Labour’s Hypocrisy on Rising Energy Bills













The total sales breakdown enhances the picture.






Where does responsibility lie for the above-inflation price increases?




Kevin Marshall


  1. Phil Franklin

     /  18/12/2013

    A question, Kevin: Do you have numbers for the National Grid? One assumes they are a separate company providing the big six with their connections, so I wonder what their costs/profit lines are like.

    • manicbeancounter

       /  18/12/2013

      I did start looking at the National Grid figures. They are online. There are quite complex due to the various regulated functions the business carries out both here and in the States.
      However, even if profit growth can partially account for the cost growth, a price freeze is the wrong policy.
      The detail should be provided by OFGEM. They have provided an approximate split of costs on a factsheet (No.98?), but only proportions at a given point in time. What is needed is the change over time of the various cost components, along with modelled projections for the next few years.

  2. The global price of coal is said to have dropped by 30% over the last five years. Considering that 40% of our electricity is still generated by coal, has this kept down the price of electricity and masked what would have been a higher increase in that period?

    On a point of information, Ed Miliband was the Secretary of State for Energy and Climate Change, not Environment Secretary, for the CC Act.

    • manicbeancounter

       /  18/12/2013

      The coal price does not appear to have affected wholesale prices. The whole thrust of Labour’s “hidden” analysis was to point to how wholesale prices were static, and energy prices have gone up.
      Lower coal prices may not lead to lower prices at present, as they are but one of a number of factors affecting wholesale prices. In particular, if coal turned out to be the cheapest form of electricity, it would not be allowed to obtain a larger share of the market. Instead there would be just larger profits from coal-fired power stations. At the same time, renewable energy is given first preference, so there is no downward pressure on prices from there.

    • manicbeancounter

       /  19/12/2013

      You are right about Ed Miliband being Secretary of State for Energy and Climate Change at the time of the Act. I thought the Act gave him the title, along with more personal powers than possibly any other Cabinet member, bar the Prime Minister. It is worth reading.

      • Brian H

         /  20/12/2013

        What does “I thought the Act him the title” mean?

        • manicbeancounter

           /  21/12/2013

          It means my grammar is as bad as ever.
          Have stuck a “gave” in the sentence, which might give it a little more sense.

  3. Peter Stallwood

     /  19/12/2013

    I have just come across your blog but am having great difficulty in reading it as the text merges with the background pictures. The pictures are pretty but could they be changed to increase the contrast between text and background?


  4. John

     /  29/12/2013

    The supplying companies are also the generating companies; they buy the ‘energy’ from themselves and sell it onto consumers ? What are the “other costs” ?

    • manicbeancounter

       /  30/12/2013

      If you follow OFGEM link and look at the profit levels for energy generation, then you will find that profits have increased – but only in line with total sales. Profits as percentage of sales have not changed, so the structure of the market is not to blame for the rise in energy costs.
      The “other costs” on energy supply have increased by £3.6bn in just four years. It is not clear exactly what they are – although I have tried to show that the energy companies are not to blame. I would be surprised if “grossly excessive bonuses” are a significant factor in the other costs. It would be a big story if the directors of the energy companies had increased their bonuses by tens or hundreds of millions of pounds a year. However, the report and accounts of the six major companies are online (with directors remuneration), so you are welcome to show how they have influenced the other costs. I will post up any analysis that you send me – and will try to put it in the context of overall rising energy costs.

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