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« How immoral? | Main | Longannet scrapped »

Huhne is not telling the truth

Andrew Neil, writing at his BBC blog, has done some thinking on UK energy prices.

...retail prices have risen again and are now above their 2008 peak. Despite lower wholesale prices compared with three years ago our fuel bills are higher than three years ago.

So, contrary to the Energy Secretary's position, higher fossil fuel prices cannot explain our current very high energy bills. And, contrary to the energy companies, they are not merely passing on the extra wholesale costs of energy.

Two further thoughts. It is clear that the energy market is not functioning like a proper competitive market, otherwise retail prices would not just go up in line with wholesale prices but come down too.

And maybe the Huhne green agenda, involving huge subsidies to wind generation, which end up on all our fuel bills, is much larger than we've been told.

This is a good point. Huhne is telling us things that can't be true about energy prices and meanwhile refuses to release his own figures on the impact of his green energy policies.

Would it be wrong of me to be suspicious?

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Reader Comments (30)

This profoundly-unpleasant man is credited with being dishonest, cruel and hypocritical. Why anyone should believe him, let alone employ him, defies belief.

Oct 20, 2011 at 8:07 AM | Unregistered CommenterHuhneMustGo

There a front page banner on the Sun... title: Chilling , links to this


Good news that the Sun is raising, bad news is that just take what is fed to them without question.

But energy is beginning to raise its profile.

Oct 20, 2011 at 8:11 AM | Unregistered CommenterJiminy Cricket

Back in July Huhne knew about the increses due to his carbon pricing.

What about the long-suffering customers? Mr Huhne is upbeat. Yes, it is going mean higher bills (£160 a year on the average bill by 2030) but the cost of doing nothing would be more (£200), he says. These figures should be treated with suspicion. Future world energy prices depend on a mass of variables, including the speed of future development in China and India, the politics of Russia and the Middle East and future oil and gas exploration. The cost of UK low-carbon energy is equally unknowable. His plans, like those of the Scottish Government, rely heavily on a revolution in offshore wind but both governments are making heroic assumptions about future costs. And what if, like last year, the wind does to blow?

I am sure I saw a quote from a year ago where Huhne wanted higher prices as a means to force changed behaviour. Will keep looking, sure it was posted in the comments on this board.

Oct 20, 2011 at 8:20 AM | Unregistered Commenterbreath of fresh

Hmm, is the title of the post directed at us Bish or at the CPS?

Oct 20, 2011 at 8:47 AM | Unregistered CommenterPete H

Somebody has to keep the PM's father-in-laws wind farms making a profit, they are not going to subsidise themselves now are they? After all “we are all in this together”, I suspect Cameron actually only refers to his Oxbridge parasite chums and family when he says things like that.

Huhne is just playing second fiddle to bought for vested interests, these people are living in a fantasy land and the recent summit on energy prices has shown this, they had their Marie Antoinette cake moment when Huhne told us:

"We should be switching if we're not on the cheapest tariff and taking the opportunity ahead of this winter to really make sure that we're insulating so that we can save money."

He may as well have said, “feeling cold? Well just chuck some of the poor and old on the fires and stop bothering me”

Oct 20, 2011 at 8:51 AM | Unregistered CommenterJason F

Or maybe Huhne would have liked to say:

"Let them eat coal!"

Oct 20, 2011 at 8:57 AM | Unregistered CommenterJason F

Is the UK energy sector supposed to be a market?

In that case, why can't the consumer have a choice? We've had plenty peddling 'Green' energy. Why not establish a power company that only uses cheap, reliable, fossil fuel. Kind of 'Brown' energy. Given the airwaves are full of nasty, loutish, F***-the-Police, Smack my bitch up, killa-gangsta stuff, it should surf a (rising sea level) wave of popularity by trading on its F***You positioning. We know the majority of the public thing global warming is a crock.

Killa Coal plc. Roasta Ltd. BWA - Brown wit Attitude, Inc. CarbonUP Unlimited...the branding opportunities are endless.

Then again, something like Reliable Energy might be better. Positioning: "Energy you can rely on costs less with Reliable Energy."

Worth a try, surely?

Oct 20, 2011 at 9:12 AM | Unregistered CommenterGixxerboy

Hey, MPs don't struggle to pay there bills so why should they give a sh*t.

It's not like there employed to help the citizens of this country, just themselves.

Oct 20, 2011 at 9:47 AM | Unregistered CommenterShevva

This is corporatism. The political regulations energy companies have supported being slathered on to their own businesses act as a barrier to new entrants to the market. They are content to suffer those regulations because they know that it helps protect their market share, that they all will suffer the same so no one company gets an advantage and that the cost of it can merrily be passed on to the customer with the connivance of Ofgem and the Government. Private industry has been captured for political gain and customers are losing out hand over fist.

Oct 20, 2011 at 9:56 AM | Unregistered CommenterGareth

The way this thread is panning out, you lot seem to think that they work for us.

Oct 20, 2011 at 10:08 AM | Unregistered CommenterSteveW

Cheaper tariffs are only cheaper if they represent a lower CTS or lock the customer in for a specific period of time at a specific rate.

Of the three, only the first two represents a genuine "saving" to anybody anywhere - if you move to DD or dual fuel, or agree not to move for a specific period of time, or to manage your account oniine with paperless billing etc., there is a genuine reduction in wasted administrative effort that *could* be passed on to consumers, and this is generally reflected in a lower tariff.

Fixing your rate for a specific period *may* have a small genuine saving, but it's encourage more from the energy trading angle. Suppliers buy tranches of power from one-another, and there are various instruments involved in an identical manner to trading in any other company or commodity - savings are a bit more ephemeral in this case.

The fundamental problem is in treating energy as if it's something that can benefit from competition - no it can't. I spent several years attempting to implement one damn fool "new" tariff or scheme after another (from an IT perspective).

Customers do not give a toss about green energy or rewards or online management or community projects or links to telecoms or, actually, bugger all except gas and electricity. They *say* they do in questionnaires, but their wallets say "the cheapest possible" and "get my bills right"

And that's absolutely all of it. Suppliers, facilitated by pointless marketing departments, flush money down the toilet trying to develop the next killer "proposition".

There isn't one to develop, but of course it's a heresy to admit it.

Oct 20, 2011 at 11:34 AM | Unregistered Commentermrsean2k

To ascertain the politico thinking try asking, yourself, a couple of questions, and these are not trick questions in any way:

1) Of the established and cost effective main sources of electricity, Nuclear and fossil fuels, if there is an apparent danger present , which presents the greatest threat to the environment and mankind?

2) Looking at the governments situation in a need to stimulate the economy and generate more income from taxation.
Which markets generate the greatest activity and interest to modern consumers, new technology directed to an individual, personal level eg mobile phones, netbooks, WIFI internet, or existing older technology such as home telephones, desktop computers, broadband.

Your response to the two questions should direct you to an understanding of which problem is more important to the government, AGW or the economy.

It should also give you an insight into this:

'Businesses have realized that wealthy consumers are the most attractive targets of marketing. The upper class's tastes, lifestyles, and preferences trickle down to become the standard for all consumers. The not so wealthy consumers can “purchase something new that will speak of their place in the tradition of affluence”.[11] A consumer can have the instant gratification of purchasing an expensive item to improve social status.

Emulation is also a core component of 21st century consumerism. As a general trend, regular consumers seek to emulate those who are above them in the social hierarchy. The poor strive to imitate the wealthy and the wealthy imitate celebrities and other icons. The celebrity endorsement of products can be seen as evidence of the desire of modern consumers to purchase products partly or solely to emulate people of higher social status. This purchasing behavior may co-exist in the mind of a consumer with an image of oneself as being an individualist.'

'Critics of consumerism often point out that consumerist societies are more prone to damage the environment, contribute to global warming and use up resources at a higher rate than other societies.[18] Dr. Jorge Majfud says that "Trying to reduce environmental pollution without reducing consumerism is like combatting drug trafficking without reducing the drug addiction."'

My conclusion, which may well differ from yours, is that if AGW is such a threat then a straight swap from fossil fuels to nuclear would solve that problem, but if a new market aimed at the consumer was generated it would possibly solve that problem in the long run but would provide a solution to the immediate economic problem that the government faces.

From an economic point of view, win win.

From an environmental point of view........ hmm!

Oct 20, 2011 at 11:46 AM | Unregistered CommenterLord Beaverbrook

Would it be wrong of me to be suspicious?
Nope Bish I consider it the best position to take in any political or scientific exchange, especially when the said politico is faking with science to sticking his hand in your pocket and conducting population control by doing nothing about excess winter deaths !

Oct 20, 2011 at 12:38 PM | Unregistered Commentermat

luckily Bob Ward is on the case over at Neil's blog:

Bob Ward
19th October 2011 - 14:23

Another very poorly researched contribution from Andrew Neil on climate change policy. Perhaps he could have consulted Ofgem to check his logic. Here is what Ofgem said on Friday: "Higher gas prices have been the main driver of increasing energy bills over the last eight years.""

Oct 20, 2011 at 12:45 PM | Unregistered Commenterdiogenes

Matt Ridley has just spoken on the Jeremy Vine BBC2 show in defence of shale fraccing. He made a great job of this opportunity to publicise the potential benefits over wind farms. Of course, the BBC researchers are highlighting callers of the usual hue to provide 'balance'.

Oct 20, 2011 at 12:53 PM | Unregistered CommenterPharos

For those without long memories like mine and who therefore don't know what the Buffhuhne has bene up to in the past here is a link

Huhne is a liar, has been and always will be. What kind of sick bar steward gets his local constiyiency supporters to hand out a leaflet saying 'matters to me so much - where would we be without them?

Read more:' while at the same time he is shafting his mistress in his families home? What I want to know is why didn't his story come out just before the election rather than some weeks after? If it had doen perhaps we wouldn't have had to suffer Huhne's constant lies as our Secretary of State for Energy and Climate Change as IMO he no doubt would now not be an MP due to fail to retain his seat at the last election?

Oct 20, 2011 at 1:04 PM | Unregistered CommenterKevinUK

'Chris Huhne not telling the truth...'
Your Grace - I'm shocked and stunned. I had to step back in amazement.
Surely you must be mistaken....

Oct 20, 2011 at 1:37 PM | Unregistered CommenterDavid

'Chris Huhne not telling the truth...'
Your Grace - I'm shocked and stunned. I had to step back in amazement.
Surely you must be mistaken....

Oct 20, 2011 at 1:39 PM | Unregistered CommenterDavid

'Fireproof' Huhne set to spend even more on Eco projects

Oct 20, 2011 at 2:34 PM | Unregistered Commenterjazznick

oops posted this on the wrong thread just now...

thinking Durban again...

21 Oct: Age, Australia: Climate change to spark more floods, says UK adviser
''We are facing what I believe will be unprecedented difficult times over the next 20, 30, 40 years,'' warned Professor Sir John Beddington. He was speaking as chairman of a panel of scientists launching a major international report about the effects of climate change on people...
The report says that by 2060, up to 179 million people will be trapped in low-lying coastal floodplains subject to extreme weather events such as floods, storm surges, landslides and rising sea levels, unable to migrate because they are too poor or ill-equipped, or because they are restricted by political or geographic boundaries.
Two-thirds of the world's cities with populations of more than 5 million are at least partially located in coastal zones, including rapidly growing urban centres in Asian and African ''mega-deltas'', the report said...
Migration and Global Environmental Change is the result of a two-year peer-reviewed project by 350 specialists in 30 countries. Speaking after the launch yesterday, Sir John told The Age that Australia should not expect the La Nina phenomenon that triggered the Queensland floods to be a once-in-a-generation event. The next one could not be predicted but it would return much more frequently than in the past...
The World Bank said it will meet in December to assess the report's implications. The International Organisation for Migration said it would organise an international meeting in Geneva to discuss action.

Gareth -

here's corporatism for u:

pdf: The Network of Corporate Global Control

20 Oct: Daily Mail: Rob Waugh: Does one 'super-corporation' run the global economy? Study claims it could be terrifyingly unstableResearch found that 147 companies formed a 'super entity' within group, controlling 40 per cent of its wealth
A University of Zurich study 'proves' that a small group of companies - mainly banks - wields huge power over the global economy.
The study is the first to look at all 43,060 transnational corporations and the web of ownership between them - and created a 'map' of 1,318 companies at the heart of the global economy.
The study found that 147 companies formed a 'super entity' within this, controlling 40 per cent of its wealth. All own part or all of one another. Most are banks - the top 20 includes Barclays and Goldman Sachs. But the close connections mean that the network could be vulnerable to collapse...

whether or not the study (models) is accurate or meaningful, and whether or not u sympathise with the OWS protests, i can't help mentioning a joke going around about the MSM constantly stating no-one can explain what the OWS protests are about. here's a clue MSM the protesters is in the name "Occupy WALL STREET"

Oct 20, 2011 at 2:45 PM | Unregistered Commenterpat

I don't really think the TPA point about non-disclosure is fair. Their question is too open ended to give a meaningful answer in my opinion, and they must know how governement departments don't answer complex open questions and so are maybe playing politics?

The real problems which preclude general public understanding in this area are complexity and media manipulation/misinformation. All the information is there if you want to look for it in my opinion.

Hasn't DECC, for example, already publically stated that the cost of the direct renewable subsidies currently add about 11% to bills?

How much they will add in future depends on what assumptions you make about energy demand, the price of fossil fuels and the carbon price. If you take a Huhne view of the world the costs will fall, on the other hand they could rise to over 25% on the basis of other arguably realistic assumptions. That's why its not easy for DECC to give the TPA a simple answer and undersatndably they don't want to send them a 100 page treatise to be politicaly cherry picked..

So simple maths shows that the growth of renewable subsidies and VAT increases have been two of the main drivers of recent retail bill increases. After all, the forward wholesale gas price is still lower than it was in 2008.

But we should also remember that competitive wholesale prices are only about 50% of the bill.

The second largest bill component at around 30% (and the biggest single percent riser) is the the regulated monopoly pipes and wires. One of the major new costs are the wires now needed to connect up remote/offshore windmills. Thses are not included in the costs of renewables statements which are only concerned with overt subsidies such as ROCs. So I'd guess there is another 3 to 5% here which is down to renewables - like for example the infamous Beauly line in your part of the world Bishop.

The third larget component of the bill are the big 6's profits. Whether these have taken a step change upwards recently is too early to say - but generally speaking the level of profit in the competitive part of the market has historically been pretty flat historically, so it seems hard to see why this should change suddenly as a result of actions by the big 6 alone.

With regard to the big 6, we should beware the media giving much airtime/print space to "Consumer Focus" to explain/champion our interests. See today's Guardian for example. Consumer Focus talks a lot about the need to switch suppliers and the iniquities of the big 6's profits , and the need for OFGEM to take "action".

Most people however do not realise that Consumer Focus is just another Government quango, and like OFGEM is partly staffed by civil servants on secondment from DECC. Both OFGEM and Consumer Focus are also effectively funded through our utilities bills by the way rather than general taxation.

Unsurprisingly Consumer Focus never mentions the impact of renewables on bills and whether the customers they purport to represent (and pay their handsome salaries) are happy about this. Bit like a old state sponsored Soviet style trade unions in my opinion.

Oct 20, 2011 at 2:51 PM | Unregistered CommenterMark, Edinburgh

I sent the following letter to the Editor of the DailyTelegraph yesterday. No sign that it will be published...


My wife and I fill our respective cars with fuel every Friday at our local Sainsbury’s. We’re not too sure what they charge for their petrol, compared to Tesco, say, but we find it easier to do a one-stop shop and in any case they assure us they are the best.

As her car is smaller than mine my wife is charged a different rate for her fuel. However, both our cars are charged at three times the normal rate for the first ten litres of fuel we put in and then, roughly, what we believe is the going rate, for whatever else is needed to fill the tanks. But then, because my wife’s car is more fuel-efficient her first ten litres are charged at a very much cheaper rate than mine and the rest charged at a slightly higher rate than mine. (We’d been led to believe that being fuel-efficient would be cheaper overall: it seems it is not the case).

Having filled up I get a bill from the kiosk. It is eight pages long. This includes detailed analyses of my petrol usage over the year and a prediction of what the following year will cost. It also includes a long breakdown of the cost scales and what I have paid at previous visits to the petrol station when prices were often different. Then I pay, and drive off in bewilderment as I ponder whether I have been ripped off.

When I complained to Sainsbury’s I was told that for a rather large outlay (about two years’-worth of petrol for each car) I could simply have the engines in our cars changed to slightly more fuel-efficient ones. It would cost me less in fuel but would mean I’d probably break down more often – so I’d better add on the cost of joining the AA - and probably have to buy another new engine in a few years time. Overall though, they admit that my fuel bill, taking into account the cost of the new engines, would mean I couldn’t afford to do any food-shopping at their store one week in four. Maybe, they suggest, we should invest in some heavily insulated walking gear and walk more often.

And then I woke up and realised it was all a dream. No one, I figured, could ever dream up such a ridiculous scheme for charging for fuel.

And then I really woke up.

Yours etc"

Oct 20, 2011 at 3:29 PM | Unregistered CommenterSnotrocket

A politician not telling the truth. How odd....

Oct 20, 2011 at 3:43 PM | Unregistered CommenterHoi Polloi

pat: "Occupy WALL STREET" It is usual, although it seems to have dropped out of fashion in government circles, when setting out on an enterprise to describe a set of conditions which will tell you if you have achieved your goal. Although I have a great deal of sympathy with the protestors, if there goal is to simply occupy Wall Street, they've achieved it and their enterprise has been successful. I happen to believe they've achieved the attention of the politicians but what are they going to do with it? That's the problem.

Oct 20, 2011 at 3:49 PM | Unregistered Commentergeronimo

Fuel "poverty", unlike climate change, is already killing people- about 2000 last winter alone.
This is entirely down to green subsidies.

Still I'm sure it is all worth it for the "greater good".

Oct 20, 2011 at 7:45 PM | Unregistered CommenterDon Keiller

" Huhne is telling us things that can't be true"? Come on, he told the truth about his speeding ticket didn't he!
I wrote to my energy company, Southern Electric, following its recent price rise. I pointed out that wholesale energy prices are in fact lower now than they were a few years ago, In their very informative four page reply they said "Although wholesale prices are currently lower than in 2008, energy costs now account for lower proportion of customer's bills...however due to significantly higher distribution, environmental and social costs we have had to increase our prices".
Which I interpret to mean, we are all paying for inefficient windmills.
So, don't put all the blame on the energy companies; it is well to note that out energy prices are still amongst the cheapest in Europe.
See Page 4 of this report
This very favourable position will change of course, as more and more of Huhne's 'environmental' costs are added, invisibly, to your bill.

Oct 20, 2011 at 8:13 PM | Unregistered CommenterBomber_the_Cat

Andrew Neill: ".retail prices have risen again and are now above their 2008 peak. Despite lower wholesale prices compared with three years ago our fuel bills are higher than three years ago."

I think Neil has it wrong on this point. Gas prices vary throughout the year. Between October 10 and June 11, whole sale gas prices for winter 2011 delivery increased 33%. The retailer does not buy the gas at the moment the consumer uses it.

The myth Huhne is peddling is that the margins retailers make are huge, and that the consumer could 'save hundreds of pounds a year' by shopping around. That may be true for some people in some circumstances, but the available data on the margins vs. the wholesale price doesn't reflect that possibility for the average consumer. I was surprised at how low the margins were.

Neill continues: "And maybe the Huhne green agenda, involving huge subsidies to wind generation, which end up on all our fuel bills, is much larger than we've been told."

I think this misses the point. It seems meaningless to me to try to work out how much of the price is owed to any certain policy. The actual proportion of our bills that go towards subsidising wind may not be that much, but when we consider what the effects of emphasising low-carbon, behaviour change, efficiency, and so on, are, we may get a different picture. What if the hundreds of billions of Euros earmarked for green energy projects across the EU, and the £200bn + promised for the UK's grid were invested instead in realistic energy projects. Or, if you prefer, what if EU/UK policy-makers hadn't intervened to distort the market at all? What if there were no ETS at all? What if there were less uncertainty about energy policies to influence investors? Huhne says we need greater competition in the retail side, but he (and many others) have changed the competition on the production side. It no use Huhne blaming the market -- it's a market that has responded to his policies.

Oct 21, 2011 at 12:52 AM | Unregistered CommenterBen Pile

Have the police still not worked out who was driving Huhne's car?

Oct 21, 2011 at 11:56 PM | Unregistered CommenterJames P

@Don Keillor

Fuel "poverty", unlike climate change, is already killing people- about 2000 last winter alone.
This is entirely down to green subsidies.

As has already been pointed out on this very thread the main cause of the rise in energy bills is the rising price of gas.

Meanwhile it looks as though fuel poverty is not actually killing people in their droves. Fewer deaths were recorded in Scotland last winter than during the previous 20 winters, despite unusually cold weather. Where did you get your figures from?

Oct 27, 2011 at 11:37 AM | Unregistered CommenterScots Renewables

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Nov 2, 2011 at 8:15 AM | Unregistered CommenterOverlandp

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