Anti-semitic?
Care to explain how?

Wrong

Right.

no he meant there have been other ones inbetween those listed so the guessing game is not over yet 😉

no he meant there have been other ones inbetween those listed so the guessing game is not over yet

Yup, you should know better than to believe the weasel protestations of Z-11 crankboy.

The correct order is Labrat to Zulu-Eleven to rattrap to ninfan.

So yes, you were wrong.

Bugger forgot rattrap but obvious when you think about it.

Could the govt actually afford to reprivatise utilities or anything else if it wanted to?

They could afford to bail out their banking chums. Wed just end up with another huge debt increase

They couldn’t afford not to bail at the banks unfortunately and bear in mind it was labour policies on financial regulation that allowed the banks to get away with so much and their policies to bail them out (as I say an unfortunate necessity – complete financial meltdown would have been far less pretty than what we have now).

With regards to the nationalised companies – they were horribly inefficient as nationalised entities. With no competition they just pissed money away and returned very little if anything to the economy. They were massively subsidised in some cases (British Coal, British Steel to name but two).

Also, I do not see any reports of the attempts to nationalise the car industry (think British Leyland) saying it was a roaring success.

Is privatisation a failure?

The utilities – BT and telecoms; a huge sucess in private hands. Would you want BT as the sole provider of telecoms, broadband, mobile etc? No, nor would I. BT is thriving as are the competition.

Gas & Electrics – reasonably successful. Their profits are not as huge as the headline number makes out. The return on investment for an energy company is around 6-7% which isn’t great. The main issue is that the profits are not necessarily ploughed back in to infrastructure which perhaps they should be. They make very little profit per customer but just have a lot of them.

20% or more of today’s bills are made up of stealth taxes, some introduced by Labour, some by the coalition (though mainly based on Labour policy) – green deal, feed-in tariff subsidies, the various low emission taxes the energy companies charge etc. Get rid of the stealth taxes and bills come right down.

Further, we do not not what bills would be like under a nationalised system nor what profit / loss they would be making for the treasury. If you cap bills under a national system and global prices go up you have to subsidise to maintain them.

Water – Barely privatised as you cannot swap water supplier. A monopolistic situation with a regulated acting as a quasi competitor by regulating prices.

Rail – a mess. But it wasn’t great in national hands either. Costs a huge amount in government subsidies either way. Rail infrastructure is expensive and there is no easy way to raise the money needed.

dannybgoode – Member
bear in mind it was labour policies on financial regulation

Policies that the tories said didn’t go far enough, btw.

Stealth taxes? Rubbish, if they’re so stealthy how come anyone who mentions stealth taxes knows what they are?

Also I don’t understand how you can subsidise a state-owned company, as the state is paying the costs anyway, are you saying they would subsidise themselves?

Stealth tax is common parlance for anything that a government introduces that increases the cost of something but isn’t named as a tax. Think bedroom tax. I am sure you know this as well as I do.

The point remains that 1/5 of an energy bill is made of of charges that the government make and not the utility companies.

This is set to double by around 2017.

Yes of course you can subsidise something that you own. You run a business, it is losing money so you pump your own funds in to it you are subsidising it.

Same with a nationalised company. If it the government at the time has to plough money in to something then it is being subsidised. The NHS is subsidised for example as it costs money to run and does not make money.

If the said entity generated money for the treasury we as a nation would be profiting from it but it would still be generating a profit or perhaps more accurately a surplus but the basic tenet is the same.

For the record I am not a Tory by nature but to say that privatisation has failed because we were promised lower bills is a meaningless statement – lower than what, compared to what and when. We do not know a) that bills under a nationalised utility would be lower than they are now and b) whether whilst bills were lower the government were having to pump £billions in to balance the books.

Britain in the 70’s under Labour was effectively bankrupt and was hemorrhaging money in support the nationalised entities – money that simply was not there.

Something had to be done as the current situation was not sustainable. I am not saying privatisation was the only or even the right solution but maintaining the status quo was not something that could be entertained.

They were inefficient of course, but was privatisation the best solution? The fundamental question is are nationalised industries NECESSARILY inefficient? I don’t see why they need be.

dannybgoode – Member
Stealth tax is common parlance for anything that a government introduces that increases the cost of something but isn’t named as a tax. Think bedroom tax. I am sure you know this as well as I do.

No, but as long as you’re sure. How is the bedroom tax a stealth tax?

@molgrips – quite agree and pretty much what I said.

However, can anyone name a country that has nationalised utilities or other companies that are not horribly inefficient (and by that I mean they generate a decent surplus not a large deficit)?

Privatisation may not have been the best solution but it has worked in some sectors – telecoms in particular.

Privatisation has downsides though. Telecoms and utilities are among the moat hated businesses we have to deal with. I’m not sure by what yardstick telecoms is considered a success in private hands? Yes, we don’t like dealing with BT but a lot of the problems exist BECAUSE of privatisation I think. It could be much better as one national organisation Imo.

@Lifer – Because it is not a tax at all yet people call it one. It is a generic term as I described above.

None of them are taxes yet all have the aim of returning money to or saving money for the exchequer from income of corporations and individuals without actually using the word tax as it is a politically dirty term and tends to do damage to ones poll ratings.

So, the government wants to receive money from the energy companies via bills. They already have VAT on there which is a true tax.

They have a few choices at their disposal – they could increase the VAT levied. Wouldn’t go down well.

They could introduce a new tax – lets call it the Green Energy Tax. Nope, wouldn’t sell.

They could tell the utility companies they are going to introduced a low carbon emissions, tree huggy, bird friendly happy charge (ok exaggerated for illustrative purposes). Hmm, that sounds fluffy – perhaps they could sell that to the populous. Global warming, we’re all go to die etc.

So they have introduced a sneaky charge, not a tax but something cunning – stealthy almost. Hmmm, a tax by another name. A stealth tax…

Given that this method seems to work I would suggest the name is entirely apt as the majority of the population do not realise they are being fleeced left right and centre

@molgrips – do you think the innovation in the telecoms industry – some of it very much from BT – would have happened if BT had remained a nationalised entity.

Or, did competition drive much of the innovation and force BT to evolve and become a serious global force its technical capabilities?

(and by that I mean they generate a decent surplus not a large deficit)

UK, Royal Mail. What do I win? Has generated surpluses for may years not just the current fattening up process. The fact that the government of whatever colour used this to bolster central receipts and not invest in new machinery and processes is a national tragedy. (That’s before we get onto the pension black hole that exists for roughly the same reason, Lamonts long “holiday”).

They couldn’t afford not to bail at the banks unfortunately and bear in mind it was labour policies on financial regulation that allowed the banks to get away with so much

So what was the Conservative Party’s policies on financial regulation of the banks then ?

IIRC it was less regulation …… am I wrong ?

Were they arguing for more regulation because it was too risky to leave it to the ‘free market’ ?

.

With no competition they just pissed money away and returned very little if anything to the economy.

What a ridiculous comment, it is precisely because energy companies have such a stranglehold on consumers through their monopolies that they are able, even through periods of recession, hardship, and austerity, massively increase their prices to consumer way above the rate of inflation and wage increases.

And when the utilities were under public ownership they returned a great deal to the UK economy, both through profits and through keeping costs to consumers low. For example Post Office Telephones made staggering profits which poured into the Treasury coffers and helped reduce the tax burden, whilst the publicly owned water companies made very little profit which resulted in miniscule unnoticed amounts being added to ratepayers bills putting more money in their pockets and increasing their purchasing power.

With democratic control decisions can be made with regards to priorities. Maximizing profits isn’t necessarily what is always best for society.

As for the part-nationalised British Leyland, it wasn’t created out of a thriving car industry you know, BL was created because of the catastrophic failure of the once mighty British car industry. The failure, with all the consequences for the UK economy, jobs, skills, etc, was all totally the responsibility of the privately owned car manufacturers. Their incompetence, lack of investment and development, forced the government to step in. You need to compare the short time that British Leyland was part-nationalised with the years it takes to develop a new model. During the same period nationalised car manufacturers Renault were hugely successful.

.

Further, we do not not what bills would be like under a nationalised system nor what profit / loss they would be making for the treasury.

Do you honestly think that the British are so staggeringly incompetent that the French can successfully operate a state owned energy supplier such as EDF but that we on the other hand are utterly incapable of doing so ?

There is no reason to believe that the performance of a British state owned EDF would be any different to that of a French state owned EDF, although obviously the initials would be different. Of course a British state owned EDF could choose to reduce profits during the lean years thereby helping their customers and stimulating the economy, as they do in France, if they so wished, that would certainly result in difference performance to a privatised company. Governments are much more sensitive to price increase criticism than private owned companies who always very successfully trot out the old “it’s the market” bollox.

EDF is not state owned – it is a private entity…

It’s 85% owned by the French government.

@Sandwich – Royal Mail is a good example however it could be argued that it has been forced to evolve and innovate because competition has been introduced to the postal system – particularly to parcel delivery.

I would very much like to see RM remain in public hands but then Labour were going that route too so rock and a hard place when it comes to voting.

RM though has effectively been run as a private entity for some time now.

It is much more difficult to introduce competition to a state owned entity where a competitor would need to duplicate the infrastructure (yes telecoms they have to an extent but laying multiple gas pipelines or electricity cables is much more difficult).

Another option is to have an independent regulator to act as the competitor and force companies to run efficiently by capping prices, imposing standards of service etc (see my comment on the water co’s). This is effectively what they did to the gas and electricity co’s when they were first privatised but still had monopolies on their repsective regions.

EDF is still a private company and run as such and has competitors.

Whilst the French government may be the major shareholder in EDF utilities in France are not nationalised.

The French market is a brilliant example of the folly of what some would propose. Who says so? The French energy regulator, the French anti-completion authority, the EU, the ratings agencies (FWIW!) and finally the French government. France is being dragged into allowing competition into the market against its natural instict for l’Etat to intervene. So if the conclusion is that the performance of an English versions of EDF would be not different from the French one, then we know what we should wish for – or not wish for in this case.

A least the French can see his (as illustrated by the policy changes in the last week) even if others can’t.

And when the utilities were under public ownership they returned a great deal to the UK economy, both through profits and through keeping costs to consumers low. For example Post Office Telephones made staggering profits which poured into the Treasury coffers and helped reduce the tax burden, whilst the publicly owned water companies made very little profit which resulted in miniscule unnoticed amounts being added to ratepayers bills putting more money in their pockets and increasing their purchasing power.

Simply because there was no competition and relatively speaking making a telephone call in 1979 was costlier proportionately than it is today, hence why my Mother restricted phone use at our house and some people had little savings boxes next to the phone, can anyone seriously say that we would be where we are today in the first world without the massive advancement in telecoms technology ?
The strowger switch was in my opinion a thing of electro mechanical beauty however the humble semi-conductor……………..has won the day, sadly imo.

You really are clinging to straws.

the French government may be the major shareholder

Yep, that’s exactly what I’m talking about.

Privatisation may not have been the best solution but it has worked in some sectors – telecoms in particular.

I think this is the key point
Its worth noting nationalising was a response to what the private companies were doing. In rail for example we had competing train companies who conveniently used different sized tracks so their competitors could not run on their tracks – is this the sort of efficiency we wanted from a national network?

Most nationalised companies are natural monopolies [ infrastructure costs which make two water supplies inefficient for example]. Why do you think we regulate the shit out of the providers of the newly privatised industries? Its to stop the weaknesses of the market.
This notion that private is always better is a myth.

Some areas compete easily – phone for example some are “competition” only on paper.

The other issue is the need for uniformity rather than the disparity that competition brings. Lets take health. It is not like towns [ the larger ones of 1 million plus may be able to] cannot really have competition over hospitals. The costs of building a hospital to compete with the NHS/current hospital is considerable and prohibitive. Furthermore, like with education, we dont want them operating just in the profitable areas of the country but we need them to to operate everywhere providing an equal service to every citizens whatever the efficiencies of doing this.
Choice with bikes and telecoms is good [ for price if nothing else]as i can get a bike from Germany or from the US and base it on price. I dont see how we do this with health. Its not like i am going to look on the internet for the cheapest operation and go to Belgium for healthcare . I have to go to the hospital nearest me and tbh this is the one i want to go to. Just like with schools it is no use to my kids if the best school is 55 miles away and i need all schools to be equally good/ of the same standard. I dont see how the private sector can do this.

Supermarkets may be good for choice if you want everything cheap and dont mind shafting farmers and suppliers or getting horse meat in your meat burgers but I would not trust them to run something really important personally – even where the right wing do they regulate the shit out of them because they dont trust them either.

Privatisation is not a panacea to all our ills and it is clear, at least in principle , that the need to make profit is an additional costs on the delivery of the business over a not for profit organisation.

I do not see any reports of the attempts to nationalise the car industry (think British Leyland) saying it was a roaring success

we baled them out rather than we nationalised – and it was only partially nationalised in the sense they had no money to pay for their expansion plans

1970, British Leyland appointed Pat Lowry as director for industrial relations, the first time in the company’s history that such a role was felt to be necessary. It did not improve matters one bit. As a result of his appointment and John Barber’s recommendations, the corporation changed the terms and conditions of 134,000 workers over the period of three years. Historically, workers had been paid for “piece work” – their rate being determined by how many cars they built, this was changed to a flat daily rate. In fact, as one ex BLMC finance manager described it, the changeover had disastrous consequences: “Under piecework the worker chased his parts and was motivated to produce; his wage depended on it. The systems for Production Control and Quality were dreadful and were horribly exposed when the move to Daywork happened. The management had little idea of how to control things and as a result cost overruns were running at huge figures per car. In theory the standard costing system showed we were losing money on Minis. But that assumed cars were produced at standard cost. Scrap quality and sheer bloody mindedness meant each car’s labour costs were some 30 to 80% higher than standard. Management basically refused to recognise the problem and got VERY upset if it was pointed out to them”.

Its problems were not caused by nationalisation they were there before it happened, whilst it was privately owned and run, so its a bad choice tbh
I still see no reason to believe the private sector is always brilliant and the public sector always poor

What happened with GS4 and Olympics security?
Who baled them out – oh yes the public sector
A4E – owners up on corruption charges for faking figures for profit – cn you see a civil servant in DwP doing this or being able to?

Simply because there was no competition

That’s exactly the point ! 😀

dannybgoode said : “With no competition they just pissed money away and returned very little if anything to the economy”

I pointed out that they made huge profits.

Not really. What you initially argued for was re-nationalisation of utilities or the fact they should never have been privatised.

What the French have is a private entity of which the French government own a vast proportion but which operates in an (allegedly) competitive environment.

In the UK the equivalent would be the government owning 85 percent of Centrica (Britsh Gas is merely the trading name) but Eon, nPower, First Utility etc all in the market as well.

That is not a nationalised entity – merely market that has one provider has the government as the major shareholder of many other providers.

And by ‘pissed the money away’ I mean it never made it to profit. It was spent running hugely inefficient companies with hugely inefficient logistics, admin etc.

All that money did not benefit the nation at all.

As for British Coal and British Steel. British Coal in the last days of the Labour government of the 70’s was costing £2m a day. That is a lot of money to not be making…

So if the conclusion is that the performance of an English versions of EDF would be not different from the French one

Remember that thread when you accused us all of being sensitive you meant UK plc there when you said England didnt you 🙄
As i said the english cannot help themsleves but to use england when they mean the whole country- your right though its us being sensitive not you using it [arrogantly]incorrectly

😳 middle stump! Couldn’t be bothered to copy n past Ernie’s comments and speed wrote what “I thought” he said. Fair cop (if unintended)!!!!

Too busy laughing about the idea of France being a great model to check my accuracy. It will be Kirschner economics next, then the typos really will be flowing.

What the French have is a private entity of which the French government own a vast proportion but which operates in an (allegedly) competitive environment.

You really are clutching at straws. You are making pedantic points about legal status, I’m talking about the actually reality. And the actually reality is that EDF, its prices, and its profits, are very firmly in the hands of the French government.

That is why the French government can dictate to the “state-controlled power utility” that it increases its electricity prices to French consumers at half the rate of price increases to UK consumers :

The French government has authorized French state-controlled power utility Electricite de France (EDF.FR) to raise its electricity price for residential consumers by 5% next month, and by the same proportion in August next year, to take into account recent increases of the company’s production costs.

http://www.4-traders.com/EDF-4998/news/EDF–France-Allows-EDF-to-Raise-Electricity-Prices-5-in-2013-2014-17076351/

As you noted its not a big deal really but it does happen
I doubt there is any actual malice in but it does grate.

I think you will be safe in terms of getting an informed economical debate from us 😉

JY – perfectly fair cop and a genuine mistake on my part. Having lived north of the border ( :wink:) I am normally sensitive to the issue and try not to equate England with Britain, even if I find the treatment and level of angst absurd/humorous.

E_L you forgot the bit about allowing prices to exceed the cost of production in France. A small triffle that Ed and Chukka managed to overlook as well.

Anyway 19 degrees sunny, dogs walked, jobs done….time for a ride I think!

Energy companies are currently trying to pressurise the government to subsidise gas storage. They claim not to be able to maintain the supply of energy without government money. And the energy market already enjoys lots of tax breaks to keep it ticking along, because, once again, the energy companies claim not to be able to supply us without those tax breaks.

E_L you forgot the bit about allowing prices to exceed the cost of production in France.

Well I can’t help it if you don’t bother clicking the link that I provide.

What do you want me to do ……copy and paste the entire article for you ?

OK

PARIS–The French government has authorized French state-controlled power utility Electricite de France (EDF.FR) to raise its electricity price for residential consumers by 5% next month, and by the same proportion in August next year, to take into account recent increases of the company’s production costs.

A recent report written by the electricity regulator showed retail prices charged by EDF didn’t cover its costs and recommended an increase of between 8.6% and 9.6% to cover the shortfall, the country’s energy ministry said late Monday in a statement.

“The government decided to spread out over several years the price increase needed to cover EDF costs to protect households’ spending power,” the statement said.

The French government last year decided to cap regulated tariff increases at 2% a year, to help protect households as much as possible. However, the regulator recommended last month raising power tariffs between 6.8% and 9.6% as soon as this summer and then by 3.2% in both 2014 and 2015.

The government’s decision to speed up increases highlights the difficulty of finding a balance between the conflicting goals of protecting households and maintaining EDF as an economically viable company, at a time when the euro-zone’s second largest economy is in recession, unemployment is at record highs and the government is struggling to keep public finances under control.

Over recent years, costs faced by EDF, which is the world’s largest nuclear operator, have risen mainly because of additional investments imposed on the company’s nuclear power plants to increase safety standards. The energy ministry said the increases for this year and next are steep as the previous administration underestimated EDF’s rising costs.

.

EDIT : You will note the difference between EDF’s operations in France and EDF’s operations in the UK.

In France, EDF has “the difficulty of finding a balance between the conflicting goals of protecting households and maintaining EDF as an economically viable company”. In the UK, EDF just needs to maximize its profits.

Do you have a problem with that ?

I certainly do.

Sorry Ernie, I wasn’t clear – I knew exactly what the rest of the article said (but thanks!), just wondering why you chose to miss the most important bit out?!? But as the penultimate para shows – it is a great example – the French case shows perfectly why Ed’s proposal at best needs a lot more thinking and a worst, is simply “populist” ( 😉 ) BS. The closest contemporary example doesn’t work!!!

ernie_lynch – Member
You are making pedantic points about legal status, I’m talking about the actually reality.

…..

You will note the difference between EDF’s operations in France and EDF’s operations in the UK.

EDF Energy is 100% owned by EDF SA…and the reality….is not a good model for the UK market.

So you’re choosing to ignore the difference between EDF’s operations in France and EDF’s operations in the UK.

Fair enough, the fact that EDF’s operations in France involves finding a balance between the conflicting goals of protecting households and maintaining EDF as an economically viable company, and EDF’s operations in the UK simply involves making a nice fat profit, must be very awkward for you. So you just ignore it 🙂

ernie_lynch – Member
So you’re choosing to ignore the difference between EDF’s operations in France and EDF’s operations in the UK.

😀 C’mon Ernie – be serious. Forget the Habana-style side step, this is what I am referring to….

ernie_lynch – Member
There is no reason to believe that the performance of a British (!) state owned EDF would be any different to that os a French state owned EDF

Exactly – hard to prove this is economically viable solution for the UK – exactly the point Paxman put to Ummana. Dont worry he didn’t answer the point either.

Should a utility company that is required to invest in the future of our energy infrastructure be allowed to make a profit – absolutely yes – 100%.

If it enjoys a natural monopoly, does this still need a form or regulation – yes 100%. But as you now that is a separate point altogether but a worthy side step nonetheless!!

But if we want to explore tangents EDF’s trails re UK energy are actually far more important IMO. Good article in the Sun Torygraph on that opposite the more important one (see the NHS thread) article by Liam Halligan on why we should stop lying about the deficit.

Should a utility company that is required to invest in the future of our energy infrastructure be allowed to make a profit – absolutely yes – 100%.

Erm, it’s the UK government that’s doing the investing, and the amounts involved will be a state secret I kid you not. EDF will just collect the profit, on behalf of the French government.

Taxpayer billions could be secretly funnelled to Edf to underwrite cost of proposed power station at Hinkley Point

Billions of pounds of taxpayers money could be secretly funnelled to the French state nuclear company Edf to underwrite the cost of its proposed new power station at Hinkley Point in Somerset, it emerged today.

The energy bill has quietly granted energy secretary Ed Davey the power to keep contract details of the crucial Hinkley Point C project a secret if he decides it is commercially sensitive to disclose them, an analysis of the bill has revealed.

Experts condemned the provision, saying it paves the way for the government to write a cheque for billions of dollars to cover the cost of budget over-runs or building delays at Hinkley Point, without the public or parliament ever finding out.

The power came to light three months after energy minister John Hayes hinted that he was considering breaking with government tradition and underwriting the construction costs of new nuclear plants.

Dr Robert Gross, director of Imperial College’s centre for energy policy and technology, said: “If the government writes a contract that allows cost escalations to translate into subsidy increases then it is effectively writing a blank cheque signed on behalf of bill payers.”

EDIT : OK I know you’re going to pedantic and pull me up on it so yes, EDF is also going to invest, but the UK government’s underwriting plus the strike price will take away all the risks for EDF, and it’s the alleged risks which are always used to justify obscenely high profits. And Hinkley Point will of course overrun, it already has.

Nationalise the loses and privatise the profit is the rule, or in the case of EDF hand over the profit to the French gov.

I wasn’t being specific to edf in that case. But the nuclear issue is v interesting but Hinkley’s contracts for difference is probably a bit too tangential even for us!!!

Edit for the edit – actually to square the ciclo fully and end on a pleasant note, in this case the EDF example is a good one. A real life example of seeing if public-private initiatives can work in power and if the lessons of Flamanville have been learned!!!