I’ve had something of an energy bill double whammy in the past couple of weeks.
For the past 10 years or so, I have always shopped around and changed providers to get the best fixed-rate deals, and did so last year.
My current deal runs out next month, just days after the energy price cap goes up, meaning I get hit not only by the increase but also by the leap from a decent fixed-rate.
The upshot is that my direct debit is going up from £140 a month to a couple of pence under £300 a month. That came as a bit of a shock to the system, I can tell you.
I have been keeping a keen eye on the energy crisis but even so, I didn’t expect my bill to more than double. I think eye-watering is the best way to describe it.
But there are a couple of things I don’t understand. My energy supplier proudly boasts that all the electricity it supplies is from renewable sources so how is that affected by the increase in the wholesale price of gas?
And while I have some grasp of the laws of supply and demand, why am I, and millions of people like me, having to foot enormous energy bills while the ‘Big Six’ energy companies are raking in billions of pounds of profit? I don’t understand this.
According to the bigissue.com, the UK’s biggest energy companies made more than £3billion in profit in 2020, a sum nearly as big as the council tax rebate offered by Chancellor Rishi Sunak to fight soaring bills.
The companies, including EDF Energy, E.ON UK, and British Gas’s parent company Centrica, recorded profits of £3.06billion, according to their most recent accounts.
Sunak’s £9billion package in response to the energy price cap rising by more than 50 per cent includes £5.5billion in repayable energy bill ‘loans’ and a £3.6billion council tax discount targeted at those living in lower-value properties.
For the individual Sunak’s scheme means every household will be loaned £200 which will be discounted off their electricity bills in October and will be paid back at £40 a year added to energy bills for five years from April 2023.
I’ve said before that I have an aversion to being in debt and I am not happy at the prospect of owing the government £200 for a loan I have no control over.
Now, according to reporter Kieran Doody, that could be even more with Prime Minister Boris Johnson considering doubling the energy bill loan to £400 to help cover the rising cost of energy bills.
Mr Johnson’s spokesperson hinted that more help could be available as they consider how to support families through this “difficult period” of spiralling energy and petrol prices, and the cost of living crisis.
The spokesman said: “We will continue to give people the support they need throughout this difficult period as we did during the pandemic.
“We continue to monitor the situation – we do acknowledge the impact of rising wholesale gas prices and petrol prices and the impact of that on families.”
Here’s the thing. I’m not sure the government really understands the impact of the cost of living crisis which has a disproportionate impact on those with low or middle incomes. When you don’t have much, there’s not much to cut back on.
Sure, if you are an MP on your £80,000 a year salary (which I don’t begrudge by the way), cutting back so you can heat your home may mean not having a second holiday or going out for fewer restaurant meals. That’s not an option for pensioners or people on Universal Credit.
As I said earlier, it’s the consumers who are taking the hit on soaring energy prices not the suppliers and calls for a windfall tax on the excessive profits of the energy companies were dismissed by Sunak.
I find it interesting that one of the justifications given for Brexit was it would enable the UK government to lower energy prices by cutting VAT, something Johnson and Sunak have resolutely refused to do.
Yet over the Channel, the French government has forced EDF, the state energy giant, to take an €8.4billion (£7billion) financial hit to protect households from rocketing energy costs by limiting bill increases to 4 per cent this year.
So French bills go up just 4 per cent while our bills go up 54 per cent, with more to come in October.
Perhaps Brexit wasn’t such a good idea after all, or perhaps the French government cares more about its people than ours does.
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