Wednesday, 23 October 2013

Major flaws

There seem to be two John Majors inhabiting the same body. One is the thoroughly decent chap enjoying the final innings of the day as the Sun slips below the village pub roof, the other is the sweaty grunting brute of a satyr making the beast with two backs on a Commons office floor; one is the politician stating that utilities should be private but heavily regulated, the other is the deluded Euphile.

No-one owning shares in gas, water, power, sewers or even broadband should expect to see supernormal profits from either dividends or capital gains. Utility shares should be a step above gilts but a step below truly commercial public companies; boring, safe and low return. We get the best of commercial practice and avoid the worst failings of nationalised provision. That, at least, is the theory. Where it all starts to get difficult is when these global monsters buy up a car factory in Peru or a condom distributor in Canada in an effort to offer unregulated profits. Major is of the view that as quasi-public concerns, the UK generally should benefit from such activity, not the shareholders. 

To a point. I actually believe the utilities are far too big. Nothing as big as British Gas or Thames Water can be good. Believe me.


G. Tingey said...

It is of course, not capitalism, but a corporaet cartel & thoroughly unpleasant.
Quite frankly, a re-nationalised utilitis sector would be an improvement of =n this theft from everyone's wallets.
Unless, of course, regulation actually starts to, you know - regulate.
Was that a squadron of Pigs I just saw fly past?

JimS said...

The sole purpose of the regulators is to remove responsibility and accountability from the Secretary of State that historically was 'in charge'.

The SoS can now say "Don't blame me guv!" while the regulator, who can't be held to account, just 'investigates', 'monitors' and eventually 'reports', whereupon it will be found that there IS no problem!

Visc said...

Agree with GTingey and JimS.

I tend to think of myself of the right (though increasingly see such labels as outdated.) but am amazed by how many right wingers fail to see that Mega-Corporation Corporatism is not Capitalist apart from in some sort of Marxist sense and has nothing to do with free markets or more importantly freedom. So in essence dont worry about teh labels or tell me what you belilive show me what it makes you do ...

Mr Ecks said...

These "mega-corporations" have been created by the state selling off its useless monopoly. The system we have is fascism without the monkey-suits and sieg heils. Yes, greedy "businessmen" will infest these organisations--because they can. But, without the violent and coercive power of the state all these "companies" would soon be destroyed by market forces and prices for energy, like all other commodities would continue to fall in real terms (as they did throughout the 19th century--when markets were much freer than now). More freedom is, as always, the answer.

Johnm said...

Low return does not pay for investment, or return that investment with a profit.
The working life of plant in the generating industries is around 25 years, heavy plant that is, and with the influx of new resource like wind generators a large investment is needed in the cabling to take the power to the grid. It all costs, and is added onto the bill.
The state of UK electricity generation is dire at the moment, and getting much more so quite soon.
15 of 16 nuclear plant are being retired, and replaced by 2 new-builds.
15G of coal fueled generation is being retired due to the EU large combustion plant directive (ignoring that Germany is building more and more of them, the UK has to be a good boy).
All good fun. They'll be replaced by wind, that well-known reliable source of power.
The next ten years will be interesting. whatever happens, it will be "the other lots" fault. That's what you get with career politicians with no honour, morality, or intelligence.

Johnm said...

And energy costs are still among the lowest in the EU