Debt woes rise 20-fold as 'Big Six' post profits

 

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The Independent Online

Britons are now so worried about paying to heat their homes that a leading debt-advice charity has seen a 20-fold increase in calls on the issue in less than a decade.

The Money Advice Trust (MAT) received 27,000 calls in 2011 from people unable to cope with fuel debts, compared with just 1,212 in 2004. In January this year, the helpline received a call for help with gas and electricity debts every five minutes its lines were open.

Meanwhile, the "Big Six" energy firms are posting bumper profits, with German-owned E.ON yesterday revealing its UK business made £304m in 2011. Figures compiled by Consumer Focus show that the four Big Six firms that had reported results before yesterday – British Gas, EDF, Npower and Scottish Power – made £168 per second in profits from British customers last year.

Joanna Elson, chief executive of the MAT, said: "We are now taking well over 2,000 calls a month for help with fuel debts. The growth in the number of people struggling to meet energy bills reflects a sharp increase in prices over the last few years.

"It is a serious problem in this country that so many people will be wondering whether they can afford to boil a kettle or turn on the heating."

Last September, E.ON increased its electricity bills by 11.4 per cent and gas prices by 18.1 per cent for its 4.8 million UK customers.

The move helped the firm to increase its profit margin from just 0.5 per cent in 2010 to 1.68 per cent last year. E.ON UK's chief executive, Tony Cocker, said the firm was determined to regain the trust of customers frustrated by years of increasing prices and poor service. But he warned he wasn't prepared to sacrifice profits to help customers.

"My main priorities are both to earn the trust of our customers and to earn a fair profit because I recognise that in the long term no company can be sustainable without both," he said."

E.ON's German owner was forced to post a net loss last year, blaming Germany's nuclear phase-out, high wholesale-gas prices, and the economic slowdown.

The firm revealed a net loss of €2.2bn in 2011, compared with a profit of €5.85bn in 2010. But it said underlying profits in 2012 would be close to €10bn.

Ahead of next week's Budget, organisers of the End the Big Six Energy Fix campaign said they will be calling on their 10,000 supporters to email the Chancellor about imposing a levy on the Big Six.

Gavin Hayes, general secretary of think tank Compass, which organised the campaign in conjunction with The Independent, said: "A levy on the Big Six's profits would be a simple and effective mechanism of ensuring that all the Big Six energy suppliers paid their fair share to society and fully met their social and environmental obligations – over time raising billions to help those in fuel poverty and helping to make homes more energy-efficient."

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