23/11/2011 Newsnight


23/11/2011

Newsnight turns up the heat on the energy bosses as Jeremy Paxman grills Phil Bentley, the head of British Gas, over pricing.


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Transcript


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Nice and warm? The energy secretary tonight, on going green and

:00:19.:00:23.

bringing foun bills for fuels. British Gas sheer, promising to

:00:23.:00:27.

make it easier for us to reduce our energy bills, what has taken him so

:00:28.:00:31.

long. How will Britain meet its energy bills in the future. Three

:00:31.:00:36.

people who think they know are here to explain. When they protested in

:00:36.:00:41.

Bahrain, dissent was met with deadly force. Now an official

:00:41.:00:45.

inquiry for the Government of Bahrain concludes there was terror

:00:45.:00:49.

and torture. I will talk to a minister in that Government.

:00:49.:00:53.

Is greater job insecurity the way to make the economy grow faster?

:00:53.:01:03.
:01:03.:01:04.

The Government seems to think so. So, the bad news is that we're all

:01:04.:01:07.

going to carry on paying for more our energy for years to come, the

:01:07.:01:12.

good news is by 2020, if we haven't frozen to death by then, bills

:01:12.:01:16.

could be lower by 7%. This extraordinary prediction by the

:01:16.:01:20.

energy secretary is based on his faith in things like home

:01:20.:01:24.

insulation. While we leave the boss of British Gas on a gentle simmer,

:01:24.:01:29.

we report on what the Government thinks is going to happen. Where we

:01:29.:01:33.

get our energy from, and how we pay for it is the big issue for the

:01:33.:01:38.

nation. The basic idea is out with the old

:01:38.:01:42.

energy infrastructure and in with new cleaner sources. It is

:01:42.:01:45.

complicated and potentially, politically, toxic.

:01:45.:01:50.

The price of energy in the future depends on how we prioritise,

:01:50.:01:53.

reducing carbon emission, and keeping costs down for the most

:01:53.:01:58.

needy. And how innovative we can be on energy production and efficiency.

:01:58.:02:01.

Who decides what that balance should be?

:02:01.:02:04.

Last month, David Cameron and his energy secretary, Chris Huhne, sat

:02:04.:02:09.

down in a doubleheader, with the energy companies, to try to sort it

:02:09.:02:12.

all out in a way that consumers will bie. The most important thing

:02:12.:02:17.

is to try to help people with their bills. Today Chris Huhne said the

:02:17.:02:23.

cost of energy and climate change policies will add �280 to household

:02:23.:02:27.

energy bills by 2020, but that he has a plan, including a Green Deal,

:02:27.:02:32.

that will mean bills come down. Overall be we anticipate that

:02:32.:02:38.

rising world gas prices will push up bills. But both gas and elect

:02:38.:02:46.

tristee, but the policies will moderate this rise. By 20 --

:02:46.:02:51.

electricity, but the policies will moderate the rise. But 2020 we

:02:51.:02:55.

expect bills to be 20% lower than they would have been without our

:02:55.:02:58.

policies. This is the kind of technology the Government says we

:02:58.:03:04.

will need A pilot plant to capture carbon, at London's imperial

:03:04.:03:10.

college. Essential to stay within Government emissions target,

:03:10.:03:16.

especially if we depend on gas. we look to the future and do things

:03:16.:03:22.

on larger scale, a power station, the foings to increase bills

:03:22.:03:24.

becomes more -- potential to increase bills becoming more

:03:24.:03:27.

significant. That is why it is hugely important the Government

:03:27.:03:30.

gets the investment climate right that enables us to do this in a

:03:30.:03:35.

cost effective way. To bring forward new technologies, to reduce

:03:35.:03:38.

the costs of the technologies we have got. Those more cautious about

:03:39.:03:41.

green investment, say it is all happening in a way that costs more

:03:41.:03:45.

than it should, that is why bills are going up. We know from

:03:45.:03:49.

calculation in the Department of Energy and Climate Change, that the

:03:49.:03:52.

Government's own green policies, will, by the end of the decade,

:03:52.:03:57.

have increased gas prices by a fifth, and electricity prices by a

:03:57.:04:01.

third. Those are huge increases, they don't need to be as big as

:04:01.:04:06.

that. We can go greener to lower cost. How much does going green add

:04:06.:04:10.

to bills. There have been some alarming-sounding estimates of

:04:10.:04:16.

increases of some �00 a year, aside from the Government's -- �900 a

:04:16.:04:20.

year, aside from the Government's own figures there is no true

:04:20.:04:26.

analysis of what that might be. Carbon budgets make sense from an

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economic perfective, there will be energy impacts but there is

:04:29.:04:35.

misconception about what the impact will be. The first misconception is

:04:35.:04:38.

energy bills are high because of low carbon, and the other is that

:04:38.:04:43.

we need huge investments and that will result in huge bills over the

:04:43.:04:46.

next decade. That is a misconception. There are growing

:04:46.:04:49.

calls for transparency on bills, to show people how much is being used

:04:49.:04:54.

to pay for what. As energy companies work on how to pass on

:04:54.:05:00.

the estimated �200 billion, it will cost them to bring out energy

:05:00.:05:03.

infrastructure up-to-date, clarity will become even more important.

:05:03.:05:08.

With us now is the energy secretary, Chris Huhne, so energy bills will

:05:08.:05:12.

be lower by 2020, this is an amazing claim? We are not saying

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energy bills will be lower. sounded like you were saying that.

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I couldn't have been clearer. could have been more clearer, you

:05:21.:05:27.

said they will be 70% lower or �94 lower. As a result of our policies,

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but that is not the only impact on energy bills. They will be higher

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in 2020? I have no control over world oil or gas prices. Why did

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you say it, if it is not true? Because I didn't say what is not

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true. I said exactly what is true. Which is we are going to have,

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according to the forecast from Government economists, a rise in

:05:47.:05:56.

gas prices from about 61p a thermto 70p. You said you couldn't predict

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what would happen to gas prices? have a low and central and high

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forecast. This is 70% on the average forecast? Our policies to

:06:09.:06:13.

save energy and low carbon transition, those policies will

:06:13.:06:20.

moderate what we anticipate on the central stand to take 70% off bills.

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It won't take 70% off bills because they will be higher in 2020?

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Compared with what otherwise will happen. Assuming no Government

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between now and 2020 did anything? If there was absolute free market,

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and you simply had reflecting what was happening in the world in the

:06:36.:06:39.

gas market, and the world oil market, then you would see a rise

:06:39.:06:44.

in energy bills over the period of 2020. We don't have a free market,

:06:44.:06:49.

do we? We have one worldwide. in this country, we don't? If we

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have to buy gas from Norway or Qatar, they are not the Salvation

:06:55.:07:00.

Army. It is an entirely bogus at that time tis snik No. Since you

:07:00.:07:04.

have admitted you can't predict price, and no Government can do

:07:04.:07:08.

anything between now and 2020? not saying we can't predict energy

:07:08.:07:13.

prices, we have three different scenarios. Last month you said you

:07:13.:07:17.

couldn't predict energy prices? key point is the things that I can

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control, that the Government can control, which is our policies, are

:07:21.:07:25.

going to moderate the impact of energy bills. That is the key point.

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But if, in the absence of policies, we're going to see a rise in bills,

:07:30.:07:34.

the effect of our energy-saving policies and our transition to low

:07:34.:07:38.

carbon, getting off the fossil fuel hook, away from the vulnerability

:07:38.:07:43.

to the Middle East, that clut bills by 27%, and indeed our bills

:07:43.:07:48.

throughout -- cut bills by 27%, and indeed our bills throughout the

:07:48.:07:52.

parliament. How much do tax-payers have to pay to meet the target?

:07:52.:07:55.

Tax-payers don't pay anything, it is, in effect, through bills. There

:07:55.:08:00.

is an increase in the unit cost of gas and electricity, pointed out in

:08:00.:08:07.

the package. There are also benefit that is flow from that, we consume

:08:07.:08:13.

less energy and the cost comes down. No increase in green taxes? We have

:08:13.:08:18.

increased the green -- reed the green taxes. Between now and 2020

:08:18.:08:22.

and this wonderful day when bills are 70% lower there is no increase

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in green taxes? You have two effects going on, you are

:08:26.:08:30.

increasing the unit cost of gas and electricity, and you are increasing

:08:30.:08:33.

the charges across the unit. As a result of the savings that you are

:08:33.:08:37.

making, in the amount. People will have to pay for more their bills?

:08:37.:08:43.

No. You have just said as much, haven't you? No, because the price

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and amount equates to the bill. If the amount comes down more than the

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price goes up, the bill comes down. It is quite simple. I have no idea

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what you are talking about. When you get your energy bill, it is

:08:56.:09:00.

made up not just the price of the unit of gas and electricity, but

:09:00.:09:03.

also the amount you use. If you reduce the amount you use by more

:09:03.:09:08.

than the price goesp, the impact of that is to reduce the bill. That is

:09:08.:09:11.

what is going on as a result of policy. That is clear if you don't

:09:11.:09:15.

use any electricity at all, you don't pay any electricity bill?

:09:15.:09:18.

That is also true, but that is not what I'm saying. We are

:09:18.:09:23.

anticipating that we will go on using a very substantial amount of

:09:23.:09:27.

both gas and electricity, but we will save the amount we will use

:09:27.:09:30.

compared with at the moment, and we will have a transition so

:09:30.:09:36.

increasingly, as we move on to non- fossil fuel forms of energy. We

:09:36.:09:42.

won't get buffeted by the events we have seen in the last year, we have

:09:42.:09:46.

had a 58% increase in gas prices because of what is happening in the

:09:46.:09:55.

Middle East and the Fukashima disaster and if we move away from

:09:55.:10:01.

that thal be good for the British consumer and jobs. Let me ask you a

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straight forward question, the �200 million investment in the

:10:06.:10:09.

infrastructure, who pays for that? That is factored in the base line

:10:09.:10:13.

of the energy bills. We are assuming the energy companies will

:10:13.:10:16.

have to make a return on the capital. We are assuming an

:10:16.:10:20.

increase in world prices, we're also giving a separate calculation,

:10:20.:10:23.

that is a calculation of the effect of our policies and that is what is

:10:23.:10:33.
:10:33.:10:34.

reducing bills by 2020. Despite the �200 billion spent on the

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infrastruck tue, paid by consume -- infrastructure paid for by

:10:41.:10:46.

consumers' bills? Not up front, you do it the same as any other

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investment, it is over the life of the investment. If it is �200

:10:50.:10:53.

billion, it is not straight away, it is over the lifetime of that, in

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the same way as a mortgage, and other ways you fund that investment

:10:58.:11:01.

over the lifetime of the investment. Thank you very much.

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Of course, reducing your bill something you can only do if you

:11:04.:11:08.

understand how the bill is calculated. The energy companies

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have produced such a baffling array of different tarrifs that figuring

:11:12.:11:21.

out which one is best would have beaten the brains of Newton and

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Leibniz. Before we talk to the boss of British Gas here is this report.

:11:27.:11:33.

As we all pay more at home for energy and gas, events far away

:11:34.:11:39.

seem far away. The earthquake in March in Japan meant shocking gas

:11:40.:11:45.

prices too as the country shut down nuclear power plants and turbd to

:11:45.:11:53.

gas, events in Libya, and the price from gas-fired powertations has

:11:53.:11:58.

risen too. The prices are buffeted by

:11:58.:12:03.

political turmoil, by natural disasters, but is the price we pay

:12:03.:12:07.

really beyond the control of politicians and energy companies

:12:07.:12:12.

here? Or is our energy market simply not working? I think we have

:12:12.:12:16.

a number of big problems in the energy market, the first is

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consumers believe very little the energy companies say. The second is

:12:19.:12:22.

we are in an environment where prices are going up, that is

:12:22.:12:26.

causing consumers to be fearful of winter weathers. We still haven't

:12:26.:12:35.

got the A, B, Cs of a proper market sorted out. The tarrifs are

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confusing and people are being driven into energy debt by high

:12:39.:12:45.

prices, there is a lot to be sorted out. We know customers are

:12:45.:12:48.

frustrated. British Gas want us to believe that new technology will

:12:48.:12:53.

help us cut back. These smart metres show you the energy you are

:12:53.:12:57.

using. Customers will understand their energy ue, pounds and pence,

:12:57.:13:00.

gas and electricity, it means they have choice about what to do

:13:01.:13:06.

differently to save money on energy bills. Recent price rises by the

:13:06.:13:10.

big energy companies have been dramatic, 16-18% for gas, and 10%

:13:10.:13:15.

for electricity. How closely do energy bills track the wholesale

:13:15.:13:20.

prices. Until the end of 2008, they tracked pretty closely, but after

:13:20.:13:25.

that point, when wholesale prices fell, to a low last summer, our

:13:25.:13:31.

bills stayed relatively flat. That tracking was less obvious. In the

:13:31.:13:35.

1990s, we had managed to create quite a successful market, which

:13:35.:13:40.

really did drive down energy prices for everybody. That was a success

:13:40.:13:44.

that people emulated around the world. Since then Governments have

:13:44.:13:49.

interfered in markets in all kinds of ways. Growing fury over the

:13:49.:13:52.

bills has pushed energy companies to say they are changing their ways,

:13:52.:14:02.
:14:02.:14:36.

The latest upset has been over profits. Energy companies ds

:14:36.:14:42.

dispute the figures, but last month Ofgem said margins for an average

:14:42.:14:48.

household had reached �125 a year, up from �pun 15 in June. Warm words

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-- �15 in June. Warm words may not be enough. With us is the managing

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director of British Gas, Phil Bentley, why do you think people

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have lost trust in you? They definitely v one of the issues is

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the number of tarrifs out there. There is 544 tarrifs to choose from.

:15:06.:15:10.

When millions of people at home are looking at the energy bill, they

:15:10.:15:14.

don't understand it, and where they can save money, as an industry we

:15:14.:15:19.

have to put our hands up and say we should be doing more to help.

:15:19.:15:23.

you wake up one morning and think we have too many tarrifs, what

:15:23.:15:27.

happened? We are announcing a big change tomorrow. I'm asking when

:15:27.:15:31.

you realised? It has been building, and for two reasons. You have done

:15:31.:15:35.

this because you have been told to do it, haven't you? Ofgem have told

:15:35.:15:39.

you to do it? If I can give you the reasons why. The world is changing,

:15:39.:15:45.

the world is changing because the UK, today, is importing 50% of the

:15:45.:15:48.

gas it needs from international markets. I know you don't want to

:15:49.:15:54.

really hear this point, let me make one point if I could. A tanker

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landed in Britain, for the gas for 100 though homes in Britain, it

:15:59.:16:06.

cost �42 million. That same tanker can sail to Japan and they will pay

:16:06.:16:11.

�62 million for it. I'm asking about why you developed so many

:16:11.:16:16.

different tarrifs in your industry, and why you have now decided,

:16:16.:16:20.

suddenly, you weren't playing fair with the consumers? Consumers are

:16:20.:16:25.

told us they don't like it. It is right we respond. Which is why, if

:16:25.:16:30.

I may, we are simplifying tarrifs, and ensuring fixed or variable,

:16:30.:16:34.

simple. Would you like to apologise for the complexity of the tarrifs?

:16:34.:16:39.

I would, I would say to all viewers we have not made it easy. Let me

:16:39.:16:43.

refer you to this graph I will put up on the wall behind me now, I

:16:43.:16:47.

hope. Would you like to apologise to them for what has happened to

:16:47.:16:50.

their bills, when you see the wholesale price of energy has gone

:16:50.:16:54.

down, and bills have not gone down? Again, you have to have this honest

:16:54.:16:57.

conversation, what's the cost of green, what's the cost of delivery

:16:57.:17:02.

to your home, and the cost of energy that goes into it. You keep

:17:02.:17:06.

saying the bills go up, you have just told us, just now, that world

:17:06.:17:10.

market prices have gone up and that is why bills have gone up. That

:17:10.:17:14.

graph proves you are not being entirely honest the wholesale cost

:17:14.:17:20.

has gone down and bills have not? Our margins are 5% a year. 5%, let

:17:20.:17:24.

me just finish the point. That graph demonstrates, comprehensively,

:17:25.:17:28.

that is a partial picture? It is a partial picture, because it doesn't

:17:28.:17:32.

include, all the other things that are in your bill. The cost of green

:17:32.:17:36.

energy. How much is it in your bill, it will be �50 next year, that is a

:17:36.:17:41.

policy decision. Transporting it through The Grid, the cost of that

:17:41.:17:46.

is going up. Within that �200 billion that Chris Huhne is talking

:17:46.:17:52.

about, we have to reinforce The Grid. That isn't to do with green

:17:52.:18:00.

measure, that is the wholesale cost of energy. Wholesale costs have

:18:00.:18:04.

gone down and bills haven't? If you look over a longer period of time,

:18:04.:18:08.

you will see the wholesale price of gas has gone up. Nobody denies that.

:18:08.:18:11.

But all I'm trying to say is that the wholesale price of gas is not

:18:11.:18:16.

the only part of the bill. It is the whole point about simplifying

:18:16.:18:20.

tarrifs, giving customers choice, giving them transparency, what is

:18:20.:18:25.

in your bill, how much is the commodity, has it gone up or down.

:18:25.:18:29.

How much is transportation and green lefies, that is what we are

:18:29.:18:33.

trying to do for our customers, that will be welcome. In that

:18:33.:18:38.

process you can lay some of it off on people like Chris Huhne, who has

:18:38.:18:41.

left the studio. Do you consider, when you look at your company, do

:18:41.:18:45.

you think you are just like any other company. Utilities, many

:18:45.:18:49.

people feel, are not like other companies, not like a fashion chain

:18:49.:18:59.

or a brewery? We offer an essential requirement to living in part of

:18:59.:19:05.

the world. We are conscious of our -- in any part of the world. We are

:19:05.:19:07.

conscious of our social responsibility. Our first priority

:19:07.:19:11.

is to help those who can't afford the heating bills. Then we have to

:19:11.:19:14.

make sure we have the energy that Britain needs over the next ten

:19:14.:19:21.

years. We signed a deal this week, �13 billion to bring gas to the UK,

:19:21.:19:25.

for three-and-a-half million homes for ten years. That is where our 5%

:19:26.:19:28.

margins go. What is an acceptable profit, do

:19:28.:19:34.

you think, for a utility company? said 5% is what we believe is right

:19:34.:19:39.

for the investments that we're having to make. So when it has been

:19:39.:19:45.

up at%, that has been morally wrong? If you look at that, that is

:19:46.:19:49.

when it has been very cold. were responsible for that? No, but

:19:49.:19:52.

we clearly sell more energy when it is cold, and when it's warm, which

:19:52.:19:56.

it is now, and it is great that it is. Bills are actually lower this

:19:56.:20:01.

year. You took the margin, didn't you? You took the margin? We have

:20:01.:20:07.

fixed costs we pass on the benefits to customers. You have told us 5%

:20:07.:20:12.

is an acceptable profit, and you were taking, by your own admission,

:20:12.:20:17.

9%? It will be lower in the year we sell less gas. As you have conceded

:20:17.:20:21.

you don't control the weather it is a meaningless stpaiplt? We don't

:20:21.:20:26.

control the price of -- Statement? We don't control the price of gas

:20:26.:20:31.

either. We are in an international market. What is important is

:20:31.:20:35.

customers understanding the tarrifs. We want to help and simplify, and

:20:35.:20:40.

the second is, can they use less energy, that is where energy

:20:40.:20:45.

efficiency can make a difference. We have Ann Robinson from the

:20:45.:20:49.

consumer group uSwitch, the founder and managing director of Ovo Energy,

:20:49.:20:55.

Stephen Fitzpatrick is here, and Liz Hutchins from the environmental

:20:55.:20:58.

charity, Friends of the Earth. Are you reassured by all of this?

:20:58.:21:03.

completely. The answer to your first question, Jeremy, about trust,

:21:03.:21:08.

consumers have seen their bills go up by 21% this year. Two increases

:21:08.:21:16.

in a year. Our last customer survey, which we have just done, shows that

:21:16.:21:22.

consumers' overall satisfaction has gone down from 70% to just over 60%,

:21:22.:21:26.

for only four in ten believe they are on the best deal for them. That

:21:26.:21:31.

is why they are not trusting energy companies. Until we have absolute

:21:31.:21:34.

transparency and fairness, and we understand what is going on, we're

:21:34.:21:38.

not in a position to judge whether we have been treated fairly. This

:21:38.:21:42.

letter that British Gas is sending out. You personally signed it, this

:21:42.:21:45.

letter to all your customers about a called honest conversation, do

:21:45.:21:49.

you feel they have behaved honestly? It is very difficult to

:21:49.:21:53.

make the judgment about whether they behaved honestly or not. The

:21:53.:21:58.

problem with the energy companies, they have the wholesale and

:21:58.:22:03.

retailers, one bit is the other bit any way. We haven't absolute

:22:03.:22:08.

clarity about what they paid for their energy. Most energy companies

:22:08.:22:14.

buy their energy four or five years in advance. They can't trust you?

:22:14.:22:18.

agree with that point, that is why we have to do something about it.

:22:18.:22:23.

Why don't they trust us? Too many tarrifs. Number two, when customers

:22:23.:22:28.

are paying more than they should, the energy companies haven't

:22:28.:22:32.

written to them, but we are writing to customers and saying you could

:22:32.:22:36.

be on a better deal. And thirdly, we will explain your bill, how much

:22:36.:22:40.

is the energy, how much we paid for it, and how much is the green.

:22:40.:22:45.

me say right now, right now there are a lot of people out there, a

:22:45.:22:49.

lot, probably the majority, scared stiff about their energy bills this

:22:49.:22:55.

winter. 21%. They have seen inflation going up 4-5%. They don't

:22:55.:23:00.

understand why they are having do this. Secondly, last winter,

:23:00.:23:10.
:23:10.:23:11.

eventhough it was a cold winter, 20% of people turned their engeooff

:23:11.:23:16.

-- energy off, it is a major problem in Britain. People in

:23:16.:23:21.

Britain should not have to make a choice between heating and some

:23:21.:23:24.

other essential good. That is why there is winter fuel prime

:23:24.:23:29.

ministers and warm discount. Nobody should be faced with that decision.

:23:29.:23:35.

I'm determined that that, Jeremy, and Anne knows this, we helped a

:23:35.:23:40.

million customers last year with their bills. I want to look at the

:23:40.:23:44.

specific aspect of competition, the market is dominated by six major

:23:44.:23:50.

suppliers, you are a very small supplier? Quite small. I don't mean

:23:50.:23:56.

to insult you! What is stopping you going places faster? We have

:23:56.:24:00.

doubled in size in the last six months. We are not exactly slow

:24:00.:24:04.

when it comes to growing, we are punching above our weight and

:24:04.:24:09.

delivering good value for money for customers. One of the things I find

:24:09.:24:13.

personally, we have been working with Jeff gem and ministers and

:24:13.:24:16.

consumer groups to raise the bar in terms of customer expectations is

:24:16.:24:19.

the level of confusion. We have tacked about it already tonight, it

:24:19.:24:27.

is so easy. We launched two years ago. These guys shut you out?

:24:27.:24:32.

getting on to that. Get a move on? The fact of the matter is that we

:24:32.:24:35.

see not only a huge range of tarrifs, but a huge range of

:24:35.:24:40.

different prices, from ones that look like the customer has been

:24:40.:24:46.

overcharged, and other customers who are clearly paying below market

:24:46.:24:50.

costs as loss leaders. We see it across the industries, and all the

:24:50.:24:54.

big six to varying degrees have exercised this practice. We agree

:24:54.:24:58.

with you, we have to stop that, be absolutely transparent about the

:24:58.:25:03.

tarrif, if there is a better deal we will tell our customers.

:25:03.:25:08.

want more competition? We welcome it, we have new entrants, we have

:25:08.:25:13.

smart metres, it keeps us on our toes, we are never shy from xeegt.

:25:13.:25:17.

We have grown to be the largest supplier -- competing, we have

:25:17.:25:22.

grown to be the largest splair of energy. You sat there patiently, by

:25:22.:25:26.

how much are energy bills going to increase with the cost of going

:25:26.:25:30.

green? The real big cost on energy bills, as has been said, actually

:25:30.:25:37.

is gas. It is the huge cost that we pay for rocketing gas prices,

:25:37.:25:42.

internationally, that's the main driver. The other factor is this

:25:42.:25:45.

monopoly that the big six energy companies have. They are holding us

:25:45.:25:49.

over a barrel on prices, frankly, yes we should switch between energy

:25:49.:25:54.

companies, but that won't solve the problem, we need to break open this

:25:54.:25:59.

monopoly, and stop people like Phil having the superprofit.

:25:59.:26:03.

dominant companies is not a monopoly, it may be a cartel, but

:26:03.:26:09.

not a monopoly. The problem is they shut out competition? They do I

:26:09.:26:13.

think Ofgem, the regulators, the department for climate change, the

:26:13.:26:17.

ministers in charge, people are starting to see the effects that

:26:17.:26:22.

loss leaders have on competition. When a commodity with gas and

:26:22.:26:25.

electricity, there is a tight operation. It is the lowest cost of

:26:25.:26:29.

service for all the energy companies, where we see larger

:26:29.:26:33.

energy companies using profits from older customer, 5% of the people

:26:33.:26:38.

consuesed by the market and not changing. When they subsidise loss

:26:38.:26:43.

leaders and price us out of the market is takes the spirit of

:26:43.:26:49.

competition. You agree you are doing that? On-line was sold as a

:26:49.:26:53.

loss leader. That isn't right. We are not doing that. It will be cost

:26:53.:26:57.

effective, and it is about being straight with our customers, simple

:26:57.:27:03.

choices of tarrifs. It is not right if we're charging our loyal

:27:03.:27:05.

customers more, and they aren't getting the special deal, that

:27:05.:27:10.

isn't right either. That is why we are writing in the letter saying if

:27:10.:27:13.

there is a better tarrif for you, we will tell you. Do you really

:27:13.:27:18.

expect the 85% of people already having switched to take your letter

:27:18.:27:25.

up and say today's the day I will do it. Shouldn't you just level the

:27:25.:27:29.

prices so energy customers don't have to. We sat in the room with

:27:30.:27:34.

Chris Huhne and David Cameron, we tacked about sending eight million

:27:34.:27:40.

letters to customers to say they could be paying less, the obvious

:27:40.:27:44.

answer is to charge them less. everyone wants to be on an on-line

:27:44.:27:48.

tarrif, my mum wants a simple tarrif paid quarterly. It will be

:27:48.:27:53.

really important to get competition going amongst those 85% who aren't

:27:53.:27:58.

switching. I'm very much in favour of the market. I think the market's

:27:58.:28:00.

right. At the moment we are sleepwalking our way to more

:28:00.:28:04.

regulation. To be honest, if we find that, for example, switching

:28:04.:28:08.

it drops even further, and it could do over the next year or so because

:28:08.:28:13.

of what is happening, then it wouldn't surprise me if Ofgem come

:28:13.:28:16.

and decide to introduce price regulation, that is more

:28:16.:28:19.

interference in the market. What is best for consumers is an active

:28:19.:28:24.

market, and us engaging, what we have to do is get the engagment.

:28:24.:28:29.

You don't believe the market works at all? I think it is a disSAS te,

:28:29.:28:34.

I think your take home pay of �1.9 million last year, at a time when

:28:34.:28:37.

one in four households are living in fuel poverty is a disgrace.

:28:37.:28:43.

People will wonder, when is the Government going to act to break up

:28:43.:28:47.

this big six dominating the whole situation. We do have competition,

:28:47.:28:57.
:28:57.:28:57.

British Gas looks after half the homes in Britain. Ofgem said last

:28:57.:29:01.

winter British Gas overcharged customers to the tune of �250

:29:01.:29:04.

million is what Ofgem said you ripped people off. You are saying

:29:04.:29:08.

you are fair with customers and will give them more choice, we need

:29:08.:29:11.

to break open this system and completely reform it, to make it

:29:11.:29:15.

fit for purpose, for the future. The only point I would make is it

:29:15.:29:20.

is an international market. We have the cheapest gas prices in Europe.

:29:20.:29:25.

You can't deny that point. We need to move away from gas. If you

:29:25.:29:29.

believed in competition, wouldn't you sell more of your gas on the

:29:29.:29:36.

open market? We produce gas and sell it on the open market.

:29:36.:29:40.

Companies do buy T that is not the issue. We are having to buy. We pay

:29:40.:29:44.

similar prices for the gas, I'm sure you are paying what I'm paying

:29:44.:29:49.

for gas. The point is prices are going up, for so long we have heard

:29:49.:29:51.

energy companies talking about investment, and the requirement for

:29:51.:29:55.

green investment gas price, going up the global market. It doesn't

:29:55.:30:01.

take away from the fact that energy companies haven't been treating

:30:01.:30:07.

customers fairly whatever the prices. Whether prices are going up

:30:07.:30:13.

we should be simplifying tarrifs and bills. Your move is great step.

:30:13.:30:16.

That is what we are doing. surprising thing happened today in

:30:16.:30:21.

the gulf, in par rain, which last been ruled by the same -- Bahrain,

:30:21.:30:25.

which has been ruled by the same family for many years. An

:30:25.:30:30.

independent investigation into protests there was read out. It was

:30:30.:30:35.

said the police used fear and torture against open pen nents, and

:30:35.:30:40.

special courts set up to deal with people denied them justice.

:30:40.:30:48.

Contrary to other claims the uprisings were home-grown and not

:30:48.:30:52.

incited by Iran. Bahrain, just south of the capital, Shia

:30:52.:30:55.

protestors are on the streets venting their anger. Their cause is

:30:55.:30:59.

redoubled by the report, commissioned by the king, which

:30:59.:31:04.

spells out the brutality of the king's own men. There could be no

:31:04.:31:08.

denying what the world had already seen. The security forces shooting

:31:08.:31:13.

down demonstrators last spring, but the commission also confirms what

:31:13.:31:20.

has been happening off camera. Torture in all its awful varieties.

:31:20.:31:24.

TRANSLATION: Severe beating, use of water pipe and wooden and metal

:31:24.:31:30.

batons and other forms of torture, and elect cushion. To expose the

:31:30.:31:37.

detainees to high levels of temperatures. Threats of rape and

:31:37.:31:41.

humiliation of religious sects. arrived in Bahrain in February, on

:31:41.:31:44.

the day they were burying of the first of the mourners to die,

:31:44.:31:48.

protesting at the Government. Within hours security forces had

:31:48.:31:51.

opened fire on the funeral prosession, killing another man.

:31:51.:31:57.

Yet the Government, the Royal Family, seemed Blythly ignorant of

:31:57.:32:07.
:32:07.:32:07.

the Israel -- blythly ignorant of the threat, they blamed Iran for

:32:07.:32:11.

stirring up the uprising. The report says that is nonsense. There

:32:11.:32:16.

was no Iranian hand the trouble lies within Bahrain's own trouble

:32:16.:32:22.

fault line. Even the police, condemned for excessive force are

:32:22.:32:27.

Sunni, imported from Yemen. The king has promised Bahrain will open

:32:27.:32:33.

a new page in history, and he will sack earnt officials. Many are

:32:33.:32:38.

unconvinced, the Government which says that torture wasn't Government

:32:38.:32:43.

policy, has, at best, allowed Security Services to run out of

:32:43.:32:52.

control. Medical staff were treated as traitors to treating the wounded,

:32:52.:32:58.

and jailed. There will be retrials. But a doctor today told us people

:32:58.:33:03.

are still dying. They were talking about torture and people in prisons

:33:03.:33:06.

stopping, but today torture, people beaten in the streets in their

:33:06.:33:11.

houses and running over them and killing them is still on going.

:33:11.:33:15.

Today just one person died. deaths, five people tortured to

:33:15.:33:20.

death, hundreds wounded, 1600 arrested. Bahrain had to come out

:33:20.:33:25.

with this report, because America, which supplies its arms, demanded a

:33:25.:33:27.

full account. Bahrain's neighbour, Saudi, will

:33:27.:33:32.

not be so impressed. They had urged Bahrain to crack down on the Shia,

:33:32.:33:37.

they won't like any hints of weakening.

:33:37.:33:42.

I'm joined in the studio by Bahrain's Minister of Cabinet

:33:42.:33:45.

Affairs. Did you know your security forces

:33:45.:33:52.

were this brutal? As the report issued today found that there are

:33:52.:33:56.

mistakes made in the past, and it has been done and we accept the

:33:56.:34:00.

report. The lesson has been learned, the most important thing is to fix

:34:00.:34:04.

things and go forward with the country. We need to unite the

:34:04.:34:07.

people and actually if the report is doing something, it is saying,

:34:07.:34:11.

it is confirming what we have said at the beginning, we want the truth

:34:12.:34:15.

even if that means it is against the Government. Blindfolding,

:34:15.:34:19.

handcuffing, enforced standing for long periods, beating, punching,

:34:19.:34:27.

hitting with wooden planks, pipes, sleep depravation, elect cushion,

:34:27.:34:33.

and numerous others, these came as a complete surprise for you?

:34:33.:34:43.
:34:43.:34:54.

have to make sure the report is A show of how the imaginationry and

:34:54.:34:58.

the Government has dealt with the situation. We can't tolerate

:34:58.:35:02.

violence and the torture. It was clearly systematic? Action has to

:35:02.:35:05.

be taken. What action will be taken? I think

:35:05.:35:13.

we have already started the reform. 20 officers have been prosecuted

:35:13.:35:17.

for mistreatment that led to death, as well as we are working with

:35:17.:35:19.

allies and the international organisations to change the system

:35:19.:35:23.

and the process. We need to implement reform to improve the

:35:23.:35:27.

country and to move forward. you saying you are committed to

:35:27.:35:31.

becoming a proper democracy? think Bahrain has started the

:35:31.:35:35.

political reform ten years ago. It was unprecedented at the time. I

:35:35.:35:40.

have to remind you until recently that Bahrain was viewed by leading

:35:40.:35:50.

democracies as the poster child for reform. Who gave you your job? The

:35:50.:36:00.

king gave your job? There was not using that as a model of reform.

:36:00.:36:05.

Committed to a proper democracy? course, we have laid down a

:36:05.:36:12.

foundation of a progressive no democracy. By when? The people of

:36:12.:36:15.

Bahrain should decide how we will progress. Unfortunately they have

:36:15.:36:22.

to wait on the king's say so, when does he want Bahrain to become a

:36:22.:36:29.

democracy? We have established the institutional, the institutions. We

:36:29.:36:34.

need to expedite the reforms and meet the demands of our people.

:36:34.:36:39.

you now we great inviting the Saudis in to help you put down the

:36:39.:36:46.

protests? I think the agreement with us, the report confirmed today

:36:46.:36:54.

that they have not engaged or contacted with the protestors. They

:36:54.:36:58.

have been located in a critical site away from the protests.

:36:58.:37:03.

don't regret inviting them?? think Bahrain and the other

:37:03.:37:07.

countries, we work to enhance our relationships, and integrate

:37:07.:37:12.

ourselves, and there is agreement to allow us to do this.Would

:37:12.:37:16.

have published this report had it not been pressure from the

:37:16.:37:20.

Americans? We did the best because we want the best for our country,

:37:20.:37:23.

we want to move forward. What happened did not benefit anyone in

:37:23.:37:26.

Bahrain. Not even the countries that want the stability in the

:37:26.:37:31.

region. It had nothing to do with an arms deal? We want to move

:37:31.:37:35.

forward and unite the people in Bahrain. What has happened is we

:37:35.:37:39.

have a social division today, it has polarised the country. We have

:37:40.:37:45.

two significant sections in Bahrain, we need to build the trust again.

:37:45.:37:51.

Unless we start a reconciliation process and reform we will not move

:37:51.:37:54.

forward. Everybody in Bahrain has to work together for the good of

:37:54.:38:02.

If you set out to seek a punch-up with the trade unions, you couldn't

:38:02.:38:05.

have done better than the set of business ideas Vincent Cable came

:38:05.:38:08.

up with today. In order to breathe life into the economy he wants to

:38:08.:38:12.

make it easier for employers to get rid of staff, without fear of

:38:12.:38:17.

facing an employment tribal. He says's -- tribunal, he says he's

:38:17.:38:20.

chopping away at restriction that is inhibit growth. We will talk

:38:20.:38:22.

about it in a moment. First this report.

:38:22.:38:26.

In the office of the business secretary, it is called a radical

:38:27.:38:31.

reform of employment relations. Vincent Cable says, in future it

:38:31.:38:37.

will be harder to take your boss to a tribunal.

:38:37.:38:43.

All claimants will be obliged to submit their complaints at ACAS, so

:38:43.:38:46.

parties can try to resolve the dispute through reconciliation

:38:46.:38:52.

before being taken to a tribunal. There will be an alternative, a sor

:38:52.:38:56.

far undefined rapid resolution scheme, and employers will be able

:38:56.:39:01.

to have a candid chat of an underperforming employee without it

:39:01.:39:06.

being used in evidence against them. We are starting a scheme of

:39:06.:39:10.

protected conversation, it allows employers to raise issues, such as

:39:10.:39:13.

poor performance, and retirement plans in an open way. You are not

:39:13.:39:19.

performing as I want you to perform. I'm performing as I want it me to

:39:19.:39:24.

perform, it is a good performance, let's agree to disagree. Maybe not

:39:24.:39:28.

like that. Number Ten canvased a venture capitalist, Adrian Beecroft,

:39:28.:39:32.

for ideas, he said employers should be free to fire at will, Liberal

:39:32.:39:37.

Democrats shredded that idea. Might it have been a policy aunt Sally,

:39:37.:39:42.

op pro posed by ministers to be knocked down so what followed would

:39:42.:39:48.

be looking better. There is a lot of tri-ainglaigs going on, you put

:39:48.:39:58.
:39:58.:40:01.

out a -- Triangle laigs going on, you will have to have some sort of

:40:01.:40:09.

policy mix to see British GDP rising. You need to be radical and

:40:09.:40:17.

bold and take steps now that perhaps two or three years ago

:40:17.:40:21.

would have been contemplate. It is not hard to spot the business

:40:21.:40:26.

secretary's lack of enthusiasm. are seeking views on a proposal to

:40:27.:40:31.

seek no fault dismissal for microfirms. That is those with ten

:40:31.:40:36.

or fewer employees, I stress we are seeking evidence on both sides.

:40:36.:40:46.
:40:46.:40:47.

That would sour relationships between employers and employees. I

:40:47.:40:50.

don't think the fundamental right they have at the moment which is no

:40:50.:40:53.

know why they are being dismissed. Of course we have to wait and see.

:40:53.:40:58.

I mustn't presuppose what the call for evidence brings. But I will be

:40:58.:41:01.

surprised if it was found that would be good for business.

:41:01.:41:07.

You were an employer before you entered parliament, did you find

:41:07.:41:12.

employment law a barrier to recruiting staff? No. Vincent Cable

:41:12.:41:18.

made much the same point in his own speech. He prefaced his own

:41:18.:41:21.

proposals by point to go a survey conducted by his department, in

:41:21.:41:26.

which those running small and medium-sized businesss were asked,

:41:26.:41:31.

what is the biggest obstacle to business success. Those citing

:41:31.:41:35.

business regulation and employment rules was 6%. What is really

:41:35.:41:38.

stopping businesses hiring is growth or lack of it. Today's

:41:38.:41:43.

announcement and those between now and next Tuesday, when George

:41:43.:41:47.

Osborne delivers his autumn statement, are intended to give the

:41:47.:41:52.

look of an active Government, pushing every lever, pressing every

:41:52.:41:56.

button to get the engine running. Are these announcements enough.

:41:56.:42:01.

These employment measures are helpful by very modest. People

:42:01.:42:04.

won't think that is the decisive thing, it helps, but they want

:42:04.:42:10.

other things to be true as well. We need a whole range of measures,

:42:10.:42:16.

people want the promise of more demand. If these workers fear

:42:16.:42:19.

losing their jobs they are reluctant to spend. If ministers

:42:19.:42:24.

fail to get the economy growing, there is one group of employers who

:42:24.:42:30.

can hire and fire at will, the voters. With me now is economist,

:42:30.:42:35.

Ann Pettifor, and venture capitalist, Jon Moulton S this

:42:35.:42:41.

salvation? I fear not. It is salvation deferred. It is action in

:42:41.:42:45.

due course, possibly up to three years forward, it is not a lot,

:42:45.:42:49.

really. What do you think of it? just think it is looking for

:42:49.:42:52.

scapegoats, and you know, there is a big elephant in the room, which

:42:52.:43:00.

is that confidence collapsing, the stock market in free fall. There is

:43:00.:43:04.

real problems out there. We are talking about fiddling, why the

:43:04.:43:09.

economy burns. This is completely fatuous? Absolutely. You obviously

:43:09.:43:17.

both agree for different reasons? So does Vincent Cable. I can have a

:43:17.:43:20.

modest disagreement, there is some benefit in making it easier to

:43:20.:43:26.

employ people. It won't solve the economy in one go, at least a few

:43:26.:43:30.

deserving souls will get jobs and undeserving souls will lose them.

:43:30.:43:34.

We are the least regulated in the whole of Europe. If we look at

:43:34.:43:38.

comparators, Germany, Sweden, in terms of regulation. We find in

:43:38.:43:41.

Germany they have twice as much protection for their work force,

:43:41.:43:45.

and they don't have the unemployment problems we have. They

:43:45.:43:50.

don't have the growth problems we have. They have more protection for

:43:50.:43:57.

their work force. They grow more. You are claiming cause and effect?

:43:57.:44:02.

I'm saying it is not the point. Vincent Cable is saying the same

:44:02.:44:05.

too. 1234 why do you mention it? I

:44:05.:44:12.

mention it because protection there are economies across the EOCD, that

:44:12.:44:14.

offer the work force more security and protection and grow better. Do

:44:15.:44:19.

it better than we are doing. We have already got very little

:44:19.:44:26.

regulation. Why do you want to go further? Essentially, at the moment,

:44:26.:44:30.

if you have a strong economy you can afford to be very good on

:44:30.:44:34.

employment law, and employment security. We haven't, we have a

:44:34.:44:39.

weak economy at the moment. I think anything that makes it easier to

:44:39.:44:43.

employ people will give rights to the unemployed, as opposed to the

:44:43.:44:47.

employed. It will take away what is, I think, unproductive bureaucracy.

:44:47.:44:55.

We have 240,000 tribunals here, it is fundamentally a pretty

:44:55.:44:59.

unproductive activity. It needs picking away at. The that is

:44:59.:45:03.

ridiculous, the idea the economy is slumping, that corporates are not

:45:03.:45:07.

investing, that banks are not lending, that the stock market is

:45:07.:45:10.

falling, that consumption is collapsing because we have

:45:10.:45:14.

tribunals is ridiculous. I didn't say that. He didn't say it was

:45:14.:45:19.

because of it? It doesn't help. Government is refusing to address

:45:19.:45:23.

the real problem, that makes the economy unbusiness friendly. Look,

:45:23.:45:26.

the Government has very little it can do about most of these things,

:45:26.:45:30.

it is dealing with what it can, unfortunately what we are talking

:45:30.:45:35.

about is not a big deal. We can make a dent in unemployment, we can

:45:35.:45:38.

make employing people more attractive. That will be helpful to

:45:38.:45:42.

the economy. Not a lot, but it will do some good. The Government could

:45:42.:45:46.

do a great deal more to make the environment for business more

:45:46.:45:53.

attractive. It could really do more about the banks and lending. It

:45:53.:45:56.

could do more to create investment in the economy which is good for

:45:56.:46:01.

the private sector. The Government is taking a hands-off approach, it

:46:01.:46:06.

says the good thing is what 94 small businesses say are not a

:46:06.:46:09.

problems. Vincent Cable told us this morning, his own department

:46:09.:46:16.

had done a survey and found 94% found regulation was not a problem

:46:16.:46:20.

in employing people. That is not a problem, but we know that the

:46:20.:46:24.

problem is customers are not walking through the door, the

:46:24.:46:27.

demand has collapsed. The Government could generate economy,

:46:27.:46:32.

and they refuse. Explain why those 94% of those

:46:32.:46:38.

small companies are wrong? I think she was saying 94% of businesses

:46:38.:46:44.

didn't think employment regulation is a problem? I I find it totally

:46:44.:46:50.

impossible to brief. How big was the sample? It was conducted by his

:46:50.:46:55.

department. We don't know about the sample? There are plenty of other

:46:55.:47:02.

samples out there they consistently list. Regulation is on the list of

:47:02.:47:07.

things that upsets them. It is a real problem in the a small company,

:47:07.:47:11.

getting rid of a bad employee is a big deal. It costs a lot of time

:47:12.:47:15.

and effort. I'm not disagreeing with that, and I'm not saying we

:47:15.:47:21.

can't do something about tribunals, making it easier for workers and

:47:22.:47:27.

employees. Cuss fom mers are not walking through the door and can't

:47:27.:47:31.

go to, -- customers are not walking through the door, because the banks

:47:31.:47:34.

are watching them. Sufficient unto the day is the

:47:34.:47:37.

discussion there of, tomorrow you are left to the tender mercies of

:47:37.:47:47.
:47:47.:47:51.

Not as cold as it was last night, frost-free by and large. Breeze

:47:51.:47:56.

yiey across the north and west, windy as we go through the day.

:47:56.:47:59.

Raining pushing across Scotland for a time. The best of the brightness

:47:59.:48:03.

will be further south and east across the UK. Down through parts

:48:03.:48:08.

of north and east of England. Bright and breezy. Winds not

:48:08.:48:12.

excessively strong. A breeze out there. Temperatures doing pretty

:48:12.:48:15.

well, 13 will be typical. Brightness for the West Country.

:48:15.:48:20.

Although the far west of Devon and Cornwall probably staying

:48:20.:48:25.

predominantly cloudy. For west Wales as well, overcast. To the

:48:25.:48:30.

east of the mountains it is hanging on. A windy day for Northern

:48:30.:48:33.

Ireland, sunshine for a time in Belfast, rain looming out west as

:48:33.:48:41.

it will be across western parts of Scotland. Gusts of up to 70mph

:48:41.:48:44.

across the Outer Hebrides. Squally wind as rain sweeps south-east

:48:44.:48:48.

wards. That should clear through, and some sunshine will return to

:48:48.:48:52.

many areas. Blustery showers on Friday. Temperatures fall ago I way,

:48:52.:48:57.

cold enough with wintry showers across the Scottish markets,

:48:57.:49:01.

further Southending reasonably dry and bright. That breeze will still

:49:01.:49:07.