The cost of everything is going up this year. It was always going to regardless of anything else that might be going on in the world at the moment. The cost of energy provision has been going up steadily for the past couple of years, but we didn’t see or hear much about it in the news because of the global pandemic. Because the pandemic existed, energy providers held off on passing those increases down to the customer for a very long time. Now the world is (mostly) returning to normal, it’s time for people to pay the piper – and that means some sharp, unwelcome increases in costs for British consumers.
People in the UK are already aware of their energy bills increasing month-on-month since the beginning of the year and are already unhappy about it. To misquote Bachman-Turner Overdrive, they ain’t seen nothing yet. A massive price hike is scheduled for April, the country’s energy regulator has approved the price hike, and so the average British household faces an increase of around 50%. To be more specific, Ofgem (the regulator, which works on behalf of the British government) has given its approval to increases up to and including 54%. Most of the country’s energy providers are expected to take full advantage of the opportunity. This will be the largest single increment in energy prices in recorded history in the UK, and it’s likely to spell financial disaster for those in the country who are already living on the breadline. The average increase is expected to be around £700 per year. However, for some larger households, the increase could be as much as £3,000.
This is the sort of thing that’s not supposed to happen in the United Kingdom. It’s one of the reasons why Ofgem exists in the first place – to protect consumers from sudden, steep increases in costs that are likely to have a negative impact on their quality of life. The UK is a country of universal healthcare, subsidised transport, and partially nationalised banks. It’s also a country of discerning shoppers. Up until recently, energy providers were in a race to the bottom regarding pricing. They had to be because British people knew to check a comparison site like U-Switch the moment their fixed-term or discount-rate deal ended, and if they didn’t like the new proposal from their current supplier, they would go elsewhere.
These days, British consumers would have about as much luck using a casino sister sites comparison website as they would an energy and gas comparison site. Because of the universal price increases, sites like U-Switch have lost their USP. Any provider switch would be a gamble about that provider’s future rates. At least Sister-Site.co.uk is open about its subject matter – U-Switch and sites like it still proclaim that they’re able to save people money when, in reality, it’s unlikely that there’s any money to be saved anywhere at all. Maybe that’s why people are more likely to read reviews about casino sister sites than they are to read reviews about energy providers now – if they’re going to lose money either way, they might at least try to have some fun while they’re doing it.
If there’s one thing that we know about the Brits, it’s that they’re unlikely to take anything lying down. The public’s attention is, for the main part, diverted elsewhere right now, and that’s understandable. It’s only that enormous diversion that’s spared Boris Johnson’s Conservative government, already reeling from the “partygate” scandal that enveloped the UK in January, from another battering in the press and at the polls. Still, though, there’s an undercurrent of discontent in the country. The government has thus far offered very little in the way of assistance to households that are about to be pushed to the point of poverty by the bill increase, but within the past week, they suggested that they might be able to take a £200 government loan to cover some of the costs and repay the loan in portions over the years. The British electorate angrily rejected that idea on the grounds that it was an entirely insufficient amount, and taking the loan would only increase economic hardship at a later date if it had to be repaid. If the government’s limited offer to assist is likely to be rejected, the question becomes one of what happens next?
An increase in energy bills isn’t the only financial misery hanging over the heads of Brits at the moment. A wide-ranging increase in the cost of household goods is also expected to bite during or shortly after April, with increases of up to 50% predicted on everything from a pint of beer to a can of beans. Again, a rise of this kind will be simply unsustainable for some. The most recent statistics available, which run up until the end of 2020, say that as many as 11.7 million people on low incomes in the UK are at risk of slipping into poverty if faced with a sudden increase in the cost of living. This is the exact cost of living crisis that the statisticians were talking about when they provided that information. The grim reality facing many British households later this year – especially in winter if prices remain high – is that they’ll have to choose whether to spend their money on energy bills or food. For many of those households, finding themselves in that situation would once have been unthinkable.
With all of this going on in the background, a grassroots campaign on social media is urging mass non-compliance. Brits are being urged to cancel their energy direct debits and leave bills unpaid on the grounds that energy providers can’t possibly take enforcement action against millions of people simultaneously. That’s probably true, but they can cut people off from their power supplies en masse and, in any event, falling behind on energy bills would have a massively detrimental effect on peoples’ credit ratings. It would be an irresponsible move that no right-minded commentator could condone, but the fact it’s being floated as a possibility at all says a lot about how desperate the situation is about to become. This is a crucial moment for Ofgem, British consumers, and the British government. Somebody has to blink and makes changes – and if consumers physically can’t afford to do so, change has to come from above.
