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Laidlaw vs. Miliband Round 2

Another day, another bashing for Red Ed. Like fox hunting some sports are too cruel and too easy to succeed at.

Following Ed Miliband’s disengage brain outburst on freezing energy prices and his apparent total ignorance of fundamental economic principles there was an initial outcry from all and sundry, not least those who pointed out that this former Energy Minister and policy ‘wonk’ really should have known better.

However desperation makes politicians embrace populism and Ed’s state then and now can be easily summed up as desperate.

But Red Ed’s crusade against worldwide energy markets has foundered as the oil price crash and the unheralded lows ahead of winter in the gas and electricity markets place the folly in sharp context.

Not to worry though, Miliband has found another ‘populist’ target in castigating the water companies, Big 6 breathe easy.

But some won’t let it lie, and some have little to lose in sticking the knife in. Step forward Sam Laidlaw.

The soon to be departed Centrica Chief Executive, Laidlaw, has once again laid into Red Ed talking of “unintended consequences” if Labour were to triumph in the 2015 election.

Laidlaw, overlooking the economic illiteracy of Miliband’s promise, instead focussed on the collapse in world energy markets:

“I think we’re in a world now where because long term the market seems to be softer [falling prices], and you’ve seen the oil price phenomenon [crash] in the last month or so, the price freeze is probably going to have some unintended consequences if it were to be put in place.

“I’ve no idea whether it will be or not, that will depend on the electorate.

“I think the clear concern is that people [the energy suppliers] will have bought some of their energy further forwards than they otherwise would have done, in order to mitigate the effects of the price freeze. That means that retailers’ ability to take advantage of a softer [lower] price are limited.”

Laidlaw also went on to add some context to life as a Big 6 energy supplier:

“People often forget the hugely valuable role that Centrica plays in the quality of peoples life, keeping the lights on, security of supply, trying to do this in an affordable way, and actually impacts Britain’s competitiveness and everybody’s standard of living and ultimately inflation rates.

“With that, inevitably, comes some fairly strong views but I think that goes with the territory, and in an election cycle, the volume will go up”

Whilst people have no ‘duty’ to remember the enlarged role an energy supplier or any other company plays and are justified in seeing their relationship with and the role of the business as merely the provider of a service and the recipient of money, Laidlaw makes some cogent points.

The energy markets have dipped, most notably oil but of more relevance is the remarkable sequence of pre-winter lows seen over recent weeks. That business energy customers can benefit from these falls is testament to the working of a market unfettered by distorting and ineffectual price ‘freezes’.

No wonder Miliband has gone quiet on the issue; the market itself has delivered the perfect riposte.