This article is the subject of a legal complaint from lawyers for Retail Acquisition Ltd.



The competition watchdog will on Thursday announce remedies aimed at addressing the dominance and excessive profits of the big six energy suppliers in the UK retail market. But the Competition and Markets Authority is set to yield to lobbying by the big six and drop plans for a safeguard price cap and, probably, lift a ban on multiple confusing tariffs. It has already turned its back on demands to break up these large utilities.

While it’s true that the big six have severely distorted the retail market, their biggest crime will not be mentioned anywhere: that they have been acting as a massive brake on work towards modernising and decarbonising Britain’s power sector.

In Germany, politicians have seized the initiative on behalf of their citizens by introducing the Energiewende – energy change – to fast-track the country into a low-carbon era. They ignored the critical screams from their (and our) utility companies, including RWE and E.ON.

In Britain these utilities have for decades used their financial and political muscle to keep their vested interests and fossil fuel assets in place.

The CMA should have gone ahead with breaking up Centrica, SSE and the rest – not because it would have had a dramatic impact on immediate prices, although it would have helped, but because it would undermine their power base.

And big six should really read big seven, because the National Grid, too, is stuck in the past and frightened of the future, just as the lights are in danger of going out because of a lack of new investment.

The grid is also compromised by the twin jobs it has been allowed to carry on doing: balancing power demand and supply; and running an energy transmission business.

All of this is an extra problem at a time when an ideologically driven Conservative government has been undermining investor confidence in wider energy sector with a series of policy U-turns or attacks on solar and wind power.

Ministers seem to feel that the only thing that stands between us and blackouts is desperate bungs of cash to the big six to keep their gas or coal-fired power stations running a bit longer.

The only new power stations energy secretary Amber Rudd seems determined to pursue are nuclear, but even the first proposed one – at Hinkley Point in Somerset – is much delayed and dependent on a yet-to-be agreed French financing package for EDF.

But amid all that gloom there came a glimmer of hope at the end of last week, courtesy of the National Infrastructure Commission in a report for the Treasury.

The report, entitled “Smart Power”, says what this newspaper, many energy experts and businesses without legacy fossil fuel interests have long been saying: you do not need to build that much new power capacity if you put more emphasis on reducing demand.

Lord Adonis, the former Labour peer who heads the commission, says managing demand, combined with improved energy storage and the use of interconnectors to hook up supply from abroad, could save consumers up to £8bn a year by 2030. “We do not call for new subsidies or significant public spending,” he said, “but rather a level playing field through fairer regulation and a better-managed network, to allow these exciting new technologies to compete.”

Demand flexibility in Britain currently is below 1%, while in some parts of the US, thanks to smart metering, it is as high as 15%. Such plans will do nothing for British Gas and the rest, but they will do everything for British consumers. Transformation can come quickly. Let’s get on with it.

Brazil’s corruption crackdown is welcome



The arrest of former Brazilian president Luiz Inácio Lula da Silva could mark the beginning of the end of a political and financial crisis that has ensnared politicians and plunged the economy into recession.

Lula, who served for eight years until 2011, is accused along with many others of siphoning cash from the government-owned oil firm Petrobras and spending some of that money on bribes and electoral campaigning.

One line of inquiry in Lula’s case concerns construction companies giving him preferential terms in the development of a ranch and a luxury beachfront apartment. The accusations may not be true – Lula certainly denies them – but the point is that the allegations will be aired and investigated, with the possibility he could go to jail.

This, together with the recent arrest of a billionaire Brazilian banker, is enough to tell the world that the rule of law operates in Brazil and wrongdoers will be apprehended. Markets in Brazil reacted strongly to the news of Lula’s arrest, and the Brazilian real surged. São Paulo’s main stock exchange index rose more than 4% last Friday.

Among Bric countries, China and India are also making a show of rooting out corruption. Beijing has made countless arrests as it tries to tackle construction scams and pyramid selling in the financial sector. But the suspicion must be that the politburo works on favours, as it ever did. Narendra Modi’s India, while growing quickly, remains riddled with uninvestigated corruption scandals. Russia? Enough said.

Investors looking at Mint countries – Mexico, Indonesia, Nigeria and Turkey – must also be wary. Mexico is trying to rid itself of corrupt practices, and Turkey’s sizable middle class is resisting the fear tactics of its president. But these countries could fall back on the old certainties.

Corruption is one barrier to investment that all these countries must tackle. In the short term Britain, considered a safe haven, benefits from this. But fears over corruption limit global economic development, which hurts us all.

No way to rebuild BHS



Sir Philip Green sold BHS for £1 a year ago this week. That may turn out to be a great deal for the billionaire retail tycoon.

The new owners of BHS last week revealed their dramatic turnaround plan – demanding that landlords reduce the rent on half of its stores and cutting hundreds of jobs.

This is a make-or-break moment for BHS. The loss-making chain desperately needs to cut costs so it can fund a modernisation of its increasingly tired-looking shops.

But BHS has got off on the wrong foot by trying to pin the blame for store closures – which are inevitable – on landlords who refuse to reduce rents. BHS’s cause has now been further undermined by the news that, in March 2015, its owners took an £8.4m loan out of the business.

If BHS is to survive and thrive, it needs all the funds and help it can get. Alienating its landlords en masse and borrowing large sums from the business are not the answer.