shut up or switch
This is going to hurt all of us in the pocket but fuel bills are going to rocket. Again. Utility bills are going to increase by as much as 20% this winter. And there’s not a lot you can do about it. In fact the average dual fuel bill (gas and leccy) will have increased by over 50% since 2007 to around £1450 per household.
Providers vehemently deny accusations of profiteering and contest they have had little choice but to inflict steep increases on us because of the steep increases on the wholesale price of gas and oil. Industry experts however argue that these prices are still lower than they were three years ago during the early days of the financial crisis. You can believe who you choose and I know who I concur with.
Prior to starting his new role as CBI president, Sir Roger Carr was chairman of British Gas owner, Centrica. His stance is entirely with the industry and argues British Gas have no alternative but to rise prices in line with wholesale prices…even though these have fallen. Furthermore, he sees the market now operating on a world-wide basis and demand from those rapidly developing eastern countries is far outstripping supply and it’s in these conditions that prices hike to a level at which the customer will have to pay them. It’s not your granny in Newmarket fiddling with her thermostat that determines the price, it’s the construction company in Beijing. And demand ain’t going to decrease any time soon.
Looking to the future Sir Rog-Dodge shuts up shop pretty sharpish when asked what Centrica plan to do in respect of prices and explains “we never comment on anything to do with forward pricing. All we’ve ever said is we have to run a business to make reasonable profit and have a sustainable model in the interests of the company.” Sounds to me like they intend to make hay while the sun shines, so to speak, and they are prepared to charge what we will pay. Ah, market forces, don’t you just love them. About as much as the shareholders that he claims to serve.
Thankfully, he’s not so coy on all things political and is surprisingly outspoken on the proposed Government initiative to reduce the upper rates of taxation: “I think that at a time of extreme adversity it’s not unreasonable for the burden to be shared but the reality is that for growth to be achieved, people at every level need to be incentivised and an improving tax rate (reduced at the higher levels that is, Sir Rog) is absolutely an appropriate agenda item.” Further controversy is bound to follow as it did when he was he oversaw, in the capacity of chairman, the sale of Cadbury to Kraft 18 months ago and the subsequent closure of the chocolate maker’s Bristol plant, relocation of key positions to Switzerland and the avoidance of huge sums of corporate tax. Thanks Roger.
So what can you do? In reality we switch energy suppliers about as often as we change banks – once in a blue moon. I’m as guilty as all of us and I’ve been with all three of mine from the start and will be undoubtedly with them at the end. Apparently, though change is on the way and last year five million of us switched last year in response to price rises and they do tend to end up with cheaper deals. At least in the short term. And here’s the rub. The ‘big six’ suppliers do display a pack mentality and many deals have been shown to be short lived, soon reverting to similarly priced alternatives.
And the real bad news? Give it ten years and wait and see what has happened to water prices. We’ll all be metered and water will be the new oil. Or probably the new gold as we’ll have used most of the oil by then.
