James Moore: Why Clegg isn't worrying the energy companies

Click to follow
The Independent Online

Outlook Get a hundred quid off your energy bills, said Deputy PM Nick Clegg with a big goofy smile on his face as he outlined plans to make energy companies write and tell us whether we are on the best tariffs that they offer for our needs once a year.

Well, thanks Nick! Just one question: why aren't the energy companies worried?

The answer to that one is easy. If the price of energy on the wholesale markets rises, energy suppliers will very rapidly hike their prices (as they always do). And they'll include a bit extra on the top to compensate them for the money they lose from having to shift customers from tariff 11468xb7 to 11468xb8, or whatever funny code they like to use just to make it all thoroughly confusing.

What about if prices fall? Well, bills will come down too (perhaps a bit more slowly). But (again) there'll still be a little left on the top to cover the loss of earnings as a result of the scheme. In other words, that £100 saving will, one way of another, evaporate away like so much liquefied natural gas. Those who have shares in energy companies have nothing to worry about.

Nor, for that matter, has Sam Laidlaw, boss of Centrica. He gets millions of pounds in free shares regardless of whether profits rise or fall. So everybody's happy. Except for the consumer.