Labour’s energy policy

Tilting at windmills

Ed Miliband’s proposals to cut energy bills seem likely to do the opposite

See article

Readers' comments


Outside the Marginals

The energy companies yelp about "price control" and their guardian Angel (or Knight?) says the lights might go out as a consequence. This from an industry whose investment cycle is huge compared to the length of the proposed price freeze - which is less than the fixed terms offered by many companies already. I think they do protest too much!

As the article points out:
"As well as freezing prices, Mr Miliband said he would use the breathing space to abolish Ofgem, the current regulator, and replace it with a more “consumer friendly” watchdog. He would also reintroduce a less market-oriented centralised pool-trading system for electricity (abandoned by a previous Labour government as a failure) and force utilities to unbundle power generation and retailing, to improve transparency."

Now those changes are radical and will reshape all the big energy companies, but they choose to complain more about the price freeze! I don't buy it - although I have to buy their product!


"Evidently he calculates that bashing big business...will appeal to voters."

Surely he's only bashing six businesses. If his plans go through all the other businesses will be getting a boost in the form of reduced energy bills.

"If utilities push up prices before the election..."

...then it suggests they're not price takers, and the market is as dysfunctional as the critics suggest and so ripe for intervention.


Is this a news article or an editorial? There seems to be a lot of unsubstantiated assumption and very little factual substance. Businessmen who can only operate in environments of certainty shouldn't be be in business. There is no information about what in fact EM expects from his plan and why a 20 month period would accomplish it. You spent all your column speculating about what investors might do rather than providing any plausible benefits. Surely you don't think the energy sector is any better managed than the financial sector, why would you not look for a better result? We read TS for factual presentations of issues, not pedestrian, lazy guesswork from your anonymous staff.


This proposal comes from Labour's last Secretary of State for Energy and Climate Change. He's proving to be a 43 carat plonker. Labour simply doesn't understand that genuinely competitive markets with effective collective action on the part of consumers are in the best interests of citizens. His previous master, Gordon Brown, imposed a 'windfall' levy on the privatised utilities which, inevitably and perfectly predictably, led to an invasion by the private equity ghouls and a hollowing out of the balance sheets of the privatised utilities and, eventually, left a number of the energy companies, in particular, vulnerable to takeover by four of the EU's 'Big 7' - EdF, RWE, Eon and Iberdrola.

The private equity ghouls wouldn't have invested to avoid the looming generation capacity crunch, but the existing national energy and the subsidiaries of the EU's Big 7 aren't prepared to either unless there is a big ramp-up in profits.

This is not just a British problem: the behaviour of the EU's ebergy sector behemoths and the associated policy and regulatory dysfunction is an EU problem. Structural remedies - in terms of breaking up these behemoths - are required, not behavioural remedies - which are even less useless than this "I'll freeze prices, because I can".

According to Gerald Kaufman, Labour's 1983 election manifesto was the "longest suicide note in history"; Ed Miliband seems determined to draft the longest drawn-out suicide note in history.


Ed Miliband has gone completely off the rails. This new energy policy is only going to deter investment, especially in the sort of green energy his Labour friends love so much.

And now I hear he's offered to sell Gibraltar to Spain for a £1?

Whether on energy or foreign policy, this man is a danger to the UK. He's taken the Labour Party back to its pre-Blair days. Red Ed will never be elected Prime Minister. Nick Clegg has a better chance of that now.



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