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Consumers to pay the price

Jul 1

Written by:
01/07/2008 14:55  RssIcon

for UK renewables

The Guardian recently reported that surcharges will be imposed on gas and electricity bills as consumers help pay for the £100bn investment by the private sector in wind turbines and solar panels.  Household gas bills could rise by up to 37% and electricity costs by 13% as the government lines up consumers to pay to meet Britain's 15% renewables target.

This is bad news for those on low incomes but it also smacks of double standards as the market fails to cope with the energy and climate crisis.

Fuel poverty

There are already 4.5 million people in the UK living in fuel poverty. Energywatch, the consumer group, said that every 1% increase in power bills brought 40,000 people into fuel poverty The only conclusion can be that millions more UK residents will be pushed into it.

Double paying

Under the current system of privatised power supplies are we not already paying above cost prices so that companies can invest for the future? We wouldn’t expect the government to impose a fee for buying a new vacuum cleaner if Dyson wanted to build a new factory. The private sector to often gets it both ways, profits flow in but when major work is needed the government all to willingly pays out (see the rail network).

In effect it would represent another form of regressive taxation with those on lower incomes paying as much as the countries top earners. With regressive taxation already prevalent in the form of national insurance, VAT, TV license etc. again showing the governments willingness to take from those on low incomes.

From the public's purse to private ownership

This will essentially distribute money into corporate coffers. The new infrastructure won’t be publicly owned once finished it will all belong to the energy companies.

Prices have already risen by 40% over the last year while profits of the electricity suppliers have risen continually with most of the hikes passed onto the consumer. British Gas customers could face additional price rises of  30-40% later this summer as a result of a steep increase in wholesale gas costs.

When the scheme is completed will we all receive dramatically reduced bills as fewer natural resources are needed to produce our energy? With 15% renewables energy capacity in the UK nowhere near enough to tackle the climate crisis and with government heads in the sand about where the UK is at in terms of oil and gas supplies, it looks unlikely.


EC Green Electricity Report

It's a little while since we took a look at the green tariff offerings from the energy providers - so we'll be publishing a new report in issue 114 of the magazine, out at the end of August. Look out for the PDF research report available on this site for £3 - our new research reports are downloadable PDFs containing the full report as it appears in Ethical Consumer magazine plus all of the detailed company data behind the scores (previously only available through 'Research Supplements'. All reports (minus the detailed score table and company data) are posted free to this site six months after publication.


1 comment(s) so far...

Re: Consumers to pay the price

Aye, we will struggle to reach our renewables targets. Im looking forward to the report. Our family went with these guys last year, and it reduced our gas bills significantly.

By Brian G on   12/08/2008 09:52


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