, that many of the shareholders are private and occupational pension funds. It is unfortunate though that many of the utilities have significant foreign ownership that results in profits going offshore and investments not being as great as might be (eg selling reservoirs).

        We are not all in this together.

    9. hefner
      August 12, 2022

      news.sky.com 13/08/2021 ‘ExxonMobil, Shell and BP among oil companies paying negative tax in UK on some North Sea operations’.
      I am sure Sir John will be keen on explaining us the details of how such thing in possible thanks to measures taken by the Government in 2015.

    10. No Longer Anonymous
      August 12, 2022

      Reply to reply (Peter Wood’s)

      The problem I’m concerned with is not company profits but the VAT that the Government is raking in on price rises in general.

      Can you not lax off a bit ?

      Why is VAT not being classed as inflationary ?

      (It is a big reason why house price inflation has been encouraged in the past few decades. So that young professionals live in shared housing whilst benefit claimants get their own.)

    11. R.Grange
      August 12, 2022

      Agree with you about being in a mess and the threat posed by net zero, Peter. But I can’t undestand why you want to keep the Ukraine war going. And sanctions? How much higher do you want energy bills to go as a result of global shortages and price instability caused by the foreign policy you seem to be supporting? Surely you see that Putin and the energy companies, all making huge profits, love what you’re apparently cheering on. Sanctions are not hurting Russia sufficiently, and have boomeranged on us. It’s time to end them and move on to energy policies that we can have some control over, including some mentioned by others on this site.

  2. DOM
    August 12, 2022

    For Labour, this is not about energy prices or human welfare. Seeking to exploit energy price inflation for political profit and to encourage a move towards greater Socialist union control over important supply chains is utterly repulsive, abhorrent and without human concern.

    Labour’s become a repugnant and brutal ideological and political machine with zero concern for the welfare and safety of this country’s most vulnerable.

    I would have thought the vileness we have seen since the late 1990’s would have opened the eyes of most voters as to how far this brutal vested interest would go to protect and indeed promote their power but it seems most are blind to Labour’s poison

    The Tories must expose woke Labour and the unions or else we could quite easily have a situation that the US is now facing in which political threats to the incumbents is brutally eliminated

  3. The Prangwizard
    August 12, 2022

    The answer is to increase supply of gas but private investment cannot do this when home production is prevented by green insane leaders like Boris and others slavishly following and refusing to criticise.

    Unless we can incease our own production urgently and build reserves our country will continue to be destroyed by its ideologically mad government of ‘greens’.

  4. Nigl
    August 12, 2022

    Another example of this government holding a meeting to show the seriousness of its intent but with zero outcomes. The say a lot do nothing administration.

    Few/any can argue the fact that they criminally mismanaged our energy over years deliberately winding down our generating capacity relying on wind/inter connectors etc.

    Lord Frost is spot on, the entitled liberal elites (how dare we criticise the pompous failure that is Andrew Bailey) have brought this country to its knees and your government through its cowardly silence and inaction has been complicit.

    If Truss wins her cabinet must be chosen because of their political bravery, resilience, strength to face the blow back from the entitled. No place for people that will crumble nor over emphasis on the soft centre right of the party that has helped get us in this ordure.

    You got us in this mess, you get us out.

  5. jerry
    August 12, 2022

    “Gordon Brown’s attempt to hijack the agenda with a proposed nationalisation of parts of the energy industry was bizarre.”

    Well I suspect one of the architects of privatization does, but what of the average working and retired plebs on ‘Main Street’, I doubt they find it at all bizarre – one always knows what pensioners are actually thinking, the Daily Maul ignores the issue.

    “Crisis? What crisis!”, that 1978/9 Winter of discontent might start looking trivial when it is not trade unionists picketing around the flaming brazier’s , burning old palates and furniture, but Mr and Mrs Average pensioner.

    Some on the right are sounding increasing like the hard left did after their 1983 election grubbing, “nothing wrong with our policies, just that were were not radical enough” Take a sniff of you coffee Sir John!

  6. Stephen Reay
    August 12, 2022

    Even if Ukraine manages to expell Russia it may not solve the energy prices. Russia is now getting more profit for selling less, he’s going to continue to squeeze the west. Current high energy prices are here to stay unless we can produce more ourselves.

  7. Donna
    August 12, 2022

    Gordon Brown may be wrong (he always is) but at least he is proposing something; which is more than can be said for the Empty Suit who claims to be leading Labour.

    The fact is that politicians have created the conditions which are resulting in the quadrupling of energy bills in one year. Politicians across the EU did what the Eco Zealots in the UN/WEF and Charity-Quangos demanded and destroyed our energy security by telling a gullible public that so-called renewable energy would provide for all our needs and would be cheap – both obvious lies which anyone with a few functioning brain cells could work out very quickly.

    The problem the politicians have created can therefore be reversed by telling the Eco Zealots in the UN/WEF and Charity-Quangos that we are going to ditch the Eco Lunacy and restore our “fossil fuel” energy sources and frack for gas at the very least until we have created RELIABLE alternatives ….. small nuclear reactors. It doesn’t mean wasting £billions on more windmills and solar.

    And in the meantime the Government should scrap the “green levies,” remove VAT from energy (and fuel) and ban the Energy Companies from levying a standing charge (which have quietly been doubled) so that even if you cut consumption, you still get clobbered.

    Change the Eco Lunacy policy …. or the people will change the politicians.

  8. majorfrustration
    August 12, 2022

    Whilst the Government should take steps to shield the population in the short term from high prices the real problem which nobody in Westminster seems to have grasped is the supply issue. If the politicians cant see that we face a national emergency there really is little or no hope for this country.

  9. Nottingham Lad Himself
    August 12, 2022

    The public’s experience of the only-for-profit lads in energy as in anything else will no doubt have made them generally highly sympathetic to Gordon Brown’s suggestion.

    The Tories’ media can’t keep the lid on the facts as to the difference in bill increases between in this country and in France, say, no matter how hard they might try.

    The issues are not just one of proprietorship, but also of regulation, of inspection, and of enforcement.

    1. IanT
      August 12, 2022

      The reason that French prices are low is because the French Government is paying the diference between market and retail prices. So ultimately, the French will pay in some form – either through taxes or credit problems caused by the huge debts being incurred. Western Governments have dug this gigantic hole (called net-zero) and will now pay the price.
      Idiot on TV arguing that fracking cannot make any difference to this Winter, which is very true – but it would have made a large difference if we’d have started fracking five years ago. Do I have to watch that same idiot making the same claim in five years time?

    2. Mickey Taking
      August 12, 2022

      Electricity wholesale prices have increased in the first quarter of 2022 by 411 per cent in Spain and Portugal, 343 per cent in Greece, 336 per cent in France and 318 per cent in Italy compared to the same period in 2021, according to the European Commission. so there !!!

      1. hefner
        August 13, 2022

        Wholesale prices, indeed, but different EU countries have different policies regarding the increase in consumer prices. In France the TRVE (regulated tariff for the sale of electricity to households) is 4% for 2022. (selectra.info ‘Evolution du prix de l’électricité en France et prévisions 2030). Obviously one way or another the French consumer will have to pay higher prices later on, but at present the shock is nothing like what we are getting here in the UK.

    3. a-tracy
      August 12, 2022

      NLH, were these companies making Profits in Brown’s years in charge? Was he trying to nationalise them then when he had the opportunity to with his booming economy? May 1997-2010 he had a rather long time to sort things out.

      It’s not like Sunak hasn’t been coughing up, £150 a further £400 promised as we turn the heating back on, some households have had a targeted £1200 promised towards energy if they’re getting other benefits? (I hope the government is paying the energy companies directly and not into the pockets of the households or they’ll just spend the money elsewhere and not pay their bills.)

    4. No Longer Anonymous
      August 12, 2022

      +1

      I believe the population is turning leftwards. The thought terrifies me but that is what abandonment results in.

      1. No Longer Anonymous
        August 12, 2022

        The forecast of average £4000 bills next year indicates an economic emergency yet we don’t really have a government at the moment.

        The country is tinder box dry.

    5. Peter2
      August 12, 2022

      France has 70% nuclear powered generation of electricity which helps keep their domestic prices down NHL

      1. glen cullen
        August 12, 2022

        I never thought I’d be envious of the French

      2. hefner
        August 13, 2022

        gc, maybe no need to be envious, right now (August 2022), 50% of the French nuclear plants (27 out of 56) have been stopped to check for internal corrosion and/or because of too low a level in the rivers used for cooling purpose.

        1. Peter2
          August 14, 2022

          Even 29 is far more than we have in the UK
          You are still right to be envious Glen.

    6. Mark
      August 12, 2022

      We have seen what happens when energy suppliers go bankrupt. That is the possibility for EdF at the moment, which is not being funded by the French government for its losses in a timely manner, such that EdF are now suing for €8.3bn in unfunded losses, with an expectation that losses will multiply enormously over the winter . That would lead to extreme power shortages in France because they wouldn’t be paying for imports. As a major retail supplier and generator in the UK, and currently customer for UK electricity exports the bankruptcy would have devastating effects here too. No chance of being able to rely on French power to keep our own lights on.

    7. acorn
      August 12, 2022

      EDF customers in France pay HALF as much for their energy as British households shell out. Britons with French energy giant had bills capped at £1,971 by regulator Ofgem, yet French customers on regulated tariffs reportedly face costs of €950 (£804). It comes after Emmanuel Macron imposed strict caps on price increases. The French President did so amid the ongoing cost of living crisis. (In the Daily Mail no less!!!)

      1. Peter2
        August 12, 2022

        They socialise the profits acorn the French taxpayers pay for the price cap.
        And of course 70% of French electricity is generated by nuclear which you don’t want.

        1. acorn
          August 13, 2022

          The French taxpayers own 84% of EDF, likely to be 100% soon. So the French customers, through their government, get the taxes and the profits from EDF’s upstream activities; which get recycled into reduced retail customers energy bills. Not possible in the UK.

          Nuclear power is too expensive and currently taking ten years to get up and running. Too long to meet government’s Carbon targets. LCOE for Nukes $160 / MWh; Onshore Wind 42; Solar PV 40; $150 / MWh for a four hour discharge Battery.

          1. Peter2
            August 13, 2022

            When EDF makes losses the taxpayer pays.
            That is an unescapable fact.
            More dodgy stats on renewable prices I note.
            And you don’t want any nuclear in the UK do you acorn?

    8. Hat man
      August 12, 2022

      Wish I could agree with you, lad, about public knowledge of energy price differences between Britain and the continent. I fear the media are doing their usual job of keeping important info from the public on that point, as on much else.

    9. MFD
      August 13, 2022

      No , no no! NLH
      Never

      The Labour party and that snide piece Broon would never get my vote, he and Blair destroyed Britain my homeland. I will never forgive those involved. Its over and OUT.

  10. Sir Joe Soap
    August 12, 2022

    The question at the root of this is who pays the extra?

    1. People were told by government (rightly or wrongly) that there was a price cap. People generally understand that as a comfort, so the concept of a price cap is a cap over a significant period of time (a year or years not months) to smooth rises and falls in price. The idiot who runs Ofgem doesn’t understand that and now throws that concept in the bin by suggesting the plan to reduce the cap period means prices will fall faster later.

    2. Why not have a 5 year plan with prices at say 5% p.a. increases from today regardless, financed by government? If our Ofgem friend is correct then the government will easily recoup their costs over that time.

    1. Mark
      August 12, 2022

      The harsh reality is that there simply isn’t the hedging capacity that OFGEM (and those politicians who demanded a cap in the first place) had been assuming to provide a properly insured cap through purchase of hedges. To be able to hedge prices forward at a price you are willing to pay you have to find someone willing to sell at that price and who is capable of delivering against that sale. That rules out wind farms, who cannot guarantee output more than a few hours ahead. It rules out nuclear plants that are under constant threat of maintenance shutdowns and even total shutdown as they near end of life. It rules out gas plants, who never know when the wind will be blowing and when it will not any more than wind farms do.

      So you are let at best with an open ended loan to cover what you deem as excess price, with no guarantee that it won’t simply be added to endlessly, until the economy collapses.

      The only real solution is to address the supply side shortages and unnecessary subsidies and taxes that serve to inflate prices. Government then needs to recognise that its foolish policies have put people in untenable positions, and therefore it needs to help out with welfare payments. Voters need to understand that foolish policies like net zero will only result in more and more financial pain and economic hardship. In Germany, the government are now expecting social unrest over the winter. It would be little surprise to see the same here.

      1. Sir Joe Soap
        August 12, 2022

        So you’re saying the OFGEM guy was spouting rubbish when he talked about the price coming down, implied next year? Then sack him. Either his reasoning for the faster change in price cap (to bring prices DOWN not up) is sound, in which case the govt. borrows confidently, or he’s talking garbage in which case sack him and forget the stupid idea of a price cap, because you’ll never recoup the loan against forever rising costs. It has to be one or the other.

  11. Paul Edwards
    August 12, 2022

    Such a poor diary entry with no policy except criticism of an ex Prime Minister’s view and the Lib Dem ideas- just defends the excess profits of the energy companies. Government responsibility is to plan and organise for the long term needs of citizens, this maybe by public or private investment. I see little prospect of this here or from the PM candidates.

    1. Mickey Taking
      August 12, 2022

      We who post on here almost always delve into criticism. Have you not noticed?

      1. Mark B
        August 13, 2022

        Yes, and the majority of it justified.

      2. hefner
        August 13, 2022

        The fishbowl effect now being applied to politicians who forty years ago could take decisions without much reaction/comment from the people?

    2. a-tracy
      August 12, 2022

      Paul, what are the excess profits in £s over the past five years? Do you know what the energy companies have done with those profits to criticise them without having the right to respond?

      Why aren’t the energy company bosses on these big salaries ever interviewed?

      1. hefner
        August 13, 2022

        What are you talking about? Ever heard of Annual General Meetings with presence of shareholders? Or of large fractions of shareholders refusing to give the final discharge to the company accounts particularly regarding the annual increase of top management? You should start to read more of the business press.

  12. Julian Flood
    August 12, 2022

    Sir John
    Frack. It’s quite simple.

    JF

    1. Lifelogic
      August 12, 2022

      Frack, drill, mine, stop blowing up coal fired power stations, scrap all subsides for renewables, stop burning wood at Drax, scrap net zero, deregulate, move Kwasi to a job he knows at least something about!

      Some people will just have to live with far less energy as we did when I was young with just one warm room and a tepid bath once a month with shared water – this whether needed or not!

  13. Berkshire Alan
    August 12, 2022

    Further to past comments on this subject.
    Never understood why these private power companies or their customers had to be bailed out by existing competitor companies and their customers, or the taxpayer in the first place.
    Most of those who went broke were small set up’s, some even run from home or a very small offices with just a few staff, and their customers went to them because they were supposedly cheaper !

    One could argue why such organisations were allowed to be set up in the first place, but surely the financial risk should be with them, their investors and those who supplied them, as indeed it is with any other sort of commercial business.
    If a company goes broke then its customers simply have to go elsewhere, and the suppliers get what little is left
    Why was this any different, why were customers of the larger suppliers expected to pick up the tab for a failed Competitor business ?

  14. Dave Andrews
    August 12, 2022

    You say the answer is more and cheaper energy. But that requires action on a global scale. Little Britain with its potential of fracked gas isn’t going to make much of a dent in global prices. All that would be achieved would be a little more gas for the energy giants to exploit. The cost to the UK consumer won’t change a jot.
    The problem for the UK is that we have handed over our energy resources to the giants for them to exploit. Even if we were to seize them back under emergency legislation so they could be reserved as cheaper energy for the UK consumer, who would then mine the resource? Not those same energy giants. Why should they when they can make much better profits selling other resource they have at the global price? That leaves the resources in the ground with no one competent to extract them.
    If fracked gas is going to be the answer in this country, then it would have to be exploited by a competent business acting in the interest of the UK consumer, not one that is just there to maximise its own profits. As far as I can tell, such a business doesn’t exist

  15. Cuibono
    August 12, 2022

    Dusting off my Davy Lamp at this very minute!
    The wicked, wilful waste of all that coal ( 300 cosy winter’s worth) and the terrible destruction of settlements built entirely on the orders from above to mine coal. Now the orders are to slink off and die from hypothermia!
    A certain broadcaster was much involved in the propaganda campaign against coal ( back in the 70s). So similar to the tactics we recognise today. Using the Unions in much the same way

    1. Dave Andrews
      August 12, 2022

      We ought to be generating electricity from coal and saving gas for domestic central heating.
      Develop renewables by all means, but don’t rely on them until they are a practical alternative. Wind currently supplying 5% of its installed capacity.

    2. hefner
      August 12, 2022

      300 cosy winter’s worth, that’s 2322 or about 12 generations. Obviously you don’t care much for your grandchildren.

      1. Peter2
        August 12, 2022

        Tell that to China heffy
        They love coal.

        1. hefner
          August 13, 2022

          And P2, do you care for your grandchildren (if any)?
          Seeing as you defend the profits of energy companies, you seem to be, like a number of people on this blog, ‘après moi le deluge’.

          1. Peter2
            August 13, 2022

            Silly emotional cliché comment heffy.
            I would prefer my grandchildren to be able to afford reliable energy and not suffer in the cold due to power cuts and hilariously high energy prices.
            And to have a well paid secure carreer in a thriving economy.
            The UK if it got to net zero China would use up that saving in a year or so.
            All on the same planet heffy.

      2. cuibono
        August 12, 2022

        Oh but I do.
        That’s the point!

  16. a-tracy
    August 12, 2022

    We’re seeing Gordon Brown on the TV its completely irrelevant and a waste of time; what the tv news should be doing is interviewing the energy company directors and the water directors to delve into the problems with the people in charge.

    The sanctions on Russia are hurting the West more than Russia, they’re making more money than ever. We are being led down the green agenda path; let’s put off the green agenda for two years and focus on sorting this emergency out first.

    1. MFD
      August 13, 2022

      A-Tracy lets dump all the green agenda as it is fraudulent , certainly will never be vfm.
      You never get anything in life unless you work for it.

  17. Donna
    August 12, 2022

    Theresa Coffey, Work and Pensions Sec, on Talk TV 8.30 this morning doing a full-on “blame the Regulator” spiel over the Energy crisis.

    These Quangos are just SO convenient for Ministers. No wonder none of them are ever scrapped. Since Government Ministers don’t want to actually govern the country, perhaps we should scrap them instead.

    1. Mark
      August 12, 2022

      She’s right that OFGEM have not covered themselves in glory. They have been found to be incompetent, effectively far too distracted by net zero and protecting green interests to look after consumers. Then again, the politicians decided to place green interests above consumer interests in Ed Miliband’s 2010 Energy Act, and appointed an architect of the Climate Change Act to head OFGEM. I don’t know what they expected.

      They need to return OFGEM to looking after consumer interests, and ensuring that it has competent people at the helm who understand the energy industry and consumer issues properly, instead of working out how to guarantee that windfarms get every penny of their subsidies rather than sharing the financial pain with the rest of us.

    2. Hope
      August 12, 2022

      +1

  18. glen cullen
    August 12, 2022

    Both candidates need to be honest with the populace
    (1) Under policies of Net-Zero energy price will remain high and get higher
    (2) Under ECHRs will can never control or expel illegal immigrants
    (3) Under NIP we aren’t sovereign over tax vat arrangements
    Regulations & interventions maintained by this Tory government still include an effective ban on fracking for shale gas, off shore gas exploration drill, coke & coal mining, the fossil fuel cars, fossil fuel domestic boilers, and domestic wood burning
    Tory Party energy policy = Green Party energy policy

  19. Cuibono
    August 12, 2022

    The trouble with nationalisation is that, although a good idea in theory it always gets hijacked by Marxism via unions ( ie NOT to benefit the workers). Marxism promises “freedom” and the working class possession of the means of production but all they actually get is “Animal Farm”. Then to control the unions the resource is sold off and becomes “privatised”…or was that the plan all along?

  20. Christine
    August 12, 2022

    All we seem to hear about is giving financial help to enable poorer families to cope with the price increase when what we need is more action on energy security.

    We are currently helping the EU to bolster its stock of gas for the winter but I can’t see any effort being made to secure our own supplies.

    We need to re-commission our gas storage capability. Re-open viable coal mines. Give licenses for more gas and oil fields.

    The only way to reduce prices is to create more supply. Throwing taxpayers’ money at the problem isn’t a long-term solution.

    1. Cuibono
      August 12, 2022

      Agree 100%
      Look along the street at night. All windows are dark. No all night security.
      But I guarantee that where there is benefit there will be light.
      Blazing out all night.
      And no ban on filling the new “opiate” …ie hot tubs!

    2. Fedupsoutherner
      August 12, 2022

      So we’re all going to have to jump on a ferry to France to enjoy the luxury of lights at a switch. You couldn’t make it up. As usual our government makes sure the population of foreigners is put before us

    3. No Longer Anonymous
      August 12, 2022

      That’s socialism for you !

      Tax tax tax and then give a little bit of it back to the people who are most likely to kick off… ie those who don’t pay tax.

    4. a-tracy
      August 12, 2022

      Christine – Guido Fawkes has an interesting post, Reeves has come up with a solution ‘Bringing prepayment energy prices into line with those for direct debit customers, they claim, will “provide relief to 4 million households”. saving around £46 per year calculate the Daily Mirror. However, what happens when more just over-the-threshold families who can’t get the £1200, start saying ok we’ll just pay bills on demand and not by direct debit no point if there is no advantage then to paying up £600 in advance through the summer with no interest.

  21. Denis Cooper
    August 12, 2022

    https://euobserver.com/tickers/155766#

    “EU sanctions have ‘limited’ effect of Russian oil production”

    “Russian oil production has fallen by less than 3 percent since the invasion of Ukraine, with western energy sanctions having only a “limited” effect, the International Energy Agency has found, as flows are rerouted to India and China. In its latest monthly report, the agency said Russia’s oil production in July was 310,000 barrels a day below prewar levels, while total oil exports were down by 580,000 barrels a day.”

    1. formula57
      August 12, 2022

      I have seen it reported that Saudi oil imports are increased through buying Russian supplies and those are then exported to the Evil Empire. So everyone is happy, save those who really wish to see Putin punished for his crimes.

    2. Mitchel
      August 12, 2022

      Bloomberg,8/8/22:

      “Mediterranean buyers return to the market for Russian crude.Increased shipments to Italian and Turkish ports support Moscow’s oil flows…………For the week ended 5 August the volume of oil from Russia’s Black Sea and Baltic terminals to Italian ports was at it’s highest level for seven weeks…..Spain bought it’s first Urals crude since April,Greece it’s first since February.”

    3. Mark
      August 12, 2022

      270,000b/d for the war?

  22. Bob Dixon
    August 12, 2022

    On one hand we have major energy companies making exceptional profits by trading in energy.
    On the other hand consumers are facing exceptional price increases.
    Please step forward those ministers and civil servants who interfered with the energy market.
    Did they not see what could happen?

    1. Mickey Taking
      August 12, 2022

      ..and back to NHS.
      England’s health chiefs say they will create an extra 7,000 beds to tackle “substantial” pressures this winter.
      It comes after government scientific advisers warned that “high numbers of beds may be needed for respiratory patients”. The extra beds will include more temporary units at hospital sites and 2,500 “virtual ward spaces” with patients monitored at home. The NHS is already facing intense pressure.
      According to official figures for July, nearly 30,000 patients waited more than 12 hours to be admitted to hospital.
      July also saw the highest number of ambulance callouts for life-threatening conditions since records began, and only 40% of patients were able to leave hospital when ready to do so.
      NHS chiefs say this could be the first winter where there is likely to be combined pressures from Covid and flu.
      There are around 91,000 adult beds in general wards in England.
      —How will patients be monitored at home? by telephone, online devices, visits?
      —Did all 30,000 patients really need to wait for an ambulance to take them in?
      —40% of 30,000 were not able to leave when ready. From experience you can wait a whole day to get Doctor clearance to go home, then many hours waiting in ‘Discharge area’ for drugs to take with you.

      1. glen cullen
        August 12, 2022

        This government said it was building new hospitals when in fact they meant a new wing to a hospital therefore using the same logic a hospital bed could be a chair or new springs in the old bed…..We don’t believe them !

    2. John Hatfield
      August 12, 2022

      Step forward net zero.

  23. Walt
    August 12, 2022

    Privatising the losses and socialising the profits of the energy companies would be at least as bad as the previous ‘mirror’ policy of baling out the banks by socialising their losses and privatising their profits.

  24. Keith from Leeds
    August 12, 2022

    Hello Sir John,
    You are right in your comments but sadly our education system turns out lefty/liberal people whose understanding of these simple truths is sadly lacking.
    You are also talking about the effect rather than the cause, from 1997 onwards we have had weak government who would not take the hard decisions to secure our energy & water supplies. Let’s start by taking VAT & all green levies off our fuel prices & stop all subsidies to wind & solar power. Let’s have tougher regulators who look at the long term rather than today so we are never in this position again.

    1. Fedupsoutherner
      August 12, 2022

      Keith. The only thing I’ve heard about the long term is more unreliable wind.

    2. Kyle Harrison
      August 12, 2022

      So you want higher energy prices then? Wind is making our energy bills cheaper. Gas is making it expensive. More wind equals cheaper prices.

      1. Mickey Taking
        August 12, 2022

        a good laugh – thanks.

        1. Kyle Harrison
          August 19, 2022

          I am telling you a fact. Wind is cheap. Gas is expensive.

  25. Cuibono
    August 12, 2022

    Did Brown step into a vacuum created by Starmer’s holiday absence?
    All the energy companies are only reacting within the framework created by politicians.
    The blame lies neither with the energy companies nor with the consumer.
    Just with successive governments which have totally failed to provide us with energy security despite our country having the resources to be completely energy independent.
    Why, pray, is Chinese coal better than our own?
    Net Zero = Net SHAM!

    1. Kyle Harrison
      August 12, 2022

      The UK does not have the fossil fuel resources to be self sufficient, this is a complete fiction. And if we did attempt to be self sufficient it would cost us a lot of money. Why do you think Thatcher closed down pits? It was cheaper to import coal. Just like it is often cheaper to import gas.

      1. cuibono
        August 12, 2022

        It may have been about controlling the unions.
        Breaking the Left..which did not work.
        Or it may have been in deference to the EU.
        Germany was the designated manufacturing country.
        We were the economic power. City of London.
        Remember what Lawson said?

        1. Kyle Harrison
          August 19, 2022

          I am sorry to be rude, but that comment you made just proves you have no idea what you are talking about and you have no idea about the realities of the British economy and British energy. Thatcher closed down pits because they lost money. That’s it. End of story. It was cheaper for buyers of coal to buy from abroad. The sort of thing you’re suggesting makes you sound like a 1980s socialist, am I correct? You certainly ain’t no Tory. And if you are, I have no idea why you are. You and Arthur Scargill would get along quite well.

      2. Mike Wilson
        August 13, 2022

        The UK does not have the fossil fuel resources to be self sufficient, this is a complete fiction.

        You’re talking rubbish. We have 300 years worth of coal. And loads of gas.

        1. Kyle Harrison
          August 19, 2022

          Wow. You sound like Arthur Scargill. Yet here you are on a Tory MPs website, a Tory MP that passionately supported Thatcher. What a world we live in.

  26. Bloke
    August 12, 2022

    If Russia values their prisoners of war held by Ukraine, might they be willing to exchange them for oil?
    The peaceful nations of the world could assist some good effect, so long as Ukrainians aren’t disadvantaged.

  27. None of the Above
    August 12, 2022

    The main solution to high prices in the energy market is the same as for the housing market, increase the supply or reduce the demand. Yes, it is a global market but if we produce more of our own energy, we will need less of other peoples, reducing some of the demand pressures and therefore reduce pressures on price. Demand in the winter will increase and if we have a cold spell driven by an anticyclone (low wind speeds and overcast skies) we cannot expect much help from wind and solar power infrastructure. This will increase gas demand hugely. In extreme circumstances that might lead to some rationing. Everyone born in the early 50s will remember the 3 day week, the need for candles, ice on the inside of windows and hot water bottles. I did not enjoy the benefit of central heating until the mid 60s.
    It’s uncomfortable but survivable. My Grandparents who were all born between 1895 and 1900 manage to survive these conditions and lived to their 80s and 90s.
    I do not welcome the idea of turning off the heating or lighting a few candles this winter but neither am I frightened of doing so.
    Our younger political leaders, already addicted to short term planning, have allowed their soft upbringing to encourage complacency. They need to remember this lesson and teach it to future generations.

  28. Mark Thomas
    August 12, 2022

    Sir John,
    I watched your interview on GB News last night. All I can say is that I hope you will soon be in a position to strongly influence government policy in the very near future.
    The last thing we need is Gordon Brown emerging from the shadows like some 70s socialist vampire.

  29. Rhoddas
    August 12, 2022

    “Frack baby frack”. On last night’s PMs’ hustings Liz said she’s up for it, hooray!
    Drill baby drill & store baby store.
    Of course the deal should be that the energy companies get the necessary UK permits ‘for a sizable fee’ which ‘helps’ HMG cover our over-expensive energy situation… without looking like a windfall tax…. catch my drift.

    Then we shall get what we need – the gas supply side corrected, ending the UK reliance on imported spot prices. Oil too for that matter.
    And crack-on & approve SMR design and locations, start RR manufacturing & press the unreasonable demand button to get some fastracked in good time for our regular energy demand / heavy lifting; also they reuse the nuclear waste from 1st gen reactors, if I am not mistaken?
    Then wean ourselves off the fossil fuels.. integrated energy planning – joined up thinking required!
    Today’s National Grid is gas 62% and wind a paltry 4%… latter might increase after my full english breakfast 🙂

    1. glen cullen
      August 12, 2022

      “Frack baby frack”. On last night’s PMs’ hustings Liz said she’s up for it, hooray!

      Liz put a caveat on her statement saying only if the local people approve…We don’t believe them !

  30. Cuibono
    August 12, 2022

    Please, please turn us into lemmings.
    Direct us to the nearest cliff edge.
    Food, energy, water, defence.
    Let us start viewing all our consumer goods in terms of bags of Chinese/imported coal!
    Or let us insist on renewable production only!!😳 ( Oh…no slave labour allowed).
    Unaffordable, like our domestic energy…or a complete impossibility?
    How many bags of coal to make a windmill?

    1. Cuibono
      August 12, 2022

      Come to think of it we don’t need to be lemmings.
      Our government and its various agents are like the rogue sheepdog in “Far from the Madding Crowd”.
      Herding us over the cliff….

  31. Mickey Taking
    August 12, 2022

    Agriculture.
    The blistering temperatures are also scorching harvests across the bloc, with farmers of some of the EU’s staple and signature foods reporting painful losses. In July, the European Commission’s Joint Research Centre warned of reduced yields as a result of the hot and dry weather, forecasting an 8 to 9 percent drop for maize, sunflowers and soybeans.
    In Germany, farmers say wheat yields will be down around 10 percent. In France, the world’s fourth-largest exporter of wheat, the agriculture ministry expects yields to be 4 percent lower for soft wheat and 14 percent lower for durum wheat compared to last year.
    Belgium’s farmers say crops such as potatoes and beans are being “burnt by the sun,” while Romania’s world-leading corn exporters expect the drought to bring production losses as high as 35 percent.
    In Italy, the drought has hit rice plantations, with farmers predicting a loss of 30 percent. Olive oil producers are also affected in many parts of Southern Europe, and the Continent’s prized wine industry faces trouble: Sun-scorched grapes in Spain and France will yield lower-than-usual output.
    Livestock farmers in France also say grazing fields crucial for feeding their herds are drying out, putting pressure on the production of milk, butter and cream, according to dairy board CNIEL. In eastern Hungary, honey production has suffered.

  32. Pelican in the Wilderness
    August 12, 2022

    Dear Sir John,

    If you were chancellor, what would you do to help people with their fuel bills. I fully understand we need to increase supply and gas storage. However, ordinary people, are in dire need now. What is the Conservative solution to this problem?

    Thank you for your daily articles, I always find them helpful and thought-provoking.

    1. No Longer Anonymous
      August 12, 2022

      Cut VAT !!! Not handouts !!!

      1. glen cullen
        August 12, 2022

        YES

  33. Stephen Reay
    August 12, 2022

    Western governments should take steps to increase import tariffs on those countries who take cheap oil from Russia. We know who these countries are China, India, North Korea and Afghanistan etc. It’s disappointing that Indian has chosen to side with Russia, it isn’t a country which is normally associated with the axis of evil and seen as traditional democratic rather autocratic like the others mentioned. India’s a great country, but it’s support of Russia will damage it.

    1. Mitchel
      August 13, 2022

      Do you realise how small the West is?

  34. Original Richard
    August 12, 2022

    High energy prices together with false climate change scares are part of the communist fifth column in our Parliament, civil service and quangos plan to reduce our standard of living and deliver rationing of energy, food and travel.

    They have been working to increase fossil fuel energy prices by restricting supplies. Not only closing down coal, gas and oil exploration and production but at the same time closing down our nuclear industry and plants so that by the decarbonisation date of 2035 we will have next to zero nuclear capacity. We used to lead the world in this technology and it is the only low carbon source of energy which is affordable and reliable, so our current position on nuclear can only be a deliberate policy.

    The Net Zero Strategy’s plan is to make heat pumps as cheap to run as gas boilers. So the idea was to increase the price of gas (see P22 and elsewhere). Unfortunately for us, increasing the price of gas also increases the price of electricity as gas generated electricity is needed to stabilise/balance the grid and provide the backup when the wind isn’t blowing.

    High energy prices are deliberate policy and they will not be reduced until Net Zero and the nonsensical fight against plant food is cancelled.

  35. ukretired123
    August 12, 2022

    PPE politicians meet real world CEO s and shock horror at the incredible gap or chasm between them on how their green net zero has landed us in the proverbial. Better to have Carrie in to hear the damage done to our energy security and extortion ate costs whilst she basks in her virtue signalling.
    Gordon Bennet with an original thought I’d revolution ary .
    Apologies my tablet can’t handle big expensive words like national isation.

  36. No Longer Anonymous
    August 12, 2022

    Net Zero is causing market distortions.

    We have to be assured that any state involvement in production results in lower prices and not us paying global prices, nor the energy being sold off on the global market to the highest bidder.

    On this and many other issues I’m being minded to wonder what the point of government is at all. Borders and all.

    Yesterday the news was all about police forces failing to solve a single burglary for a year.

  37. paul
    August 12, 2022

    All the energy companies should come together and give the public a discount off their bills and not just the ones you pay your money to, i mean all, if it came to the equivalent of the daily charge on the elertric and gas on consumers bills, the same as receiving a discount at shop’s in the high street, even just electric daily charge be something.

  38. Alicia
    August 12, 2022

    Watching the UK is like being on the Titanic and seeing the iceberg but realising no one is trying to avoid a collision.

    Except for Officer Redwood who is spinning the wheel despite it not being connected to the rudder.

  39. paul
    August 12, 2022

    Look’s like Europe is also on frie after companies sold reservoir’s there as well and didn’t bother to replace.

  40. paul
    August 12, 2022

    So how much will this bail-out come to. 100 billion a year or more for consumers and businesses, i see small businesses will be getting nil so far, the backbone the country , nil. Oh what lovely war on the people.

  41. Kyle Harrison
    August 12, 2022

    If the Tories had not essentially banned on shore wind turbines our energy bills would be cheaper now. Wind is cheap. And through the contracts for difference wind farms are now paying back money to the govt. The reason our bills are so high is because of gas and there is little we can do about that since the UK cannot produce enough gas to seriously bring down prices, the North Sea reserves have depleted over the course of decades of extraction and fracking is not viable as a major industry. There is no definitive study showing that fracking can technically produce enough gas to seriously bring down the price of gas, and that is just the technical side never mind the terrible politics of trying to force fracking sites on communities. It should be noted that it is Tory MPs and a Tory council in Lancashire that oppose fracking locally. Plus, whatever gas we produce feeds into the wider international wholesale gas market we are part of. What extra gas we can possibly produce is sold to the highest bidder, which includes foreign buyers. The UK cannot produce enough gas to seriously bring down the market price.

    We can however invest in cheap wind energy. It isn’t the answer full stop because it is intermittent (for now) but battery technology is being worked on. But the more wind turbines we have the more opportunity we have to generate cheap electricity. We should also be developing nuclear. We will still need gas for a while yet but the less of it we use, the cheaper our bills. We can build more wind capacity quickly. We should do on shore wind, as Boris planned. We should also be investing in better insulation and we should be creating an energy market in which people get cheaper bills to use energy at off peak times. We need a campaign to lower demand. Public education is a good thing. Let’s educate the populace on how to save energy just like we did in WW2 when it came to making do with less in regards to food etc… Lower demand means lower bills.

    In regards to helping people with their bills, direct help for people on low incomes is best. Which is what Rishi suggests. But the practical side of doing it is what is difficult. What mechanism do you use? Using local council tax I do not think was a particularly good way of doing it. If we could design furlough so quickly surely we could design a system that targets help to people on low incomes through the PAYE system or universal credit? Something like that. Otherwise, the Ed Davey plan of helping everyone through a govt subsidy of the utility providers across the board might be best. Albeit, pricey.

    Reply Wind power is not cheap because you also need to spend a lot of money on back up power

    1. glen cullen
      August 12, 2022

      Wind power works only on subsidy

    2. Original Richard
      August 12, 2022

      KH :

      Sir John is correct that wind energy only appears cheap because the gas generators subsidise its intermittency plus the fact that empirical evidence (company accounts) is showing that the CfD prices for wind are so low that the companies are losing money.

      Batteries are totally uneconomic, even if there exists on the planet sufficient quantities of Lithium. If hydrogen is used then it will be necessary to multiply by 8 times the installed capacity of wind turbines for any given quantity of power.

      The medieval technology of wind turbines will only ever produce insufficient quantities of intermittent electricity, the situation made even worse by the electrification of transport and heating.

      Nuclear is the only low carbon technology that is affordable and reliable, which is why it has been discarded.

  42. Pauline Baxter
    August 12, 2022

    Yes Sir John. As Lord Frost has pointed out U.K. is no longer a Free Market Economy and it needs to return to being one.
    If it had not been for Bojo’s carbon neutral nonsense, on top of previous interference in how our energy is supplied, we would not be in such a bad predicament.
    I did here that our present P.M. contributed nothing to the cabinet meeting.
    Still I suppose he had to be there for a cabinet meeting to happen.

  43. Lindsay McDougall
    August 12, 2022

    We also need measures to reduce demand. Subsidising energy makes no sense because that increases demand. There are a few things we could do. Reduce to zero the VAT rate on clothing, so that elderly people could afford to buy three layers of thin sweaters, their most efficient way to keep warm. Reduce by three centigrade degrees the temperature required in offices. Specify a maximum temperature of 17 degrees C for houses controlled by a central heating thermostat. Use carrot and stick to increase the proportion of houses with cavity wall insulation. No doubt there are more simple demand suppression measures.

    1. MFD
      August 13, 2022

      Thank you very much for your concern Lindsay but we oldies are well in front, leading the young wimp by a mile. Don’t forget we have lived through an era of “ one room heating” “nondouble glazing” i am reminded of holding my hands on the frozen glass in my bed room to see what the weather was for the day and much much more. Its the wimpy children of this generation who will need our advice in eating healthily and the ability of dealing with difficulties

  44. Stephen Reay
    August 12, 2022

    The problem is sanctions on Russia. Sanctions are not working. It would have been better to have the status quo and for governments to give Ukraine the weapons they needed.
    The decisions made are by persons who will have no measurable impact on themselves as a result of higher energy prices. The way to end this is to end the war quickly.

  45. Geoffrey Berg
    August 13, 2022

    I think most people would agree the medium and long term answer is cheaper, better and more assured supply. However we face a short term crisis for which better, more realistic analysis is needed. We shouldn’t just kowtow to the various professional ‘poverty’ lobbies forever urging more welfare money for the poor.
    For a start if Putin loses power soon the problem may evaporate – so we are not even dealing with certainty.
    Furthermore if the prices go up, usage will go down and many people will go cold (or put on more clothes and blankets) rather than spend more money (even if they get extra benefits) on energy.
    Many people will also go to live with relatives or friends that will alleviate the housing crisis for a time. Just consider the text I got from one of my tenants several weeks ago that reads (in part) ‘I’ve spent the last week at my mum’s as had no electric at home. I have also had no credit to ring you back and been at work between the hours of 8 a.m. till 8.30 p.m.’ This is a youngish working tenant who evidently spends his money as soon as he gets it -I haven’t found out on what.
    What is clear is giving extra cash while damaging the nation’s finances won’t for most people solve the energy problem but will cause long term problems – so I urge the least damaging response is an amount of fuel price subsidy (while insisting North Sea resources be used for our national benefit) until the problem eases.

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