Time to limit price rises in energy oligopoly

Associate business editor Trevor Sturgess
Associate business editor Trevor Sturgess

Why can we buy a luxury wide-screen television for next to nothing but pay an arm and a leg for essential items?

Luxuries are often cheap in the UK, but the price of gas, electricity, water, train and bus fares constantly rise at inflation-busting rates. It’s always a pleasure to visit a foreign city like Rome with cheap fares.

To go four miles on an Arriva bus in Maidstone costs more than a fiver. Commuters could buy a car for the cost of their annual season ticket on Southeastern. Cheap public transport is the sign of a civilised society and has the green benefit of discouraging car miles.

Every business and individual needs energy. Yet prices rocket inexorably, provoking a fierce political row.

As shareholder-owned companies, energy suppliers have the perfect right to determine output prices according to the cost of inputs, some of which are imposed by the government. But there are wider issues. As providers of essential products, they should have different obligations to others in the private sector.

They get away with it because of an oligopoly, where a few suppliers virtually control the market.

Unlike television suppliers in a highly competitive market, they do not face enough price pressures. That they raise prices virtually in concert only underlines that it is not a fully competitive market. Smaller suppliers lack marketing muscle and critical mass to make huge inroads.

‘The energy industry is failing the consumer and should be limited in its ability to sting enterprises and public’

Energy companies – surely more hated now than ever – choose to defy every principle of good public relations by antagonising every business and domestic customer in Kent. They recognise their commodity is up the political agenda yet press on regardless to punish the vulnerable and encourage fears over a possibly fateful choice between “heating and eating”.

It’s facile – although rather good politics – to believe the consumer will benefit longer-term from a price freeze. Unfettered suppliers will only shift the timing of price hikes. But this industry is failing the consumer and should be limited in its ability to sting enterprises and public.

Dungeness shame

On the subject of energy, successive governments have left this country exposed to price rises and energy shortages by a lack of proper investment in new power generation. Fearful of cost and protest, they have flunked every chance to ensure the lights do not go out.

The UK could have led. Now it can only follow by turning to French know-how and Chinese investment such as that at Hinkley Point, where the new nuclear plant will create 25,000 jobs. It’s disappointing that similar investment is not on the cards for Dungeness.

Vive Le Kent!

Olivier Cadic is one of Kent’s unsung flag-wavers. You might not have heard of him, but the Canterbury-based French businessman is constantly urging his entrepreneurial compatriots to set up on this side of the Channel.

He did it again recently in his homeland at a widely reported conference for France-based business people frustrated by their country’s anti-enterprise tax regime. We have many French businesses happy and doing well in Kent because of a business-friendly attitude, lower start-up and employment costs, and our magnificent countryside and coastline. Well done, Olivier. You deserve an Invicta “Legion d’honneur”.

Ken Wills of Heli Charter and Bell Helicopters’ Eric Cardinali sign the customer service facility deal at Manston
Ken Wills of Heli Charter and Bell Helicopters’ Eric Cardinali sign the customer service facility deal at Manston

Uplifting deal

Finally, congratulations to Heli Charter and boss Ken Wills
for teaming up with US company Bell Helicopters to invest in a showroom and maintenance facility at Manston.

Ken, a helicopter pilot himself, had the vision for the facility.

It’s good to see Manston renewing its aviation links with the USA forged during the Second World War and the 1950s Cold War era.

Now let’s hope Kent’s biggest airport under new owner Ann Gloag of Stagecoach fame fulfils its potential.Heli Charter will also support the UK’s emergency air ambulance and police services.

Welcome plans for the nearby Manston Parkway will only help.

After various setbacks, Manston should finally take off big.

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