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Ed Miliband

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"The market" really works don't it?

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"The market" really works don't it?

People only complain about the markets when they are the loser in the transaction, which of course in the energy markets we as buyers are all losers. But I don't hear people complaining about the markets when they are selling something for higher than its worth such as a house during a housing boom or tickets to a sold out gig because "that's the market price for it".

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I think this years party conferences are good, very entertaining.I'm really looking forward to the Blue Nasty's next week

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"The market" really works don't it?

 

Well, there's clearly a view that the UK energy markets don't work, with the suspicion that the energy retailers act as a sort of cartel, eg. when they all tend to raise their prices at similar times and at similar rates. That said, I'm not sure what aspect of the market is to be reformed or 'reset', and I'm not clear how a price freeze is going to operate in such an energy market as we have now.

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I think this years party conferences are good, very entertaining.I'm really looking forward to the Blue Nasty's next week

 

I just caught a quick glimpse of the UKIPpers last week when I was in Mallorca - looked like a hoot!

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People only complain about the markets when they are the loser in the transaction, which of course in the energy markets we as buyers are all losers. But I don't hear people complaining about the markets when they are selling something for higher than its worth such as a house during a housing boom or tickets to a sold out gig because "that's the market price for it".

 

That's a fairly shallow comparison.

 

Unless you live in a cave, you need to buy energy. You have no choice in the matter if you want to heat and light your home or business amongst other things. When the energy companies act as a cartel - and they do - they can effectively charge the consumer what the hell they like, regardless of the wholesale price of the energy they are selling, in order to rack up enormous profits at the expense of those who can least afford it. That is not a 'market' by any stretch of the imagination, it is a racket. It's about time it was dismantled.

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That's a fairly shallow comparison.

 

Unless you live in a cave, you need to buy energy. You have no choice in the matter if you want to heat and light your home or business amongst other things. When the energy companies act as a cartel - and they do - they can effectively charge the consumer what the hell they like, regardless of the wholesale price of the energy they are selling, in order to rack up enormous profits at the expense of those who can least afford it. That is not a 'market' by any stretch of the imagination, it is a racket. It's about time it was dismantled.

I don't think you understand how the energy market works if you think it's the selling companies at the end of the chain that are the problem. Those domestic supply divisions work on fairly tight margins of about 3%.

The real problem lies much further back in the chain than that. The likes of EdF make multiple times more money in their generation and brokering divisions than in their actual supply companies. The real problem lies in these companies being able to dictate the price at which to sell into the energy pool, which is then picked up by their brokers and sold on to the end supply company (quite often they are 3 divisions of the same group). If any government really wanted to slash energy prices it would start not by capping the end retail price but by capping the price at which the generating company can sell into the pool as everything else is a consequence of that.

Edited by Derwent

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I don't think you understand how the energy market works if you think it's the selling companies at the end of the chain that are the problem. Those domestic supply divisions work on fairly tight margins of about 3%.

The real problem lies much further back in the chain than that. The likes of EdF make multiple times more money in their generation and brokering divisions than in their actual supply companies. The real problem lies in these companies being able to dictate the price at which to sell into the energy pool, which is then picked up by their brokers and sold on to the end supply company (quite often they are 3 divisions of the same group). If any government really wanted to slash energy prices it would start not by capping the end retail price but by capping the price at which the generating company can sell into the pool as everything else is a consequence of that.

 

How do they dictate the price if it is a competitive market? You'd think that if they were overcharging then other generators would come into the market and undercut them. Or are we saying that there really is a criminal conspiracy to keep prices artificially high? Or is it some structural problem with the market that prevents other suppliers from getting an entry into the market?

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I don't think you understand how the energy market works

 

It doesn't work. That's the problem.

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what price would energy be today if government owned.

 

Good question.

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People only complain about the markets when they are the loser in the transaction, which of course in the energy markets we as buyers are all losers. But I don't hear people complaining about the markets when they are selling something for higher than its worth such as a house during a housing boom or tickets to a sold out gig because "that's the market price for it".

 

 

Au contraire mon ami, the idea of "The invisible hand" of the market eventually curing all social and economic ills is a myth, but as many of us know,these myths can grow and oppress us, jesus, mohammed, the market, all oppressive myths.

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The idea of public works depts and direct in house labour was to counteract all the Joe Bloggs's and John Doe's down the road getting together and name their own price

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Then the taxpayer would have to fund all the capital investment etc etc

 

The taxpayer funds the capital investment anyway.   The reason why the UK has such a low gas reserve (15 days, compared to 99 days in Germany and 122 days in France), is because Centrica wouldn't build the capacity unless the government paid for it.

 

 

It's worth remembering that if a trade union threatened to "switch out the lights" in the way that Centrica are threatening, then Cameron would be holding press conferences on the steps of Downing Street and talking about the enemy within.

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The taxpayer funds the capital investment anyway.   The reason why the UK has such a low gas reserve (15 days, compared to 99 days in Germany and 122 days in France), is because Centrica wouldn't build the capacity unless the government paid for it.

 

 

It's worth remembering that if a trade union threatened to "switch out the lights" in the way that Centrica are threatening, then Cameron would be holding press conferences on the steps of Downing Street and talking about the enemy within.

 

Can we see the source and exact wording of the Centrica comment? A BBC News report doesn't count.

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Come in Frank Owen give us The great oration and the great money trick

:)

I'm just reading that at the moment. There are plenty of things in it that remind you of things happening in the present day. Unfortunately. :(

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The taxpayer funds the capital investment anyway.   The reason why the UK has such a low gas reserve (15 days, compared to 99 days in Germany and 122 days in France), is because Centrica wouldn't build the capacity unless the government paid for it.

 

 

It's worth remembering that if a trade union threatened to "switch out the lights" in the way that Centrica are threatening, then Cameron would be holding press conferences on the steps of Downing Street and talking about the enemy within.

So the government built the storage facility?

 

Miliband would probably say the same thing from the steps of which ever "ordinary" house he lives in, while trousering a big check from the "ordinary" people.

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:)

I'm just reading that at the moment. There are plenty of things in it that remind you of things happening in the present day. Unfortunately. :(

Like what? As far as I can see, life now is infinitely more preferable to what it was 100 years ago, life expectancy being a tad better for one. Then there's the whole who can and can't vote nonsense.

Edited by archibald

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That's a fairly shallow comparison.

 

Unless you live in a cave, you need to buy energy. You have no choice in the matter if you want to heat and light your home or business amongst other things. When the energy companies act as a cartel - and they do - they can effectively charge the consumer what the hell they like, regardless of the wholesale price of the energy they are selling, in order to rack up enormous profits at the expense of those who can least afford it. That is not a 'market' by any stretch of the imagination, it is a racket. It's about time it was dismantled.

You want it dismantled? To what?

Unfortunately, if you have a pension you really need this cartel to make as much money as possible.

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I suspect that Milliband has massively shot himself in the foot with this energy policy. Even if it is sound (which I don't think it is), it has been widely panned and the fear of blackouts will be a real blow for their image.

Therefore they are left with the choice of either persisting with the policy and the fear of blackouts putting voters off or back tracking and it looking like they are stupid and prone to making bad choices.

The Tories were the ones that have really benefited from this.

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He won't, but Milliband should go on the offensive on this one, if it were me I'd denounce the energy companies as the enemy within, tell them that the first facility to be taken off-line at peak time would be taken over by the army and taken into public ownership and tell the energy cartel they were being re-nationalised with no compensation.

 

But he won't, 'cos he wants to uphold the capitalist system.

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He won't, but Milliband should go on the offensive on this one, if it were me I'd denounce the energy companies as the enemy within, tell them that the first facility to be taken off-line at peak time would be taken over by the army and taken into public ownership and tell the energy cartel they were being re-nationalised with no compensation.

But he won't, 'cos he wants to uphold the capitalist system.

Better still, just treat power supply like the railways. If a power company wants to supply the national grid then they have to meet an obligation. If they fail for say a maintainence issue then they are liable to a prohibitive fine. No need to be as drastic as you say.

And if nobody wants to sign up we get a situation like the east coast line were it is run by the government and actually turns a small profit back into the public purse. But the profit is not large enough for the private sector to want to run it.

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I suspect that Milliband has massively shot himself in the foot with this energy policy. Even if it is sound (which I don't think it is), it has been widely panned and the fear of blackouts will be a real blow for their image.

Therefore they are left with the choice of either persisting with the policy and the fear of blackouts putting voters off or back tracking and it looking like they are stupid and prone to making bad choices.

The Tories were the ones that have really benefited from this.

Actually what Steve May said is relevant why is it if the unions wee threatening this then there is uproar - Marxists attacking democracy etc, but when a large corporation threatens thus it is somehow different.

Please explain this point to me because in my view it is just either section looking after their own interests.

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