I’ve a slightly snarky new piece at the Sharpener, on how ‘fuel poverty’ isn’t nPower or EDF’s fault (or, indeed, a very meaningful concept).
Some of the discussion about this issue has reminded me of how bloody annoying it is when hacks and bloggers take £ profit numbers as meaning something in their own right. “BT’s made a profit of £35,000 per second, but they’re outsourcing call centres to India – outrage“, etc.
Profit numbers are only meaningful as a percentage – whether of revenue, of share price, of number of customers, or of the same number last year. Even then, you need to be very careful not to overstate things: when your values of y and z are similar, x = (y – z) can produce very large variances in x for small variances in y and z.
And if your y varies in the long term (say, retail energy prices) while your z varies in the short term (say, wholesale energy prices), this can produce massive apparent swings in profits that really don’t mean very much…