If energy suppliers are failing to compete (as it appears generally) then they are operating in the same frame as would a monopoly and they are bringing nothing to the party ... so it might as well be state-run, if only to save the profits for the consumer.
Plus, as DaveO has pointed out, generators' and suppliers' (for electricity not gas) own figures say they make a profit on generation of between 17% and 23%.
So, for electricty at least, bills could be a whole heap cheaper.

Plus, as I mentioned before, a set 5% profit margin might look low but as the wholesale cost of energy rises, the retail price is rising by more.

If I buy socks at 50p and sell them for a pound and then, due a global sock shortage, the wholesale price goes up to 60p ... I only need to increase my selling price to £1.10 to make exactly the same profit. (The energy retailers are not doing this).
If I increased the selling price at the same percentage rate that my sock costs have risen by, I'd charge £1.20. (The energy retailers are telling us it's right to do this .... and then some more !).

What we really need to know is what % of the consumer bill equates to generation costs, then we'll know how much profit that really equates to. Some Ofgen figures on the BBC put overall wholesale costs as 46% of the consumer bill (dual fuel). So what we need to know is what % of the wholesale cost is generation, and then we can make some assumptions about how much the profit on generation equates to in consumer bill terms. So effectively it will be a % profit on a % generation cost of the 46% overall wholesale cost.

Also, on whether competition is working, another graph on the BBC suggests that our retail energy bills are amongst the lowest in Europe, second lowest in EU 15, which makes me think talk about competition not working in the UK is really a red herring. The problem is more fundamental and relates to global supply and demand of energy, and talk of nationalising or doing expensive competition investigations is simply about creating the illusion of activity without dealing with the really hard problems.

You have a point here, in that a massive part of the problem on fuel bills is that cost of living as a whole in the UK is so high – housing being a particular case, but not the only one. With wages having been driven down over the last 30 years, while the cost of living has risen hugely, the issue is not simply the cost of fuel bills, but the cost of living as a whole.

And when companies ratchet up their bills by vast, way-above-official-inflation amounts, people will see it and feel it particularly keenly.

So ultimately the points that need to be tackled are related to the rising cost of living and falling levels of income.

...of course in the days when power stations were coal fired and UK PLC owned all of the coal mines, and owned all of the rail network to transport the coal, and owned all of the power stations to generate the electricity, and owned all of the grid to distribute the electricity, and owned all of the gas fields or coal gas producers, and owned all of the network of gas distrubution...

...then any such costs were just overheads and profit was not a primary motivator in distributing energy.

It doesn't follow that the reason for this is competition in the UK. Other countries bills could be higher for any number of reasons.

However the important point is it does't matter if we do have some of the lowest energy bills. What does matter is if this competition we supposedly have has driven the costs down to the lowest they can be in absolute terms, not whether they are the lowest compared to others and this is obviously not the case.

After all that was the promise of privatisation.

Whatever competition there is [ihas[/i resulted in the problem El B mentioned, of price increases being passed on at the same % as the wholesale price increases thus inflating profit. The fact we may still have cheaper energy than others when the generators are making 17%-23% profit also means our retail cost is too high.



The problems of supply need to be dealt with but talk of nationalisation is certainly not giving an illusion to anything as it would theoretically reduce bills by a certain percentage permanently unlike removing the green levy which would have an effect for 12 months at most. Now that really is an illusion.

Yes, but all that still had to be paid for, so it doesn't really answer the question of whether the underlying per unit cost was relatively cheaper or relatively more expensive, whether it was genuinely more cost efficient. Whether we pay for energy through a retail bill or through taxation, or via some combination, we still have to pay, and the costs can be fiddled in all sorts of way to make x or y or z superficially cheaper, so what matters is the underlying unit cost after the smoke and mirrors are removed.

The argument for privatising the industries that were previously nationalised is that nationalised industries were inefficient - that is the primary reason for privatising all of the ones that I mentioned.

The reasoning always went the way of over-staffed, over-managed, businesses with poor working relationships leading to strikes and huge loss of production hours, basically no-one in the nationalised sector seemed to know how to run a business or were so ingrained in the attitude that it didn't really matter that it led to a business that carried a huge overhead.

The argument for privatising was always based on "we will be much more efficient, and therefore cheaper" and several decades later we are slowly realising that while those businesses may be leaner and more efficient and may have had new capital equipment investments made, the savings in those efficiencies have not been passed on to the consumer.

Its easy to criticise the old British Rail for being inefficient, dirty and unreliable and then point to (say) Virgin Rail or Cross Country and their new fleets of clean (ish) rolling stock and their reliable (ish) services and ask if you really want to go back to British rail - but does anyone recall paying the equivalent of £100 for a return Leeds/Birmingham ticket tomorrow, or £222 for Leeds/Kings Cross (both standard fares, just checked) ?

Does anyone really think that privatisation of industries leads to a lowering of costs through efficiency savings or is the reality that efficiency savings within those industries are required in order to factor in the larger profits that the private investors will require, profits that were not the primary concern of the nationalised industries ?

(Although East Coast haven't made a bad fist of it)

East Coast have done very well – money coming back to the taxpayer, and high ratings in terms of customer satisfaction.

Makes you wonder why the determination to reprivatise.

Oh.

Ideology.

Virgin : Manchester-London : Anytime return : £308 (and fewer off-peak savings options).

Whether it [iwas[/i cheaper or [iwas[/i more cost efficient is a completely irrelevant question today simply because so many things have changed between then and now.

Back then privatisation was certainly sold as something that would deliver things cheaper and more efficiently.

After a few decades and given how things are [inow[/i the question that needs to be asked is this really the case [inow[/i?

The East coat main line suggests the way it was sold as an absolute given that privatised industries would be the most cost effective and efficient is complete rubbish.



Of course we still have to pay but one of the main arguments against privatisation back then was that for it to be cheaper it would have to be so while still delivering a profit for shareholders and that remains as valid a question as ever particularly in the energy sector. In this sector where we see an apparent disconnect between wholesale price rises and retail price rises and profit margins on the generation side which are, as said, between 17% and 23% there is certainly a need to remove the smoke and mirrors just so we understand exactly what the privatised industries costs are and just what its profit margins are.

And just to add insult to injuryhttps://www.independent.co.uk/news/uk/home-news/exclusive-the-other-energy-scandal--power-giants-use-loophole-to-cut-their-own-tax-bills-8906447.htmlrl

"HMRC knows the exemption is being misused and considered restricting it last year, but backed down after lobbying from the financial industry."

No wonder MP's aren't concerned about rising bills: www.mirror.co.uk/news/uk-news/ho ... gy-2671053 Altogether now; 'We're all in this together'

No wonder MP's aren't concerned about rising bills: www.mirror.co.uk/news/uk-news/ho ... gy-2671053 Altogether now; 'We're all in this together'

Well, that tells you who runs the country doesn't it?

Well EDF are making a play to dictate government policy.

They put their prices up today by 3.9%. Less than the other companies to do so, so far.

This smaller increase is in anticipation of the government removing the green levy.

If the government doesn't do this EDF have said they will increase prices again in consequence.

So there you have it. "Remove the green levy or else...."

And as I suggested earlier despite removing it, prices still go up by 3.9%! Well actually that is worse than I suggested as I kind of expected dropping the 9% green levy would mean prizes frozen for about a year but no, we still get an increase despite (the anticipation of) 9% being wiped from the companies costs.

Cameron must be livid. He will have wanted to see at least a freeze in energy prices up the election in 2015 but all he is going to achieve by removing the green levy is the destruction of the green energy industry it funds (not that I think he is bothered about that), bills that increase anyway and the companies profits intact.

Fantastic Mr Cameron. An absolute winner of a solution to to rising energy bills!