Debt to be eased by utility reforms?

Hard-pressed consumers may be set to see their utility bills kept under more control by new legislation.

One of the major causes of risin…

Hard-pressed consumers may be set to see their utility bills kept under more control by new legislation.

One of the major causes of rising consumer debt and financial strain in the past couple of years has been the surge in utility prices. Water bills are up while gas and electricity costs have rocketed.

This has all added to inflation at a time of economic strife and hit hardest at the poor, who spend a higher proportion of their money on fuel. It has increased the number in fuel poverty – defined as having to spend over ten per cent of income on fuel – and even left some leaving heaters off on cold winter days as they grapple with the choice of heating or eating.

With this being an area of widespread concern, pressure has been placed on the government and utility companies alike. Ministers have been seeking a solution and have now revealed plans are in the pipeline to improve the lot of householders.

Announcing new legislation, the Queen's Speech said: "My government will propose reform of the electricity market to deliver secure, clean and affordable electricity and ensure prices are fair."

In addition to this, the Queen also announced: "A draft bill will be published to reform the water industry in England and Wales."

Those words do not confirm that there is a specific aim in the latter case to reduce water bills, but such an outcome would be eminently desirable for the government and the consumers who can reward or punish it at the ballot box. But the electricity proposals are clearly aimed at ensuring the cost of energy is kept down.

Commenting on the electricity plans, executive director of consumer body Which? Richard Lloyd said: "We recognise that mechanisms to encourage investment in low carbon electricity generation are necessary, but the cost to the consumer should be the government's overriding concern when they are negotiating contracts.

"People tell us rising energy costs are their biggest financial worry so the government should also take the opportunity to reform energy tariffs and make them simple and fair."

Of course, with pressure to ensure Britain's energy generating future is as green as possible, that circle may not be easy to square. However, a better idea of whether this can be achieved may be gauged when details of the bill are published.

Posted by Paul Thacker
 

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