Wednesday, 22 August 2012


While we are enjoying the occasional (if fleeting) summer days, many of us are wondering about what our winter fuel bills will be like, especially if we have a bad winter. Some of us may face the stark choice of heating or eating this winter. Energy supply wise, we are now in the situation where we are now even more dependent upon imported gas from either unstable regions or dubious suppliers than ever before, and we the customers are facing increasingly expensive domestic energy bills.

News that research by Consumer Focus Wales now shows that a third of those asked described their energy bills as more of a worry than it was a few years ago will surprise few of us. The research shows that people on lower incomes, are unsurprisingly those most likely to be struggling to afford their energy bills. As has been previously noted the elderly and people in rural areas are also affected by increased energy bills. Almost 25% of people said energy bills needed only to go up by another £120 (a 10% increase) and they would also be struggling to afford the payments.

The stats make grim reading, the regulator Ofgem, has said that household energy bills have effectively doubled since 2002 and are now £1,250 per year. Back in 2008 the industry’s average dual fuel bill for both electricity and gas was £885. The ‘Big Six’ energy supplier’s cartel announced cuts of 5% in either their electricity or gas prices, but, this failed to reverse the years of price increases.

Consumer Focus Wales research shows that the proportion of people in Wales falling in to debt with suppliers is actually rising. Some 8% of energy consumers say they have fallen behind with energy bill payments in the last year – this figure rises to one in seven among young people and lower income households. Back in 2010 Consumer Focus Wales found that 5% of people were in arrears on their gas and electricity payments.

Back in February and March one by one of the 'Big Six' quietly announced a raise in profits at a time when many people were trying to avoid or to live with fuel poverty, something that was never going to go down well with hard presser domestic energy customers. Centrica (who own British Gas) revealed a group operating profit of £2.5 billion pounds, up four percent on 2010.

This unfortunately timed announcement came against a backdrop of growing fuel poverty, which affected (at the time) around 5.5 million households in the UK. The definition of Fuel poverty is when a household spends more than ten percent of their disposable income on gas and electricity. Fuel poverty is one of those things that the previous (and former) New Labour Government and the current Con Dem Government have done nothing about and no doubt quietly hope will go away or that the rest of us will continue to suffer it in relative silence.

Nothing has been done or will be done to curb or regulate excessive profits from the energy companies via windfall tax. The talk about customers benefiting from dual fuel bills, etc, is little more than a distraction. We have had a dual political failure, something that speaks volumes as to how far both the former New Labour Government and the Conservatives (and their Lib Dem coat holders) have gone to drop even the pretence of standing up for the interests of ordinary people in favour of courting the City.

It looks like we are going to get hit by another rise in domestic energy bills, kicked off this time by SSE, (Scottish Hydro, Swalec and Southern Electric) who have announced that they will increase its domestic gas and electricity prices by an average of 9% from October 15th. I'll bet the City and the shareholders will be happy, unlike the rest of us.

For growing numbers of ordinary people this winter it may come down to a choice of heat or eat, literally choosing between putting food on the table and heating their home. The only real winners here are HM Government (with extra tax) and the big six energy companies (with fat profits) all of us as customers are losing out hand over fist as the energy cartel continues to ramp up its profits.

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