Energy companies hid behind hedges to keep prices high. Now the hedges have gone, what's their excuse?

Regulators in Britain, including OFGEM (energy companies) and the FCA (financial companies), are powerless to stop many rip-offs because Parliament has made them that way. 
Regulators have about as much right to stop bad behaviour as a cop has to pull you over for doing 29 mph in a 30 mph zone. You'd need to be shooting at pedestrians with one hand, leaving just your other hand on the steering wheel, for them to do that. Even then, if a British regulator was prosecuting, you wouldn't be done for the civilian casualties but would get a £100 fine for driving while distracted (by shooting at people) as if you were using a mobile phone.

Regulators are impotent because consumer law passed and maintained by successive parliaments, Conservative and Con-Dem and Labour, make it quite legal for traders to rip off the 'less than average' 50% of their customers. This premise forms the bedrock of British commercial culture from banks to pensions to mobile phones to estate agents to broadband packages. The Office of Fair Trading (OFT) even provides a helpful roadmap to guide crooked traders on reaching the below average consumers (our annotations are in red (and this chart really is an OFT roadmap, not us being satirical)):



Energy companies, for example, have traditionally hidden behind hedges to carry out their mischief. These are not the leafy hedges prized by small children with catapults. The hedges the energy companies lurk behind are financial. So what are these financial hedges about?

There are legitimate reasons to take shelter behind a financial hedge. For example, the average refrigerator contains 123 pounds of steel. When a fridge manufacturer publishes a catalogue of prices for the next year, it wants to be sure the cost of the steel it uses doesn't shoot up leaving it making losses on the fridges it sells (or having to randomly hike their prices). The fridge maker can hedge this risk by contracting to buy all the steel up front, but only to be delivered and paid for at various times in the future during the year (a "futures contract"). The steel can be delivered to the fridge factory monthly, just in time for it to be fashioned into that month's quota of fridges.

As a result of the hedging the fridge manufacturer won't suffer if the actual price of steel goes up, but neither will it benefit if the actual price of the steel goes down. It will just pay the price it agreed when it signed up to the futures contract hedge.

Energy companies, who generate and sell electricity and gas to households and industry, can also 'hedge' their purchases of the fuels they use: oil; gas; coal; uranium.

In January 2016 David Cameron complained again about energy companies, scolding them for not cutting their household bills at a time oil prices had plummeted. 18 months before Cameron's passing winge, in June 2014 Mr. Dermot Nolan, CEO of OFGEM, wrote a “letter calling on large energy suppliers to explain the impact of falling wholesale prices on customer bills.”


This resulted in a series of "Dear Dermot" letters. The Big Six consensus being that due to hedging it would be at least 18 months before wholesale prices would have any impact on retail energy bills to households and businesses. Scottish Power stated in its letter:

"Dear Dermot,....
we buy our fuel ahead in order to avoid price shocks from instability in the wholesale markets. This means that movements in wholesale spot markets up or down, are not immediately passed into our cost base: the majority of our energy for 2014 was bought before the start of the year. Unfortunately, the energy we are mainly buying now – for delivery in 2015 and later – is not falling much in price.”


The energy companies thought the drop in oil prices would be temporary. They thought oil prices would surely be back up well within 18 months. In its own Dear Dermot letter, NPower said:
 
"Dear Dermot...
The primary reason for the fall in [wholesale] prices is the exceptionally mild winter we have had" [i.e. the winter of 2013-14].

Low prices caused by the exceptionally mild winter in 2013-14? They never for a moment thought the price would still be low 18 months later, blowing away their 18 month deep smokescreen and ripping off all the 18 veils they were prancing behind.

To better understand what they were talking about, take a look at the graph below of the price of a futures contract to deliver crude oil in January 2016. The price of a barrel of oil delivered to your power station in January 2016 depended on when you bought your futures contract:

• If you bought the futures contract in 2013 it would have cost around US$95.  
• If you bought the same contract in mid 2014 it would have cost about US$100. 
• From mid 2014 the price crashed. 
• In January 2015 the price was down to US$60. 
• By the middle of 2015 this futures contract for delivery of oil in January 2016 was down to US$50. For the remainder of 2015 the price continued to fall towards US$40.

https://www.quandl.com/data/ICE/BF2016-Brent-Crude-Futures-January-2016-BF2016

The next graph shows the price of futures contracts for delivery of oil in July 2017.

https://www.quandl.com/data/ICE/BN2017-Brent-Crude-Futures-July-2017-BN2017

With prices so low, the energy companies should be filling their boots with oil futures for as far into the future as possible. They should be promising households and employers much lower energy bills for at least 18 months. Sadly, past experience shows when oil prices go up households and employers will pay more pretty quickly.

Oil prices will go back up. The price can be moved on the whim of a small group of men in countries round the World not subject to shareholders nor democracy nor supply nor demand. Just as energy companies claim to have been stuck with high prices for 18 months after prices crashed, they should also be stuck with low prices for 18 months after the oil price rebounds.

Will our household energy bills stay low for that 18 months? OFGEM did once try to expose the energy companies' shenanigans by publishing wholesale and retail prices. However, they were quickly slapped down, presumably by OFGEM's political masters. The Daily Mail reported in January 2016:
"Power giants have won a secret battle to hide the scale of the profits they are making by refusing to cut prices.

Money Mail can reveal that last April the energy watchdog was bullied into ditching data that show whether households are getting a good deal.

These vital figures used to be published monthly. They showed the difference between what power firms were paying [wholesale] to supply energy to your home and what they were charging you on your bill."

Dear Dermot, OFGEM CEO, responded to the Mail's allegation saying it's not true any secret deal was done. Dermot completely avoided the question of why OFGEM stopped publishing these figures.

History shows that when oil prices go up consumer energy prices go up straight away. But when oil prices go down, even when they collapse, consumer energy prices just trickle down. In February 2016, following the oil price crash 18 months earlier, energy companies reduced prices by a puny 5%.

Whichever way oil goes the energy companies continue business as usual, barely able to stifle their chuckles. They are confident that those who can do something won't, and those who want to do something can't.

Which leaves poor old OFGEM standing impotently by looking to British consumers very much like buffoons.

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OFGEM is extremely relaxed about Wholesale profiteering by the Big Six energy companies.

Pity the poor executives of OFGEM, Tweedledum to the FCA’s Tweedledee. Both OFGEM (Office of Gas and Electricity Markets), regulator of the UK energy market, and the FCA (Financial Conduct Authority), regulator of the UK finance industry, are just actors on Britain’s regulatory stage. And like actors anywhere, they can only read from the script they are given. A script written by lawmakers in Parliament, in a farce directed by Cabinet Ministers. When one actor fails to smile and shout and sob as directed there are plenty of replacements to choose from. Plenty of players eager to pick up a medal or perhaps even a damehood or knighthood for services rendered (or artfully not rendered).

And that's not to mention a generous six figure salary for those who get to the top. OFGEM’s report for 2014-15, showed their CEO taking £215,000 for that year; Martin Wheatley, FCA CEO until being defenestrated in September 2015, was on a basic salary of £460,000.


You will notice the FCA’s boss is paid considerably more than OFGEM’s CEO. Perhaps because the public have a better understanding of financial rip-offs, and thus have more contempt for the FCA’s dopey regulation of the banks. This is of course quite unfair, as OFGEM’s performance is entirely equally dopey. 

If only the public understood the energy market better then OFGEM’s boss would surely get a bumper hike in salary to compensate for the heightened public contempt.

So we thought we would throw a little more light on OFGEM’s lamentable performance. And perhaps its CEO can get a well deserved, if not earned, payrise.

In 2011 OFGEM commissioned the accountancy firm BDO to look into the issue of energy pricing transparency. BDO made 8 recommendations, of which OFGEM ditched 6 and watered down the remaining 2. Perhaps BDO got the wrong end of the stick, thinking OFGEM wanted them to recommend how to INCREASE transparency!

Silly them. In practice, OFGEM seems to find lack of transparency quite agreeable. The graph below is from an OFGEM infographic titled "Bills Prices and Profits". It is an example of how OFGEM strives to smokescreen energy company profits. The graph shows only a meagre slice of profit (EBIT) at the top of each column, illustrating how hard OFGEM fights to keep prices down:

The reality is the Big Six energy companies operate in both the Wholesale market (generating) and the Retail market (selling to end users, like you and me and the companies we work for). They are all making profit from the "Wholesale costs" shown in the OFGEM graph above. However OFGEM fails to show this.

OFGEM's "Wholesale Energy Markets in 2015" report shows all the Big Six generate a significant portion of the electricity they sell on the Retail market. EDF actually generates more than it sells.

So OFGEM provides the helpful graph to show Retail profits. But fails to provide the equivalent to show what the Wholesale profits of the Big Six are.

An analysis was done by Derek Louden, an energy industry commentator, which may explain why. According to Louden's calculations, the generators are generating very healthy profits indeed.

OFGEM themselves gave the game away in a report way back in 2010, "Electricity and Gas Supply Market Report, Ref:23/10". Their graph shows how from 2005 the energy companies suddenly switched their profits from their Retail to their Wholesale businesses. Explaining why they and OFGEM now seem to focus on the teensie retail profit, while ignoring the fat wholesale profit. (As far as we can tell, OFGEM haven't been so forthcoming since this 2010 report - please let us know if we are mistaken).


In 2015 the Competition and Markets Authority (CMA) published its "Energy Market Investigation, Notice of possible remedies". In this report the CMA identified a "Lack of robustness and transparency in regulatory decision-making", specifying "The lack of a regulatory requirement for clear and relevant financial reporting concerning generation and retail profitability."


Non-transparent regulators and non-transparent energy companies confusing the ripped-off British consumer! Ripping us off to the tune of £1.7 billion a year according to the CMA’s “Energy Market Investigation” report of July 2015:
“This equates to customers paying approximately £1.7 billion per year more than they would have done had prices and costs been at benchmark levels, or £8.5 billion over the five-year period.”

If the loss of money was not enough, even the loss of life was insufficient for something to be done. The Hills Report on fuel poverty, commissioned by the Department of Energy and Climate Change in March 2012, stated:
"From a health and well-being perspective: living at low temperatures as a result of fuel poverty is likely to be a significant contributor not just to the excess winter deaths that occur each year (a total of 27,000 each year over the last decade in England and Wales), but to a much larger number of incidents of ill-health and demands on the National Health Service and a wider range of problems of social isolation and poor outcomes for young people."
Final report of the Fuel Poverty Review, Professor John Hills


So unaffordable energy was a significant contributor to the 27,000 excess winter deaths over the decade to 2012? Having seen junior traders from miscreant banks led off to prison while their directors are left to buy each other drinks in their clubs, we think junior energy company executives would be prudent to keep evidence for when the corporate manslaughter charges are brought in a decade or two.

Neither the Labour nor Tory governments, nor the LibDems in coalition, did anything much about the energy market. David Cameron promised, in Prime Minister's Questions on 17th October 2012:
“I can announce, which I am sure the hon. Gentleman will welcome, that we will be legislating so that energy companies have to give the lowest tariff to their customers—something that Labour did not do in 13 years, even though the Leader of the Labour party [at the time, Ed Miliband] could have done it because he had the job.”

Miliband didn’t do it. Cameron didn't do it either. 

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Figures reveal Tory promises of a "Low Tax, High Pay Economy" has actually meant higher taxes and lower pay

Poverty is a matter of definition. Which means two of the ways of reducing poverty are:

1) Increase poor people's incomes

2) Change the definition of poverty 

The Tories were quick to notice that one of these poverty alleviation strategies is easier, quicker, and cheaper than the other. And were quick to start fiddling around with definitions.

In 2013 the UK government changed the definition of 'fuel poverty'. According to the CarbonBrief blog, that comments on Climate and Energy Policy:
"The Department of Energy and Climate Change (DECC) has changed the way it defines fuel poverty - seemingly lifting two million households out of it in the process. "


In 2015 Iain Duncan Smith confirmed plans to redefine Child Poverty. His ministry stated:
"The current child poverty measure – defined as 60% of median income – is considered to be deeply flawed and a poor test of whether children’s lives are genuinely improving.....The government will bring forward legislation to correct that with new measures focused on levels of work within a family and improvements in education attainment"

It's not just Poverty. Disability is another matter of definition. In 2013 the Tories 'cured' thousands of disabled people by redefining 'disabled'. Before you could claim certain disability benefits if you could not walk more than 50 metres. This was reduced to 20 metres, at the stroke of a pen converting all those medium distance 21-49 metre walkers from disabled to abled.

It's not just Poverty and Disability. In 2015 George Osborne put everyone, sort of, onto a 'living wage' by redefining the 'minimum wage' to the 'national living wage'. A wheeze that got IDS jumping for joy, if not those on minimum "national living" wages.

And it's not just Poverty, Disability, and Living Wages. You may have though 'Higher' and 'Lower' are pretty unambiguous. But in Conservative Britain you would be wrong. When the Tories boast about creating a "Low Tax, High Pay" economy, it escapes enough people for the Tories to win an election that low tax has meant higher tax, and high pay has meant lower pay. The Tories appear to have redefined "Higher" to mean "Lower", and "Lower" to mean "Higher":

a) "Low Tax" has meant taxes have actually been Higher each year since the Tories took Downing Street in 2010 (according to Adam Smith Institute figures). The Tories have not been cutting taxes, they have been hiding them. When announcing Tax Freedom Day (the number of days earnings it takes you to pay all your taxes) for 2015 the Director of the Adam Smith Institute, Eamonn Butler, said :
"The Treasury hates Tax Freedom Day, because they don’t want us to know how much tax we really pay. They prefer to conceal the tax burden through stealth taxes and indirect taxes that we don’t even realise we’re paying."

b) "High Pay" means the average pay of working people is still Lower than seven years ago, at the 2007/08 banker bust (from Office for National Statistics figures):

You can't really blame the Tories for taking the opportunity to pull the wool over voters eyes if voters are so easy to befuddle.

Actually, you can.

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Wind farm subsidies will end a year early. Another promise abandoned thanks to pressure from the oil lobby?

KJ and Chris can see the spirit of Magna Carta in Cameron's "greenest government ever"...

SOURCE BBC NEWS: Earlier end to subsidies for new UK onshore wind farms

New onshore wind farms will be excluded from a subsidy scheme from 1 April 2016, a year earlier than expected. There will be a grace period for projects which already have planning permission, the Department of Energy and Climate Change said. The funding for the subsidy comes from the Renewables Obligation, which is funded by levies added to household fuel bills. The Conservatives promised in their manifesto to hold down bills and increase renewable energy. But onshore wind is the cheapest readily-available form of clean energy in the UK. That's why some experts have described their decision to kill the onshore wind programme as bizarre and irrational. Some of the business leaders are baffled why ministers will give local people a unique veto over wind turbines, when they cannot veto shale gas fracking or even a nuclear power station on their doorstep.

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Over one million of England’s working households are now in fuel poverty

SOURCE GUARDIAN: More than a million working households in England are in fuel poverty 

A study by the right-wing think tank Policy Exchange looking at the 2.3m households in England in fuel poverty found that half of them, around 1.1m households, had someone in work. Fuel poverty has been made worse by rising energy bills and, despite improvements, the housing stock is still highly inefficient, it said. Households in the least energy-efficient properties would have to spend an extra £1,700 a year to heat their homes to a comfortable level. The thinktank said energy efficiency should be viewed as a national infrastructure priority, tapping into the government’s £100bn infrastructure budget over the next five years. Richard Howard, the report’s author, said: “Most people assume that it’s the elderly who are most at risk of not being able to heat their homes. But the facts paint a startling picture. There are over one million working households struggling to afford their energy bills and living in underheated homes... Fuel poverty can severely affect people’s health and also puts a strain on the NHS. It is absolutely critical that the government prioritises support to those households most at risk.”

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Graphs at a glance: Will fracking bring cheap energy to Britain? The evidence suggest not.

There has been a lot of talk about fracking the UK. Our government is so keen it has considered changing the law on trespass to make it easier for companies to frack under our properties. 

Would it be a good thing? Even if there is absolutely no risk bits of our green and pleasant land  may disappear down multiple sinkholes?


The graph below from a parliamentary report, "The Impact of Shale Gas on Energy Markets", shows how fracking caused the price of gas to plummet in the USA. Benchmark natural gas prices in the USA (Henry Hub) and the UK (National Base Point (NBP)) were about the same until the Americans got down to some serious fracking.

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Our sky high energy and food inflation hits the poorest hardest. Our rock bottom mortgages hardly benefit them at all

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Graphs at a glance: The UK has the worst investment record of the 27 EU nations, so where does all the money go?

For years one of the favourite excuses for making all us Ripped-off Britons worse off by hiking prices and keeping down wages has been the need to pay for "investment". 

Energy , telecoms and transport companies warn of blackouts and overcrowding unless we swallow price hikes for "investment". 

Employers and governments say wages and pensions can't go up because the  money kept from us is needed for "investment".


A report by the National Audit Office, "Infrastructure Investment: the impact on consumer bills", reveals the extent of the rampant rises:

"Spending [by consumers paying their bills] on energy and water bills rose by 44 per cent and 21 per cent respectively, in the period 2002 to 2011 while median incomes were still the same in 2011 as they were in 2002 (all figures calculated in 2012 prices)"

And yet when the rain pours, the wind puffs, or the wrong type of snow falls everything seems to grind to a halt. Is all the investment we pay for with higher bills and stagnant wages being wasted? Or is it simply not happening at all?

Figures from a European Union report, "In Depth Review for the UK", suggest that the "investment" is actually woefully inadequate. The report shows that the UK has about the worst investment record of all 27 EU nations.

Makes you wonder where all the  money actually does go:

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OFGEM to investigate British Gas for paying salesmen bonuses for inflating business customers’ bills

Including the Royal British Legion! KJ learns more from his mate, a British Gas salesman...

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Regulation in Britain: Compare and contrast regulation of Citizens and of Companies. Company executives pay piffling fines, ordinary citizens do jail time.

In May 2014 the energy regulator OFGEM boasted about its latest ‘record fine’: £12 million inflicted on E.on. OFGEM’s press release stated:

• E.ON’s large scale mis-selling results in biggest supplier payout to consumers 

• Ofgem found management arrangements were insufficient to protect against mis-selling

OFGEM has the power to fine upto 10% of revenue. E.ON’s UK revenue in 2013 was £9.9 billion. The £12million fine, about 0.1% of revenue, is not even a drop in that ocean of cash.

Money is the one thing that is not in short supply for Energy companies. They are awash with it. Fraudulent behaviour by our Energy and Financial sectors have been ‘punished’ by taking from them that which they have most of: money taken from their customers. Like fining Billy Bunter a doughnut – he may not like it, but he has plenty more. The loss of a doughnut will not reform him.

Fraud is directed by people, not companies. Directors don’t fear fines – after all it is almost inevitably the company that pays them. But while they have more than enough money to brush off fines, they have about the same amount of time as anyone else. A year in jail is a year in jail, whoever you are.

The Sentencing Council, appointed by the Lord Chief Justice and the Lord Chancellor of the UK, provides guidance to the British Justice System. Here is the guidance when it comes to frauds by ordinary citizens:

• "Confidence Fraud" (not unlike doorstep selling by energy companies) for sums of £500,000 or more: 5-8 years custody 

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Nike’s England shirt is £90. An excellent early lesson for your kids on the power of having a monopoly

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Graphs at a glance: Financial regulation in the USA and the UK: Federal Marshal versus Sleeping Policeman

Winston Churchill said of America:

“You can always rely on America to do the right thing once it has exhausted all the alternatives”

Sadly, the same can’t be said of Britain.

London and New York have fought for the top “Global Financial Centre” spot for years. According to the March 2014 “Global Financial Centres Index” produced by Z/yen, who describe themselves as “the City of London’s leading commercial thinktank”:

“New York is now the leading centre, although its lead over London is statistically insignificant – two points on a scale of 1,000.”

What is it about crusty old London that keeps it head-to-head with glitzy New York? According to a puff-piece by the City of London Corporation the key elements to a Global Financial Centre are:

• Critical Mass; Connectivity; People; Regulation; Domestic Market Infrastructure; Business Environment

Six solid gold attributes that New York and London can both offer. But London offers something even more valuable! In March 2014 the Financial Times reported that the total fines paid since the Banking Crash by banks to US regulators hit the US$100 billion mark:

"Wall Street banks and their foreign rivals have paid out $100bn in US legal settlements since the financial crisis, according to Financial Times research, with more than half of the penalties extracted in the past year."

Figures show that in 2008 both UK and US regulators were fining banks a similar amount - reflecting the fact that the US regulation was then just as spineless as the UK. But by 2013 UK regulatory fines were only one fiftieth US fines.

Exchange rate US$1.6 = £1

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Operating a profiteering cartel is a criminal offence. So if 6,000 die from fuel poverty each year, will manslaughter charges be next?

Fee, KJ and Chris wonder what will happen next to the "Big 6" energy firms...

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Graphs at a glance: Wholesale energy price data from OFGEM and NPower show the key excuse for energy price hikes has been a fib

The Financial Conduct Authority (FCA, previously the FSA) and OFGEM are the pantomime twins of regulation in Britain: Tweedle-dumb and Tweedle-dumber. 

The FCA waving its Vorple Sword is regarded by the banks as no more threatening than a cheer-leader wielding a furry pom-pom. The litany of bankers' interest rate rigging; pension annuity scams; insurance scams etc. goes on with no sign of any banker swapping his pure wool pinstripe suit for an acrylic stripey prison jersey.

At least the FCA can claim it is getting tricked by different scams all the time. OFGEM, evidently the dumber of the twins (it must be truly mortifying to be dumber than the FCA!), has managed to be deceived for years by one central fib: the soaring wholesale price of energy. 

For years energy companies have blamed consumer price hikes on World energy markets. Data published by OFGEM in October 2013 (why did it take them so long to do something so obvious?), and by NPower in January 2014 (why did they do it at all?) show wholesale prices simply have not been shooting up.

Combining this data from OFGEM and NPower, and retail prices from Consumer Futures reveal:
 
a) Using NPower's figures (in real terms) since 2007, customer bills have increased by 18% in 2013, and predict a 40% increase by 2020, while wholesale costs have actually fallen. In this NPower report instead of blaming wholesale prices NPower blames everything else except profits:

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E.On energy profits up 26%, winter deaths from cold homes up 29%

Fee, KJ and Chris try to figure out the logic...

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Lessons on the dangers of loan sharks are being launched in our schools. Why stop with loan sharks?

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Are we being overcharged by up to £4bn? OFGEM, the energy regulator, says they have no idea

But Chris, KJ and Fee think they do...

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Watching Channel 4's Benefits Street? How about Bank Bailout Boulevard and Tax Dodger's Bypass...

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Excuses for being completely useless - Regulators (OFGEM; FCA/FSA; OFTEL et al), here are some good excuses for not doing your homework

In January 2014 the Labour Party issued another report, “Powering Britain: One Nation Labour’s plans to reset the energy market”. The report made various assertions relating to the period after 2010, conveniently overlooking Labour’s own lamentable record regulating the energy industry. It is quite extraordinary how much politicians care for us when out of power, and how little when in power. Wasn’t it Spiderman who said “With no responsibility comes great power”. Power to talk without having responsibility to deliver. Anyway, the report stated:

"Since 2010, household energy bills have gone up by over £300 a year whilst small businesses are paying over £13,000 a year more

Lack of competition in the retail market has resulted in consumers paying £3.6 billion more than they need to"

The report includes graphs showing how energy companies’ blaming wholesale cost (what the energy companies pay) for retail price (what you pay) rises since 2011 are phoney. Average annual increases between 2011 and 2013 have been:

• Electricity: wholesale up 0.5% per year; retail up 9.7% a year
• Gas: wholesale up 1.59% per year; retail up 11% per year

OFGEM, the energy regulator, denies that consumers are being ripped off though OFGEM accepts the need to “break the stranglehold of the big 6 in the retail market” (so we're not being ripped off, just strangled?) and has repeatedly blamed energy companies for not being "transparent" (i.e. telling the simple truth) about their wholesale costs.

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Graphs at a glance: Cambridge University study shows fewer than 1 in 10 members of the public trust or regard as ethical banks and energy companies

The relationship between British Industry and British Government is the same as that between a dominatrix and her clients. Plenty of shouting and threatening, but no visible marks. 

Ministers appear in the news shooting out their lips, shaking their heads, scolding, threatening terrible consequences and spankings, but making no visible changes.

If you want to see a pair of reddened cheeks you need go no further than certain parliamentary committee rooms:

"I think you do evil" intoned Margaret Hodge, Chair of the Public Accounts Committee, who was being strict to the boss of Google, accused of tax dodging.

“I apologise to the Secretary of State and I should apologise to this committee and the taxpayer on behalf of our company. We didn’t have the systems in place that we needed” grovelled the boss of G4S having been caught out overcharging for offender tagging services. 

Margaret Hodge is matched by Andrew Tyrie, the man of the gimlet gaze who chairs the Treasury Committee. Peers of the Realm have been called liars by other peers of the Realm. Lord Lawson, sitting on the committee, chastised Lord Stephenson, former chairman of the wrecked bank HBOS, with the words "Either when you said that you were being dishonest, or else, if you believed it to be correct, you were delusional. I prefer to believe that you were not dishonest, and you were simply delusional."

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