Socialist Worker

Fossil fuel businesses set to punish poor with price hike

by Charlie Kimber
Issue No. 2767

Fossil fuel companies care more about profit than people

Fossil fuel companies care more about profit than people


The same corporations that base themselves mostly on the fossil fuel economy have been cleared to ramp up energy bills for millions of people in Britain.

The increases will hit particularly hard because of the lack of action over climate chaos. There is not enough home insulation, so heat is lost. And the government has been too slow to enable people to move away from gas heating to renewable electricity. 

Energy regulator Ofgem, which is supposed to protect ordinary people, announced last week that prices will soon rise for 11 million households.

Those whose bills are dictated by the main price cap are set to increase by £139 to £1,277 a year.

That’s a rise of 11 percent at a time when many employers are holding down wages and the Tories are about to cut benefits.

A further 4 million of the poorest households, who are on prepayment meters, face an even bigger rise of £153 to £1,309.

These rises will mean real poverty for many, and the terrible choice of whether to eat or heat. Fuel poverty, where a household has to pay a very high proportion of its income on energy costs, is already high.

In the latest estimates, around 13 percent of households in England were classed as fuel poor, 25 percent in Scotland and 12 percent in Wales.

The number of households struggling to keep up with energy bills has grown by 410,000 since before the pandemic, according to a survey by Citizens Advice. A further 6 million households were already worried about paying their energy bills.

The price rises kick are set to kick in on 1 October. That’s the day after the government is due to pull the plug on the temporary £20 a week Universal Credit increase during the pandemic.

Scrapping Universal Credit £20 uplift will be ‘huge blow’
Scrapping Universal Credit £20 uplift will be ‘huge blow’
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The Tories have admitted that they had made no effort to assess the impact of the cut on poorer people.

Peter Smith, director of policy and advocacy at the fuel poverty charity National Energy Action, called the energy price increases “devastating” and said the winter would be “incredibly harsh for millions of low income and vulnerable customers”.

He said the increases “could not be coming at a worse time”.

“As well as a significant rise in general inflation—driving up spending on other essentials such as food—millions of people will see a reduction in their incomes, as furlough winds down and the uplifts to universal credit are likely to be withdrawn,” added Smith.

Energy firms say the price rises are an inevitable result of rising wholesale prices, particularly of gas.

But many of them are still making obscene profits.

Centrica, the parent company of British Gas, more than doubled profits in the first half of this year. That’s because many people were at home in lockdown during cold weather.

The group saw adjusted operating profit swell to £172 million, up from £78 million a year ago.

Profits before tax and other adjustments saw an even bigger turnaround. They increased to £907 million, against a £462 million loss at the same point a year ago.

British Gas attacked its workforce in a brutal fire and rehire assault this year. Now it will increase bills.


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