The Energy companies have reaped a 500% increase in profits over the last five years have been quick to blame rising oil and gas prices, and quick to rake in the profits, as the average annual dual fuel bill has risen from £662 a year in 2005 to 1,048 in 2007. The New Labour Government has been happy to rake in the extra tax revenues and the Energy companies have been slow to pass on reductions in energy costs to their customers – the only real losers are the energy customers.
While Crude oil has fallen from $147 a barrel in July last year to about $70 a barrel and no one is disputing that the six main energy suppliers have not cut their prices since the beginning of the year, energy bills are still too high. Consumer Focus research suggests that current gas bills should be at least 7.4% cheaper (£60.10 annually) and electricity bills at least 3.1% cheaper (£13.80 annually). Customer Focus’s new research for the first time shows the reality, that the energy companies are pocketing £1.6bn extra, while millions of households struggle to make ends meet.
Lets be brutally honest here, what we have here is an effective monopoly on energy supply in the UK. This is a direct result over the last ten years of the number of energy supply companies falling from twenty two to six - that's the way the market works we have been told don't worry about it. Now with less that £30 differential between all of the energy supply companies, which works out to be no more than a few pence a week difference in bills, so what we have is an energy cartel which brings minimal benefit to hard pressed energy customers and maximises it's profits and which feeds the government impressive amounts of tax.
The complicit insanity of the Conservative’s headlong dash to gas in the 1980’s has been compounded by a real failure in basic strategic energy planning and made worse by the Government's perverse decision to half-heartedly look at developing diverse reliable alternative energy sources. This New Labour Government has ignored repeated warnings that it was setting the UK on a path towards higher prices and blackouts. Over the next six years almost all of our old nuclear reactors, along with nine major coal and oil-fired power stations, will be closed, with nothing ready to replace them.
We are now in the situation where we are now even more dependent upon imported gas from either unstable regions or dubious suppliers and we the customers face unnecessarily expensive bills. As a matter of urgency the Westminster Government, the Scottish Parliament, the National Assembly and the Northern Ireland Assembly should work with the Irish Government to make these islands entirely self sufficient via renewable non market driven energy resources. By developing a flexible self-sufficient energy development strategy that encourages decentralised microgeneration schemes and by actually implementing it this could create jobs, useful skills and help to bootstrap the economy out of the developing recession as well as helping consumers.