Huge rise in cost of living revealed

Friday, 28 July, 2006

THE huge rise in the cost of living in East Anglia can be revealed by the EADT today - as British Gas customers steel themselves for another massive price hike.
The energy company is to increase bills significantly for the second time in 12 months, sparking fears that those on limited and fixed incomes will once again feel the pinch.
But today the full extent of rises in gas, water, electric and council tax bills in Suffolk and Essex over the last three years can be revealed.
Since 2003 the average cost of those four main services in Suffolk has risen by £708 from £2,017 to £2,725 (35%) while in Essex the increase is £727 - from £1,993 to £2,722 (36%).
Over the same period the average basic state pension has climbed by just 11% from £3,926 per year (£75.50 per week) to £4,381 (£84.25 per week).
The figures come just days after the East Anglian Daily Times revealed pensioners in the region have struggled with the highest council tax rises in the country over the last 10 years.
While the charge for council services in the region has soared by 104% since 1996-7, during the same period the average income for a retired couple has only increased by 27%.
The latest findings have led to fears that once again it will be those on fixed and low incomes - especially the elderly - who will be hardest hit.
Daphne Savage, chief executive of Age Concern Suffolk, said: 'It is a huge problem for older people because the rise in pensions doesn't come anywhere near the increase in cost of living.
'Energy bills are a serious issue because when winter sets in it is important for people to keep warm and it is a real worry if people are unable to pay them.
'It is a pity energy companies cannot be more adaptable and try to reduce the impact for vulnerable groups like pensioners and those with a disability.
'Anyone who needs help should call our benefits line on 01449 674222 to see if they are entitled to receive more and I would advise people to start shopping around to see if they can get a better deal for their electricity or gas from other companies.'
Gordon Beare, secretary of Tendring Pensioners Action Group, said: 'Last year they gave all pensioners £200 to help with their council tax, and this year they have abolished it. Meanwhile all the other prices have gone up.'
David Ruffley, Conservative MP for Bury St Edmunds, said the findings would 'terrify' those on fixed or low incomes.
'Once again it is the most vulnerable in society who will be hit hardest. It underlines the urgent need for this Government to start reforming pensions in line with earnings to get more money into the hands of the elderly who are facing high increases right across the board."
John Gummer, Conservative MP for Suffolk Coastal, said a rise in gas and electricity bills was inevitable and Whitehall needed to do more to promote greater energy efficiency.
He said: 'It is not a surprise gas prices have risen and there is very little we can do about it. The Government should make it easier for people, especially those on lower incomes, to save energy so they can cut costs. To date they have not done anything like enough to help.'
British Gas owner Centrica announced yesterday that it would increase its gas bills by 12.4% and electricity bills by 9.4% from September 4 to help cope with record half-year losses of £143m.
It is the fourth time in two years that the company has increased its charges by more than the rate of inflation and follows a 22% hike in both gas and electricity bills in March.
Earlier this week, rival EDF Energy said it would charge its customers 19% more for gas and up to 9.1% more for electricity from next Tuesday.
Suppliers have blamed the increases on the soaring cost of wholesale gas, which has been driven up by record oil prices, the growing reliance on imports and the lack of openness in energy markets on the Continent.
But critics said the move inflicted yet more misery on the firm's 10.7m gas customers and 5.8m electricity customers.
Steve Bloomfield, national officer of public service union Unison, said: 'It is very disappointing to hear of the continued losses being faced by British Gas.
'The biggest losers will be low-income households. Although the winter rebate will help, this latest price hike is likely to push many families into greater debt.'
Mark Clare, managing director of British Gas, defended the hikes saying the cost of wholesale gas had soared 71% in the last 12 months - including a 30% rise since February.
He said: 'We need to run a profitable business so that we can invest in bringing more gas into the UK, which will drive down wholesale prices in the longer term.
'We hope there will be no further increases in prices but it depends on the cost of wholesale gas. The anxiety over Europe is still there as it was last year and as a result we have seen wholesale gas prices remain stubbornly high.
'We cannot carry on operating at a loss and if it is clear that wholesale prices are continuing to move away from us we have to increase energy bills.'

Average annual gas and electricity bills per supplier
Supplier Gas (£) Increase (%) Electricity (£) Increase (%)
2003 2006 2003 2006
British Gas 370 707 91 237 428 81
EDF Energy 324 642 98 240 357 49
npower 329 536 63 234 364 56
Powergen 311 544 75 241 358 49
Scottish Power 319 623 95 251 379 51
Scottish and Southern Energy 326 541 66 246 342 39

British Gas prices for 2006 as of September 4 this year
EDF Energy prices for 2006 as of July 31 this year

Rise in cost of living in Suffolk
Utility 2003 cost (£) 2006 cost (£) % change
British Gas (gas)
370 707 91
British Gas (electricity)
237 428 81
Anglian Water 273 316 15
Council Tax 1137 1274 12
Total 2017 2725 35
Basic state pension per year 3926 (£75.50 per week) 4381 (£84.25 per week) 11
*Average council tax in Suffolk for a Band D household, but not taking into account parish and town council precepts.
Rise in cost of living in Essex
Utility 2003 cost (£) 2006 cost (£) % change
British Gas (gas)
370 707 91
British Gas (electricity)
237 428 81
Anglian Water 273 316 15
Council Tax 1113 1271 14
Total 1993 2722 36