Gossage – Gossip


Surprise on the cards

There was a brief moment when my heart leapt up when I learned the name of the new chairman of the regulator Ofgem. The retirement of that very distinguished person, Lord Mogg, precipitated a long and arduous hunt for a successor. Given the most far- ranging of briefs, deliberately the head-hunters searched far and wide. A big surprise was on the cards.


When I heard it was David Gray who had been appointed, I was full of admiration. His second biggest-selling album  ‘A New Day at Midnight’ would steel him for long negotiations with the Big Six.  His last Top 10 album, ‘Life in Slow Motion’ describes perfectly the Ofgem decision-making process.

Singles like  ‘Sell. Sell. Sell’,  ‘Please Forgive Me’ and his biggest US hit ‘Life in Slow Motion’ were beautifully descriptive of the companies to which Ofgem has long been captive (apologies: has long regulated).

And inevitably he will be glad his biggest US hit, ‘Dead in the Water’ sold so poorly here- otherwise it might have been presumed to be a simple prediction.

What a shame to discover that the David Gray who has actually been appointed is not the 45 year old Sale-born warbler. But a former Ofgem director of networks with precisely the same name. Sic Transit Gloria.


Mini scandal

My many devoted readers will recall the mini scandal caused by each of the Big Six electricity companies, by the curious methods used to meet their legal obligations to install energy saving measures into homes. Rather than install new boilers or insulation, instead they flooded the market with millions of clunky unlovely 40 watt-equivalent compact fluorescent light bulbs. Many of which ended up in kitchen draws.

This all happened a few years ago. Between 2002 and 2010, between them the Big Six electricity companies succeeded in distributing some 262 million of these cfls. As I pointed out at the time, the average home has 11 lighting installations. With 24m homes in Britain, that worked out delightfully that each home possessed almost 11 of these energy saving bulbs.

So theoretically all the old incandescent lightbulbs had become redundant. But even now there are many independent shops still stocking the old bulbs, almost the only 19th century product still being sold well into the 21st century.

Now Ofgem has finally caught up with E.ON. The company had told the regulator that it distributed around 3.4 million free energy saving light bulbs to UK homes in 2010. A relatively modest number compared with some of their counterparts. But in fact some bulbs were sold in the Republic of Ireland, and E.ON could not prove that others had actually been distributed.

After much huffing and puffing, the utility has agreed to make a £2.5m payment. So 18,500 extra low income customers will receive £135 each under the 2013/14 Warm Home Discount this coming winter. Of course there is nothing to stop any recipients from heading to their nearest corner shop, to stock up from the remaining incandescent light bulbs. Which somewhat defeats the purpose of the original scheme.


The powers-that-be at the Department of Energy and Climate Change are determined to see at least one new nuclear power plant built. There will be no stopping them.

No matters that the earliest year of opening it has slipped from 2017 to 2022. No matter that the anticipated price tag has escalated from £5bn up to £14bn (and rising). No matter that original co-owners Centrica have backed out, pleading financial prudence.

No matter than putative Chinese replacements have been vetoed by the military, for fear of proximity to nuclear weapons knowledge. No matter that the government is having to breach its official no subsidy mantra by providing a massive £10bn guarantee.

There will simply be too much egg on too many very self-important faces not to see the good people of Somerset having a new nuclear plant imposed on them at Hinkley Point. After much publicised hard bargaining with the French government  (cunningly disguised as Electricité de France), eventually all but a few token points will be conceded. And the go ahead will occur. Give or take approval from the competition directorate in the European Commission, determined to ensure that the single market is not breached.

But just as thirty years ago, when Margaret Thatcher’s government set about creating a whole family of new nuclear power stations, and then had to settle for just Sizewell B blighting the Suffolk coast, the sheer enormity of the efforts and contortions necessary to get a single power station built will exhaust the patience of al but the real diehards. And the attention will turn elsewhere: gas fracking, anybody?

The most poignant aspect of this entire sad tale is the location of what was due to be the second 1980s nuclear power station, after Sizewell. At the time, lengthy deliberations and plans took place. A massive public inquiry was held. Permission was granted to build. Which then lapsed, as nobody had either stomach or pocket to do so. And where was this fantasy power station to be constructed? Why, at Hinkley Point in Somerset.

Pure coincidence

In no way would I wish to add to the opprobrium that has been heaped upon RWE over recent months. All because it has avoided paying well over £100m in UK corporation tax for three years, by using a Maltese shell company called Scaris.

Over half the firm’s funding comes from its German owner via loans paid through Scaris in Malta, thus allowing the UK arm Npower to return annual interest on its loans. This generates a paper loss. And thus deprives the exchequer of some £108m.

Seeking to rebut the widespread criticism that it belongs firmly in the tax-dodging Google/Starbucks/Facebook category, RWE has been stating emphatically to all and sundry that “all of the ways in which we manage our tax is approved by HMRC (Her Majesty’s Revenue and Customs).”

It is of course entirely coincidental that one of HMRC’s senior official external advisors is Herr Volker Beckers. And that it was he who was the chief executive of RWE in the UK, when the Scaris arrangements were put in place.