Letters to the Editor - 15/10 - Energy prices, Best of Twitter

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[Miliband’s policies have already damaged Britain’s economy, yesterday]

The barrier to new entrants is scale. We have arrived at a “Big Six” because you need at least 4m customers to recover the investment in registration, trading and billing systems. Today, the only competition that exists is on price, and the only way to reduce costs is by scaling up. Competitive markets cannot work where one supplier’s product is identical to another’s.

Matthew Rees

There is a perfect parallel to Ed Miliband’s price cap in the disaster that befell California in the early noughties. A retail price cap and regulatory delays to bringing new capacity online left the suppliers vulnerable to a price spike in wholesale markets. When this happened, the power companies went bust and the state plunged into darkness.

Name withheld

Ed Miliband’s energy proposals won’t protect consumers from spiralling bills – energy firms could simply pre-empt the cap by hiking prices before 2015. What’s more, his plans don’t take into account the loss of tax revenues to the Treasury, or the impact on smaller shareholders of these firms.

Mary Bate

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