A fix for energy poverty: As bills keep on rising, we must ensure the £15bn of unclaimed benefits gets to where it’s needed, says ALEX BRUMMER
Comparison websites and automatic switching for energy have been a consumer friend.
The current energy market is so disrupted by the surge in wholesale oil and gas costs that comparison websites are in trouble. Energy Helpline is now in administration.
Power chiefs argue that the scale of price shock and its impact on bills is so great it is beyond what they can deal with.
The current energy market is so disrupted by the unprecedented surge in wholesale oil and gas costs that comparison websites are in trouble
The boss of Spanish-owned Scottish Power, Keith Anderson, warned 40 per cent of British households could be left in fuel poverty. Michael Lewis of German-owned Eon cautioned that many of the UK’s 27million households could face difficulties.
Ofgem chief Jonathan Brearley notes the jump in gas prices is painful for the whole sector. But it is customers facing a 54 per cent rise in the price cap who are really suffering.
Cries of desperation from highly-paid energy bosses would be more acceptable were they playing fair with consumers.
Data collected by Ofgem reveals that some suppliers have been raising direct debits by more than is necessary, improving their own credit balances at the expense of hard-pressed consumers.
As the comparison sites became less useful, suppliers have been directing customers to tariffs which are not in their interest.
Even more disturbing is the disclosure that some power firms have been using credit balances, that is our money, to prop up their finances rather than ring-fencing them to pay for future gas. As a result, the kitty has often proved empty when the firms run into financial difficulties.
There has long been mistrust of the energy suppliers, particularly those in overseas ownership. The tendency is to put the interests of their own domestic investors and consumers ahead of those in the UK.
It was alleged that Scottish Power in the past diverted earnings and dividends –which might better have been invested in the UK – to owner Iberdrola for spending elsewhere.
Eon abandoned its interest in building new nuclear in Britain when Germany (as it turns out foolishly) pulled back from atomic power.
Taking the advice of conflicted suppliers on how to deal with hard-pressed customers would be a mistake.
A suggestion that better-off customers should directly subsidise poorer counterparts needs to be resisted. It is up to governments to redistribute income, not companies.
What is certain is that for lower income groups, household energy bills will be a pressing social problem come the autumn.
Rishi Sunak’s buy-now, pay-later approach is unappealing and loads up the least well off with extra debt.
An obvious way government can directly help is through the social security system. Universal credit was temporarily increased by £20-a-week in the pandemic.
Given the impact of the war on Ukraine on gas prices, restoration of the extra payments could make a big difference.
Research shows that there are £15billionn of means-tested benefits for struggling families and pensioners which go unclaimed each year.
This is largely down to fussy bureaucracy and lack of digital access for poorer sectors of society. Getting the right money to the neediest households would make an enormous difference to those feeling the burden of soaring energy tariffs.
The staggering 35 per cent fall in the Netflix share price is almost certainly overdone.
It should be no surprise that when Covid restrictions were eased, bingeing on streaming sites would become less attractive.
Having once occupied creative space to itself, Netflix is now having to share subscriptions with rivals including Disney+, HBO Max and Amazon Prime as well as British upstarts Britbox and ITVX. The latter had ITV investors jittery long before the Netflix retreat.
It is not just competition for eyes which has gathered momentum. Production capacity also has come under strain.
One shouldn’t underestimate the ingenuity of founder Reed Hastings. After all, Netflix began as an old economy postal DVD distributor before transmogrifying into a global entertainment champion. There are relatively simple things to be done to improve income streams.
Freeloaders could be converted into customers, and there are opportunities for yield management, micro-payments and advertising. In the end creative content will win. Embracing minority, innovative productions such as Turkish series The Club is where the intrinsic value sits.
But the journey will be bumpy for investors.