Tag Archives: Ofgem

Why are the Tories trying to hide energy bill misery for those who use the least?

The hard fact for the poorest people: while headline energy costs are falling, the price for those who can least afford to pay is rising unaffordably.

Average energy bills will fall slightly in the three months from October – to £1,923 a year for the typical household, the regulator Ofgem has said

This is a drop of £151 on the current annual energy bill for a typical household, which is currently £2,074.

But there are complications!

The drop is in the price per unit of electricity and gas, and standing charges – that are charged daily regardless of energy use, are set to rise to recoup the costs associated with the wave of supplier failures, consumer defaults, and additional support to shore up energy companies’ finances.

This means people who use less energy – logically, poorer people – will end up paying more for it.

The Resolution Foundation has explained the situation in a press release here. I’ll pull out the important bits:

Any family with an energy consumption less than four-fifths of the average will see higher bills this winter than last, a situation that applies to around one-in-three (35 per cent) of households in England and close to half (47 per cent) of those in the lowest income decile.

For some, these extra costs will be substantial: 13 per cent of households (2.7 million families) face energy bills rising by more than £100 this winter, a figure that rises to one in four (24 per cent) for the poorest households.

The removal of the flat £400 Energy Bill Support scheme, which was paid out in monthly instalments over winter 2022 to all households, regardless of income or energy consumption, is in effect putting upward pressure on every household’s bill this winter.

Whether a household faces a lower bill this winter depends on whether the lower per-unit prices provide savings that outweigh the higher standing charges and removal of the £400 support.

The Resolution Foundation expects 7.2 million households will end up paying more, with 2.7 million spending more than £100 more on gas and electricity bills – including 24 per cent (almost a quarter) of those in the poorest 1/10 of families.

The Conservative government doesn’t care about this increased pressure on the poorest.

Here’s Tory mouthpiece Andrew Bowie (he’s an under-secretary for “Nuclear and Networks”, whatever that means), refusing to discuss the issue with the BBC’s Naga Munchetty and determinedly trying to force the subject back to the reduction in bills for the very richest people:

We may draw just one conclusion from this:

Conservative government energy policy is to make the poorest pay the most (as a proportion of their available funds). They are using energy bills to create poverty.

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The news in tweets: Monday, July 10, 2023

Number of people waiting long periods for PIP claim result has plummeted

The number waiting longer than six months has dropped from more than 20,000 to just 300 within 12 months, and the DWP says it has halved the time it takes in acting on a claim.

But how many claims are the DWP processing now, in comparison to 12 months ago? What is the figure as a proportion of all claims received? And – more to the point – how many are successful?

Ofgem asks energy suppliers to publish all their tariffs, so customers know what deals are worthwhile

Scam adverts: the government has STILL enacted no laws to protect you against them

Are doctors in Scotland well-advised to suspend strikes after pay offer of 17.5% over two years?

It may seem a lot but doctors in Scotland have only suspended their strike action for a pay deal of 8.75 per cent per year – that’s still less than the current rate of inflation and therefore a pay cut.

But it is more than junior doctors have been offered by Health Secretary Steve Barclay – whose own pay packet has not been reduced by inflation.

Meanwhile, teachers are being told their own job is a “vocation” – meaning it is especially worthy of dedication – and they should be happy with £27,000 a year, by Heather Wheeler. Take a look at this point:

There is no degree in being a member of Parliament, and most of the degrees in politics don’t seem to be worth the paper they’re written on (look at the havoc wreaked on the nation by graduates of Oxford’s Politics, Philosophy and Economics (PPE) course). It is a career for which there is no qualification and cannot be described as a vocation – but Heather Wheeler draws down a salary of £82,000 a year, plus expenses.

And it is important to remember that teachers aren’t just striking to get better pay for themselves. Government spending on education suffered its longest-ever decline under the Tory governments between 2011 and 2019, and teachers are striking to ensure that education as a whole is properly funded:

And the Tory arguments that pay increases would raise the rate of inflation have already been proved false.

So there is no good reason for refusing to pay doctors, teachers and other striking workers what they are due – which would bring them to parity – in real terms – with their pay in 2010. And there’s no good reason for refusing to properly fund education and the NHS either; taxation is currently at its highest in something like 70 or 80 years, which should mean public money is available for such projects. What have the Tories done with it?

All of the above supports the following short clip, making an important point that should be remembered by everyone who complains about strikes:

Did Jeremy Corbyn grab Israel Advocacy member – as he claims – or was the MP the one who was assaulted?

Here’s video footage of what happened. The context note beneath it clarifies exactly what really did happen. Reggie D Hunter’s comment is pertinent too:

These aggressively Zionist, pro-Israel goons think they can do whatever they like and then lie about it when we can see what’s really happening via their own recordings.

Remember that, next time one of them makes a wild accusation.

Most train ticket offices in England to be shut within three years, no matter how many people it disadvantages

That’s the theory. Here’s the practical upshot:

Does anybody remember a piece of law called the Disability Discrimination Act? Did it not make provision for a situation like this?

If not, is it time that Act was amended?

Jeremy Hunt to appear on Martin Lewis ITV show about mortgages – and you can help grill him

Tin-eared airport bosses want to increase pollution there by 60% amid public fury over environmental harm

Minister for disabled people refuses to discuss his disability action plan with them

Perhaps Tom Pursglove doesn’t want disabled people to object to the plan to close railway ticket offices?

Perhaps there are a multitude of other omissions in his plan that he doesn’t want to allow under the spotlight until it has been rubber-stamped?

Whatever the excuse, this is unacceptable behaviour from any government. Nobody’s life should be changed by the government if they haven’t had a chance to participate in the process.

“Nothing about us without us,” remember?

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New energy price limit to be set in five days. Why is it still going to be sky-high?

Wholesale gas prices are now cheaper than before the Russia-Ukraine war pushed them through the roof.

That fall in prices should be reflected in the cost to the consumer, of course:

But it won’t.

The article states:

Households should also expect their energy bills to remain stubbornly high through the coming winter, at almost double the rates paid in 2020, and remain above pre-pandemic levels for the rest of the decade, according to analysts at Cornwall Insight.

Prices are not expected to return to pre-2020 levels until the end of the decade at the earliest – but no reason is given for that.

It is a fair point that energy sources are bought months in advance of their use, meaning that the current price falls will still take a few months to come to bear on our bills.

But this means that our bills should be capped at £1,000 or less by the end of 2023.

But they won’t. Why not?

Is this the privatised water fiasco being played out with a different national utility?

Water isn’t rare (yet) but the system was privatised on the understanding that bills would become cheaper and investment would go into modernising the water/sewage network and neither of those things have happened.

Instead, £66 billion have been taken from the public (we all need water) and given to shareholders as profit, while the privatised firms have gone around £54 billion into debt. Absolutely no effort has gone into modernising the network at all.

Now, the outcry over the pumping of sewage into our waterways has forced the water firms to agree they will modernise the system – at a cost of £10 billion (so, much less than has been given away to shareholders, and therefore an amount that could have been withheld from their dividends) that will be paid by water customers.

Clearly, greed has overtaken service provision in the boardrooms of the water firms.

Moving back to the energy firms: they have been making money hand over fist in the time since energy prices hit the roof. I’m not sure I understand how they have managed this.

If wholesale prices are coming down below what they were immediately before the Russia-Ukraine war, then it seems likely those profits will evaporate.

How do they keep the money flowing in? The answer seems clear: keep the price to the consumer artificially high.

That, I think, is the reason energy prices to the consumer will remain high, despite the cost to the companies coming down.

Ofgem, the regulator, has a responsibility to set a cap on energy prices, so it would be reasonable to ask what’s going on there.

If it isn’t going to hold the companies to their duty – providing energy to the public in the most cost-effective way possible – shouldn’t it be replaced by an organisation that will?

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Ofgem’s new rules could harm the people they’re supposed to help

Is this an example of a well-intentioned scheme backfiring, or of an ill-intentioned plan doing exactly what it’s supposed to?

In response to a backlash after it was discovered that employees of some energy suppliers, including British Gas, had been breaking into the homes of people who had been defaulting on their bill payments to forcibly install pre-payment meters, the regulator Ofgem has imposed new rules.

Energy firms have agreed to the voluntary code. It includes a ban on forcibly installing prepayment meters in the homes of people over the age of 85.

Companies will only be able to force the change if they stick to a set of voluntary restrictions and must make at least 10 attempts to contact a customer.

They must also carry out a site welfare visit before a such a meter can be installed and will need to avoid forced installations where a “continuous supply” of energy is needed for health reasons, such as for the terminally ill.

Energy firms will also be required to make representatives fitting meters wear body cameras or audio equipment.

But some have warned that the new rules aren’t good enough:

It seems Ofgem has not taken account of the fact that 29 per cent of households are now in debt to their energy supplier.

Critics say the regulator had an opportunity to introduce targeted debt relief for those who are most in need of it – but didn’t.

Nor has Ofgem considered the energy needs of people with disabilities or health conditions in its definition of the kind of vulnerability that would make a bill-payer exempt from having a pre-payment meter in any circumstances, it seems.

There is also the question of how people will prove their medical conditions without being humiliated by an energy firm health inspection.

Ofgem has said it will consult on whether the new code of practice can be made legally binding before the winter.

Labour seems to be in two minds about the situation. According to the Morning Star article mentioned above, Ed Miliband said Ofgem’s scheme was “not good enough”.

But Jonathan Ashworth seemed to have a different opinion:

Worse than that, the changes may mean energy bills increase – to cover their own cost:

How can that be, in any way, fair?

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Paying for energy by Direct Debit? Your bill may rise before October so be ready!

Toothless energy “regulator” Ofgem has said household bills may rise before the price cap does in October, as firms try to spread the cost of higher use in the winter months.

The story is on the BBC here.

But this kind of unilateral change by energy suppliers means customers are denied the opportunity to change the way they pay, if they have to.

Who says people are going to want to spread a notional cost of energy they haven’t used?

Millions of us are planning to limit our energy use instead, cutting out all but the essentials – so for us it would be better to take back what we have overpaid in the summer and pay only for what we use in the winter.

The suppliers won’t be happy with that because it removes their safety cushion. But they have been merrily paying massive bonuses to their shareholders, so perhaps they should have engaged in a little forward thinking before demanding that the rest of us take the strain?

As This Writer stated in a previous article, the best advice for you – for now – is to get in touch with your supplier, explain your personal financial circumstances and discuss the best way for both of you to get through the current crisis.

It will also give you a chance to check how quickly your supplier will bring bills down when energy costs start to drop again.

Now British Gas has cut its standard tariff – by much less than it should

150119britishgas

Gosh. British Gas is to cut household gas prices by five per cent – but this is a whopping 22 per cent less than the fall in wholesale gas prices.

The company says its 6.8 million customers will benefit by £37 over a year (that’s if the price cut remains for that long). It’s more than E.On customers (as reported here yesterday)…

… but the benefit of the wholesale price cut means British Gas will still make a whopping profit of more than £1 BILLION.

(Total profit is likely to be around £1,107,040,000).

British Gas representatives were all over the media this morning, apologising for making customers wait until February 27 before they feel the benefit; this is because the company reckons it bought the gas being used at the moment at higher, 2013-14, prices.

They should have been apologising for failing to pass on all of the wholesale cut to customers. It would have saved them very nearly £200 per year.

That kind of money is desperately needed by families feeling the pinch of the Conservative-planned cost of living crisis.

The drop will only benefit customers on British Gas’s standard and those Fix & Fall tariffs and the effect on different customers will vary.

The Labour Party, which has been campaigning for fairer energy bills for more than a year, has been (understandably) disparaging about this meagre display of largesse.

Shadow energy secretary Caroline Flint tweeted: “Wholesale gas prices down by [more than] 20%, yet gas bills only cut by 5%. Regulator must have power to make sure full savings go to all consumers.”

In a statement to the press, she added: “This shows that Ed Miliband was right to challenge the energy companies to cut their prices and pass on the falls in wholesale costs to consumers. But given gas prices have fallen by at least 20 per cent a price cut of just 5 per cent means consumers still aren’t getting the full benefit of falling wholesale prices.

“The next Labour government is committed to making big changes in our energy market: freezing energy prices until 2017 so that bills can fall but not rise, and giving the regulator the power to force energy companies to cut their prices – when wholesale costs fall – to all of their customers.”

Some have taken issue with the description of a freeze that allows prices to fall, rather than keeping them static, but this is nit-picking. We can all see that Labour is simply pushing for households to get the best deal.

What do the Conservatives want? What do the Liberal Democrats want? Only last week they showed…

They’re quite happy for the rich company bosses to keep your money.

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Labour wins price battle as E.On cuts tariffs; the war continues

The price of privatisation: This graph charts the rise and rise of utility prices since privatisation. When the Conservative governments of the 1980s and 1990s sold them off, the promise was that prices would fall.

The price of privatisation: This graph charts the rise and rise of utility prices since privatisation. When the Conservative governments of the 1980s and 1990s sold them off, the promise was that prices would fall.

Here’s something many people may have missed: German energy company E.On has cut its standard gas tariff in response to “mounting political pressure”, according to the Telegraph.

Don’t get too excited – the 3.5 per cent reduction is less than one-eighth of the 27 per cent drop in wholesale gas prices over the last 12 months, but it does mean that around two million customers will save £24 on their gas bills if the reduction stays in place for a year. That’s equivalent to two weeks’ worth of usage.

E.On will lose £48 million of what it would have had if it had kept the tariff at its previous level – but if prices stay the same, it will gain £322,285,710 in comparison with its profits before the wholesale price dropped.

In any case, E.On has a lower tariff with an annual bill of £923, more than £200 less than the £1,145 post-cut cost of its standard rate.

So it seems Labour was right to call the cut “pretty measly”.

Some commentators have tried to claim that E.On’s move will signal a price-cutting war between the so-called ‘Big Six’ suppliers, but nearly a week has gone by with no further announcements.

The day after E.On cut prices, a Labour motion for regulator Ofgem to force energy companies to pass on the benefits of wholesale price cuts to their customers was defeated when the Tories and Liberal Democrats voted to support the energy companies rather than their constituents.

Despite voting against a move that would make it compulsory, Tories have hypocritically called on energy firms to pass on such savings willingly, and George Osborne has asked fuel companies to do the same with the prices of petrol and diesel.

There’s one more thing to say about this. Take note of the fact that E.On is a German company. This is what happens when you allow rampant privatisation of national utilities like gas and electricity – foreign companies get a chance to take those utilities away and run them for their profit, rather than for the good of the country.

E.On will make more than £300 million in profit from UK citizens, even after cutting its prices – and that’s on top of the profit it was already making before wholesale prices dropped.

Foreign firms own our energy companies and water suppliers. Foreign healthcare firms now have their claws firmly embedded in the English National Health Service. Hedge funds now own a large part of the Royal Mail as a result of Vince Cable’s botched sham of a sale last year. Who knows what will happen to the UK’s share of Eurostar, if the Coalition succeeds in selling that off before the election?

These travesties were all made possible because the public allowed the Conservative Party into government, giving its members an opportunity to strip the country of any assets that had value.

We must not make that mistake again.

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Whoever said Labour has no policies: Prepare to be embarrassed!

Michael Meacher MP has proposed that Labour make the end of austerity its flagship policy. Don't get too excited - Labour has to get into office first, and we've no idea how bad the Conservative-led Coalition will wreck the systems of government before May 2015.

The end of austerity should be Labour’s flagship policy, according to Michael Meacher MP. Don’t get too excited – Labour has to get into office first, and we’ve no idea how bad the Conservative-led Coalition will wreck the systems of government before May 2015.

This is turning into a very bad weekend to be a Conservative.

The Nasty Party has lost control of 10 councils, with hundreds of councillors unseated. Its claims about people on benefits are falling flat when faced with the facts. It has fallen foul of UK and EU law with its fake psychometric test, which turned out to have been stolen from the USA. Its claim that Labour has no policies has proved to be utterly unfounded.

… What was that last one again?

Yes, you must have heard at least one Tory on telly, rabidly barking that Labour can’t criticise the Coalition if it doesn’t have any policies of its own. Those people were not telling the truth – even though they probably thought they were (poor deluded fools).

I am indebted to Michael Meacher MP, for posting information on the following in his own blog. He lists Labour promises, as revealed to date – and it’s quite a long list. Much – or indeed all – of it may have also appeared in an article on the Green Benches site, I believe. So let’s see…

Labour has already promised to:

  • Repeal the Health and Social Care Act (otherwise known as the NHS privatisation Act)
  • Build 125,000+ homes
  • Regulate private rents
  • Promote a Living Wage for public sector workers and shame the private sector into following that lead
  • Offer a minimum 33-40 per cent cut in tuition fees
  • Limit rail fare increases to one per cent
  • Reimpose the 50p rate of income tax for the super-rich
  • Impose a mansion tax on the rich
  • Repeat the bankers’ bonus tax
  • Reverse the bedroom tax
  • Scrap Workfare and replace it with a ‘compulsory’ Jobs Guarantee (I’m not too keen on this one but it’s been promised)
  • Offer a VAT cut or a ‘temporary’ VAT holiday
  • Implement the High Pay Commission report in its entirety
  • Scrap Ofgem and bring in proper energy price regulation
  • Break up the banks and set up a National Investment Bank, and
  • Support mining communities and clean coal technology.

In his article, Mr Meacher suggests that Labour needs to go further, with a really strong hook on which to hang all these policies. He suggests the following:

We will end austerity.

Yes, I thought that might stun you. Let’s have it again:

We will end austerity.

Now that you’ve had time to get used to the idea, I hope you’re applauding as much as I was when I read the article. Why not end austerity? The squeeze on public spending and services that David Cameron and his Boy Chancellor imposed in 2010 has not worked at all. There is now no basis for it – I wrote to Mr Osborne, requesting information on the other foundations of the policy after it was revealed that his main justification contained a huge error, and he has not replied, so clearly he has nothing to say. Its loss will be unlamented and can’t come soon enough.

There’s more in the article so I invite you to visit Mr Meacher’s site and read it yourself.

As for Mr Cameron… he’s a survivor but he’s starting to look tired and the number of his own party members who are stabbing him in the back is growing – Lord Tebbit has stuck his own knife in (again) during a BBC interview.

I wouldn’t bet any money that Cameron will still be PM by the end of the year.