Why energy bills are really sky high and what Grant Shapps and the Tories won't do about it.
Conservative Party chairman Grant Shapps has produced an interesting Buzzfeed post entitled ‘12 Facts: Why Energy Bills Are Sky High, And What We Can Do About It?‘
According to Shapps, the “Conservative Party will keep you warm this winter”.
The problem is, all but three of Shapps’s ‘facts’ are plainly untrue or miss the point entirely.
Shapps’s ‘facts’ are in bold; the actual facts are underneath.
1. “So your energy bills have probably DOUBLED in the last 10 years. Even if you use less energy.”
This is true. In the last eight years energy bills have risen by £520, and the Committee on Climate Change has blamed this on the rising price of gas.
2. “This is partly because, in the last 10 years, wholesale gas prices are up 240%.”
The Committee on Climate Change indeed blames energy price rises on the rising price of gas. But this doesn’t account for the recent price hikes. As smaller energy supplier OVO recently pointed out on its website, the most expensive price it paid for wholesale gas in the last four years was in May 2011 – since then the wholesale price has come down.
3. “AND Labour didn’t build a single new nuclear plant, to shield us from those price-rises.”
Shapps is correct; they didn’t.
4. “AND, Labour destroyed competition. They squeezed 14 energy firms down to just the ‘Big Six’.”
The ‘big six’ energy companies control 98 per cent of the retail market. In 2000, there were three generating companies and 14 suppliers – 17 companies – and by 2010 there was the big six. This can’t be blamed entirely on Labour, however – a similar tendency toward concentration and monopoly has plagued other big privatised utilities too. And Ed Miliband has pledged to break up the Big Six, which is more than the Tories are offering.
5. “AND Labour let the energy market get really confusing, with more than 4,000 different tariffs.”
Considering that the Big Six mysteriously hike their prices by similar amounts and at the same time every year, the biggest problem customers face is not really which tariff to choose – they are being fleeced whichever tariff they go with – but that there is nothing to stop the energy companies raising their prices. That’s what Ed Miliband’s price freeze is for.
6. “The result? Labour left 2 million more households in fuel poverty.”
If you use the measure of fuel poverty that the government intends to adopt – if fuel costs are above the national average, and were the household to spend that money, their costs would leave them below the poverty line – fuel poverty actually went down under Labour. According to Channel 4 FactCheck and the Department of Energy and Climate Change (DECC) figures, fuel poverty fell under Labour from 11.8 per cent of households in 2003 to 11.5 per cent of households in 2009.
7. “So this is how your bill breaks down today.”
The graph is accurate. What it doesn’t show, however, is that, as per point two, wholesale gas prices are roughly the same now as they were in 2011. Consumer bills have gone up during that period, however.
8. “The fastest way to save money today is by switching your provider.”
Not according to the graph below it isn’t (there is some discrepency in the final destination of the lines because not all of the Big Six have yet put their prices up this year. As you can see if you look back across the graph, though, they always do).
![Electric and gas]](https://www.leftfootforward.org/images/2013/11/Electric-and-gas.png)
9. “Ed Miliband attacks switching as a con. But that’s exactly what he did himself.”
Trying to make the best of a bad situation does not mean that you cannot propose fundamental change. If I believe that the price of petrol is too high, does that mean that I can’t shop around in the meantime to make a small saving? Don’t. Be. Silly.
10. “Even now, Ed Miliband wants your bills to rise by another £125 a year.”
Npower estimates that bills will increase by £80 (not £125 a year) by 2020 as a result of low carbon policies. This is actually less than the potential savings from energy efficiency measures. The Committee on Climate Change (CCC) says that measures such as boiler replacement, insulation measures and efficient appliances would be “worth around £145 per household in 2020, with more savings potentially available in the 2020s”.
Update——- (HT the Carbon Brief)
In fact, the Tories predict that consumer bills will rise by £125 by 2030, if the power sector is decarbonised by 2030. The figure is sourced to a report by consultancy Poyry, for the Committee on Climate Change. The CCC estimate that a 2030 decarbonisation target will add £20 to bills by 2030 – six times lower than the Conservatives’ figure. It says the Conservatives are misusing Poyry’s figure. http://www.carbonbrief.org/blog/2013/08/conservative-estimate-for-cost-of-decarbonisation-target-six-times-higher/
11. “That’s right. Ed Miliband is demanding your bills must rise by £125 a year. Madness!”
See point 11.
12. “The Conservatives will keep you warm this winter.”
David Cameron does in fact have a number of tips to keep warm this winter, but they don’t involve reducing you energy bill. Here they are:
#1. Baking Bad
David Cameron doesn’t have a clue about the price of a loaf because, he says, he bakes his own.
“You set the timer [of the bread-maker] overnight so when you wake up there is this wonderful smell wafting through your kitchen. It takes 30 seconds to put in the ingredients,” Cam said.
A Panasonic SD2500 Breadmaker costs £100 – pricey when inflation has been rising faster than wages for 39 of the last 40 months.
#2. Put a jumper on
British Gas announced yesterday that bills would go up by an average of 9.2 per cent for 8 million customers. Unwilling to do anything meaningful about rising gas bills, Cameron did have one piece of advice for pensioners feeling the chill this winter: wear a jumper.
“He is not going to prescribe the actions that individuals should take but if people are giving that advice that is something that people may wish to consider,” a spokesperson for David Cameron said.
#3. Let them use i-pads
If you’re finding retirement lonely, Cameron won’t provide you with better publicly funded social care, but instead will give you an i-Pad. This would provide lonely pensioners with a “link to the outside world” by allowing them to hold “video conferences with friends and family”, ministers have said.
A potentially good idea is hamstrung slightly by the fact that very few 90-year-olds know a thing about touch-screen tablets, e-mails and video conferencing.
#4. Fracking
Cameron believes that communities will receive £1 million each “immediately” from fracking. In reality, they will get £100,000 – a tenth of Cam’s estimate – if they allow fracking in their local area.
Don’t worry about the earth tremors, mind.
23 Responses to “Why Grant Shapps doesn’t know what he’s talking about on energy prices”
blarg1987
SO cutting doctors salaries and 10n year pay freezes will likely mean people jump ship. And since you obviously believe in paying the market rate how will you attract people to these professions, inclease wages?
Political parties do not get funding from the tax payer, they have a capped limit during elections. Only the main opposition have funding i.e. access to civil servents etc as the main part of opposition to ensure there is one.
Cutting regulation, what exact regulations would you cut? Would you say ensuring products and services that are provided to a safe standard to a consumer to much regulation? It is very vague to say cut regulation unless we know exactly what regulations would be cut.
Flog of surplus land and goverment assets – this is a short sighted policy it would be just like me saying to you flog up your house and rent instead, short term it would net a large amount of money that I agree with, long term it would cost more to the tax payer having to buy the land back at a later date for need e.g. building a new hospital etc.
VED and cutting taxation would still leave a shortfall, laffer curve may not work unless you have tax reform, as billions of pounds is shipped off shore in tax heavens so you would still have a shortfall that needs to be made up somehow or other services would need to be cut.
blarg1987
No renewables should be cosy neautral not generate profits for fat cats. What should happen is a target set to encourage then to invest in new technologies by using shareholder dividens (which they have not done).
How do you know it would not take long to build renewables? If there is no renewable industry there would have to be research carried out (takes time), the grid will need upgrading for it (again takes time) and to put the facilites in place to build renewables that will take time it won’t happen magicallyy over night would it?
Dakiro
One practical step is to invest into new nuclear technologies research, a few years of decent research will no doubt improve on he tried and tested Thorium Fluoride Molten Salt reactor, or some other simple and safe molten fuel nuclear reactors. In 10 years we could have a few working small scale prototypes, in 20 years coal energy could be replaced. A bit optimistic but not impossible.
TM
‘Isn’t the reason that fuel bills go up and up that, private companies, operating in a cartel are there to make a profit from their shareholders.
That is their function in life. In reality they don;t give a shit about pensioners or children or anyone else, because that is not the job of a limited joint stock company.’
All the Tory, and any other, propaganda BS that gets spouted about it all, and yet you have it all in two paragraphs!!! They don’t give a flying f*** for anyone other than themselves and their shareholders and why should they? That was never the intention, it was and always will be about rich people profiting at everyone else’s expense and if 1000s of pensioner die because they can’t afford to heat their homes and millions of houses are cold and children are cold, well they are poor aren’t they, and nobody seems overly concerned about the poor and the Working class at the moment do they? As long as the rich live in splendour and all the affluent Middle classes have got their wonderful careers and a rosy future, who cares about the underclass?
‘Ideally we should nationalise all things that are utterly essential.’
Ultimately, that has to be Labour’s agenda and in their manifesto, because although a price freeze is a step in the right direction, unless they are renationalised they will just keeping putting the prices up again after the price freeze. They HAVE to be renationalised!!! Or few of us will have any real future. And we know what happens when millions of people fear for their future don’t we???
Finally, the French government are made to heel by the majority of people, we are the prisoners of our government and they all have far too much power and little real accountability. That has to change too, or we will continue to be cash cows or impoverished.
TM
There’s always money for rich people’s tax breaks isn’t there, and always high wages for the affluent and compliant and complicit Middle classes hey?! Oh they never seem to suffer do they? But somehow inevitability poor people and Working class people are fleeced all ways and have to manage on very low wages. Ask yourself why that is. We need to question the whole system of doing things in this country and why a wealthy country has foodbanks and 1000s of pensioners die each year because they can’t afford to heat their homes. In 20 or 30 years time, that may be some of you facing that bleak end to your life. No such thing for the affluent hey?? Plenty of wealth and food and heating for them, and lots of wonderful careers too. Ask yourself and then get angry.