All those hidden costs of efficient capitalism

I’m beginning to think I support the re-nationalisation of energy supply in the UK. This might make me sound like a radical leftist, but my reasoning is one of cost, fairness, and efficiency.

To give some context, I’ve just changed electricity suppliers. One of the reasons I moved was that I couldn’t understand any of the bills I got from the supplier I left. I never knew if I owed them or they owed me, and eventually it was too time consuming to keep trying. When I moved suppliers I used one of the price comparison websites and got the move rolling through them.

In accordance with all the regulations, I was then given a cooling off period, in which nothing happened, and then, after I couldn’t change my mind, I was sent a chunk of paperwork for the new supplier. It was a typical bit of regulation that added hassle and little benefit to me. I then got a chunk of paperwork from the supplier I was leaving, begging me to stay, and a chunk of paperwork from the supplier I was moving to.

Along the way, I saw numerous references to Ofgem, the UK’s power regulator.

One of the key benefits of capitalism is meant to be that competition leads to the driving down of prices for the consumer, and an increase in service levels. Consumers can shop around until they find the balance of price and service that they want.

The bit I don’t understand about this logic, though, is all these extra costs which have to be covered by the consumer somehow:

  • profits to the shareholders of the private companies
  • all the private companies managing the joining and leaving of customers and all the paperwork that goes with it
  • management and regulation of all the private companies to ensure competition is fair
  • and, crucially to me, the cost, in time terms, of every householder in the country selecting a supplier on a regular basis, or risking paying over the odds for their power.

It’s that last point that I find most intriguing. People who are too busy or who can’t work out how to read their bill (ahem!) can easily be penalised by this system. And everyone else has to put in chunks of time on a regular basis to ensure they are getting the best deal for them.

That said, there is one element of this where I can see that a non-centralised (dare I say, nationalised?) approach has genuine benefit and that is where the consumer decides to pay extra to support a cause they care about deeply. In the case of electricity, I have often chosen to pay more to companies who invest in green technologies, and sometimes I choose not to do that if my funds are limited.

However, in an ideal world, I can’t help but think that one national electricity supplier would end out costing consumers the same as, or less than, the system we have now. Especially if you take into account all the time everyone can save.

Apparently, taking back ownership of the energy supply is on Jeremy Corbyn’s agenda, although it doesn’t appear as Labour policy. It’s got some issues in terms of initial cost (to put it mildly!).

It’s interesting to see it on an agenda, however unlikely to be implemented. We can also dream the national system would invest in renewables.