The 14 Words

Thursday, 10 October 2013

Profit before People: 'It's a choice between heating and eating'

Families face hardship as energy giant SSE leads price rises with an increase of 8.2%

Hard-pressed families could be forced to choose between 'heating and eating' this winter experts have warned after energy giant SSE announced it was increasing gas and electricity prices by an average of 8.2 per cent next month.

The company, which has around 10 million customer accounts, is the first of the major suppliers to announce a rise this autumn, but it is feared others will follow suit.

SSE has blamed the rise on the increased cost of buying and delivering wholesale energy as well as Government levies collected through bills.

It said the latest increase, which is three times the rate of inflation, would come into effect from November 15. SSE, which trades as Southern Electric, Swalec and Scottish Hydro, said the hike equated to an average £2 a week for a typical dual fuel customer.

But Martin Lewis, of the Moneysavingexpert website, said the price hike would mean many people this winter will have to choose 'between heating and eating'.
'The most important thing to understand is that the big six energy companies are like sheep - where one goes, the rest will almost certainly follow in the next three months.'
Just this week City experts warned price rises were on their way within the next few weeks, although SSE said it would resist as long as it could any upward pressure on prices.

Since the turn of the century, householders have seen their energy bills almost double. Research published last month showed the average cost for gas and electricity last year altogether was £1,339, which was 85 per cent more than £710 paid in 2000.

The figures – adjusted to 2012 prices to take inflation into account – show that gas bills went up by 119 per cent and electricity bills by 47 per cent between 2000 and last year. In the past two years alone, gas bills surged by 19 per cent and electricity by 11 per cent.

According to the study by the House of Commons Library, the worst offenders were British Gas and the former regional electricity monopolies.

All the prices in the Commons research were converted to 2012 prices so they could be compared without being skewed by inflation.

It shows that in 2000, the average domestic gas bill was £383, when adjusted to 2012 prices, more than doubling to £839 in 2012.

It was a similar story for electricity bills, which were £341 in 2000, soaring by a half to £500 in 2012.
British Gas queried the report, saying it was based on figures from the energy watchdog Ofgem that do not take into account its customers’ lower-than-average energy usage.
A spokesman added: ‘Our customers’ energy consumption is much lower than that of the average energy customer due to the steps we’ve taken to make our customers’ homes more energy efficient and help them manage their energy usage.’

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