This is what energy company SSE had to say today as it raised prices:
‘Over many years, policymakers themselves have failed to highlight adequately the cost to consumers of the policies they have pursued in government.’
Government has been allowed to hide the costs of those ‘green’ energy policies and the way they makes our fuel bills go ever upward, and the reason is that the BBC has, instead of doing what Humphrys said was the BBC’s role, bringing Power to account, it has done everything it could to support those policies:
The BBC has worked hand in hand with climate scientists.
It’s journalists have taken money from those climate scientists to fund their propaganda.
It has worked hand in hand with climate activists.
It is a climate activist in its own right.
The BBC instead of investigating, challenging and reporting political events surrounding climate change has worked with the politicians to promote their policies.
Even today the BBC continues to muddy the waters and distract attention from the real reasons for price rises and concentrates on inciting a feeling amongst the public that the energy companies are profiteering as they freeze in their homes and old people and the vulnerable fall sick or die from the cold.
We are constantly treated to Miliband’s analysis …that the market is failing and companies ripping us off….and his price freeze is the answer.
Here the BBC tells us that Greg Barker, government Energy Minister, has been ‘defending the energy companies’ against Miliband’s claims and that ‘the more these companies put their bills up the more Ed Miliband’s offer looks attractive’..….so the BBC takes Labour’s narrative…that the Tories are only supporting big companies and abandoning the ‘vulnerable’….and Miliband’s policy is popular.
The BBC must think everyone is a fool…Miliband’s proposals have been roundly condemned by just about everyone…even a previous Labour energy minister.
This is what the BBC tells us Adam Scorer, Director of Consumer Futures says:
“SSE and others who follow need to demonstrate why this rise is justified.”
But in fact his main message was this (11 mins):
‘I have a lot of sympathy with SSE…We are in a high cost energy market and the prices aren’t going to come down any time soon…the only solution is…Government needs to make a real and sustained difference to the cost of energy. Sadly, short term freezes or the exhortation to switch just do not get to the heart of the matter. We need to see Government and regulators pull the right levers.’
So Miliband’s short term price freeze is a crock.
Strange the BBC didn’t quote that.
Just been listening to Labour’s Diane Abbot on Question Time….she claims that the 8% rise in energy price by SSE demonstrates that the energy market is rigged and dysfunctional.
So let’s have a look at whether the companies are making undue profits, if the market is rigged and dysfunctional…and if so, who is to blame.
The company says it has put prices up because of a rise in wholesale prices…in the main…. it is their first price rise in twelve months….and the profit margin is a mere 5%.
Ofgem is the regulator for the energy market and this is what it has to say about the price of energy:
Facts about wholesale costs
The wholesale price of gas for use this winter is 8 per cent higher than the price of gas for use last winter.
The wholesale price of electricity for use this winter is 13 per cent higher than the price of electricity for use last winter.
We have made the transition from a country self-sufficient in gas to a country dependent on gas imports. This, together with environmental targets and the need to invest in ageing power stations and energy networks, has increased pressure on prices.
Facts about environmental costs
Over the last ten years environmental costs have risen from £10 to over £100.
Compared to 2012, environmental costs have risen by around £10 to £115 of an average annual dual fuel household bill.
If current trends continue, we anticipate environmental costs to increase further over the next 12 months.
Energy bills have risen in recent years for a number of reasons. These include the impact of global energy prices on wholesale energy costs, the increasing cost of meeting the government’s environmental targets and the cost of investing in the pipe and wire networks.
So that’s pretty clear…SSE raises prices 8%…Miliband claims it’s a scandal, the BBC reports his words…but doesn’t report along side that that wholesale prices have risen 8% for gas and 13% for electricity.
The BBC has been broadcasting a doom and gloom scenario for these price rises…it has been broadcasting Miliband’s soundbite all day…‘It’s a scandal and the government is just standing by allowing these companies to rip us off.’
John Pienaar tells us every chance he gets that Ed Miliband is setting the agenda on the ‘cost of living crisis’….no mention that this new line by Labour is because their Plan B strategy failed so miserably.
Is Miliband setting the agenda then?
Didn’t the government raise the tax thresh hold for millions of low paid workers? (Something that rarely gets a mention on the BBC)…and as for energy isn’t the government already working to keep prices low and transparent and improve competition in the market? So, well ahead of Miliband.
The government tells us:
On 21 June 2013, after two years extensive research, we published detailed rule changes that will deliver a simpler, clearer and fairer energy market.
The reforms will tackle problems of widespread consumer confusion over energy tariffs, poor supplier behaviour and lack of transparency which is stifling competition. This will give consumers the choice they want and simplicity to compare energy tariffs, making it much easier to access the information they need to find the best deal on the market.
There is little genuine effort on the part of the BBC to drill down into the figures and who is to blame.
Here is Guido:
Ed Admitted Cost of Living Would Be Increased By His Policies
Willing to “Lose Six Months of Economic Growth”
Here is Sky News:
Demonising Energy Firms May Be Slightly Unfair
Here is the Telegraph:
Ed Miliband can’t freeze those bills he himself sent through the roof
But look at the BBC and Miliband’s role in all this is missing….the green tax burden is downplayed and the analysis of exactly why prices rise is missing in detail…the BBC mentions wholesale prices and ‘government levies’ as it puts it, but fails to give the detail…such as wholesale has risen 8% and 13% in the last year…kind of an important fact.
They tell us that the green taxes, or government levies or programmes, only make up a small part of a bill….
David Cameron wants to shift the focus of restricting price rises on to green taxes, which make up part of your bill…It’s only a small percentage of what you pay
A small percentage? The BBC itself tells us that it is up to 11%….and as you can see from Ofgem’s figures that is £115 per year on your bill and set to rise…anything up to a total of£300.
As the green tax is the only thing other than company profit that can be reduced and thereby reduce retail prices those taxes should be taking a far more prominent role in the discussions by the BBC.
Are the markets failing? Well it makes a nice soundbite….but what is the truth and who is responsible for the markets?
Firstly I fail to see how 6 companies constitutes a lack of competition…amongst a myriad of smaller companies…and it was Labour that reduced the number of big companies from 14 to 6…and bare in mind that National Grid is a monopoly..and its prices have gone up 10%…why is that not a ‘scandal’, why is that not due to lack of competition, why does Miliband not want to freeze their prices?
Clearly it is not a market failure that is driving up prices….and with margins of only 5% the companies don’t have much room for price cuts…..and as they all buy wholesale from the same markets and use the same National Grid infrastructure prices are always going to be similar and therefore comments from Labour about market failure can be seen to be so much hot air.
Who is responsible for regulating the market and what is their role?
Our role is to make sure that retail energy markets work in the interests of consumers. We do this by monitoring the market and, where necessary, taking action to strengthen competition or enforce the rules with which suppliers must comply.
Our priority is to protect customers’ interests. One way in which we do this is through the promotion of effectively functioning competitive markets.
When necessary, we use our powers to monitor and address any anti-competitive behaviour or practices which may affect the market.
So pretty clear…Ofgem regulates the market, tries to ensure ‘value for money’ for the customer and promotes competition within the market.
If the market isn’t working presumably it’s not the market’s fault, because the market is being ‘controlled’ by the state regulator.
It is Ofgem’s fault.
Ofgem also regulates the National Grid network….SSE said that 10% of its cost rise came from the National Grid raising its own prices….this is what Ofgem says:
It is important that National Grid has appropriate commercial incentives to operate the gas NTS in an economic and efficient manner, as they are required to do under the terms of their licence as the System Operator.
To achieve this we work to develop incentive schemes that provide National Grid with an appropriate balance of risk and reward. At the same time, we also try to protect the interests of present and future consumers, who ultimately pay for the costs of system operation.
Listening to the BBC and its own analysis and presentation you’d never know of Ofgem’s large and vital role, you’d never know of the price rises in wholesale gas and electricity and how they relate to SSE’s price rise, you’d never know whether the markets are failing or not and you’d never know that Miliband’s price freeze was an eye-catching highly cynical political ploy…a trick.
It is just curious how the BBC whilst mentioning the bare minimum of facts manages to ignore those facts and still push the idea that the companies are profiteering, that price freeze is a good idea and that all this has nothing to do with green policies, or Ed Miliband.
Listening to the BBC you might just come away with the idea that the energy companies are ripping everyone off, that capitalism has failed again, and that the only answer is a good dose of socialist state intervention…a solution that the Public apparently finds attractive.