Joined: 03 Jun 2005
|Posted: Fri Jul 22, 2011 8:46 am Post subject: OUR ENERGY AND WATER COMPANIES ARE OWNED BY FOREIGNERS
|The scandal behind your soaring energy billsBy Alex Brummer
Last updated at 9:00 AM on 22nd July 2011
As families across Britain — at least those who can afford to — set off for their summer holidays this weekend, the power company Scottish & Southern delivered a fresh hammer blow to households and businesses.
Electricity tariffs are being raised by 11 per cent, and gas bills by an outrageous 18 per cent from September.
These latest increases come hard on the heels of similarly inflated charges imposed by British Gas, part of the vast Centrica group, and Spanish-owned Scottish Power.
Burn baby burn: Higher energy prices will add to the pressure being exerted by increased prices elsewhere in the British economy
On average, the higher charges will add £200 annually to the cost of heating for consumers, and could leave many elderly people — who can ill-afford to pay more — shivering under layers of winter woollies and blankets this autumn and winter.
Just as critically, this high-handed action by the power companies could deliver a devastating blow to the economy.
Higher energy prices will add to the pressure being exerted by increased prices elsewhere in the economy — the result of surging raw material costs — which are already a burden for High Street shops, small businesses and large manufacturers alike.
If these higher costs faced by business are passed on to consumers, there is a real danger the nation could become caught up in a late 20th century-style wage-and-price spiral.
Dialling down: The soaring heating bills will tighten the budgets of families who are already struggling in the recession
Blame for this gathering economic storm — far more relevant to ordinary citizens than the hacking scandal which continues to dominate the headlines — rests firmly on the shoulders of New Labour, which utterly failed, until its last months in office, to begin addressing Britain’s looming energy crisis.
Labour stood idly by while overseas predators, with marginal interest in UK customers, bought up many of our biggest power generators and distributors — which they regarded solely as cash cows.
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That’s why, in 2007, when Russia sparked a supply crisis in Europe by cutting off gas supplies to the Ukraine because of a political dispute, British consumers and businesses — reliant on gas pipelines controlled by German-owned energy giant RWE — faced power cuts. Meanwhile, supplies to their German counterparts remained largely intact.
Last month, Iberdrola, the Spanish owner of Scottish Power, became the first of the big energy groups to raise its prices. Imagine the shock, then, when it was discovered it had enough spare cash to loan £800 million to its American offshoot.
This was money that could have been invested in this country’s energy infrastructure — a striking example of how foreign ownership of UK energy firms can work to the detriment of Britain and its consumers.
Winds of change? Large windmills across the UK, like these ones in East Renfrewshire, have proven to be largely ineffective
As well as allowing control over much of our energy supplies to fall into foreign hands, Labour ladled ‘green taxes’ aimed at reducing carbon emissions onto our utility bills (a policy continued by the Coalition), but failed to come to grips with the gaping hole in our future energy needs.
As the output of oil and natural gas from the North Sea fields fell away, the Government’s answer was to meet the shortfalls through alternative energy supplies by offering big subsidies to wind power.
Giant windmills have already been proven to be hugely inefficient, but we would have far less need for them if we’d marshalled our gas supplies more wisely.
The truth of the matter is that our biggest energy supplier, Centrica, which provides gas and electricity to 16 million homes, has been disastrously slow in investing in gas storage facilities and the long-term supply contracts required for security of supply.
At the same time, the Labour government showed extraordinary timidity by failing to support new investment in Britain’s nuclear power industry for fear of alienating voters worried about safety and waste disposal.
More from Alex Brummer... COMMENT by ALEX BRUMMER: Europe fails credibility test 15/07/11 COMMENT by ALEX BRUMMER: Obama rides the Asian tiger 14/07/11 ALEX BRUMMER: Is Italy next to plunge into the abyss? 14/07/11 COMMENT by ALEX BRUMMER: Troubled empire of the sun 12/07/11 COMMENT by ALEX BRUMMER: News Corp wields a cleaver 07/07/11 ALEX BRUMMER: What will happen if the Greeks welch on their debts? 25/06/11 COMMENT by ALEX BRUMMER: Riding the merger carousel 21/06/11 Black spot lifted at Primark 17/06/11 VIEW FULL ARCHIVE Shortly before the 2005 general election, Mike O’Brien, then the Energy Minister at the Department of Trade & Industry, hosted a dinner for newspaper City editors at a London hotel accompanied by panjandra from his ministry as well as tame industrialists.
He and the assembled company were questioned relentlessly on whether, given the looming energy crisis, the Labour government was willing to give its backing to a new generation of nuclear power stations in Britain.
We were treated like a bunch of recalcitrant schoolchildren for suggesting such a thing. We were told there was no appetite in the power industry to build nuclear stations, the capital markets would not support such projects and the only solution, for Britain’s long-term energy needs, was to harness wind and wave.
It was an astonishing display of complacency.
Had Tony Blair’s government taken the big decision to invest in nuclear power at that time, Britain might have been well on its way to providing itself with a degree of energy security.
Yet it was not until Gordon Brown’s premiership, almost five years later, that Labour recognised the dire crisis and embraced the nuclear option. However, this was achieved only by selling off British Energy — owner of the UK’s existing nuclear power plants — to the French government-controlled power supplier Electricite de France, thus placing much of Britain’s energy future in overseas hands.
The point is that, when investing in new nuclear power stations, it is critical to take decisions early.
Even if, as intended, the new plants are built on existing sites adjacent to current plants, planning permission can take years to come through. It will not have been made any easier by the disaster at Fukushima in Japan, which lead to a more intense focus on safety.
Experts say it will take a decade to develop each of the new generation of nuclear power stations from the drawing board to operation. Construction of the foundations and walls alone could take years, because of the protection needed before the special steels, technology and control systems — replete with fail-safe systems — are installed.
That’s why Labour’s refusal to confront the nuclear decision earlier has proved a mistake for which we are all paying.
To make the deal more palatable, the government persuaded British-owned Centrica to take a 10 per cent minority stake. Meanwhile, the uncertainty of global markets has spurred Centrica into investing heavily in new storage facilities on the Norfolk coast.
But even with this new gas storage capacity, Britain has only a fraction of the safety net enjoyed by many continental countries and America.
To its credit, Centrica has signed a long-term supply agreement with the gas-rich desert state of Qatar.
None of this, however, has come quickly enough to prevent our power bills being ratcheted up far beyond the level of inflation.
In a feeble response to the Scottish & Southern decision to raise tariffs so much, the Energy Secretary Chris ‘Windmills’ Huhne — a very late convert to the virtues of nuclear investment — described the price increase as ‘disappointing’, adding that it demonstrated the need to shift Britain away from fossil fuels to green energy sources, including nuclear.
The bitter truth is that Whitehall’s fixation on alternative energy resources has meant a decade wasted while we failed to invest in gas storage, pipelines across the North Sea and new nuclear facilities.
The consequences of this inability to confront the severe energy shortages facing the nation has landed Britain in deep trouble. More, perhaps, than any other advanced nation we have exposed ourselves to the vicissitudes of global oil and gas prices, driven by factors beyond our control such as the uprisings across the Arab world.
This neglect of long-term need, in favour of a politically correct carbon-free agenda, is proving disastrous for consumers, businesses and the economy as a whole as prices race ahead — and the whole nation, particularly the elderly, suffer the pain
You cannot just blame the thatcher government for all the problems in this country today, Labour put the final nail in the coffin and sold us down the river to the EU.
We have hundreds of years of coal stocks but thatcher denied them to us, to get revenge on the miners & now we import millions of tons,. she used the police as a paramilitary force & they became out of control & corrupt, she deregulated the public transport & look what it costs now & what a lousy service it is,she destroyed manufacturing & went for the financial sector & that is why we are in the economic mess of today.
That saint Tony Blair brought in the Human rights act so that his wife could make millions while we the people pay millions to foreigners to stay here, he went to war on a lie and cost thousands of lives.
Gordon brown sold our gold reserves to friends at a discounted rate, & finally he sold off all our essentiall utilities for his rich friends to buy cheaply who sold them on to foreigners for a quick buck now look what your paying for gas, electricity, water, rail fares etc, and it will only go up.
Thatcher, of course, also closed shipyards steelworks & pits & people moan about people on benefits. i just wish people would realise who caused all the misery in this country, POLITICIANS & if you think the idiot cameron (who doesn't know sh** from clay) is going to put it right god help us.
We need out of the EU now, close our borders to the millions of foreigners coming to the land of free houses and money supplied by YOU, and get a grip on our manufacturing base once again.