Simon Read: Utility upgrades must not drain the less well-off again
Friday 04 July 2014
MPs warned this week that future infrastructure costs of £250bn will be added to consumers' bills. The Public Accounts Committee pointed out that vulnerable people would be hit hardest by the extra charges.
Committee chair Margaret Hodge is concerned that making consumers pay for essential improvements through their bills will leave struggling people unable to afford to pay for their energy or water.
She has demanded that the Treasury produce an assessment of the long-term affordability of bills. "They need to assess the combined impact of increased bills on different households, including those households most vulnerable to price rises," she said.
This is an important issue. Not only must we ensure that the people who can least afford it aren't penalised by being forced to pay for improvements to assets owned by private companies, we also need to ensure that any cash spent will actually benefit consumers, not just the companies that deliver – and charge us a packet – for our energy and water.
Others have weighed into the debate. The Citizens Advice chief executive Gillian Guy said: "Less well-off consumers spend more of their income on gas, electric and water bills than others, which in turn means costs for infrastructure make up a larger share of their spending than other consumers."
Richard Lloyd, executive director of the consumer group Which?, said: "It's vital that the Government and regulators get a tighter grip on the massive costs that are being passed on to household bills. We need to see rigorous, independent scrutiny to ensure that these costs are affordable and provide value for money for consumers."
Even the energy giants themselves support an inquiry. Paul Massara, the RWE npower chief, said: "There can be no doubt that a full, public and regular review of how much government policy is costing customers is the right thing to do."
Over to you, Treasury...
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