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17/10/2012 - Rising energy prices hit the poor

We've heard the same old excuses time and again about wholesale prices rising, increases in operating costs, investment in infrastructure and subsidies for home insulation for the poorest consumers. We've heard them, memorised them, and still don't believe them because we know that the energy oligopoly is making grotesquely obsessive profits and handing out cosy dividends to shareholders while workers, pensioners and people living on benefits and benefits are having to tighten their belts.
 
Many poor pensioners died last winter, forced to choose between eating and heating their homes after British Gas and other members of the 'big six' that dominate energy provision raised gas and electricity tariffs to 18 per cent and 16 per cent respectively only last August 2011. Its pleas of "sorry, we had no choice" were put into perspective when the company declared profits of £742 million, up 24 per cent.
 
The latest 6 per cent rise in both gas and electricity prices announced by British Gas, to take effect at the onset of winter next month, will increase fear among people already wondering how to survive the government's austerity agenda. And it is not only those poor pensioners that face the choice of keeping warm or eating a decent hot meal during cold winter months ahead.
 
All UK families now face the great ‘Heat or Eat’ dilemma as revealed in a disturbing study by Find Energy Saving which shows that hundreds of thousands of people in the UK are facing the financial choice between heating their homes or feeding themselves.
 
In a contradiction to the perceived wisdom that it is the elderly who suffer most due to high energy costs, a survey by Find Energy Savings reveals that 25% of 30-39 year olds have also had to choose between food or heating at least once. Other findings from the survey ( conducted in March 2012 and in which 1095 people took part, with full results to be published laer on in the year ) include:

 

  • 45% of people asked said that they turned off their heating every day to save money
  • 18% of 21-29 year olds have borrowed money to pay for heating or electricity
  • 80% of people asked said they would rather the government reduced tax on energy and increase tax on alcohol and cigarettes to pay for it
  • 48% of people said that they would not be prepared to pay more for energy from renewable sources as opposed to 20% who said they would
 
It seems that this study is only reinforced by the growing concern about the rise of energy bills as British Gas announced this week that the average dual-fuel bill is set to rise by more than £80 and will break the £1,300 mark.
 
Pushing households into further financial strain, British Gas have pointed the blame at the National Grid network and higher wholesale prices rising.
 
However, it seems for energy consumers the worse is yet to come as Npower, EDF Energy and Scottish Power have not made any promise that they will not increase prices by the end of the year, with some industry experts predicting a rise of nearly 10% in energy bills.
 
In a statement, the CEO of Find Energy Savings, Justin Elliott said:

“We were very disturbed by some of the findings of the survey and we were surprised in particular that it appears to be younger people who are struggling to pay their energy bills rather than the elderly who are most often portrayed as the most vulnerable to high energy costs. We were also very concerned about the number of people who said that they have had to borrow money to pay for energy bills – some of whom even said that they had used payday loans at extortionate interest rates.”
 
David Kerr, Executive member of Solidarity said:
 
"The simple truth is that gas and electricity privatisation, among the first to be carried out by Margaret Thatcher's Tory government, has been a failure in the terms touted at the time. All privatisation has achieved is fuel poverty and pandering to corporate greed.

In terms of energy privatisation's real goals - the further enrichment of a small section of society to the detriment of the rest - it has been a rip-roaring success. Public investment  has been converted into private profits.

Yet company apologists try to separate one end of the market from the other, even though both companies have the same root - the once publicly owned British Gas that provided gas throughout Britain at much lower cost than today.

Breaking up a single natural monopoly provides profiteers with scope for minimising taxation and maximising revenue for shareholders."
 
Report by Ian Bell