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Comment by EricBurnett | Hacker News Reader

> My mum owns a small café in Leicester. Her electricity bill has just jumped from £10k ($12k) a year to £55k ($64k) a year.

> Callum's mum may try to avoid shuttering her doors by raising her prices by more than 5x but that will result in $13 chocolate crossiants and $20 iced lattes.

What kind of flawed reasoning is this? The net prices will only have to go up 5x if the price is the product originally was 100% covering the cost of electricity. In practice, it'll probably need to go up something <2x to maintain the same profit margins, with other costs (e.g. wages, property) trickling up at a slower pace (years) as the overall economy adjusts. Which is material, no doubt, but let's not lose ourselves to hysteria here.

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Brits love a good moan, and exaggerating issues by at least 10x is standard.

Source: I live here. :(

Chocolate crossiants and iced lattes in Leicester - is she having a laugh ...

The UK is getting hit much harder than other countries.

People talk about Germany being dependent on gas but for heating I think they're about 50% gas while in the UK it's more like 80% and the UK is far behind in insulating homes to be cheaper to heat.

Combine with a government that doesn't actually want to help (which may explain why the houses are so expensive to heat in the first place) and it'll hit much harder.

Combine with a political system designed to let a minority keep control plus Brexit and things could get bad.

Note, I don't think the problem is unsolvable, I just think a lot of the people responsible for solving it will be looking for ways to make themselves money from the chaos.

Yeah, I find the whole nations issues sort of confusing though. We have spent the last 10-15 years voting to make things worse. Our political systems are shit, and we decided NOT to change them. Our PM is a joke and won by a landslide.

Now everyone is acting surprised that the place is getting worse, the government are incompetent and nothing can be done about it.

I am sorry for people who didn't vote for this (including myself), but I have to admit we are a minority and we should really just emigrate...

"Landslide" in this context meaning nearly 44% of the vote, translating to 56% of the seats, meaning they can overule the "will of the people" usually.

https://commonslibrary.parliament.uk/general-election-2019-t...

I think its more accurate to exclude Scotland and NI which makes those figures worse, but yes. That is a landslide and guaranteed Bojo basically unlimited power under the British system. And people voted 2:1 to keep this system back in 2011

https://en.wikipedia.org/wiki/2011_United_Kingdom_Alternativ...

This is the problem the UK has: we choose to fail and then complain we're failing.

They only got offered one other option though. Because the research suggested a true PR option would win, so they didn't offer it, then they could claim they'd tried and the people had rejected it.

Same trick used in the Scottish and Brexit referendums. Worked out for them with the first two, blew up in their faces on the third go.

I think without realising it, you're exemplifying my point.

Why improve our shitty system when the improvement isn't the exact thing you personally want?

Because "true PR" wasn't on offer, people voted no and we have basically no democracy at all.

Because there was no cheap, easy, clean, 100% supported energy supply on offer we end up reliant on Russian gas.

Because Corbyn was not the messiah, better elect Boris.

We're about to do it again with Kier.

This is the british disease: people would rather have something terrible and moan, than something better but not perfect.

People voted no because the same people who ran the Brexit campaign told them not to, with the backing of all the newspapers.

That would have been harder if they'd given a better option, so they didn't.

People should have voted yes, it was the smart best thing to do, but they didn't. Some of them are just idiots, but most were just bamboozled into thinking they would get more money for the NHS by people who hate the NHS.

>The UK is getting hit much harder than other countries.

I don't understand this narrative. Germany will have its gas supply from Russia literally turned off for the next three days!

>but for heating I think they're about 50% gas while in the UK it's more like 80%

I saw that Guardian article too! A further 25% of Germans heat their homes with oil, and another 14% use district heating (which will be fossil-fuel powered).

Germany imports 98% of its oil, 95% of its gas, and a large amount of its coal, with a total of 63% of all energy being imported.

On the upside, the premature end of this age of exceptionally unreasonably cheap energy will hopefully teach us all a thing or two about what sustainability really looks like.

The problem is gas (and electricity) are a market and have prices set by that market. If a British company can make more money shipping gas out of the country, they are going to.

If a Norwegian company can make more selling to someone other than the UK, then they will. And those profits go to the Norwegian government, which isn't the case in Britain.

There are some limits due to transport but countries with more links to suppliers and storage can ride it out better even before getting into political responses.

I understand that. However, the political aspect will be the dominant factor. You can have all the links to international suppliers, but it won't help if they won't sell to you. Russia has already decided to f** with Europe, and in a way that I can't see making any (short-term) financial sense for their own economy. France may decide to stop exporting quite so much of its nuclear-generated electricity. The UK could decide that it needs to slow exports of its gas, and keep it back for its own citizens. Germany will basically have to turn back to its own brown coal reserves for electricity generation, although that won't help its citizens heat their homes.

None of that really helps though, it's just a type of "Beggar-thy-neighbour“ game theory failure:

https://en.m.wikipedia.org/wiki/Beggar_thy_neighbour

Working together obviously makes it easier for everyone. But we have whole political parties built on ignoring that principle and blaming foreigners for everything.

What does help, is everyone using less natural gas.

edit: some green Tory ideas that accept that reality:

https://www.cen.uk.com/press/2022/8/16/green-tories-propose-...

>it's just a type of "Beggar-thy-neighbour“ game theory failure

Funny how much international politics looks like a "game theory failure", right? If only we could get along!

I'm mostly looking at this from the perspective of the "begger" - hence me originally pointing out that, in the current narrative of countries that are doing badly with energy geopolitics, Germany is in much bigger trouble than the UK. You can be the nicest country in the world, but you can't really predict or change what others will do.

For that matter, why should other EU countries bail out (in the form of energy exports) another country that has become absurdly reliant on energy imports from a hostile neighbour?

>What does help, is everyone using less natural gas.

Humans have burned stuff to heat their homes since the dawn of humanity - it's hard to see what could possibly replace that, unless we go nuclear. Heat-pumps require quite specific circumstances to function efficiently.

We don't have to replace it, well not in the short term. Just turning thermostats down a little, increasing insulation, stopping doing low value things with gas that we don't need to do, shifting electricity use to times when we have wind/nuclear available etc. is enough to ride this winter out.

And the whole point of "begger thy neighbour" is that it hurts you. So saying "I still really want to punish my neighbour because this is his fault" is literally punishing yourself. It doesn't make sense.

As I said, not a technical problem, a political problem.

Your solutions are essentially what I've been doing for years - short of a benevolent government paying for people's lack of discretion when it comes to longer-term financial and energy planning, I don't see what could make people do any of that unless energy suddenly became more expensive.

>And the whole point of "begger thy neighbour" is that it hurts you

Not necessarily, and not necessarily across differing timeframes. Using the scenario at hand - Germany is reliant on a hostile regime to keep its lights and heating on. Why is it necessarily in some other country's own self-interest to send some of its own energy supply based purely on international economics, and not the needs of its own citizens?

A blind application of this "principle" would mean that less wealthy countries would be obliged to help out a wealthy neighbour in a time of distress, and just hope that the wealthy neighbour will be nice to them when they can. It assumes best intentions all around, which is nice but unrealistic.

Okay, I see this reality isn't politically correct for you so I'll not push it too much.

If actual Conservatives can't convince you this is in your best interest then I have no chance.

But this is a good example of why the UK is and probably will continue to be hit hardest by this. The EU will be working together, and UK businesses will be selling out to them for profit, and the only politically acceptable solutions will be economic self-harm, leaving the UK with the worst possible outcome.

>Okay, I see this reality isn't politically correct for you so I'll not push it too much.

You mean this idea that "beggar thy neighbour" is not in someone's self interest? You haven't explained why that is necessarily true. The (very short) wikipedia article you linked also does not talk about "punishing other countries", and in fact is specifically focussed on reducing imports. In the context of our original discussion, we were talking about how Germany is now being screwed by the country it has signed up to gas deals with. How does that fit with your "be nice to everyone" idea?

Ultimately if the UK were to start protecting it's gas output then a) the value of British currency would likely drop even further, pushing up inflation and prices further and b) the UK can't cover it's peak electrical supply, and it is unlikely the rest of Europe would continue to sell it electricity to cover peak if the UK was entering into that sort of protectionism.

Not to mention all the other things we rely on our neighbours to sell to us like food and medicine...

>the value of British currency would likely drop even further, pushing up inflation and prices further

Why?

Examining a relatively similar historical record of exporting scarce resources that are in high domestic demand, are you telling me the Irish potato famine was the best that could have happened?

In economic terms, if they could sell the produce for more money to the UK and use that money to buy food to feed themselves, then they'd come out ahead.

Instead, very similar to what the UK is doing with gas, they sell the gas to the EU and keep the profits in private hands and let the poor people starve/freeze.

The key missing element is a government that cares about your life if you are poor and can't be bought off by fossil fuel interests.

Ah I see - the idea is sound, it's just the implementation that was faulty. Tell me, how do sellers access international markets without several layers of collective bargaining?

Because currency markets are generally negative towards government intervention and economic protectionism. You can say that's reasonable or unreasonable, but it's unquestionably true. The UK has suffered over the last six months for example from not increasing interest rates faster. An increase in interest rates would have been unpleasant for homeowners (I know, I am one), but it would have strengthened the value of the pound against the dollar, and that would have helped with energy costs significantly as it would have increased the UK's ability to buy.

I'm not really sure the Irish Potato Famine is relevant, given Ireland barely had it's own currency at the time (British pounds were in widespread use, and the value of the Irish pound was fixed to the British one).

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