The Only Way is UP – The Double Speak of Energy Price Rises

The ‘double speak’ that surrounds energy pricing in the UK would astound even George Orwell. When he coined the phrase in his book 1984, he had a very different subject matter in mind. Nonetheless it can be applied easily to the UK energy market.

We have a so called ‘free market’, where the energy companies seem to act in unison like an oligarch, give or take the odd fraction of a decimal point. Internal markets between generation, distribution, wholesale, retail and anything else they can come up with gives them plenty of scope to play hide and seek with profits depending on what they want to justify.

We have a ‘green levy’ which is really a hidden form of taxation, but to add it legitimately to income tax would be inconsistent for a ‘tax cutting government’. Price rises, we are told, are also to fund infrastructure – yet it is likely the French and Chinese are the ones taking the nuclear risk, underwritten with guarantees from the Government and therefore future tax payers. And now the future is nuclear and not green – despite the levy (yes I know nuclear is considered green by some that make a mental leap and ignore the likes of Chernobyl and Fukushima).

Cameron says ‘customers will be put on the lowest tariff’ according to his new policy. What a surprise then that these tariffs are more expensive, unless you fix and therefore incur penalties should you wish to switch supplier. Funny free market! And let’s not even begin with the shambles of a toothless regulatory body.

Energy is more like food. For those on the lowest incomes, expenditure on energy represents a higher proportion so any increase is felt more acutely. The smoke and mirrors campaigns run by energy companies are designed specifically to confuse and this is exacerbated by ill-conceived short term government policies.

It is no wonder that the public suspects that the energy companies are acting not as a free market but as an oligarch working with a complicit Government and other vested interests. The public is not daft. They know energy has to be paid for at a price that secures supply, prepares for the future and makes a profit for the investors and risk takers. However, just as they can be certain that petrol prices are likely to rise just before the school holidays, substantial energy hikes come just a winter begins. While pundits may ponder correlations with wholesale prices and other factors, yet another senior citizen, maybe one that fought and took the ultimate risk for this country, is choosing between a tin of soup or another hour of the electric fire!

Adrian Maguire, Partner, Ainsworth Maguire Public Relations

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