Ed Milliband single handedly wiped just under £1 billion off the share value of one of the few UK energy companies. After his latest promises that Labour would freeze energy costs for two years should they be returned to power, Centrica had £950 million wiped off their share value. The overall impact is in the billions. One point of that should not be lost on Cameron. The markets consider it likely that Labour will oust Conservatives at the next elections. I do not intend to even consider the Politics but with the Liberals saying at their conference that they would share power with Labour or Conservative, the markets are jumpy. Whether, like me, you consider that any future Liberal Party will have less representation than the Greens is a mute point. What is certain is that Milliband came from within an earlier Labour administration that was behind the Carbon Scam from the beginning. It was not Cameron but Blair who signed the Climate Act. Labour’s record is pretty dismal on AGW and Climate and not to be trusted. That a professional Politician could make such crass comments at his Party Conference that damaged British Industry and put in doubt the investment necessary to pull the energy rabbit out of the bag suggests that they have learnt absolutely nothing and are unfit to govern. This is not a party political comment but one based on realism.
The facts are that price freezes would be unsustainable in a private energy market. All they do is divert investment elsewhere. Labour created this fiasco with a subsidised market for wind which means that everyone, gas, nuclear or coal immediately jump on the band wagon and demand their share. The whole point of privatisation is to move away from a publicly funded economy. The three card trick of ROCs and FITs where it is the general public and not the government that subsidises the market obscures that fact that the renewable industry now makes it’s profit not from it’s power generation but from subsidy. The rest of the power generation industry simply want their share. Reality will only return when the DECC and Ministers stop meddling with the industry and remove all subsidies. Then we shall see a balance where competition rules the game. The whole ethos of a privatised industry. Whether I consider that utilities should ever have been privatised or were simply a cash cow for previous administrations is for another time and another blog,
Mind you, this is Party Conference Silly Season as we saw from Ed Davey’s comments. Wonder what the Conservatives will come up with? Are we hoping for some joined up thinking? No comment.
There is of course a cheap quick fix. Cancel all subsidies and climate charges which would immediately reduce electricity costs by 14-18%, confirm tax breaks for fracking exploration but not production and expedite licences but with oversight by DEFRA and The Mines Inspectorate coupled with the Royal Geological Survey. Don’t let the carbonistas at the DECC anywhere near it. Two minutes at the Conservative Conference and UK PLC would be on the way to future prosperity with economical affordable energy. The only losers would be off-shore carpetbaggers and already wealthy, often absentee, landowners. might even guarantee a future term for Mr. Cameron’s Conservative Party but without the hindrance of the Lib-Dims.
Read the response from the Energy Industry and their complaints about green stealth taxes that they say are the real reason for rising bills.