Friday, 29 August 2008

The heat is on

As two energy suppliers hike prices again, the temperature is rising for households and firms, writes Nathalie Thomas
WHEN, in the grip of the 1970s oil crisis, US President Jimmy Carter advised Americans to turn down their heating, wear more jumpers and switch off their Christmas lights, he was mocked by his critics as a "feckless thermostat-watcher in a cardigan".

But 30 years later, on this side of the pond, households are starting to sit up and listen to his tips after two more energy companies last week unveiled their second price rises in a year.

To the chagrin of consumers already squeezed by spiralling food and petrol prices, Scottish and Southern Energy (SSE) and E.ON told customers on Thursday they will have to shoulder increases of as much as 29%.

For SSE customers, the announcement followed a near 16% hike in gas bills in March, while E.ON had already raised its gas and electricity prices by 15% and 9.7% in February.

SSE and E.ON are not alone. Scottish Gas customers were left holding their heads in their hands last month when it announced a 35% increase in retail gas prices, just six months after raising gas bills by 15%. The French energy giant EDF, which has five million UK customers, also unveiled a second round of double-digit rises in July.

Consumer groups such as Energywatch warned that this second round of increases will push the number of UK households living in fuel poverty above five million for the first time in decades.

"The brakes have failed on the energy market," said Adam Scorer, campaigns director at Energywatch. "The results are calamitous."

Business groups, including the Federation of Small Businesses (FSB), cautioned that the rises will also have a detrimental effect on the economy, in particular Scotland's army of small firms.

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