Simon Read: Economic boom? Not for the masses struggling with bills

 

Egghead economists were quick to queue up to offer endless opinions about the state of UK plc on Thursday after it was revealed we've climbed out of recession (again). While that may be good news for the rent-a-quotes, it's not such fabulous news for the rest of us.

Why? Because millions of families will continue to be hard up and forced to further tighten their financial belts. Especially after EDF Energy yesterday added to their woes by announcing a massive 10.8 per cent increase in annual gas and electricity bills.

The move will add roughly £130 to the average bill – an increase higher than any other energy supplier. That's peanuts to the average fatcat energy boss – of which there are plenty – but could prove a crucial difference between heating and eating for many vulnerable folk.

My conversations with some bosses of the big firms show how out of touch they are with their customers. When I questioned profits of 5 per cent and ask why they couldn't be cut to 3 per cent, I was told: "That would only cut average bills by around £30. What's the point?"

The point? £30 is a lot of money when you have none to spare. It may only pay for a starter in the kind of restaurants I imagine the fatcats frequent, but a struggling family may have to stretch £30 to pay for food for a week.

EDF's price rise also increases suggestions that the Big Six energy firms are working as a cartel. While the firm's tariffs will still be slightly cheaper on average than the other suppliers who have increased their prices, it's illuminating to know that the average bills across the suppliers will be within £36 of each other, taking into account the most recent increases.

"Another price rise, hot on the heels of those we've already seen, will again feed into consumer concerns on pack behaviour and whether price changes are driven by real supply and demand issues," said Audrey Gallacher, director of energy at Consumer Focus.

Energy firms, of course, deny that they set prices collectively. So it must be a huge coincidence that they have increased prices within weeks of each other. Of the Big Six firms, we're only waiting for E.on to join in, but since the firm has promised not to increase prices before the end of the year, we're expecting its announcement towards the end of November.

Once the winter price increases take effect, the average household energy bill will have rocketed by £812, or 156 per cent, from £522 in 2004 to a record high of £1,334 by the end of this year, according to uSwitch.

The comparison site's research suggests that almost nine out of ten households are expected to ration their energy usage this winter. Meanwhile the cost of energy has become the top household worry for consumers, ahead of the rising cost of food, petrol prices and mortgage and rent payments.

"The figures speak for themselves," said Ann Robinson, director of consumer policy at uSwitch. "With the average household energy bill rocketing by 156 per cent in the last eight years, it's no surprise that consumers believe that energy is rapidly becoming unaffordable."

She reckons some seven million households will this winter face living in fuel poverty, when a 10th of their available income is spent on heating their home. More worrying are the rising number of unnecessary winter deaths which are caused by elderly people turning their heating down or off because they can't afford their bills.

So I'm pleased to report that it's not all bad news from the energy firms. They are all – pleasingly – making progress in terms of identifying hard-up customers and targeting efforts to help them.

EDF said yesterday, for instance, that it will guarantee 100,000 vulnerable older customers the cheapest possible price. Other energy firms should do the same.

British Gas says it is working hard to help vulnerable customers, but forcing hard-up folk on to meters, which means they end up paying more for their bills, hardly helps. I hope the company's bosses read our article about Laura Coyle on page 61 and adopts a more positive approach to people who get behind with their bills.

However the Government also needs to do its part to help those in fuel poverty. For starters, it needs to force the Department of Work and Pensions to share information about vulnerable people – such as the disabled and families living on low incomes – with the energy companies and charities, so that those most in need can be identified for extra help.

Which brings us back to the burgeoning economy. Although GDP growth was only 1 per cent this month, that's been enough to push the UK out of recession, we're told. But individuals don't normally feel the benefit of GDP growth – through pay increases or more jobs – until months later.

And by that time we will all be worse off anyway, hit by rising fuel bills, higher food prices and soaring inflation. With that in mind, finding ways to cut energy costs becomes more important than ever.

s.read@independent.co.uk

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

PROMOTED VIDEO
News
Johnny Handle, Northumberland, Ted Relph, President of Lakeland Dialect Society, and Sid Calderbank, Lancashire, founder of the National Dialect Day
newsMeet the enthusiasts determined to stop them dying out
News
The data shows that the number of “unlawfully” large infant classes has doubled in the last 12 months alone
i100Mike Stuchbery, a teacher in Great Yarmouth, said he received abuse
Arts and Entertainment
The starship in Star Wars: The Force Awakens
filmsThe first glimpse of JJ Abrams' new film has been released online
Sport
Rio Ferdinand returns for QPR
sportRio Ferdinand returns from his three-game suspension today
News
The Speaker of the House will takes his turn as guest editor of the Today programme
arts + ents
Arts and Entertainment
St Peter’s Seminary in Cardross. Argyll, has remained derelict for more than 25 years
arts + ents
News
people

Watch the spoof Thanksgiving segment filmed for Live!
Sport
Billy Twelvetrees will start for England against Australia tomorrow with Owen Farrell dropping to the bench
rugbyEngland need a victory against Australia today
Arts and Entertainment
The cover of The Guest Cat – expect to see it everywhere
books
Sport
Tyson Fury poses outside the Imperial War Museum in south London ahead of his fight against Dereck Chisora
boxingAll British heavyweight clash gets underway on Saturday night
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Austen Lloyd: Company Secretary

    Excellent Package: Austen Lloyd: EAST ANGLIA - SENIOR SOLICITOR LEVEL ROLE** -...

    Citifocus Ltd: German Speaking Client Specialist

    £Attractive Package: Citifocus Ltd: Prestigious asset management house seeks a...

    Citifocus Ltd: Performance & Risk Oversight

    £Negotiable: Citifocus Ltd: This is a varied role focusing on the firm's mutua...

    h2 Recruit Ltd: Sales Director - SaaS (SME/Channel) - £140,000 OTE

    £90000 - £140000 per annum + benefits: h2 Recruit Ltd: Are you a high achievin...

    Day In a Page

    Homeless Veterans Christmas Appeal: ‘We give them hope. They come to us when no one else can help’

    Christmas Appeal

    Meet the charity giving homeless veterans hope – and who they turn to when no one else can help
    Should doctors and patients learn to plan humane, happier endings rather than trying to prolong life?

    Is it always right to try to prolong life?

    Most of us would prefer to die in our own beds, with our families beside us. But, as a GP, Margaret McCartney sees too many end their days in a medicalised battle
    Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night - is that what it takes for women to get to the top?

    What does it take for women to get to the top?

    Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night and told women they had to do more if they wanted to get on
    Christmas jumper craze: Inside the UK factory behind this year's multicultural must-have

    Knitting pretty: British Christmas Jumpers

    Simmy Richman visits Jack Masters, the company behind this year's multicultural must-have
    French chefs have launched a campaign to end violence in kitchens - should British restaurants follow suit?

    French chefs campaign against bullying

    A group of top chefs signed a manifesto against violence in kitchens following the sacking of a chef at a Paris restaurant for scalding his kitchen assistant with a white-hot spoon
    Radio 4 to broadcast 10-hour War and Peace on New Year's Day as Controller warns of cuts

    Just what you need on a New Year hangover...

    Radio 4 to broadcast 10-hour adaptation of War and Peace on first day of 2015
    Cuba set to stage its first US musical in 50 years

    Cuba to stage first US musical in 50 years

    Claire Allfree finds out if the new production of Rent will hit the right note in Havana
    Christmas 2014: 10 best educational toys

    Learn and play: 10 best educational toys

    Of course you want them to have fun, but even better if they can learn at the same time
    Paul Scholes column: I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season

    Paul Scholes column

    I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season
    Lewis Moody column: Stuart Lancaster has made all the right calls – now England must deliver

    Lewis Moody: Lancaster has made all the right calls – now England must deliver

    So what must the red-rose do differently? They have to take the points on offer 
    Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

    Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

    It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
    Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

    Sol Campbell cries foul at Labour's mansion tax

    The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
    Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

    Sarkozy returns

    The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
    Is the criticism of Ed Miliband a coded form of anti-Semitism?

    Is the criticism of Miliband anti-Semitic?

    Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
    Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

    Ouija boards are the must-have festive gift

    Simon Usborne explores the appeal - and mysteries - of a century-old parlour game