It's time to present them with the bill!

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8 January 2008

The new year started with energy companies announcing price rises. Npower said last week it would raise prices by 27% and other companies are following with hikes of 15% - at least...

This would mean that energy bills will go over the £1,000 a year mark for many people.

Why is this happening? Npower claims that it's due to the price of oil going up - but it takes oil contracts for 3 to 5 years, so the short-term changes in the oil price do not make any difference, except for top-ups the company needs to make from the so-called "spot market" when supply is short.

Maybe what Centrica (the old British Gas) says is more revealing - that the demand for gas is "strong" - so these companies could really rake it in if they increase prices under such conditions.

Already families, especially the elderly, do not have the money to charge their meters, or choose not to turn the heating on, because they just cannot afford it.

It's all about profit guzzling

But of course, if the price of oil went up for the energy companies it also goes up for us - with the £1 plus per litre now being charged at the pump for petrol and diesel, though a lot of this is still tax. And unlike the energy companies, we cannot take out a 3 or 6 month (price frozen) contract!

But energy and petrol are not the only basics to go up, because food prices are soaring as well. Dairy prices are at a 3-year peak. Since October, the price of butter has gone up by 23.2%, eggs by 21.8%, and cheddar cheese by 16.5%. Again, as a result milk is being poured into butter production to make higher profits. It is not small farmers of course, but the big dairy companies that are making a packet out of this. And their excuse is that the price of wheat doubled last year so animal feed is more expensive. Sure and thank-you! Because we already, also, pay more for bread and other wheat-containing food!

Then there were the expected annual rises in train fares into the bargain - something those of us who regularly wait for trains which are cancelled or late do not find very funny at all. Even if the fact that the cost of public transport in this country is a joke, it being so high compared to everywhere else.

That is not the end of the story because the cost of our homes - rents or mortgages are going up regardless of the fact that the property bubble is deflating (or even because of it).

Our wages always lag behind

The worst aspect of all is that the government sits and watches all these price rises and then says the answer is to keep wages "restrained" to avoid inflation! They slapped a 2% wage freeze on public sector workers - which has now led to the threat of a police strike - which would be the first since the 1920s!

Gordon Brown warned at the weekend that Britain's economy faced a "dangerous year". For once he was not talking about terrorism. No, he said "more" needs to be done "to break the back of inflation". So he insists that the public sector bosses stick to the way-below-inflation pay limit which means that public sector workers would actually be getting a pay cut of 2.3% if the RPI of 4.3% is the baseline. But if you take the real price rises into account, then this is a pay cut of 15%-20% or more! Who can afford such a fall in living standards?

We are told Brown's Darling will be asking the energy companies about their double-digit price rises, but we are not holding our breath for the outcome!

It should be crunch time for them

Up to now most people have been relying on credit since wages for many jobs have been lagging behind the cost of living for so many years. The minimum wage, for instance, of £5.52/hr, which sets a benchmark, is certainly not a living wage. But now credit and remortgaging are less and less an option because of higher interest rates and the debts people have already accumulated. No wonder workers do all the overtime they can, keeping up Britain's record for the longest hours worked in Europe - and for the most heart attacks and strokes.

It is not everyone who is compelled to stick to the pay limit. MPs will be voting on their own 10% increase (over 3 years). They "only" get a basic salary of £60,675 plus allowances for nearly everything, adding another £60,000-£100,000! Why should workers fund any rise for them when they would like to force us to tighten our belts?

No, we should instead present them, and the company bosses who they protect, with the bill for all our losses. That way we would make sure that for Brown and the bosses, it will indeed be a dangerous year, but that our year is safe, for once!