At this time of year, as it starts to turn colder, our thoughts turn toward nudging on the heating, and, providing it hasn’t packed up over the summer, for some people the increased cost might just make them hesitate a little before turning that dial.
With the energy companies putting their prices up, some of them up to £100 since this summer at least, the charge of unfair profiteering is being levelled at them. They should be providing a service to us, not creaming off the all the money for themselves. It’s become so bad that the prime minister has invited them to downing street to discuss the question of ‘fairer prices’.
I bet they can’t wait.
But, but, but.
I can’t help thinking that this may be a case of ‘what goes around, comes around’. Back in the late 1980’s when the government of the day agreed to the privatisation of the energy sector, many people rushed to snap up shares in these companies and, in some cases, make a tidy profit. Others held on to their shares and waited for the money to come in over the subsequent years.
Whilst one could argue that to begin with prices came down as more choice became available, the cost of gas and electric has risen steadily ever since.
And we have to realise that these prices will always reflect the need for these companies to make a profit, they’re run as a business, that’s what they do. If you or I started a company we wouldn’t think of “giving it away”, we’d want a fair return for our time and energy. Where this model falls down is when a firm, or group of firms in this case, know that they’ve pretty much got the market covered. And it would seem that this group of companies has decided to “mirror” each other far to often when it comes to price rises.
You need gas and electric, you’ll need to pay the price. Any easy answers? Take the utilities back under public ownership? Set a cap on profits? Tax the profits at a heavier rate? Bring in a tiered system of pricing based on abilty to pay?
There’s never going to be a simple answer, especially when the energy companies are going to fight to protect their profit margin, regardless of what the government or energy watchdogs are going to propose.
The whole energy market needs reforming, prices need to be fairer, people need to be able to pick and choose who supplies them and at what price.
But will these companies listen, and what do we do if they won’t?
- Energy companies fuel customer confusion (moneyexpert.com)
- Why has Ofgem taken so long to act against energy companies? | Terry Macalister (guardian.co.uk)