Letter: The real world of utility price rises

Sir: In your Commentary article 'Doing their bit for inflation' (Business & City, 26 August), you say: 'Ofgas and its fellow regulators have been doing their bit in the battle against inflation.' Lower inflation should, indeed, produce lower utility price increases and lower utility prices would, indeed, produce lower inflation. Unfortunately, that is not what is happening in the real world.

My own organisation has just been faced with a demand for a 17.29 per cent increase in electricity charges for one of our factories, which we managed to negotiate down to 13.41 per cent. As this factory is a large user of electricity, this represents not only a substantial percentage increase, but a large sum of pound notes as well.

In the same round of negotiations we sent out requests for quotations for our two major factories to eight suppliers and we had responses from three suppliers, all at around the same level.

Needless to say, we have taken this matter up with Offer, but as things stand we are going to have to pay a hugely inflated price for our electricity, involving costs that we cannot possibly pass on to our customers.

Perhaps the author of that elegant commentary would care to step from the realms of theory and find out what is going on in the real world.

Yours faithfully,

BRIAN R. TAYLOR

Chief Executive

Wardle Storeys plc

Brantham, Essex

4 September