Darling and Ofgem Must Show Their Teeth Over Energy Price Hikes.
Wat Tyler Wed Jan 09, 2008 at 10:50:30 AM GMT 
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The recent announcement that the UK's fourth largest energy supplier is to raise its prices means the government and the regulator must take decicive action.
Chancellor Alistair Darling has intervened as the UK’s fourth largest energy supplier announced it was to raise its prices.
NPower has told its customers that the price of their gas will rise by 17.2% and their electricity by 12.7%, other companies are expected to follow their lead in the near future.
The Chancellor, who has no power to enforce a reversal of NPower’s decision has written to regulator Ofgem saying the he is ‘aware that recent developments in the international oil markets (the price for a barrel of oil reached $100 briefly last week) are feeding through into the UK gas and electricity markets,’ and called for the regulator to give its assessment of future trends in the market.
According to Uswitch some 24 million UK households can expect to see double digit raises in their fuel costs this year, it is thought this could cause a sharp spike in the rate of inflation as workers seek pay claims that will keep pace with the rising cost of living.
The Chancellor is right to be concerned, and not just because higher fuel costs mean higher inflation, as TUC leader Brendan Barber said in his New Year’s message the gulf between the rich and the poor in the UK is growing ever wider, allowing more people to experience the damaging effects of fuel poverty can only exacerbate this problem.
There is also a real concern that the current price rises have more to do with traders exploiting the market than responding to worldwide demand for energy. If so both the government and the regulator must take decisive action.
Since 1997 Labour has done more than any previous government to lift people out of poverty, it must not let its good work be trashed now by people in the energy industry chasing short term profits with little or no concern for the long term consequences of their actions.
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