EVERYONE who believes their gas and electricity bills will go down over the next 12 months should stop reading now. Ah, I see you are still with me. I don’t believe it either.
Don’t get me wrong, the Government’s plans to simplify the energy market are a good thing. But whether they’ll mean we’ll all pay less is another matter.
I don’t understand the energy market. I bet you don’t either. Only one in five consumers plays the market switching suppliers once a year. The rest of us take a “better the devil you know” attitude sticking with the company we’ve always used, an attitude that costs us about £100 a year.
Paying an unnecessary extra £2 a week for one of life’s basics might seem crazy, but there are lots of reasons why people do it.
Lack of time, lack of confidence, a basic and maybe healthy distrust of the rapacious lot who run the energy business.
But we wouldn’t take this attitude if we were buying a car, a house or a sofa. The problem is that we use gas end electricity without thinking and pay for them in the same way.
If we had something like a petrol gauge showing us how much it costs to “fill up” the vacuum cleaner, toaster or central heating, things might be different.
But no, the bill arrives once a quarter, there’s a loud scream of pain – or very occasionally a sigh of relief – we promise ourselves we’ll look for a cheaper supplier, then we do absolutely nothing.
The Government’s plans mean that companies can have a maximum of four tariffs, a fixed rate for a fixed term, a variable rate and two others. They must put consumers on the lowest one.
The problem, of course, is that companies might just level up charges rather than cut them. It was interesting to see the energy companies claiming that most of their overheads were fixed costs – infrastructure and clean energy development – so we shouldn’t expect too much.
On the football field this is known as getting your retaliation in first.
I suspect the sharpest consumers will continue to do well while the rest of us may make some modest savings. For the really vulnerable, fuel-poor people who have to choose between heating and eating, any savings will be swallowed up by impending changes to welfare benefits. But that is for another column.
The next time we switch on the cooker or the lights we might also pause to think where all that energy is coming from as well as how much it costs.
There has been a big increase in the energy generated by renewable sources in recent years.
But it still made up only nine per cent of the National Grid’s output last year. On one hand we have the energy minister Ed Davey pledging his support for wind farms, while one of his underlings cheerfully dashes off letters saying they’re a white elephant and we should stick to gas and nuclear.
For decades, energy, like wealth has flowed from the undeveloped east of our world to the comfortable west, where we have pretty much wasted as much as we have used.
Now, it seems safe long-term energy supplies are no longer a given.
We really need more openness in what we are paying for energy and where that energy will come from, not just now but in decades to come. If we don’t, the lights will go out all over Europe like they did nearly 100 years ago and the consequences will be just as awful.
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