Electricity firms warn price cuts will hit jobs
Friday 03 December 1999
The AEEU engineering union claimed the pounds 15 reduction in average household bills next year could result in as many as 10,000 redundancies. However, the public service union Unison put the figure at a more modest 2,000 to 3,000 job losses.
The Electricity Association, representing the country's 14 public electricity suppliers, also warned of the threat posed to jobs and security of supply adding it wanted to avoid a trade-off between cost savings and reliability. The instant reaction in the markets was one of relief that the regulator had backed down from draft plans announced in October to reduce average bills by as much as pounds 25, or 10 per cent. However, after an initial surge in share prices, stocks fell back and some electricity companies ended the day down as analysts concluded that the price curbs were still very demanding.
The marked difference between Mr McCarthy's draft price curbs in October and the final reductions announced yesterday is that he has decided to place more reliance on competition bringing electricity bills down.
However, in the key area of distribution charges - the amount companies levy for use of their local wires monopolies - he has barely shifted at all. Distribution charges, which make up just over a quarter of the average bill will have to come down by 24 per cent next year - equivalent to a reduction in income of pounds 650m.
In addition the regulator has re-allocated pounds 300m of costs from distribution to supply, where there is now a competitive market, giving companies little scope to pass on the costs to customers.
Mr McCarhty said: "I have been tough on companies where they have a monopoly and I have established a safety net in supply where I expect competition to be the real driver of prices."
He added that had he stuck by his initial plans for a much bigger cut in supply charges, it would have limited the scope for companies to undercut one another while customer inertia would have reduced the number of households switching supplier.
David Porter, director of policy at the EA, said the deep cost cuts represented "a tough challenge for the industry", which could jeopardise both jobs and future investment.
Companies have until 20 December to decide whether to accept the new price curbs or appeal to the Competition Commission. Only Scottish & Southern, which has escaped with price cuts of pounds 7-pounds 8, saw its share price end the day strongly up.
Outlook, page 23
New UK station Russia Today gives a very bizarre view of Britain
By performing as African Americans or Indians, white people get to play act a kind of 'imaginary liberation', writes Michael Mark Cohen
Top Gear presenter is no stranger to foot-in-mouth controversy
New essay by JK Rowling went live on Pottermore site this morning
Review: Mike Leigh's biopic is a rambling, rich character study
- 1 'Nasa Confirms Six Days of Darkness in December': No, they don't - it's a hoax
- 2 Canadian actor punched in face after 'Islamophobia' experiment goes wrong in wake of Ottawa shooting
- 3 Topshop at centre of row over body image as 'shocking' skinny mannequin photo goes viral
- 4 If you think Russell Brand’s new book is confused, you should read what his critics have to say about it
- 5 Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
'Nasa Confirms Six Days of Darkness in December': No, they don't - it's a hoax
Canadian actor punched in face after 'Islamophobia' experiment goes wrong in wake of Ottawa shooting
Halloween 2014: From the Screaming Man of Pluckley to the 'White Lady' of the Tower of London - Britain's 20 most haunted places
Russian politician says Apple CEO Tim Cook should be 'banned' from country after coming out as gay
Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
Pope Francis declares evolution and Big Bang theory are real and God is not 'a magician with a magic wand'
Huge surge in Ukip support after EU funding row, according to new poll
Ukip ‘exploiting grooming scandal’ to secure party’s first police chief
Nigel Farage: 'There’s nothing wrong with white people blacking up'
Maureen Lipman says 'she can't vote Labour while Ed Miliband is leader'
Muslims, immigration and teenage pregnancy: British people are ignorant about almost everything
iJobs Money & Business
£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...
£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...
£20000 - £23250 Per Annum pro rata: Clearwater People Solutions Ltd: Pro rata ...
£40 - 48k + Benefits: Guru Careers: We are seeking a Marketing Manager to join...