Some things are simply true whoever it is that tries to do them. If the just and righteously socialist decide to take over vast swathes of the economy then we’ll have vast swathes of the economy run with bureaucratic efficiency. If Greens insist we all live like medieval peasants then we’ll all live like medieval peasants. And if Tories bring in price caps then we’ll have all the effects pf price caps. Like, you know, no suppliers and no supply of the thing being price capped.
Note that when the Bolivarian socialists in Venezuela made food nice and cheap suddenly there was no food. This law about supply and demand doesn’t change simply because it’s energy being price capped by Conservatives:
Energy titan Npower is axing at least 4,500 jobs after warning a price cap has left its consumer business in a “critical and unsustainable” state.
The loss-making company will slash almost 80pc of its UK workforce in a battle to stay afloat, dealing a huge blow to staff before Christmas.
Npower has suffered a torrid year amid an influx of cut-throat competitors offering cheaper deals, while profits across the industry are down after the Government imposed an energy price cap at the start of 2019.
It’s not that there’s competition which is the problem. It’s that there’s not the freedom to compete which is. Price caps being just that, a limit upon that market competition.
Price capping energy in the UK is, to put it politely, an odd thing for government to do. 25% of a domestic electricity bill is tax and only just under 5% the supplier’s pre-tax margin. It is obvious who is responsible for making the cooking of food and the warming of hearth so expensive, but it is not so obvious how the guilty party gets away with finger pointing and poor legislative proposals. The idiocy, at least non-politically, of impeding fracking only adds insult to the injury and injury it is, for it is energy that makes the wheels of… Read more »
Leo S: “it is not so obvious how the guilty party gets away with finger pointing and poor legislative proposals.”
I beg to disagree. It is very obvious how the Political Class gets away with this. We the People are falling down on our task of supervising them, and we are consequently getting the government we deserve, good and hard. A Tory government knows it can do stupid things like impose price caps because the Tribe will keep on voting for them.
It’s not the price caps that are killing nPower, it’s their incompetence, such as for two years reading my neighbour’s meter and billing me, reading my meter and billing her, in the face of multiple calls to them to correct the matter, and at least three insistances by them that yes, they have updated the database, honest guv.
On the subject of price caps, would a piece on Sark’s electricity problems be informative to your wider audience?
I haven’t really made up my mind on the point. There is a price cap, it is also a monopoly…..
.. and also a government apparently telling them to operate at “a loss,” or at least at an insufficiently generous profit.
But is this a real price cap? It only applies to those on default tariffs and so many (most?) are actually paying less than the cap. It seems strange to say my a business is struggling because if a price cap when it is offering lower prices to those paying the cap.