Not discussing the other areas, but blaming rising gas and electricity prices on privatisation is plain wrong. That is down to the simple fact that the UK is not self-sufficient in fuel, and hasn't been for a long time. As a result it has to pay market rates for both - which have gone through the roof in the past 15 years. You should also add a significant portion of increased electricity prices being due to renewable energy policies, which are entirely under the control of the government, and nothing to do with ownership of anything.

BrisbaneRhino wrote:Not discussing the other areas, but blaming rising gas and electricity prices on privatisation is plain wrong. That is down to the simple fact that the UK is not self-sufficient in fuel, and hasn't been for a long time. As a result it has to pay market rates for both - which have gone through the roof in the past 15 years. You should also add a significant portion of increased electricity prices being due to renewable energy policies, which are entirely under the control of the government, and nothing to do with ownership of anything. Water bills rise 64% in a decade, which is twice as fast as earnings, with almost a third of the average household bill (compared to 9% in other utility areas) going on profit.

BrisbaneRhino wrote:Not discussing the other areas, but blaming rising gas and electricity prices on privatisation is plain wrong. That is down to the simple fact that the UK is not self-sufficient in fuel, and hasn't been for a long time. As a result it has to pay market rates for both - which have gone through the roof in the past 15 years. You should also add a significant portion of increased electricity prices being due to renewable energy policies, which are entirely under the control of the government, and nothing to do with ownership of anything. Water bills rise 64% in a decade, which is twice as fast as earnings, with almost a third of the average household bill (compared to 9% in other utility areas) going on profit.

6 hours away from running out of gas in March We are now reaping the folly of the 1980s sell-off but "it was a price worth paying"

6 hours away from running out of gas in March We are now reaping the folly of the 1980s sell-off but "it was a price worth paying"

Whjy are profits up in the energy sector then?

...and again complete, unrelated tosh comes back.

The wholesale cost of gas has gone through the roof - as has oil and to a (lesser) extent thermal coal. Nothing at all to do with privatisation. If profits are 'up' ask the regulator, not me, they control margins. But if you seriously think good old British Gas would have somehow kept prices in check when the international wholesale price has gone up something like 600% in 15 years when Britain's own gas resources are almost non-existent, then you're deluded.

And cod'ead, the very article you've linked to doesn't explain either how British Gas could/would have avoided the very issue you mentioned, which was down to a specific combination of events.

I wasn't talking about water or anything else either. People have a dig at the likes of Dally, then come piling in with just as idiotic, ideologically driven nonsense whenever anyone points out that their oversimplistic guff is just that, and then get p*ssed off when they're called on it.

To me there are some serious questions about what should/should not be run privately vs by the public sector, and whether the claimed benefits actually exist. I certainly have a problem with the way most utilities are regulated in any event. Sadly the chances of any sort of reasonable debate on those issues here is nil. Its red corner, blue corner and ne'er the twain shall meet.

No its not, some people perceive your "red corner, blue corner" ideology, and surprisingly its always those who, if categorised, would place themselves squarely in the "blue corner" who whine about this as if they were some sort of oppressed minority.

The fact of the matter is that people have a right to complain about the high cost of utility bills and about their providers, there is no doubt that as a percentage of take home pay the cost of utilities is far higher than it ever was at any other marker point you care to choose and so its right to ask why and the utility companies have to explain why they blame rising raw supply costs and not rising profit margins, there is a disparity there and its plain and simple and everyone can see it - and its got nothing at all to do with politics other than the fact that politicians only seem capable of wringing their hands and agreeing with the public about it whilst being powerless to actually do anything.

You dismiss criticism of the utility industry as "tosh" ... and yet when it pointed out that profits have rocketed, you still parrot the same chorus, that the wholesale price has gone up.
The point is that the price has gone up MORE than it would without that profit-taking.
You then blame the regulator ... failing to recognise that the regulator is only needed BECAUSE of privatisation.
You also blur the issue when you dismiss the idea that "good old British Gas" could have avoided price rises ... You are correct that BG would still have had to cope with rising wholesale prices but, as a public utility, the profit element would not have featured.

"Oversimplistic guff"?
Maybe, but sweeeping denials such as yours (containing only one fact) are just as bad.

According to Ofgem's figures the average net margin on a dual fuel customer is about £95 out of a total bill of £1,420 (compared to anaverage over the past 4 years of less than £14). That compares to wholesale costs of well over £600 and VAT/other costs of over £500. Ofgem also states that the sector as a whole lost money 2004-2009 as it wasn't able to pass on wholesale price rises to customers.

Was everyone complaining that it wasn't fair on utilities back then? Shouldn't they at least have been allowed to break even? Joking aside, what the figures do show is that even setting net margins to zero would have little effect on long-term prices - far less than somehow capping wholesale costs.

BTW when referring to 'tosh' I was referring specifically to the two replies to my post, the first of which addressed water (which I didn't and haven't mentioned), and the second referred to a one-off issue that was nothing AT ALL to do with privatisation.

My issue with a lot of these discussions is that by dumbing them down to simplistic rants (corporate greed etc), people are in in fact making their own arguments weaker when there are genuine issues behind them and they don't take the time to try to find out for themselves at what the underlying causes are.

Here in Australia we have seen electricity prices triple during a period when wholesale prices have fallen in real terms. The actual cause is government-owned utilities massively overspending on infrastructure, and renewable energy policies (including direct subsisidies to the middle class to install solar POV at the expense of working class families who couldn't possibly afford the installation costs). But all the surveys of public perceptions are that the two causes of price rises are privatisation and the carbon tax - neither of which has made much difference at all to household bills at all.

The problem is that targeting utility profits cannot and will not fix the problem in Australia, and cannot and will not fix the problem in the UK.

BrisbaneRhino wrote:According to Ofgem's figures the average net margin on a dual fuel customer is about £95 out of a total bill of £1,420 (compared to anaverage over the past 4 years of less than £14). That compares to wholesale costs of well over £600 and VAT/other costs of over £500. Ofgem also states that the sector as a whole lost money 2004-2009 as it wasn't able to pass on wholesale price rises to customers. How do you equate those numbers with rising profits at most (if not all) of the utility companies ? http://www.guardian.co.uk/business/table/2013/may/22/uk-energy-companies-profits-customers-price-hikes Its one year in isolation but those are impressive figures in a time of recession and with many households seeing a real decrease in their household income year-on-year.

BrisbaneRhino wrote:According to Ofgem's figures the average net margin on a dual fuel customer is about £95 out of a total bill of £1,420 (compared to anaverage over the past 4 years of less than £14). That compares to wholesale costs of well over £600 and VAT/other costs of over £500. Ofgem also states that the sector as a whole lost money 2004-2009 as it wasn't able to pass on wholesale price rises to customers. How do you equate those numbers with rising profits at most (if not all) of the utility companies ? http://www.guardian.co.uk/business/table/2013/may/22/uk-energy-companies-profits-customers-price-hikes Its one year in isolation but those are impressive figures in a time of recession and with many households seeing a real decrease in their household income year-on-year.

If raw materials go up, this forces the prices up if the companies make the same mark up on a high base cost profits will rise. Not a difficult concept?

Years ago prices may well have been comparatively lower but these were subsidised by taxes that were significantly higher. It would be interesting to go back to the relationship between utility cost and net income under Callaghan and now.