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General, Polictics, Technology

Wrongest endest of the stickest 2- Ed Milliband


According to Ed Milliband ( here ), train companies are “overcharging” people and energy companies are “ripping them off”.

Thats hardly news is it, when the duo have been doing pretty much that for close to 20 years now.

And what’s more troubling is the solution Ed proposes:-

“We are going to take on interests, however powerful, that are holding them back.

Today we are talking about how we are going to take on train companies which are overcharging them for fares and energy companies that are ripping them off.”

Aaaah. So this is going to involve some confrontational exchanges right? Wow!  But how confrontational? I’m curious [****lets out an evil monalisaesque giggle************].

Will he for example legislate guide prices, and a code of conduct, which all energy and train companies should forthwith abide by, or else…?

Nope, he can’t do that. Even he knows he won’t be allowed to do that. Parliament wouldn’t pass such a draconian bill, neither would the EU allow him such anti-competitive liberties. Alas! that would be price fixing! and possibly fall foul of Article 100 / 101 of the EC Treaty(check if a govt body can be an “undertaking or associations of undertakings …” under the treaty) . Further,  any such measures couldn’t possibly win him popular support from the private sector, will it now? Ah Ed , you forget its a free market economy. You forget its Capitalism. Oh, you’re so bordering on the vain.

So what then can poor Ed do? What are his options?  He can’t buy the energy companies off their respective owners, to be run by the state, can he now? (although pending Competition law considerations, at least that has a potential to be a non-illegal option).

The fact of the matter is, at the current rate we are borrowing, if Labour came to power, his government is bound to be broke and tightly squeezed. It would have to borrow more  money from somewhere to be able to do that, although from past experiences, that would not win them any votes (i.e. Are they trying to screw up the economy again?). Yet surely if it is possible to bail out banks (i.e. the RBS group deal) and acquire a controlling stake in them [ensuring in the process that hundreds of millions in bonuses are still paid!!! :-)], it should be possible to buy back private corporations in distress (although energy companies are CURRENTLY not in distress, and it is unlikely that they will anytime soon be in any form of a financial predicament).

Nor could Ed use coercion and threats to bully them into reducing their prices, tactics which I’m told Putin, and communist China are a master at. He’s certainly not going to be that frightening, hair raising nor convincing with that stutter. Imagine telling your son “Hey Charleth! hey boy, thtop pushing your thithter! or you’ll get your ath whoopthed!”

The kid will be in stitches, instead of fear the kid will be incapacitated with laughter.

Alternatively, Ed could try to  round up the honchos from energy+ train companies and warn that, if they don’t reduce their prices, and if they continue to stifle competition with dirty tricks, each time objecting to measures designed to simplify and remove barriers to entry, the goverment will tax them more, or introduce painful regulation designed to make their operations tougher.

To which the honchos are likely to shrug, and respond (in this order, and with a smug) that:-

(i) they have to maintain their prices above a certain threshold (which threshold?) to be competitive with foreign companies (most of them are foreign owned anyway so this is a half-truth), and to reflect the rising prices or Oil/ Gas/ Metal, etc  from Russia, etc, etc, otherwise it won’t be profitable. i.e. the eternally effective We are not charities rebuff, which never fails to deliver its purpose.

(ii) If we reduce our prices, we’ll have to cut jobs to remain competitive and continue paying dividends to our shareholders. Surely no government wants high unemployment or low dividends (since many people in your Party Sir are shareholders) And if we do have a cull, there will be demonstrations on the streets, which may not be that good for you, if you’re in power.

(iii) There are many companies in our industry and competition is always encouraged. There is no collusion (really) and we fully abide by EU competition regulations (whatever you say, don’t believe you. If these guys can do it,  what makes you think we’d trust you).

(iv) But if you insist in giving us a tough time, we’ll have no option but to stop all our societal projects/ competitions that help the poorest in society /start-up entrepreneurs, and  move most of our operations abroad and you’ll lose the corporation tax that we’ve been so generous to let you have. Further job cuts will follow and then you’ll really be in the shits.

I’m not sure what Ed’s response to this would be, but whatever it would be, I’m darn sure it would still send my young nephew into stitches.

Maybe Ed should promise to do the following (in this order):-

1.That his government will buy stakes in companies competing with big corporations. In particular SME‘s and assist them to be serious competitors to big corporations. He can do this by refraining from favoring only the BAE’s or the GSK‘s of London. Why not transform 5000 SME’s around the country (whose current turnover is less than £100,000) to achieve turnovers of upwards of £600,000, with a requirement that they in turn each employ at least 20 people. I think  a tactic in these lines would assist more people and harness the economy instead of dancing to the tune of the likes of BP’s , Google and Microsoft, etc.

2. You have to build a brand around these acquisitions and offer competitive rates that will snatch customers from the big companies, en mass, while maintaining a modest profit margin ~ 10-20%. By maintaining low prices, and diversify into foreign markets he’ll be spreading his risk. He then has to offer jobs to people on the dole in these foreign markets. The same “either you work, or we’ll cut your benefits” stance which ID Smith is trialing, but this time they’ll work abroad – in factories, assembly lines and warehouses, etc, to be paid in local currency -in accordance with local levels of pay. They could even be trained and be given managerial positions. That’ll save the govt a few quid. Thinking about it, you could even send troublesome yobbish kids that way. Trust me, if they were to undertake the level of training I have in mind, they’ll cease  to cause trouble in no time.

3. Make full use of renewable energy and agriculture. Encourage and provide interest free loans to companies who will sign up to providing affordable home  energy generation solutions, including growth of plants for biomass production. Set the exact retail pricing for renewable energy technologies [Extremely crucial this because as an example, Solar Panels which  wholesale ~ US$200 – US$400 a piece in China, will retail at upwards of £3000 a piece in the UK.[and because everybody is selling them at such prices, the consumer can’t really get a good deal. Not that we get that much sun around here, but there is collusion, even silent collusion. Surely, you can’t beat the energy giants if you can’t introduce a competitive alternative with much lower profit margins in this critical sector, which at least gives consumers an alternative.] Same goes for Wind power, Oil, Gas.

4. Get ready for battle, because someone will inevitably get upset by your tinkering, so you must be prepared for the worst. Because if the giants can’t swallow their pride, lowering their prices and begin playing fair, they will retaliate, and accuse the government  of orchestrating an illegal scheme. After all they’ve got the money to do so. So, make sure you have it all nicely figured out, and a legal army in contingency. Oh, and pay your army on a no win no fee basis. #CPS

5. Finally, after a few legal battles and ~ a quarter of a million happy rail passengers and 2 or 3 million households which switch to your suppliers, you’ll be in the money, and you can then try and coerce your way into buying the big guys, on your terms, not theirs.

Ed, that’s got half a chance of getting you into number 10( or keeping you there).

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