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Posts Tagged ‘utility companies’

What the US row over the regulation of broadband provision can tell us about the privatisation of public services and why we must maintain the basic right to the same level of ‘public’ services for all…

November 11, 2014 Leave a comment

images-10We have so much news available to us now that it has become very easy to miss the stories which may fail to catch the public eye.

Away from the headlines today, some of our news sources have been covering the growing row between US President Barrack Obama and the Industry Leaders controlling the supply of Broadband Services in the United States.

Obama appears to be pushing for a system of regulation which will ensure the same level of supply across the Net to all customers, whilst the Industry itself is apparently looking for its own kind of controls which will allow differing levels of supply – and ultimately a ‘fast lane’ or optimum service for those to be made available for those who will pay for it.

On the face of it, this could immediately sound like something and nothing. We do after all have a whole range of choices when we buy or arrange our own internet packages and right now, it now seems pretty normal to pay for every little thing that we have.

However, whilst the speed of the roll-out of superfast broadband leaves many of us knowing only too well that different levels of service currently exist and seem to leave us with little choice, this is in itself just an evolutionary or developmental stage of provision. It is much like the experience of the switch from analogue to digital has been for those of us who used the Web from the beginning, and can still remember the rattle and hum of the tones as we hogged the phone line and dialed-in.

We may not like it and in an age where we have been conditioned to expect everything at the touch of a button, slow internet is beyond frustrating. But right now, we are accepting of it, as we are culturally acclimatised to accept that there is a direction of travel at work, which will only see services improve. (Yes, 4G apparently will at some point exist, even if you have already been paying for it for many months…).

But what would it mean to you if the next generations of technology were simply kept from you, when you knew that they existed and other people or businesses had ready access to them?

Your immediate thought might be that you are pretty happy with your iphone 6, or perhaps a Galaxy Smartphone, and that will do you just fine. But technology is moving apace, and if you were to work on the basis of Moore’s Law, which indicates that the speed and capacity of technology doubles approximately every 18 months to 2 years – which affects functionality as well as speed, you can soon begin to imagine what you might be missing out on by the time you are thinking about the phone you will be able to buy AND operate fully in the year 2020. Apply this to the services you receive through broadband too, and there is perhaps no need to say anymore.

The speed of communication through information technology mediums has been and remains a game changer which has impacts upon us all, usually in ways that leave us feeling completely untouched.

However, it is this very speed, and the capacity to move significant amounts of data from one location to another – perhaps even across the world, in timescales that as humans we at present still remain cognizant of, which have for example equipped money markets and traders to create industries within industries which literally create money from nothing as stocks and shares change hands with the potential to do so again and again over the course of a minute, whilst speculators also ‘bet’ on the transactions and the way their vales will go over the same period of time.

Speed – and therefore time, is increasingly becoming worth money where communication is concerned.

Whilst this may not be a thought that drags many of us away from our phones and iplayer-streamed episodes of The Big Bang Theory today, it will surely stand to reason that those who supply much faster internet services will see the opportunity in being able to charge a considerable premium for the product they supply tomorrow; whilst those who have the most to gain from the almost guaranteed technological leaps that are coming, will already possess and indeed have the most to gain financially from paying what will to them be trivial sums.

Not a problem for many of us today. But if the supply of service did really become as diverse as it could, there is no reason to believe that like in many other areas of contemporary life, cost will not quickly price large numbers of people out of the latest technology marketplace, with repercussions that could easily lead to the imposition of a whole tier of barriers to entry to services, apps and anything else which has then become entwined with the internet age.

Look at the behavior of the Industry in the States, and it will suddenly become very clear why our own providers could be so resistant to Government led regulation, and the imposition of a level playing field which will never have the potential for the same levels of profitability as that of the alternative.

Regulation that ensures a basic level of service for all and which is not itself qualified by a premium is essential. It can only be offered by an impartial third-party organisation – ideally good government – which has no financial interest in the services provided.

Government is today painted as the bad guy for any industry that provides either a public-wide service, or one which can ultimately have that same effect on the population and is not currently regulated – or guided with a robust ethical code that prioritises access and consideration of the consequences of profit-making actions upon us all.

This applies to the inappropriately named utility companies; companies such as the telecom providers, and also to the companies within the financial and banking sectors, where perhaps the most clear example of what happens when the fee-earners are left to regulate themselves was demonstrated by the financial crash of 2008.

The relevance of the US example should not be lost on us, just as the importance and argument that now definitely exists for greater Government intervention to regulate what are and remain public services.

The core reasoning of keeping essential services in the public domain was lost to decision makers of that time, through prolonged periods of low productivity and the high cost of running industry sized monoliths which were inherently resistant to change.

Regrettably, the long-term gift of what are effectively now monopolies to the money markets was not considered in terms of the requirements of ethical or regulatory practice, and the escalating costs of heating and electricity are just a symptom of what happens when a service is provided to a captive market by companies that are allowed to focus on nothing but the bottom line.

Sooner or later, Government will have to address these issues which face and surround all of the public services which are now in public hands.

Ed Millliband has to date probably been the most outspoken of the Political leaders in acknowledging the need to tackle the impact of unbridled energy price rises. But as with almost everything else, inflicting price changes, freezes or any kind of formula without regard to the real implications of doing so is akin to madness – and certainly so if the Industries themselves are not given adequate opportunity to reform before doing so.

Existing problems will be very complex to address. But for services such as the NHS it is not too late for politicians to do the big thing and tackle the problems that exist with meaningful reform. With Internet Services, it is in no way too late to ensure that the market continues to serve the best interests of everyone, and not just the few who will otherwise stand to make the most money from manipulating its harnessed profitability to their best advantage.

There is much for Government to do. But before anything there must be a change of mindset to one that genuinely considers the impact of polices on other polices and ultimately upon the consequences for us all.

The Internet will only come close to achieving all that it can for good if access to it is essentially the same for all.

Government will need to address this, just as it will soon have to accept that the parallel world which the Net has created will require its very own set of rules.

The distance which the Internet has created between us is already removing the humanity from relationships. We now need to ensure that our ability to pay is not the system of qualification for improving our lives that we should now be able to take for more than granted.

image: thevoltreport.com

The Cost of Living crisis: – It’s those money men, stupid

August 15, 2013 Leave a comment

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Hypocrisy has become an artform for many of today’s Political class, and talking up politically expedient issues, spinning away inconvenient truths or criticising others for doing no more than they would do themselves has become the apparent norm.

After a media splurge targeting their inactivity in the sun whilst Cameron has been busy making hay under his, Labour have returned to the stage this week focussing their less than lacklustre performance on the ‘cost of living crisis’, giving every indication that this is the ‘issue’ that will steward their return to majority Government in 2015.

If tackling every issue were seen to be as simple as giving it its own branding or strap-line like this and waiting for it to go viral, we would have a marketing man in Number 10 already – which of course we actually do.

Sadly, the ‘cost of living crisis’ is probably the most dangerous issue that any of our Politicians could ‘play’ with, in the run up to the 2015 General Election, and we should perhaps all be concerned by its apparent adoption by the political left in order for it to be manipulated as a vote-winner. After all, the future of most of us is tied up with it, and its genesis reaches far deeper into the fabric of our society than any of our leading Politicians seem willing to contemplate or have the moral capacity and determination to deal with – even if they have apparently now acknowledged it for their own political ends.

The reality for most of us outside Westminster is that we don’t need posturing Politicians and media hype to remind us of the fact that wages are effectively standing still whilst the cost of paying our bills just seems to keep on going up and up, month after month, year after year without any sign that it will ever relent. Many hard working people simply struggle to keep themselves afloat even before they start to consider some of the luxuries that those very same politicians and newsmen probably take for granted.

Real people living in the real world already know firsthand what it is they are experiencing when the letters hit the mat; the e-mails arrive, the phone rings and when they go and shop. When the pay rises, tax breaks and bonuses that they desperately need aren’t coming to middle England and those hovering either above or below Britains poverty line– simply because the Government’s Pot is already exhausted and the Nation simply cannot afford it – these same people need politicians to drop talking up the effects of the problem and start tackling the cause head on.

This task is not one that will lend great comfort to any politician who values their place in history more than they do the lives of the people who elected them and this is problem enough with British Politics today in itself.

Facing the reality that the free market has surpassed its point of balance and therefore the good for which it was intended is not a thought that many in power will want even to contemplate. Therefore accepting that increasing freedom within the markets to pursue infinite profit, whilst that very same action is effectively enslaving great swathes of the normal population within fiscal misery is not a pill that many of today’s Politicians will swallow willingly. But it is there in front of all of them just the same.

Through the creation of the virtual monopolies which are the utility and energy companies; private businessmen, shareholders and pension funds have been given seemingly insurmountable power over the lives of everyone by being able to dictate their own paydays, whilst they go unhindered by Government and Regulators – who have nothing really but the interests of their Industry at heart.

Likewise, ever growing convoluted supply chains, often reaching the length and breadth of the Country or even across Continents allow many different traders, dealers and agents to add their cut to the margins which you would normally expect to see only from producers and retailers, then inflating prices way beyond what they should realistically be.

Further still, those businesses without control or a sizable share of their markets are also having their margins forcefully squeezed by the companies and organisations who do and many of these businesses are the same ones that cannot afford to recruit or pay more than negligible wage rises to the very same people who are now being affected financially from almost every angle you could imagine.

Whilst no reasonable person would argue that businesses exist to make a profit, it is simply beyond logic to add layer after layer of profit onto the most basic and essential of items or services and then expect end users to keep picking up and meeting these overinflated bills without any real additional income of their own to cover these exponential and wholly unrealistic rises.

Companies, traders, financiers and all manner of individuals and entities are in effect ‘vacuum profiteering’, making money ex nihilo or basically creating something from nothing in a manner which could be akin to having the midas touch, were it not for the misery that it is increasingly inflicting upon those who are wrongly being expected to pay for it.

Without those who hold this power over our economy taking steps to regulate and restrict the way that they make profit, they are through their very actions writing an agenda for Government over many years to come – whatever its Political make-up may be, that has the potential to create social and financial problems of a size and scale across our Nation that Government itself won’t be able to afford to put right – simply because the Taxpayer has no money left to fund it.

Such levels of responsibility over the health and wealth of a Nation should never have been placed in the hands of money men in the first place without sufficient safeguards in place to protect the many who could be affected by the unscrupulous profiteering of a few. But it has.

No Political Party should be seeking to take the moral or politically philosophical high ground on this issue as it is a problem which can only be tackled one way. That is by Government stepping back into the free market and taking an actively pro-market or even interventionist approach to regulating market behaviour – should it be so required. The UK needs to retain capitalism but it must also maintain it in a responsible and considerate way that doesn’t destroy the ability of consumers to consume in the process.

By taking just the key players such as the utility, energy and finance companies to task, Government could go a considerable way to putting safeguards in place that would ensure a basic standard of living can be maintained against the minimum wage, and that the minimum wage would then itself reflect a living wage and one that should keep many more people safe from harm and therefore from being a potential burden to the State.

Regrettably, action of this kind does not reflect the creed of contemporary Politicians and the point continues to be missed that wealth creation only works effectively when there are benefits – in whatever form they may be – for all.

Conservatives, Liberal Democrats and Labour don’t want to embrace the answer and neither does UKIP, which is riding high on the tide of discontentment and disenfranchisement that the lack of connection with reality amongst the other Political monoliths has created within the Electorate itself.

It’s time for Politicians to wake up and smell our overpriced coffee before it’s all too late.

image thanks to http://www.telegraph.co.uk

Tax avoidance, foreign companies and the real influence of Utility providers on our cost of living

Utility companies are in the news again and this time for exploiting the foreign ownership loopholes that are allowing an increasing number of monopolistic companies to avoid paying sizeable sums in tax.

Were it not for the near exponential rises that we seem to experience from energy and water companies alike on regular basis, you might be forgiven for having a little sympathy with a company which is struggling to make money.

But these are companies which are not only achieving great success in securing stratospheric profit margins from the services they provide using what appears to be increasing levels of media-friendly scaremongering; they are arguably doing so without making any real contribution to the wider society that pays them whilst customers also seem to pay for all their upgrade work as well.

This situation has of course been in the making for a considerable time and whilst it would serve the political interests of some groups to blame the problem on the process of privatisation in its basic sense, it is pretty certain that the sale of shares to everyday taxpayers was never intended as a direction of travel which would result in foreign ownership, or to the cartel like behaviour which has contributed to the creation of rip-off Britain.

Coalition Government or hung Parliaments don’t lend themselves well to dealing with issues of any real importance when they are in power as we all continue to witness each and every day. But that of course is when they face issues that we as a public are openly aware of because Politicians have chosen to acknowledge them for whatever politically expedient purpose that it might serve.

The real travesty with the issues regarding utility companies and the influence that they are having on the true cost of inflation to us all – which has this week been suggested to be as high as 25% – is that there is not even the will to talk about the true impact of their actions upon us all in Westminster.

With the economic fall-out of credit-card government and the continuation of spending with money that the UK simply doesn’t have, reality suggests that negligible or zero percent rises in wages for the workforces operating within the commercial and public sectors alike are here to stay. That benefit and service cuts will remain the uninventive and ill-considered weapon of choice used by a political elite which seems bereft of any consideration for the mechanics of life outside their own societal bubble.

However, there are choices for our leaders and within the constraints of Coalition Government or not, Politicians taking their responsibility to the Electorate seriously would and should all be using them.

Before anything else, acknowledgement that companies providing what are in fact essential services are profiteering and are misusing the opportunities that they have would be a significant step in itself. People would at least begin to feel that leaders are identifying with what real life is really like.

This would by its very nature have to been done with clarity and purpose and with much more than a mere suggestion of what action lies ahead. Another mealy-mouthed effort like that on the part of Politicians when it has come to addressing the previous actions and future behaviour of bankers simply will not do.

It has become clear that self-regulation in such key industries isn’t working for anybody but the companies themselves, and this is where those with Government responsibility should really be taking a lead.

The next step would be to regulate pricing to allow the true cost of service provision to be reflected in the prices that we pay and dictate the formula under which such Companies can raise funds for new and improved infrastructure which in most other industries would rightly come from the bottom line.

Because the services that these Companies provide are essential to everyone, profit should be capped and systems put in place through vigorous auditing processes  to ensure that clever accounting methods cannot provide a conduit through which different cost centres or budgetary areas can be manipulated to provide an enhanced dividend.

Company owners wouldn’t like this approach, but the fact remains that with services that customers have no alternative to use, profiteering before doing what is right has created a cash-cow for the few, whilst inflicting financial misery on the many in circumstances where people cannot even earn more just to compensate. That’s why foreign owners have been so happy to throw cash in the direction of companies in the UK that governments most other Countries would at least keep very close to State control and why our Politicians must now recognise the power and influence that these industries actually have in our everyday lives.

Finally, the time has long since passed when simplification of the Tax system was required on a comprehensive basis to stem the flow of revenue from leaving the Country that we desperately need and to which we are entitled.

Tax should be applied at the point of sale; not at the location where the account managers and owners  are based. This one simple and realistic change could find tax raised from the tills where coffees are physically bought; from the sale on the actual computer and screen where products are purchased; and from the meters where our power, gas and water are measured and supplied inside the houses in which we live.

Scary as the prospect of taking on the industrial and financial monoliths might seem, it is for reasons just like these that Politicians are Elected and why Governments are given power. It might not be easy, but if those who seek our votes at Elections take the trust we have given them seriously, it necessarily follows that they will use it for our benefit too.

Isn’t it time that they started living the mantra ‘action speaks louder than words’, rather than simply just paying lip service to it?

image thanks to source unknown

The commonalities between bankers, blame-based lawyers and union bosses that touch us all and can only be dealt with by a change in the mind-set of Government first and the policies which will then follow afterwards

February 22, 2013 Leave a comment

Crazy as it may seem, many of the problems and fears facing society as a whole are inextricably linked and propagated by us all through a mesh of similar behaviours and actions. These are marked apart only by simple interpretation, knowledge, and the differences of public perspective that are all too often profitable for politicians and activists to retain.

One such example of this within this libertarian age is the ‘feel-good’ which comes from targeting those who most openly profit through the exploitation of others, and the apparent greed and avarice of high-level bankers and wealthy tax-dodgers has captivated ill-feeling within many. But is it really possible for just those few to ride off the backs of many others within a society which paints itself as being considerate of all others; or is this just the one end of a predominantly passive chain slowly strangling the UK as part of an evolving something-for-nothing and therefore self-before-all culture?

As unpalatable as it may seem, there is a distinct thread of commonality which runs from the profiteering of the hated fat-cats, through the behaviour of politicians, the influence of those promoting and making blame-based-claims, to the actions of union leaders and their seemingly strike-happy members to beyond in a way that very few would outwardly wish to knowingly associate. The sad reality is that each and every one of the self-beneficial acts that we probably at some point will have all pursued, goes on to have a negative impact upon others and usually so in a much greater number than just ourselves.

At one end of the spectrum, bankers and pension fund managers sat in plush London offices think little of the impact that pressure on retailers or energy providers to raise profits will have on end users – a point which may turn out to have been very well illustrated by the horse meat scandal and the continuing issues surrounding milk prices for farmers where margins are squeezed to unsustainable levels.

A few miles down the road, ‘career’ politicians make decisions which will affect 60 Million people based upon their chances of getting re-elected or promoted, whilst the oversold age of austerity does little to deliver any real reduction in deficit but leaves the very same people paying a higher price just the same.

Meanwhile clever animations with manipulated pop-songs and actors posing as glamorous lawyers promote the resignation of any self responsibility in accidents and the idea that somebody else is always fully to blame and must therefore pay in a very easy way, whilst the prices of almost every insurance policy in the land rises as a result.

Then in the papers, public sector union barons tell us that the Government is to blame for the slashing of services up and down the Country, when it is actually the unrealistically beneficial working conditions, wages and the limitation of responsibilities they have ransomed for their members over the course of many years which have contributed most to the destruction of a once enviable system which is sadly no longer able to sustain itself.

It is indeed ironic that it is the rise of ‘rights’ for the individual in the workplace and in just about every other part of life thereafter that strangle the rights and lives of others at every turn, and then come back full circle to a point where it is the jobs of those who sought those rights in the first place which are no longer sustainable because of the costs of the legislation and conditions that those very same enhanced rights have come to impose – generally because they have long since surpassed the point of doing good.

In every case, the public and customers at large end up paying through higher prices for food, fuel, taxes, insurances, lessening standards and losses within public services which are destroying quality of life and in some cases will probably lead to deaths if they have not already done so.

The true impact of the rising cost of living itself and the growing impact it will have upon low-income families and those in middle England who end up subsidising just about every other part of life has yet to truly manifest itself. But without change in each and every part of life and the way that every one of us approaches it, what we consider to be painful now, may soon become truly horrific.

Most of us do of course read every situation we face in life in terms of how it makes us feel and how it will impact upon us personally, rather than how it will affect the others involved, irrespective of how near or how far from us through a chain of resulting reactions they may actually be.

So in the same way that the banker raises profits by indirectly pushing the price of food up by continually pushing for better margins from the retailers that they own, union bosses demand higher wages for members so that they can afford to keep ahead of cost of living rises, with the ultimate effects being pretty much the same whichever way you choose to look at it.

Getting to a point where the balance is redressed in every sense is not a journey that any of us can toy with lightly, even though it would be politically expedient for any one of the groups discussed or their libertarian or profit-hungry apologists to do so.

The complexities brought into being when people prioritise themselves or manipulate others to do the same are enormous and much easier to embrace than they are to replace. Sadly, those who have become emotionally tied only to themselves without due regard to the result of their actions upon others are caught in a spiralling trap. One which is increasingly negative and encourages the growth of the ever evolving paranoia which accompanies the concept that all problems are of someone else’s making and that others must be made to pick up the tab.

Tackling a problem which is now cultural and has become so through many years of conditioning via the self-serving leadership of successive Governments is no easy task. Fundamentally, this is a problem which does not discern between demographics or social class and is defined only by the medium in which it is applied by the individual. It has been enhanced by the perception of close proximity, delivered by ease of communication through distance and propagated by the ease of buy-in which has itself been empowered by the two-edged-sword which is the media age.

Ultimately, self awareness and therefore responsibility of the individual has to be the aim of real Government as it will prove to be far more liberating and beneficial to everyone than the fleeting benefits any impractical plot cooked up by politicians as an easy and profitable crowd-pleaser.

It is the responsibility of those who led us here and are most likely to be happy with the status quo to lead us away from it and that is where the greatest difficulty arises.

Politicians can not only make the necessary policy changes to bring about a change which is much bigger than being about policy itself; they can also lead us in a way that advertisers, union reps and bankers simply cannot or never will be able to.

The real question here is where a change of this magnitude is going to come from when it is the political system itself which is responsible and politicians themselves who attain most benefit from maintaining the status quo.

After all, it is only politicians who have a genuine and meaningful mandate who will be selfless enough to take the risks to make those long overdue changes which nobody in Government today seems willing to outwardly contemplate. And these are indeed changes that are needed as a beacon for all to demonstrate a better way of living where a thought for all on the part of one is seen for its benefits to the one as a consequence of its benefits for us all, rather than for us continuing to live a life where the self must always come first and it seems ok for us to do so.

Rail fare hikes and tough talk on welfare waste: Today’s problems will not simply be solved by continually taking more from pockets when there is even less to replace it.

January 2, 2013 1 comment

With a 4.2% average rise in ticket prices hitting rail commuters today, just how long do politicians think that rises in the cost of essential services, utilities and products will remain ‘sustainable’?

Stories such as this one and also the attack on welfare payouts by Iain Duncan Smith in just the past two days alone demonstrate just how little emphasis there really is in dealing with the root causes of problems, which may be unpalatable to those in power, but are nonetheless very real indeed.

As a businessman with both conservative and capitalist principles, I have enthusiastically embraced the opportunity to be both enterprising and entrepreneurial throughout my career. However, I also learned very early on that there are basic laws at work within business, one of which is that costs will generally be fixed, but profit will always be variable.

Where this goes wrong in the economy is in situations where those in control of businesses are able to fix minimum profit margins and then seek the cost of investment and renewal through price hikes which usually only affect people and other businesses who themselves have no ability to raise their own incomes or margins to cover those very same costs.

Those reading this who have experience of the commercial sector in its broadest sense will know that the circumstances which generally allow this darker side of capitalism to thrive, only exist within monopolies or within industries which provide services or products which people must have; many of which were once in public hands.

The history which has given privately owned businesses the ability to dictate the ‘breadline’ or to become able to ‘profit in misery’ is a long one. Profligate spending by idealistic politicians who believe in the principle of something for nothing, simply created a situation which left others with a more realistic understanding of the way that an economy really works with little choice in the way they had to respond.

The age of privatisation was soon born and responsibility for its evolution cannot be levelled at the door of any one Conservative, Labour or Coalition Government, as all have played their part since the 1960’s.

What can equally be said is that no one person who can ask for the votes of many thousands of people, can reasonably expect to retain any sense of respect as an MP if they have accepted that responsibility and then failed both to recognise and then to act upon the damage and pain that such levels of power are causing in the wrong hands.

Yes we need travel fares that make a job worth travelling for. Yes we need reform of welfare, benefits and taxation so that there is an incentive for all to work and stay in this Country. Yes we need managed investment in just about every area of life and infrastructure that we could conceivably imagine.

But we also need Government which is responsible, confident in taking risks and ready to deliver reforms which may well include legislative restructuring of businesses offering essential services in order to limit what they actually make.

The failure of Government to ensure and safeguard basic costs for independent living is a root cause of many of today’s problems and will not simply be solved by continually taking more from pockets when there is even less to replace it.

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