There may well be some truth in this article on Socialist Appeal as regards manipulation of UK gas prices, but what is strange is that he thinks that nationalising the gas suppliers would help.
Wouldn't a quicker fix be to shelve this idiotic plan to stick another £300 on our fuel bills for the next umpteen years to subsidise windmills?
Friday, 4 July 2008
"Why are gas bills so high?"
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12 comments:
What is strange is that anybody should think of privatising it. The supply is not susceptible to competition. In the totally similar case of privatised water supply , Anglian Water began to pump contaminated water to a quarter of a million people in Northants, who could not switch on an alternative tap and vow "I'll never touch that Anglian" or" Anglican water" as the local MP called it , "again".These things are what used to be called natural monopolies which is why Henry George
considered the land supply a monopoly: increased demand could never increase supply by competition. George, who was as Tory as they come said in "Social Problems" that he'd nationalise the American railways and public utilities. Tories like Churchill understood this just fine. But since the Conservatives were taken over by con artists, the idea that competition cannot have any effect in certain areas has become old hat.
Eric Hollies talks about largely foreign-owned companies conspiring to keep prices high. Let's assume he's right, as I can't rule it out at this stage.
Why bother nationalising? Why can't Ofgem just tell the gas companies that UK retail prices may be no higher than in e.g. The Netherlands?
Problem solved.
The pretext for this privatisation / corporate welfare racket was that competition would bring prices down: the whole thing was more efficient.The Invisible Hand would spirit gas supplies from the Continent and everybody would, as usual, according to naive pink-faced Varsity conservatives, enjoy the best of both worlds: commercial freedom (to compete!)
but regulated too!Ho hum.
If I may so ,you have not dealt with the absence of competition issue ( which is kinda basic in market economics) . Also you said in the Indian context that foreign ownership is not an issue but now you are referencing it yourself.
It is hard to credit that the soft-face men who did well out of privatisation were not aware that ,if you created a cartel,its members would collude.
Yes, I did say that foreign ownership is not an issue. And neither is lack of competition*. That's because we can still put a cap on prices if needs be.
* I agree that privatisation works fine with e.g. motor cars, but giving ALL the major airports to BAA was an act of madness, for example. Water is more like a monopoly, you are right there.
A start would be to remove the 5% VAT imposed on gas , electricity and water bills by the one eyed man years ago!
Motor cars are surely not the best advert for privatisation. This country has pretty well stopped trying to make them using private capital.The partial public ownership of British Leyland was hampered because the designers involved produced such duff models.All shades of political opinion insist that we can't make cars over here though the home market is enormous. The disappearance of the car industry
is hardly an advert for private sector enterprise. The public sector's involvement did at least try to keep some factories open ( e.g. Triumph motorbikes)but right wing opinion was full of jibes about old-fashioned "tin bashing" and that the future of Britain lay in sophisticated service industries like financial services!
DBC: I quote from here:
"UK car production peaked in 1972 at just over 1.9 million cars, but a steady decline set in and within 10 years production had more than halved to under 900,000 units. However, growth has again returned with new investments at carmakers around the country.
In 2003, over 1.65 million cars and 189,000 commercial vehicles were produced in the UK. Of these over 1.1 million cars and nearly 55 per cent of the commercial vehicles were exported to a variety of markets.
This is in stark contrast to the industry of 40 years ago, when most cars sold in UK were designed and built in the UK, specifically for the UK market, albeit with a degree of export as well. UK made vehicles are now exported to a wide variety of markets, with Europe the main destination, significant sales in North America, and specialist luxury marques sold around the globe.
UK’s leading facility in terms of output is Nissan at Sunderland, with 332,000 cars produced in 2003. This is also Europe’s most productive car plant , with Toyota (Burnaston) and Honda (Swindon) also in the European top 10 most productive car factories. 2002 saw the end of Ford car production at Dagenham (though the site is now their global diesel engine centre of excellence), whilst 2001 saw the arrival of the BMW Mini, now a major success around the world.
These figures are very interesting and tend to indicate that: we don't make motor cars using British private capital, the factories are owned and financed by Nissan Honda, Toyota etc; British car factories do not dominate the U.K home market for cars I.I million of 1.5 mill being exported.These were the points I was trying to make in an admittedly ham-fisted and under-informed by figures way.
Was called to Lunch in the middle of this. The point I was going to make is about public sector subsidies to Japanese car makers. Nissan got £112 mill up front to build on Sunderland airport which was sold at agricultural land prices.The Toyota deal (Derbyshire?)was actually investigated by European Commission for "hidden subsidies and unfair competition".There is a paper by somebody from LSE on" Voluntary exports restraints"(oh the excitement!)which pretty well says that the encouragement of Japanese investment was merely a ploy to cease subsidising nationalised industries without losing too many jobs.But the authors reckon the cost of saving these jobs was disproportionate. As usual the boundary between public/private sectors is very blurred.
Was called to Lunch in the middle of this. The point I was going to make is about public sector subsidies to Japanese car makers. Nissan got £112 mill up front to build on Sunderland airport which was sold at agricultural land prices.The Toyota deal (Derbyshire?)was actually investigated by European Commission for "hidden subsidies and unfair competition".There is a paper by somebody from LSE on" Voluntary exports restraints"(oh the excitement!)which pretty well says that the encouragement of Japanese investment was merely a ploy to cease subsidising nationalised industries without losing too many jobs.But the authors reckon the cost of saving these jobs was disproportionate. As usual the boundary between public/private sectors is very blurred.
"the cost of saving these jobs was disproportionate"
I am sure it was. It always is. But the £112m bung to kick start Sunderland looks like relatively good value compared to the £6.5m that Labour threw at Rover to keep it open for just one week longer.
And manufacturing cars can't possibly be a 'core function' of the State, not by any stretch of the imagination.
Your list of core state functions is more prescriptive than descriptive and not even the Daft Old Bat Herself would have passed muster.
"Prime Minister Margaret Thatcher is offering generous subsidies to Toyota" New York Times 9.xi.87Meanwhile the French Gov have managed to keep a great deal of their car-making in existence.The Guvmnt has the right to preserve a balanced economy surely? Does n't the aim of directing capital(by means of LVT) out of landed property and into the production of goods and services push the envelope of core functions a great deal?
Don't feel the need to reply.I am getting bored with my opinions myself.
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