Rising gas prices hit us all in the pocket

By Paddy Kent

I was so pleased with myself when a comparison site signposted me to join Utility Point in January 2021. Pat on the back for finding the very lowest prices on offer and locking in those prices for 12 months. Household spending spreadsheet updated. Paperwork filled away in the lever arch. Forget about it.

Last month, they went bust, swamped by wholesale gas prices that have quadrupled since May and are now far higher than what they were charging me.

My new provider is charging me the current market rate, 50% more than I was paying previously. Now I face a stick or twist style choice of sticking with a (high) variable rate and waiting and hoping prices will drop or twisting by fixing at a high price due to fear of further price rises. All this comes just as I want to turn the heating on for the first time this autumn.

As my colleague Fraser Raleigh covered above, at Conservative Conference this week, Minister after Minister told us that things were on the up. But Boris did mention energy. I’ve edited the quote below to remove the bumpf, bluster and banter:

‘…housing, energy, transport are now huge parts of our monthly bills and it is … by sorting out our energy supply – more wind, more nuclear, becoming less dependent on hydrocarbons from abroad … we will hold costs down and save you money’

It is interesting that Boris says he will ‘save me money’. A whole ‘fact-checking’ industry seems to have developed since Boris became PM. If the price I pay for energy does drop, will Boris really be able to claim credit? He will certainly say so, make up a three-word slogan and keeping saying so. But I think the short answer is no.

Around 10am yesterday, Russia announced it will increase gas supply to the UK. Prices dropped by around a third. But if there was one place aside from the EU that the Government would not want to come to our rescue, it’s Russia. And from Putin’s point of view, this was surely no altruistic move.

Boris is right – we must generate more energy on this isle – and just off it. Because Tory voters will have a hard time what they dislike more – wind farms or nuclear power. Solar panel farms (not mentioned) are also highly contentious. Yet off-shore wind power should generate less opposition. The other broad approach is to reduce usage, which comes with its own political challenges. The spike in gas prices should work perfectly for Insulate Britain, but instead they concentrate on blocking roads rather than delivering a really compelling narrative about the benefits of insulating our homes.

Of course, I should acknowledge rising gas prices will not cripple me. By extraordinarily poor coincidence, as Boris gave his Conference speech yesterday, the £20 uplift in universal credit came to an end – which some label a cut. I wouldn’t go that far, but the coincidental timing seems perplexing. Perhaps the Government was aware of this, but decided on the ‘good day to bury bad news’ strategy. It’s recipients of universal credit who will be most affected by rising energy bills.

Gas prices don’t just affect energy bills. Today we hear about the indirect consequences of higher gas prices – higher food prices, construction materials and even an increase in the price of paper.  And there could be unintended consequences. That ongoing discussion about a ‘return to the office’, well soon employees could be weighing up not just the cost of train travel into the office but also the cost of keeping their homes warm enough to work in. Winter has never seemed so depressing.