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corporates too much power?

Community Veteran
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Registered: 11-12-2013

corporates too much power?

Sometimes I wonder how much damage shareholders cause the country, but here is the situation.
As many probably know labour have pledged to freeze domestic fuel prices after the election.
Well a family member of mine works for one of the companies who would be affected and even tho there has been no election yet they have told all staff that if labour win the election there will be redundancies as profits would fall to 2 billion GBP and 2 billion GBP is a unacceptable level of profit for the shareholders.
So in affect the company is telling their workers who to vote for assuming people value their jobs.
Whilst I am not that surprised if these companies would cut jobs as a form of protest, I didnt think they would do something as blatant as this.
The company is centrica who have projected 2.51billion profits across its group for 2014 and was 1.5 billion just 5 years ago, astonishing growth.
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Community Veteran
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Re: corporates too much power?

I don't think there is anything wrong in opening up with their analysis. Similar things were said at the time of the Scottish referendum when business was concerned with Alex Salmond's Micky Mouse Economic plan.
I know who I trust and it is business who understand how to make a profit
If Labour get in I will be shifting some of my share investments out of the UK probably to the Far East or South Asia
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Community Veteran
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Re: corporates too much power?

Why? you have no idea what will happen, to change investment based on a political party seems far fetched.
The problem as I see it regarding energy prices they are out of control, energy is a utility.  Labour have gone about it the wrong way, the result is predictable.  But I think this situation the needs of everyday families have to come before shareholders.  I think many business's would be jumping up and down with 2 billion of profit.
If you were to ask me what I would do, I would setup a state owned utility which undercuts the commercial entities significantly, at a level where if they were to price match they would still make a profit but not an excessive profit.
It also becomes scary when you realise major employers could simply do mass redundancies to get their way politically as they can cause recessions on a whim by doing so.
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Re: corporates too much power?

Milliband and Balls seem too accident prone! Every time they announce a new policy it falls apart on basic finance or economics.  I wouldn't trust them with a jumble sale.
And don't underestimate how easy it is to change your investments. I have a balanced portfolio some US some UK and some far east my investment management co has other packages it only takes a phone call. Me and many other investors worldwide  Undecided
To do is to be - Neitzsche
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do be do be do - Sinatra
Community Veteran
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Re: corporates too much power?

Regarding energy prices - specifically electricity - the policies of our politicians (except UKIP) is to artificially increase the prices to support green energy
http://www.telegraph.co.uk/news/earth/energy/11292367/Green-policies-to-add-up-to-40pc-to-cost-of-ho...
Quote
DECC’s initial 88-page report was published on Nov 6, but the raw data on which the findings were based were omitted.
The Renewable Energy Foundation requested the figures and this week they were finally made available.
The supplementary tables show the “average impact of energy and climate change policies on households’ energy prices” will see the cost of electricity rise by as much as 42 per cent by 2020 from £131 per megawatt hour (MWh) to £186.
An average household uses about 4.5 MWh, meaning a rise of as much as £250 in the cost of electricity. By 2030, the price of a megwatt hour will increase by 60 per cent to £206.
This gives a bit more detail https://notalotofpeopleknowthat.wordpress.com/2014/12/14/decc-forced-to-release-data-showing-impact-...
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Re: corporates too much power?

Too true @oldjim
right back three or four governments the UK ETS and EU ETS (emissions trading scheme) have been the policy of choice driving the energy mix towards renewables. This has always had the end result of the consumers paying the bill but politicians have feigned ignorance then expressed shock horror when the truth was revealed. The energy companies are sticking very closely to the government line on this. Not breaking ranks.  Roll eyes
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Re: corporates too much power?

Quote from: chrcoluk
Sometimes I wonder how much damage shareholders cause the country, but here is the situation.

Shareholders don't run companies - they have very limited powers, other than being able to appoint/remove directors.
Quote from: chrcoluk
As many probably know labour have pledged to freeze domestic fuel prices after the election.

I think what they're trying to do is in doubt - http://www.huffingtonpost.co.uk/2015/01/14/miliband-price-freeze-uturn_n_6468932.html
I don't think they could force energy companies to freeze prices if wholesale costs suddenly shot up. It would cost the Treasury billions in lost income.
Quote from: chrcoluk
The company is centrica who have projected 2.51billion profits across its group for 2014 and was 1.5 billion just 5 years ago, astonishing growth.

Where did you get those numbers?!
Operating profit for 2014 was £1.75bn and in 2010 it was £2.39bn - http://www.centrica.com/index.asp?pageid=833
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Re: corporates too much power?

The OP has little or no understanding of business. £2.5bn may seem a lot of money but a new power station is estimated to cost £16bn to build. How do you think a project like this is financed?
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Re: corporates too much power?

Quote from: PeterLoftus
Milliband and Balls seem too accident prone! Every time they announce a new policy it falls apart on basic finance or economics.  I wouldn't trust them with a jumble sale.
And don't underestimate how easy it is to change your investments. I have a balanced portfolio some US some UK and some far east my investment management co has other packages it only takes a phone call. Me and many other investors worldwide  Undecided

I never said was hard, but you have got no idea what the future holds no matter who is in power.  So to change purely on the basis of a election result smacks of nothing more than a protest.
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Re: corporates too much power?

Quote from: artmo
The OP has little or no understanding of business. £2.5bn may seem a lot of money but a new power station is estimated to cost £16bn to build. How do you think a project like this is financed?

Yeah I only run a business and attended managerial meetings in others.
You say all this is impossible yet other western countries that are wealthier than us have state owned domestic fuel companies just fine, and a prime reason they wealthier is a bigger % of GDP is across the general populace rather than in shareholders pockets.
You see no problem with the current situation? if yes I think you bonkers.  British gas should never have been sold.
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Re: corporates too much power?

Quote from: chrcoluk
Yeah I only run a business and attended managerial meetings in others.

Yet you seem to lack any comprehension of corporate structure and the roles of shareholders...
Quote from: chrcoluk
You say all this is impossible yet other western countries that are wealthier than us have state owned domestic fuel companies just fine

Which other western countries have a bigger GDP than the UK and state owned energy companies? (Here's a clue - there is one country and one company).
Quote from: chrcoluk
and a prime reason they wealthier is a bigger % of GDP is across the general populace rather than in shareholders pockets.

This makes no sense what you've said. Are you even aware how GNP/GDP are calculated?
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Re: corporates too much power?

Going back to the original topic. You can't blame companies like Centrica analysing the market and making business decisions but you can blame governments for not setting policy and arranging the playing field they operate in.
As said above the market should generate profit to fund the replacement of power stations and government policy with the market should direct what we should build. This they are failing to do and the power companies are giving the government what they ask for not what we as a nation need.
Rather than wind farms we should be building new gas power stations and coal power stations with carbon capture and storage. And exploiting fracking. Or the lights will go out  Angry
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Community Veteran
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Re: corporates too much power?

https://www.google.co.uk/url?sa=t&source=web&rct=j&ei=PszyVO6rOoTkaq_2gugO&url=http://www.lowcvp.org...
See page 7 this plant was being developed with Centrica Smiley
To do is to be - Neitzsche
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Re: corporates too much power?

I'm not sure how long it takes to design/build coal or gas power stations, but it takes 15-20 years for a nuclear power station.
The present and previous governments have completely failed on energy policy. They have not addressed the future energy requirements and what can be supplied by the ageing UK energy infrastructure.
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Re: corporates too much power?

Quote from: chrcoluk
Yeah I only run a business and attended managerial meetings in others.

How many people do you employ?