General Election 2015

[eFestivals]

Neil, I seem to remember that you were quite critical of that policy when it was announced. Have you changed your view on it or have I completely misremembered?

I was critical of it being announced when it was, cos I thought it might come back and bite Miliband on the arse - and so it's proven.

I wasn't critical of the policy itself. The market needs reform; how it is at the moment is a licence to print free money.

I doubt it'll be reformed well or properly, but an attempt at reform is certainly better than none at all.

[eFestivals]

Agree with Barry on this one. If there is a problem, there is existing legislation there via the cartels and competition act to deal with it. Politicians coming out and promising price fixes for purely populist reasons isn't the way to go about it.

But it wasn't that at all.

It was about market reform, from a system where the buyers are also the sellers, and where bidding each other upwards has the public keep handing over ever-more cash.

Just about all markets are regulated. Some are regulated better than others.

[eFestivals]

WOW.... So its ok if he fucks it up as long as he meant well....

just about anything would be better than what we have. When the buyers are also the sellers in a market, that market is corrupt.

It would be pretty hard to fuck it up that badly for a 2nd time.

And I'd rather someone tried than Cameron do nothing. By doing nothing we definitely lose.

[LJS]

just about anything would be better than what we have. When the buyers are also the sellers in a market, that market is corrupt.

It would be pretty hard to fuck it up that badly for a 2nd time.

And I'd rather someone tried than Cameron do nothing. By doing nothing we definitely lose.

The problem comes when you privatise something that is essentially a monopoly & then have to invent pretend competition so I can buy my electricity from Cornwall.

I know it's as likely as Neil admitting he is wrong but electricity, water & the railways should all be renationalised Any reforms will merely be tinkering with an unjust arrangement with all the dice loaded in favour of the big 6.

Just saying.

[pink_triangle]

Agree with Barry on this one. If there is a problem, there is existing legislation there via the cartels and competition act to deal with it. Politicians coming out and promising price fixes for purely populist reasons isn't the way to go about it.

I think it would be naïve to assume the competition act always gets things right. The big companies all push up bills as their prices rise and are a lot slower to do the same when they fall. Whether Eds proposal would work is debatable, what it did however was focus attention on how much these companies are ripping us off more than anything. Im not sure prices would have come down recently if he hadn't made the proposal.

[lost]

I think it would be naïve to assume the competition act always gets things right. The big companies all push up bills as their prices rise and are a lot slower to do the same when they fall. Whether Eds proposal would work is debatable, what it did however was focus attention on how much these companies are ripping us off more than anything.

I don't think anyone has suggested it always gets things right but if there are issues with the regulation or price fixing they need to be looked at, freezing prices then looking to see if unfair practices are going on is like executing a bloke and then trying him for murder.

You've also got to remember gas costs are only a proportion of the companies costs, I've friends who work in this industry and as they used to be nationalized you generally find they are one of the few private sector industries where nearly all the staff are still members of unions and so get very generous pay rises. Gas costs may be back at say 2005 levels but the companies labour costs which is generally their highest costs will be significantly higher. 7% year on year pay rises would double their labour costs within the 10 years. There was no consideration of other costs and no consideration of what the gas price would be in 12 months time hence it was a populist and almost child like in its understanding of basic economics, its backfired now the gas price has dropped significantly and made him look stupid.

Im not sure prices would have come down recently if he hadn't made the proposal.

Well we have the example from the similar down turn in energy prices after the 2008 crash which obviously happened before Ed's speech and yes we did get price cuts then as well. Google tells me British gas cut by 10% in 2009 and a further 7% in 2010.

Edited February 9, 2015 by lost

[eFestivals]

I know it's as likely as Neil admitting he is wrong...

says the man who won't face up to what the SNP's demand of "full fiscal autonomy" for Scotland would do to Scottish public spending.

[gary1979666]

Im not sure prices would have come down recently if he hadn't made the proposal.

They might have come down further still - there would still have been media coverage putting pressure on a reduction. I'm sure they must be holding the cost up for when Labour come in. If you know there a strong chance your prices will be frozen, you don't drop as far as you can.

[the_hedge]

I work for E.ON and can confirm the unions still have a strong presence. Having come from other private sector companies I get amazed at what pay rises we get compared to other companies. Another thing, nobody ever get's sacked here. There are people here who anywhere else would have been sacked three times over for their poor performance and attitude. Not here though they just get another 3-4% pay rise every year regardless of inflation.

That said the profit margin is only 3% on residential, most of the profit comes from the business side.

[eFestivals]

That said the profit margin is only 3% on residential, most of the profit comes from the business side.

... and the wholesale side.

I'm not sure about E.ON, but the likes of British Gas is selling gas to itself, which means that the buying side can push up the prices they'll pay (which doesn't increase residential profits), while the selling side gets free money - and a free-pass from residential prices oversight from OFGEM.

Edited February 10, 2015 by eFestivals

[the_hedge]

... and the wholesale side.

I'm not sure about E.ON, but the likes of British Gas is selling gas to itself, which means that the buying side can push up the prices they'll pay (which doesn't increase residential profits), while the selling side gets free money - and a free-pass from residential prices oversight from OFCOM.

Well the whole market is under a review from OFGEM and the CMA at the moment, out team has had to supply them a lot of data for this.

E.ON have been pushing for an investigation from the CMA for some time as it feels there is very little to hide (from our side) and may put a lot of the false claims to bed.

[gary1979666]

... and the wholesale side.

I'm not sure about E.ON, but the likes of British Gas is selling gas to itself, which means that the buying side can push up the prices they'll pay (which doesn't increase residential profits), while the selling side gets free money - and a free-pass from residential prices oversight from OFCOM.

But I would have thought the trasnsfer pricing structure between the buying and selling sides would be properly audited by the HMRC - they've done that in all TP structures that I've worked. The reason it's done like that is partly to match the risk and reward (I would assume the riskier bit is selling, so they should get more of the profit) but also to ensure an arms length transaction - i.e. sell to themselves at a comparable rate to what would be sold externally - this is to try to reduce movement of profits between businesses. You'd be amazed at the hoops they have to jump through to prove that their transfer prices are 'fair' and not just a fiddle.

[eFestivals]

Well the whole market is under a review from OFGEM and the CMA at the moment

not according to OFGEM's website it's not.

OFGEM are always doing investigations, but there is no "whole market" review taking place.

[russycarps]

I work for E.ON and can confirm the unions still have a strong presence. Having come from other private sector companies I get amazed at what pay rises we get compared to other companies. Another thing, nobody ever get's sacked here. There are people here who anywhere else would have been sacked three times over for their poor performance and attitude. Not here though they just get another 3-4% pay rise every year regardless of inflation.

That said the profit margin is only 3% on residential, most of the profit comes from the business side.

Interesting. Is that because it's a german company do you think?

[eFestivals]

But I would have thought the trasnsfer pricing structure between the buying and selling sides would be properly audited by the HMRC

yep, and HMRC can tax the profits. They can't set limits to profits.

There's nothing illegal in buying and selling in what the govt have pre-defined as "a market" (tho it's not) via the very "market" structure the govt brought about.

It's not "transfer pricing" that's happening in the energy "markets". It's simply all of the buyers bidding each other ever-upwards, and where lots of those buyers don't care at all about doing that because the company they're buying for gets greater profits when they do and not less (as is more-normally the case when you have to pay more for your raw product).

Edited February 10, 2015 by eFestivals

[the_hedge]

Interesting. Is that because it's a german company do you think?

I think it' carries over from the generation side. I'm not against having a strong union as they are there to help protect us but it feels very one sided at E.ON. You would have to punch someone in the face in front of 5 witnesses to get sacked from here. I guess working in the banking industry previously I just find having a strong Union very strange, not bad just different.

[the_hedge]

not according to OFGEM's website it's not.

OFGEM are always doing investigations, but there is no "whole market" review taking place.

I can confirm the big 6 are under a reviews from the CMA in the last 6 months.

They are going after OFGEM next!!

http://www.thisismoney.co.uk/money/bills/article-2934434/Energy-prices-regulator-attack-Competition-body-set-say-Ofgem-s-four-tariff-policy-stops-bills-falling.html

[eFestivals]

I can confirm the big 6 are under a reviews from the CMA in the last 6 months.

and so you can also confirm you were incorrect to say they were under review by OFGEM.

[the_hedge]

and so you can also confirm you were incorrect to say they were under review by OFGEM.

Well to be super pedantic we are sort of always under review from OFGEM but I get your point.

[eFestivals]

Well to be super pedantic we are sort of always under review from OFGEM but I get your point.

to be fully pedantic you're only under review when you're under review, but I get your point.

If OFGEM were anything like you're suggesting, OFGEM wouldn't have let those companies take the piss hugely for the last 10-ish years (and perhaps longer).

[russycarps]

deutsche bank think a labour snp coalition is most likely outcome in May. Goldman sachs think a tory majority is most likely.

if a labour snp coalition is the outcome I hereby pledge to go into the deutsche bank foyer (it's not far from here) and sodomise myself with a german sausage. It aint gonna happen.

[gary1979666]

deutsche bank think a labour snp coalition is most likely outcome in May. Goldman sachs think a tory majority is most likely.

if a labour snp coalition is the outcome I hereby pledge to go into the deutsche bank foyer (it's not far from here) and sodomise myself with a german sausage. It aint gonna happen.

Which polls have Goldman Sachs been looking at?!

As for DB's prediction - that's the wurst!

[russycarps]

Which polls have Goldman Sachs been looking at?!

As for DB's prediction - that's the wurst!

I think goldmans assertion is that the torys will get about 3 or 4% more than the polls are suggesting (something like that anyway).

[eFestivals]

I think goldmans assertion is that the torys will get about 3 or 4% more than the polls are suggesting (something like that anyway).

it's certainly the case that the tories get a bigger vote than the answers given to pollsters say, but I'm under the impression that the pollsters have been pretty-much successfully modelling for that since the fuck-up in '92.

I guess that modelling stands a bigger chance of being inaccurate this time around, because the model is worked against the results that happen, and this election is likely to have some unusual voting patterns compared to normal.

BUT ... if the modelling is wrong because of that, it will be over-stating and not understating the tory share of the vote.

So they must be working on the basis that many more will return to their more-normal voting patterns than the polls are currently saying. A UKIP collapse, perhaps?

[gary1979666]

I hope a shift away from UKIP as the election draws near (not just out of self interest), but as Farage announces a proper manifesto rather than just random policy statements then people might see them for what they are.....we can dream.