Monday, 16 January 2012

All fuelled up

When global fuel prices rise, our gas and electricity bills go up like a rocket; when they come down, our bills fall like a feather. Last week’s headline grabbing ‘British Gas cuts prices by 5%’ hid the reality that BG wasn’t cutting gas prices at all, just electricity prices. And, that cut only applied to some customers; for many, there was no cut at all.

The cost of a typical dual fuel bill is now £1,345 – a 48% increase since 2007; in plain English, that’s £9 a week. Standard tariffs rose by £175 between June and November last year alone.

The number of households in debt to their electricity supplier has increased by more than 25% to 850,000. The number of gas customers in the red has also risen by 20% to more than 700,000. Many families will be in debt on both accounts.

Yet, the ‘big six’ energy companies are enjoying record profits. This is because, between 2007 and 2011, they have more than doubled the gap between wholesale (what they buy at) and retail (what they sell at) prices. And, the executives and directors of the energy companies have enjoyed massive pay hikes at our expense.

Before the General Election, David Cameron said that claims that the Tories would cut the winter fuel allowance were “lies” and that if the Conservatives won the election they would “protect” it.

But, as energy bills have rocketed, the Conservative-led government has cut Winter Fuel Payments, cut the Warm Front programme – insulating homes – by 70%, and is replacing the social tariffs with the poorly designed Warm Home Discount, which will leave millions without support this winter.

It’s time to stand up against the powerful vested interests in the energy industry. We need:
  • an investigation into the mis-selling of energy, and compensation for consumers who have been ripped off
  • simple tariffs – people should automatically be on the cheapest applicable tariff
  • transparency on trading data – full openness about what they pay and what they charge
  • reform of the energy market – it’s clear there is no real competition
  • to use the soaring profits to help families and businesses with rising energy bills now.