Do you think the Big Six are out of touch?

Energy should not be privatised, as Post and other necessities for life These should always be in the hand of an elected( proportional voting system still lacking in UK)Government.

I agree 100% gibello

If the government were to put away a few billion pounds each year into a re-purchase fund we could probably achieve this in around twenty-five years [with compound interest]. Of course, we would have to forego what that money buys in the meantime.

Hang on a minute – didn’t an elected( proportional voting system then lacking in UK)Government – decide to privatise these industries?

Why should we trust a Government that doesn’t want to own and run these industries to run them efficiently and fairly?

I don’t get your point at all on having to put awaay billions of pounds to buy back these services.
They got them for a drop down cost and have reaped billions from them since. So it would be quite logical and even legal, to take them back into public ownership at no cost to us..

Yes, Frank, a future government could pass legislation to compulsorily re-acquire all the shares in the companies that provide utility and other essential services [plus a few more that were still in their infancy in the 1980’s like mobile telecommunications or, indeed, barely embryonic like satellite broadcasting]. Having been bought from the original buyers of the privatised companies these shares are largely held now by institutional investors [like pension funds and managed personal investment portfolios] and by foreign companies or governments. Many, and possibly most, of the utility companies are themselves foreign-owned so it would not be straightforward but arguably it is one way of getting on in the world if nothing else matters.

I seem to recall that the money received by the government for the whole privatisation programme was around £30 billion at historic prices – not exactly a “drop down cost” – and some companies have appreciated in value enormously since privatisation so their current market value is very high; but some of the industries that were privatised have little relevance to domestic consumers [so would presumably be outside a buy-back programme] or no longer exist in recognisable form.

I wrote at the beginning “a future government” because such a measure would require a totalitarian regime to sustain it and we do not enjoy such liberty in our present situation.

Further to Frack GS’s post, from my very limited experience of EUlaw in action, I am sure that, without proportionate compensation payments to the current owners, re-nationalisation would be illegal.

The British had the best society due to Socialism, but they became lazy, selfish, greedy and jealous of the ‘haves’. They wanted to become like Americans, so the politicians gave the family silver away to their friends and backers, now we have no remaining British industry because they belong to foreigners.
Blame the ignorant, uneducated, greedy peasants for our predicament, not these companies whose only purpose is to exploit and make profits.

Even if the UK left the EU it would be illegal under UK law so Parliament would have to pass new legislation. That certainly isn’t going to happen under the present government, or even the next one in all likelihood. But irrespective of the legal issues, which lawyers could no doubt ruminate on exhaustively, there is the matter of the effect on the economy and future trading relationships of a country that would dispossess owners of their valuable assets and income streams. As well as other financial services sectors, the life assurance and private pensions industry would be so seriously disrupted that there would be major repercussions against the state and the whole compulsory expropriation exercise would become counter-productive. However desirable re-nationalisation might or might not be, it is not going to solve the present problems in the energy market.

I thought the ‘family silver’ [the gas, electricity, water, telecoms, railways, petrochemicals, engineering, steel, aerospace, and numerous other industries] was largely sold – not “given away” – to private investors who could buy limited numbers of shares each in the initial public offerings. The prices were attractive and quickly appreciated so ultimately the shares were sold on to corporate investors. Personally I put the faults of the utility companies down to slack regulation. The actual profits don’t seem to be particularly impressive as a percentage of turnover but because the ‘big six’ energy companies have complex operating structures that include production it is difficult to unravel the economics for the domestic market. Government obligations, levies and taxes further distort the consumer prices.

“Certainly the vulnerable need helping, and should be helped separately.” So we might help the vulnerable (no certainty about this) so that the companies can go on exploiting them and making profits for the shareholders. That does not seem like a good idea.

I don’t follow your comment. We help the vulnerable to choose an appropriate tariff. Ofgem are making proposals for the vulnerable to be helped by the energy companies. Then somehow they are being “exploited”? and the shareholders will profit? Charging the same price, whichever energy company it is, is a very certain way of some companies’ profits artificially increasing out of proportion and their shareholders profiting. That would probably increase investment in them at the expense of smaller companies and then…………………….

I did not write the introduction, Malcolm. The price difference between tariffs is becoming greater and no amount of tinkering will solve the problem of vulnerable being charged more. It’s fine to suggest that benefits are available for the vulnerable but it is well known that those who are eligible to benefits don’t always claim them.

We need a radical solution to put an end to the most vulnerable members of the community being exploited by the energy companies.

I did not suggest you did write the introduction, I am not suggesting either that it is done through benefits. I am suggesting that the vulnerable receive help to get onto energy deals that are appropriate to their needs. This is not very different from them being helped to deal with other aspects of life. Charities, family, and others concerned with these people can help in practical ways. There are, i believe, Ofgem proposals aimed at getting energy companies involved. One such concerns pre-pay meters, to remove the problems these can create unecessarily.

It would be simpler not to exploit the vulnerable in the first place.

No one is being “exploited”. Most people (excluding, for example, those in debt to their supplier) have the freedom to choose from all the suppliers a tariff that best suits their needs. On the internet, by phone. What is a barrier to some is their inability to use these methods, or know how to deal with them. Therefore they need help to do this. That is not “exploitation”, no more than people who cannot use the internet to buy cheaper goods, or whose local supermarket is more expensive than another they cannot access, are being exploited.

Malcolm makes a very good comment:

“Be careful, though, how we view these deals. If everyone went for the cheapest deals – generally fixed-price ones – then profits would dip as the extra revenue from “standard” (variable price) tariffs would fall substantially. So these “cheaper” deals would then rise in cost to restore profits . I’d like to see choice in tariffs, clearly advertised, and a central independent (that is, of commmercial motives) comparison site. Simply put in your annual usage, post code, and find the cheapest deals from which you can select the one you want. I’d like someone like Ofgem to offer this. Then no more “selective” comparison sites, no more “commissions” for customers who switch through them.

Ofgem take note please

Malcolm, You make a very good suggestion here. I would suggest you put your idea on the 38 Degrees forum it is easy to do, that way if enough people add their name this might force Ofgem to consider your very valid idea.

I think that you have missed the point here. The quote you give compares the average price of Big Six with that of the cheapest. This tells us that the prices the Big Six charge are actually all very similar. I suggest that this is typical of dis-functional, open markets. I believe it is fallacious to assume that having an open market will automatically lead to low prices. When you look around real marketplaces you soon realise that the main suppliers group their prices at values representing the highest price that the bulk of purchasers will pay for the lowest quality product/service those same purchasers will accept. This is why I do not believe that the CMA will actually change anything.

The intro says ” the price gap between their standard tariffs and the cheapest deals on the market almost doubling.”. Standard (variable) tariffs are the most expensive from any supplier so it is not fair to compare them with fixed price tariffs. You need to compare like with like. The “big 6” offer fixed price cheaper tariffs.

Main suppliers = highest prices? I’ve just looked at pricing my annual consumption. The best (cheapest) currently is Sainsbury – which effectively is British Gas as a reseller. Scottish Power came 5th out of 178 offers. Other “big 6” figure on the list with plenty of smaller companies among and below them.

If we know who the cheaper companies are, then why not use them?

You are right I am fighting 6 incurable disease and live alone been with British Gas for over 40 years i used to have an essential user tariff then they took that away and put me on a standard tariff i have a prepayment meter and never been offered a cheaper tariff. Why do i pay more when they do not have to pay someone to read the meter, accounts are computerised no staff with pencils and adding machines. Between december 2014 and January 20 15 over 6 weeks i put £170 in but they say the meter is ok

THESE people Malcolm r?! They are the same as you and me but with less money and should not have to rely on charity to be able to afford energy, especially when others are making big profits from the essentials for civilised living. Energy ( and water) should be taken back into public ownership and everyone should be on one tariff: the cheapest. Instead of tinkering with different tariffs the effort would be better used to develop new ways of generating cheap energy. In the not too distant future we could become our own generators, the technology is already there for instance to harness the friction from our shoes as we walk and turn it into electricity, and just needs to be developed.

Jan people do not want lots of different tariffs, they just want one: the cheapest. All the profits given to shareholders and enormous salaries paid to CEO’s could be used to reduce the cost of energy and fund new technology if the energy firms were ditched and it was taken back into state control.
As for 38 Degrees don’t go there! They claim the credit for other peoples’ campaigns and just want your money, and earn well from lobbying people in and around Parliament.

william, even the Which? Switch site uses this calculation when you are part way through a fixed-price tariff. Using the standard variable tariff as a basis is used since they have no idea what other tariff to use; and if you do nothing and your fixed price deal expires you will be automatically transferred onto the SVT until you choose otherwise.

I find the best way, when I use Which? Switch is to put in my annual kWh usage and simply look at the total cost of the best deals. That is all I really want to know for the next usage period.

It does take time to switch, partly because your meter numbers have to be confirmed centrally and you will still be given a cooling off period. However, unless you are on a poor tariff the savings “lost” during the changeover should not be huge.

Then maybe the price comparison should only show up to the date your fixed tariff ends, thereby giving an accurate comparison. Problem solved. Rather than allow these profiteering companies to hide the fact that they’re not actually offering you a true saving.
And just because Which use the rules doesn’t mean the rules are right and shouldn’t be corrected. And the Martin Lewis MSE switch comparison doesn’t use these rules for the exact reason I stated, they don’t believe the rule is right either and they have told ofcom, so ofcom are aware.

william, I’m neither supporting nor condemning the way the calculation is done, just providing an explanation. I do not see that a published saving is more important than the predicted annual cost of alternative tariffs. I can select the most appropriate for my needs on that basis alone.

The Big 6 are not the only ones who do so. Spark Energy is collaborating with letting agents to force tenants to use them. The letting agents switch properties to Spark between tenancies (without the knowledge of the landlord) so that they can tell the next tenant that the property is “already with” Spark and put a clause in their tenancy agreement saying that they are not allowed to move it away from Spark. Obviously Spark is paying the letting agents a kickback to get them to do this.

Ask, perhaps, for a smart meter which will do this automatically.

I don’t support the vast cost of the smart meter roll out, but perhaps there is a good case to give these to those who have problems with reading their meters or get into financial problems with their energy bills. One problem with smart meters is that they may lose functionality if you switch supplier, or so I have read.

I believe they all retain basic functionality. There is a standard to ensure the compatibility of all makes of smart meter.

Like you I think they are, on the whole, a waste of money. If we can’t be bothered to change supplier we are hardly going to be bothered to watch a smart meter and alter our energy consumption habits – even if there was significant scope for change which I would doubt. The money (well, our money) would have been much better spent in my view in upgrading the insulation of properties where the residents could not afford to do it for themselves, and giving cheap loans to others to do the same. Not only would that reduce their energy bills but it would also reduce the maximum demand. Perhaps there are not enough such properties left that would benefit, though?

I very much doubt if the majority of people could work out their gas or electricity consumption easily but if their smart meter showed that they were using 10p electricity and 20p gas per hour or their total consumption of both for the week was £20 so far, they might be able to relate to it.

I have always felt that smart meters should be available to those who want to buy one, but perhaps there is a case for giving one to those in arrears with their fuel bills. I know that those with solar panels tend to become aware of their consumption, for example by putting on the washing machine when the sun comes out, so it seems possible that some users will use theirs to help cut their consumption.

wavechange – at least for electricity, most of the benefits you mention are readily available to anyone you can get an electricity monitor, e.g. an Owl or similar:

“The Owl Electricity Monitor
OWL wireless electricity monitor shows you how much electricity you are using, how much it is costing you and how much carbon is being generated.
This means you can see in real time the benefits of turning off electrical devices .”

Obviously, equivalent, simple, clip on devices are not available for gas.

But whilst you can save money by turning off devices, most core costs will arise from basic needs like lighting, heating, cooking, washing and drying clothes and so on.

I agree, Derek. A lot cheaper than smart meters.

Just so, Derek. I think we should abandon fixed price deals and use a standard variable tariff, with variants to suit different people. Off peak tariffs, two tier tariffs for lower users. Smart meters will open up the possibility for 1/2 hour charging (time of day tariffs reflecting the variable cost of electricity based on demand). Do we want that? It might save many some money, but estimating the best supplier and your likely bill could be more complicated.

Dave your right “dual passport holders ” run this country and the US . But can the public accept the truth ? Nope !

“Explain how our, bought and paid for, dual passport politicians, get away with this stupidity.”

Easily done – we voted them in 🙁

(Most especially when they privatized all our loss making state industries.)

I am with you Eileen, OVO are brilliant, readings given every month, easy log in a monthly usage graph, massive savings. I wish to warn against Co-op Energy who I switched to via the Which Big Switch, I foolishly trusted the Co-op, it cost me 100s of £s and they are a nightmare to deal with.

Exploitation:
– the action or fact of treating someone unfairly in order to benefit from their work
-The action of making use of and benefiting from resources
– The fact of making use of a situation to gain unfair advantage for oneself
In this case for the vast majority of people we have around 40 energy suppliers with no barriers to prevent consumers from choosing an appropriate deal. That is competition not exploitation as I see it.

However, being pedantic over the words is not the point. I want to see positive moves made to help vulnerable people get the same benefits as those who are able and capable can get (should they choose). I’d much rather work constructively towards a solution that makes this happen rather than complain about something. So if we could examine positive methods to help these people we might achieve something helpful. Whether we do this in an organised way or not we can, of course, still play our part as individuals.

As I said earlier, these same people will also benefit from help accessing better prices for food (a significantly greater spend for many than energy), getting benefit entitlements, dealing with finances, etc. etc. A caring but proactive society is what we need to develop. Society is us.

Thanks Beryl. Then it’s time as a country we encouraged people to help those less well off than themselves. Do something to help instead of moaning about businesses.

“Spare a thought for….” As I said above I don’t like this insinuation that because someone has contrary views to others and, in particular, tries constructive suggestions, they must somehow be heartless with no social conscience. It is not a universal truth and can put genuine people off contributing to Convos in case they incur such criticism. In fact many older people are extremely computer literate and can look after their affairs very well indeed.

The report as far as I have seen says nothing about exploitation being rife.
🙂

I respect both your positions, and expositions of the same.

I am with you both that more needs to be done to protect the bewildered and the bamboozled.
I am also very conscious from my experiences that the adge of you can take horses to water but you cannot make them drink does apply.

This is a hugley complicated subject but the nub is how far are we prepared to constrain peoples free choice. If there is a half way house where we introduce a degree of coercion there will still be people who fall outside “protection” from bad decisions.

For instance we could make a special tariff for retired folk which must be loaded by default, and perhaps this applies to people with a disability allowance etc. This comes with its own set of problems but not major ones and overall could have blessings regarding disconnections or paying direct or picking up anomalies. And of course allowing people to opt out provided they give reasons or the restricted amount of Kwh available under the tariff.

Bottom line is that many disadvantaged people are poor at making good life decisions.

My immediate approach would be to trawl through all societies looking at what good ideas [and costings] can be nicked form other countries. France for a starter with it’s capped gas prices.

Someone must be listening!

BBC News Report
13th June 2016

“Urgent action is needed to deal with the UK’s digital skills crisis warn MP’s, or it risks damaging the country’s productivity and competitiveness.
It is thought 12.6 million adults lack basic digital skills, while 5.8. million
have never used the internet at all. “Stubborn digital exclusion and systematic problems” with education and training need to be urgently addressed, the report said.
It urged the government’s digital strategy to be published without delay”.

This was dealt with on Radio 4 last week. i heard a repeat on Saturday and apparently there will be a body set up later this year which will pass the billing information between the respective companies. So if were with OVO with a smart meter then they would be required to send the reading information to whatever supplier yuo subsequently went to.

Christine I would advise you to put a complaint in with the assistance of an organisation for example Citizens Advice Bureau and if you get nowhere go to the energy ombudsman.

I am very tempted to add the word ‘wholesale’ in there somewhere John.

That was my first thought, Beryl, but the article was about the Consumer Prices Index so I thought it must relate to the price of energy per unit as paid by the householder. I went into the Office for National Statistics website to see if I could find the origin of this reference but there was no mention of energy prices. There were various other upward and downward factors stated in the ONS release that contributed to the inflation rate but energy was not one of them. So I am perplexed, and wonder where the BBC got their information from. Indeed, energy does not appear as one of the items in the CPI basket of goods and services shown in a graph on the ONS website. I admit to being a bit out of my depth in looking at this data but I am convinced the phrase “weak energy prices, which are still below half the levels of two years ago” would have been part of the ONS commentary if it was indeed a significant factor. Curious, to say the least.

Further to my preceding post I have submitted a question to the BBC News website seeking clarification and a source reference for the information given.

John, CPI Domestic fuel components are published on the gov.uk website.
The indices go back to 1996 (as far as I can see) and I’ve abstracted these:
Electricity Gas
1996 62.5 43.3
2007 87.3 84.0
2010 100.1 104.6
2012 115.1 123.6
2014 129.1 138.8
2016 127.9 129

Thanks very much Malcolm. I could not see “energy” listed in a table on the ONS website which seemed to show the ups and downs of inflation on the goods and services in the basket.

But it isn’t that simple, R Matta. Suppliers have the right to offer several tariffs with different features, to set different levels of standing charge or absorb the full costs in the unit rate, to give different discounts [or none at all] for paperless billing, dual fuel, direct debit, and so on. And they can use fixed rates or variable rates, and apply exit penalties or let you change supplier for nothing. It all makes for a complex and confusing bundle of variables to compare, but, through filtering, some comparison websites do make it as straightforward as possible to select the most appropriate tariff to meet your circumstances.