British taxpayers are rejoicing once again this Christmas season over the infinite wisdom of their leaders in privatising the utilities industry in their country—as price increases have mean that the cost of heating the average U.K. home have risen by 63 percent in the last five years.
The privatisation policy—first introduced by Margaret Thatcher as part of her “anti-socialist” crusade (which was then taken up with equal gusto by the Labour Party) has seen increase after increase since the power industry was passed into private hands.
The latest increase, by German company E.ON (which has said that it will increase gas and electricity prices by an average 8.7% in January 2013) means that all six of the largest energy suppliers in Britain have now increased their prices with effect from Christmas.
It’s got to be a happy Christmas for someone, at least, and it certainly is for the utility companies. For example, in November, “British Gas” and “Scottish Gas” owner Centrica (listed on the LSA) announced that its annual profit was £1.4 billion.
The same day it announced its record windfall, it announced an average household increase of around £50 per year, blaming the increase on the “costs of carbon reduction targets.” Well, someone has to pay for it…
Meanwhile, Scottish & Southern Energy experienced a 38% jump in half-year profits to nearly £400 million, while putting up its prices by 9%. Npower announced an increase of 8.8% for gas and 9.1% for electricity from November 26, while EDF Energy (owned by the French state!) raised its prices by 10.8%.
The average household energy bill – including heating, hot water and lighting – will stand at an “eye-watering” £1,334 a year by Christmas, research by consumer advocates Uswitch.com found.
The cost of heating the home accounts for almost half of the total bill, meaning that average annual heating bills will stand at £587 a year by the end of December, up from £360 five years ago.
The “staggering” difference of £227 has “knocked consumers for six”, the price comparison site said.
Ann Robinson, director of consumer policy at Uswitch.com, said: “Many consumers are fearful of how they will afford to keep warm during the winter months.
“Recent price hikes from energy suppliers will add £753 million onto energy bills. Many households will feel that they have little choice but to turn their heating down or off, and by doing so risk gambling with their health. Three-quarters of people went without heating at some point last year, and with price hikes pushing bills even higher this figure is likely to rise.”
Enlightened Patriot
- Edit
3 percent? I wish. Would I be right in thinking this is a typo? After a quick check on my calculator, I got just over 60% increase in the past year alone – or are my maths suspect?
Whatever the figure, we know things are going to get much, much worse as I just told my wife returning from the supermarket complaining about the escalating price of food. I tell her the country is heading for financial collapse mid-2013 along with hyper-inflation, in an effort to justify my new venture of us investing substantially in precious metals, particularly silver which is still far too cheap.
I have hated the privatisation of all our utilities from the very beginning – it was bound to end in tears but these people don’t care if our elderly freeze or starve to death.
Enlightened Patriot
- Edit
My apologies, I have realised that the £227 (around 62% of the £360? ) increase is over 5 years, not one, but still can’t get 3%.
Max Musson
- Edit
Hi Enlightened Patriot,
The 3% figure initially quoted was a typographical error. The figure which I have now corrected, should have been 63%.
David Warner
- Edit
Enlightened Patriot:
You may be more accurate that you realise in saying UK financial collapse is due mid-2013. For more than 30 years the cost of government borrowing has been kept artificially low, and as of right now the BoE is contemplating reducing interest rates still further. This is, however, purely a temporary phenomenon as sooner rather than later foreign investors will consider the UK too risky an investment area and pressure will build for interest rates to rise – this will be the trigger for collapse. Were interest rates to rise back to their ‘normal’ level of 5%, the cost of government borrowing would treble – and that’s only 5%! The major banks all have massive government debts on their books – any rise in interest rates will see the value of those debts plummet, with billions being wiped off the banks’ balance sheets. It is doubtful whether many of the high-street banks could withstand such a shock. The massive debt burden that the UK is saddled with, taking into account public, corporate and private debts, totals more than 900% – more than nine times what the economy is worth. There is only one historical precedent for such a situation – the Weimar Republic of 1919 where the debt loading reached 913% – the only possible outcome was collapse.
Life after collapse will never be the same again in the UK – we will see first a run on the banks – then a collapse of the housing market (Ireland’s has already collapsed 50%) – the government will then be forced to privatise the NHS and scrap the benefit system. Life in the UK may very well become like living under siege conditions – with the armed forces called out to restore and maintain public order – we may well see dusk-to-dawn curfews in many areas. Do you think we will still see the threatened flood of Romanian and Bulgarian immigrants after the collapse? – I rather think not!
You are wise to take advantage of the low price of silver at the present time – once collapse kicks in, the price of both silver and gold will skyrocket.
Max Musson
- Edit
The trouble with precious metals is that you cannot eat them, you cannot wear them as clothing and you cannot live in them in order to keep warm.
At a time of rapidly diminishing natural resources, a better place to invest money will be; directly in commodities; in commodity shares; directly in agricultural land; in shares in food production companies and food retailing companies; and in residential property. People will always need to eat, they will always need clothes and they will always need housing, but when complete economic collapse arrives, a ‘precious metal’ ingot is just a shiny brick and loose diamonds are simply sparkling gravel.
Enlightened Patriot
- Edit
By coincidence, I had just looked at my local rag to find this article –
https://www.lancashiretelegraph.co.uk/news/blackburndarwenhyndburnribble/10098593.East_Lancashire_people_living_with_long_term_illnesses_warned_to_plan_for_winter/
Plan how – take out a loan to keep warm? The first comment there echoes my last sentence.