The labour Leader thread...

muon · 23 Aug 2015 at 13:50

Caged said:
Presumably other European states being happy to own UK utility companies means there's money to be made in doing it, otherwise why bother. I don't see how it's preferable to have that profit leave the country than being returned to government coffers or being used to keep prices charged to consumers lower.

Nationalise all profitable companies then?

The issue of nationalised industries being inefficient due to the knowledge of a safety net of extra government support is a totally separate one that can be tackled by having competent people running them. It also didn't seem to stop National Express just handing back the East Coast franchise instead of it dragging down the rest of their business to keep to the terms of their agreement.

The East Coast franchise is a famous example, but that was due to poorly managed process and note I haven't actually been critical of plans to nationalise rail. I don't have a concrete position on that yet.

Experience has shown us in the long term, nationalised utility providers have been poor value for money.

scorza · 23 Aug 2015 at 13:51

muon said:
You think it is because EDF operates in the UK?

No I think it's because EDF is a state-owned monopoly whose business objectives include keeping prices as low as possible for the French people.

muon · 23 Aug 2015 at 13:54

scorza said:
No I think it's because EDF is a state-owned monopoly whose business objectives include keeping prices as low as possible for the French people.

I'd say it is is more to do with the fact 85% of their electricity production is Nuclear.

I don't know how those reactors were originally funded, but if they were subsidised by government then tax payers are subsidising energy currently.

Jokester · 23 Aug 2015 at 13:55

muon said:
I'd say it is is more to do with the fact 85% of their energy is Nuclear.

Nuclear ain't cheap.

muon · 23 Aug 2015 at 13:57

Jokester said:
Nuclear ain't cheap.

Once set up though, running costs are relatively low. Hence my question as to who funded the original investment.

Caged · 23 Aug 2015 at 13:59

muon said:
Nationalise all profitable companies then?

More like don't privatise industries that more or less enjoy a monopoly position and expect nonexistent market forces to lead to an improvement in service quality.

muon · 23 Aug 2015 at 14:00

Also not substantially cheaper. I will admit it isn't negligible though.

http://ec.europa.eu/eurostat/statis...,_second_half_2014_(¹)_(EUR_per_kWh)_YB15.png

Jokester · 23 Aug 2015 at 14:01

muon said:
Once set up though, running costs are relatively low. Hence my question as to who funded the original investment.

Presumably EU state aid rules would have required that the debt be transferred to the company on "privatisation" a few years ago. Would explain the amount of debt they still have.

muon · 23 Aug 2015 at 14:04

Jokester said:
Presumably EU state aid rules would have required that the debt be transferred to the company on "privatisation" a few years ago. Would explain the amount of debt they still have.

I would hope so. That is why I am saying that EDF isn't really a nationalised company. It is more akin to the current RBS situation.

France has a good electricity market, however, how much that has to do with EDF being majority state owned is what I would question.

Jokester · 23 Aug 2015 at 14:08

muon said:
I would hope so. That is why I am saying that EDF isn't really a nationalised company. It is more akin to the current RBS situation.

France has a good electricity market, however, how much that has to do with EDF being majority state owned is what I would question.

Except, I seem to remember that our government explicitly made the statement that they wouldn't use their controlling stake to use RBS for the wider nations benefit.

muon · 23 Aug 2015 at 14:12

Jokester said:
Except, I seem to remember that our government explicitly made the statement that they wouldn't use their controlling stake to use RBS for the wider nations benefit.

That's what I mean though. The relatively hands off approach is more akin to the government acting more like traditional shareholders than the state.

I wouldn't call that nationalisation in the sense that employees are actually public sector employees answerable to government.

Does the EDF board believe they work for the French people and government or for normal business goals? In that sense the French government would not be exerting influence.

Caged · 23 Aug 2015 at 14:15

I'd call it nationalisation because the company is owned by the state. It just isn't a government department.

muon · 23 Aug 2015 at 14:19

Caged said:
I'd call it nationalisation because the company is owned by the state. It just isn't a government department.

I would as well, but if you don't exert influence and drive the company policies, then you are just an investor rather than what Corbyn would want.

The energy market in the UK enjoys large profits due to poor competition, neither are those profits being used to invest. The solution is to tackle that rather than take over the sector and force the company to make less profit.

Caged · 23 Aug 2015 at 14:26

How do you encourage competition in industries where the costs of entry are so incredibly high? I don't think setting up a company that just buys from generators, pays bills to distribution and then charges end users has really increased competition at all.

Tefal · 23 Aug 2015 at 14:27

muon said:
Once set up though, running costs are relatively low. Hence my question as to who funded the original investment.

running costs include decommissioning costs.

Danthus · 23 Aug 2015 at 14:29

Strife212 said:
Lots of our "private" energy is owned by the French state.

Don't forget RWE, Germany has a fair chunk too.

Danthus · 23 Aug 2015 at 14:36

Caged said:
How do you encourage competition in industries where the costs of entry are so incredibly high? I don't think setting up a company that just buys from generators, pays bills to distribution and then charges end users has really increased competition at all.

Seems to me that the state takes on the liabilities and the private companies just take the profits.

PlacidCasual · 23 Aug 2015 at 14:38

scorza said:
So why is electricity cheaper in France than it is in the UK?

Probably because they haven't been subsidising renewables like passing urine until very recently. We throw away a tonne of cash to mainly foreign investors trying to use a hairdryer to stop a runaway train.

Also is electricity cheaper in France? I was under the impression that despite the subsidies we had amongst the cheapest leccy in Europe.

GAC · 23 Aug 2015 at 15:01

PlacidCasual said:
Probably because they haven't been subsidising renewables like passing urine until very recently. We throw away a tonne of cash to mainly foreign investors trying to use a hairdryer to stop a runaway train.

Also is electricity cheaper in France? I was under the impression that despite the subsidies we had amongst the cheapest leccy in Europe.

we do have reasonably priced electric compared to the rest of europe. by why let the truth get in the way of attacking the tory's ? didnt stop labour from a regime change in iraq now did it.

also on subsidies ALL power is subsidised and renewables are the ones that cost the gov the least at the mo and even less with them cutting back on wind subsidies for land based wind farms.

Jokester · 23 Aug 2015 at 15:17

GAC said:
also on subsidies ALL power is subsidised and renewables are the ones that cost the gov the least at the mo and even less with them cutting back on wind subsidies for land based wind farms.

That's disingenuous though, the so called "subsidy" the others receive is almost all a result of reduced VAT rates on electricity, so it's no wonder that conventionals that make up the majority (85%) receive a bigger "subsidy" than renewables.

Renewables get that as well, plus all the other stuff they get.