17 years of water and energy bill price hikes

HM Treasury has identified £310 billion of planned investment in UK infrastructure that is needed to replace ageing assets as well as help meet policy commitments (such as climate change targets) and expanding demand. £176 billion of this infrastructure is in the energy sector. New infrastructure can be funded through taxes or through consumer bills and charges, however it is unknown exactly what impact this will have on consumer bills.

The NAO says: “Gaps in analysis, and the lack of a common approach to measuring affordability, mean that the Government does not have an overall picture of affordability, either for the average household or for those on low incomes. There are schemes to support vulnerable consumers in all three sectors, but we are concerned that government and regulators cannot assess the adequacy of these schemes without a better understanding of affordability.”

The NAO expressed particular concern about the plight of the low-income households where energy and water bills accounted for 15% of spending in 2011 – almost double the overall average of 8% – while their incomes had fallen by 11% in real terms since 2002.

Commenting on these latest figures, Ann Robinson, Director of Consumer Policy at uSwitch.com, says: “These figures are simply shocking. The country is already on the brink of an energy affordability crisis with almost seven in ten households (69%) going without heating at some point last winter and over eight in ten (83%) saying they will be rationing their energy use this winter in an attempt to keep a lid on bills.

"Once bills hit £1500 a year, almost four in ten (36%) will be forced to turn their heating off entirely."