Higher Bills & Bigger Profits: The UK’s Utility Companies in 2018:

Which professions are most trusted in Britain today? According to research conducted by “This Week” magazine and the Ipsos Mori opinion poll specialists, doctors, nurses and teachers all feature at the top of the “Veracity Index”, followed by judges, scientists and weather forecasters – who, with a percentage score of 76% are now rated above the police (74%). Television news readers and hairdressers are apparently more respected than members of the clergy (down to 65%), lawyers (54%) and the Chief Executives of charity organisations (50%). At the bottom of the list, predictably, are politicians, government ministers, journalists, estate agents, plus (a new addition to the Index) professional footballers.

This data also reflects the public disenchantment with bankers (38%), the business sector in general and particularly with the private companies which control the supply of the UK’s water, gas and electricity. As the re-nationalisation campaigners “We Own It” point out, “only 32% of the public trust the energy industry and 77% of us believe energy should be in public ownership”. WOI’s mission is to “end privatisation for good so that people come before profit”. Public services, they declare, whether it’s the NHS (National Health Service), schools, water, energy, rail, Royal Mail, care work, or council services “should belong to all of us”.

Allister Heath, the former editor of the City AM newspaper, acknowledges that there is “overwhelming support (68%) for the nationalisation of energy companies”. He considers this to be misguided but unsurprising in view of the “pathetic customer services of many of these firms” and the fact that energy prices continue to shoot up unabated. The “Big Six” – British Gas, Npower, EDF, E.ON, Scottish Power and SSE (Scottish & Southern Energy) – are, in the opinion of “Which?” magazine, largely responsible for the low esteem in which they are held by the public. Which? asked nearly 9,000 energy customers to rate their suppliers on a variety of factors, including customer service and the accuracy of bills. Npower got just one star (out of a possible five) for value for money, British Gas and Scottish Power two stars, E.ON, SSE and EDF three stars, whereas the much smaller energy company “Ovo Energy” received four stars.

On 24th February – just before the “big freeze” hit the UK – the Guardian columnist Adam Vaughan reported that the “Big Six” have been accused of deceiving customers paying expensive “standard variable tariffs” (STVs) by moving them on to fixed deals which supposedly will be cheaper but in fact will cost more.Then, in a front page Guardian article on 3rd March, with most of the UK still covered by snow, Vaughan revealed that E.ON had quietly implemented price increases on the coldest spring day on record. This move, he noted, is expected to be the first in a series of price rises from energy providers and has been described by consumer groups as “ devastating news” for households.

As the Press Association reported on 28th February – based on statistics issued by the energy regulator, Ofgem – there is now a trend for customers who are unhappy with the “Big Six” to sign up instead with one of the many smaller, rival companies such as Green Network Energy, Utility Warehouse, Engie and Ecotricity. “Last year, 5.1 million electricity consumers and 4.1 million gas consumers changed supplier, the highest number for almost a decade”. The “This Is Money” website has pointed out that this option is, however, not currently available in the water sector: “You cannot switch supplier because the 25 water companies across England, Scotland and Wales are responsible for customers in set geographical regions. The only way to save money is to install a water meter or cut back on your usage”. The Independent’s political editor, Oliver Wright, contends that this situation has enabled the water companies “to make gains of at least £1.2bn over the past five years from bills being significantly higher than necessary. Among those worst affected have been the poorest customers, with average water bills now representing 5.3% of their annual income”.

Jim Armitage, a correspondent for The Independent, has focused on what he considers to be the “scandal” of the millions of pounds paid by UK consumers that then go to foreign-owned public services. Swathes of Britain’s energy, transport and utility networks, he has emphasised, “are run by companies owned by other European governments – meaning foreign exchequers reap the dividends which then fund their schools and hospitals while their UK customers struggle with burgeoning fares and bills”.

Statistics published by Graham Hiscott, Head of Business for the left-wing Daily Mirror, have indicated that these overseas energy firms are using the extra money they make in the UK to subsidise their customers in their home countries. He cites examples of the contrast in price increases: E.ON (German owned): UK price rises: Gas 21.6%, Electricity 21.4% , compared to 9.1% (Gas) and 6.7% (Electricity) in Germany; Npower (German owned), + 21.6% (Gas) and +12.7% in the UK, but +11% (Gas) and 0% (Electricity) in Germany; EDF (French owned), +22.9% (Gas) & +12.3% (Electricity) in the UK, though just +15% (Gas) and + 3% (Electricity) in France. Scottish Power is a subsidiary of the Spanish company Iberdrola, but both British Gas (part of “Centrica”) and SSE are UK-owned.

In an article captioned “Britain for sale: How long Before a Foreign Power Turns Off Our Lights?”, the Daily Mail commentator, Alex Brummer, has expressed his firm belief that auctioning off our vital services to overseas interests is a risky strategy that has not been adopted by other countries and takes no account of what might happen in the future.

Filed under: Politics, Society | Posted on March 7th, 2018 by Colin D Gordon

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