Renting – Britain's social scandal that is being ignored

Private landlords threaten eviction as they pocket half of their tenants' wages, but politicians do nothing

• 
• • Patrick Collinson
  • The Guardian, Saturday 4 January 2014

More than four million people now rent privately and a million more will join them in the next few years. Photograph: Alamy

Will the rise in rents turn into one of the major issues of 2014? Young adults and families are being painfully stretched by private landlords, who are now often pocketing half or more of their tenants' wages with threats of eviction if they don't cough up another inflation-busting rent rise in the year ahead. A report we published in December headlined "Rents rise twice as much as earnings" was greeted with rage by tenants. "My landlady spends the money she gets from my rent on herself and not on the house I live in, it hasn't had any work done on it apart from a very badly fitting new front door in the last five years. But what does she care? She doesn't have to live in the cold, damp, draughty place, as long as her standard of living doesn't suffer," commented one.

"A lovely affordable two-bedroom house recently went up for sale in my area where affordable housing is very rare," said another. "It sold very quickly and I was hoping to see a nice young couple/person move in, but lo and behold it was snatched up by a landlord who already owns six properties in our street. Another affordable house now off the market and into the grubby hands of a rich landlord. I still hope a lovely young couple/person does move in, but unfortunately they'll have to pay more than what a mortgage costs and they won't own one brick. What a lovely country we live in. We are going back to Dickens's time."

Every time we publish a story on rents we see a similar response, and it's getting worse. Yet this rage is being met with almost total silence from the political and economic establishment. How many MPs have rented their family home all their lives from a private landlord? I'd wager almost none.

How many heads of our banks and building societies would prefer to live under a six-month assured shorthold tenancy rather than own (and control) their home? None. I've sat on panels at conferences examining the private rented sector. I ask how many people in the room rent their main residence. Rarely do I see a hand go up. There is now a vast gulf between the experience of policymakers, many of them baby boomers who have benefited from property price rises, and what is happening to the generation following behind.

Politicians have ignored the issue for so long because it isn't seen as national. Many still think of it as a London thing, with "entitled" young professionals carping on about the rent on a luxury two-bed pad in Clapham. That simply exposes their disconnect from reality. Over the past decade there has been a 127% increase in families with children in the private rented sector. There are now 4.3 million people renting privately, and a million more will join them in the next few years. The fastest-growing group of private tenants are not students leaving university, but people between 35 and 44, often with children.

Today's Money pages examine the experience of individuals across major world cities. New York and Sydney appear to match, or even outdo, London. Yet again, Germany offers a model that appears to work much better than the rapacious Anglo-Saxon approach. Rent control is not the dirty word in Munich or Berlin that it is in Whitehall.

Tories, who tend to receive rather than pay rent, go apoplectic at the merest suggestion of rent control, but should heed Ed Miliband's focus on the cost of living crisis. A cap on rent (let's call it "stabilisation") may be no less electorally successful than the proposed cap on energy bills, such is the level of despair so many young people and families are feeling.

A Labour Party policy review proposes a national register of private landlords (partly to at least make them pay tax), measures to improve the atrocious state of much of the privately-let stock, and tougher sanctions on rogue landlords.

They deserve wider attention, although more form-filling by the many decent landlords out there achieves little when councils cower from dealing with the true crooks. See David Lawrenson's blog on this at lettingfocus.com which, while pro-landlord, is more nuanced than most.

What isn't tackled is the underlying issue of supply and demand. We are living in a modern Speenhamland system where, as I've written before, employers pay below-subsistence wages, subsidised by tax credits, which mean workers can never afford to buy. Meanwhile high rents to landlords are subsidised by housing benefit.

The government promises £100bn for new infrastructure, but on housing it is only planning £3.5bn over the next four years. That's just a tenth of what will be spent on housing benefit over the same period. House building should be Britain's number one infrastructure priority – not just for buyers, but renters too.

Food banks in the UK: cowardly coalition can't face the truth about them

Conservatives cannot admit a real fear of hunger afflicts thousands

• 
• • Nick Cohen
  • The Observer, Saturday 28 December 2013 18.29 GMT

Donated food at a a food bank. Photograph: Christopher Thomond for the Guardian

I went to the Trussell Trust food bank round the corner from the Observer's offices just before Christmas. If I hadn't been reading the papers, I would have assumed it represented everything Conservatives admire. As at every other food bank, volunteers who are overwhelmingly churchgoers ran it and organised charitable donations from the public.

What could be closer to Edmund Burke's vision of the best of England that David Cameron says inspired his "big society"? You will remember that in his philippic against the French revolution, Burke said his contemporaries should reject its dangerously grandiose ambitions , and learn that "to love the little platoons we belong to in society, is the first principle (the germ, as it were) of public affections". Yet when confronted with displays of public affection – not in 1790 but in 2013 – the coalition turns its big guns on the little platoons.

It would have been easy for the government to say that it was concerned that so many had become so desperate. This was Britain, minsters might have argued, not some sun-beaten African kleptocracy. Regardless of politics, it was a matter of common decency and national pride that Britain should not be a land where hundreds of thousands cannot afford to eat. The coalition might not have meant every word or indeed any word. But it would have been in its self-interest to emit a few soothing expressions of concern, and offer a few tweaks to an inhumanely inefficient benefits system, if only to allay public concern about the rotten state of the nation.

But the coalition is not even prepared to play the hypocrite. Iain Duncan Smith showed why he never won the VC when he was in the Scots Guards when he refused to face the Labour benches as the Commons debated food banks on 18 December. He pushed forward his deputy, one Esther McVey, a former "TV personality". All she could say was that hunger was Labour's fault for wrecking the economy. She gave no hint that her government had been in power for three years during which the number attending food banks had risen from 41,000 in 2010 to more than 500,000. Her remedy was for the coalition to help more people into work.

If she had bothered talking to the Trussell Trust, it would have told her that low-paid work is no answer. Its 1,000 or so distribution points serve working families, who have no money left for food once they have paid exorbitant rent and fuel bills.

But then no one in power wants to talk to the trust. As the Observer revealed, Chris Mould, its director, wrote to Duncan Smith asking if they could discuss cheap ways of reducing hunger: speeding up appeals against benefit cuts; or stopping the endemic little Hitlerism in job centres, which results in unjust punishments for trivial transgressions. In other words, a Christian charity, which was turning the "big society" from waffle into a practical reality, was making a civil request. Duncan Smith responded with abuse. The charity's claims to be "non-partisan" were a sham, he said. The Trussell Trust was filled with "scaremongering" media whores, desperate to keep their names in the papers. But he had their measure.

Oh, yes. "I understand that a feature of your business model must require you to continuously achieve publicity, but I'm concerned that you are now seeking to do this by making your political opposition to welfare reform overtly clear."

Ministers will not confess to making a mistake for fear of damaging their careers. But it is not only their reputations but an entire world view that is at stake. Put bluntly, the Conservatives hope to scrape the 2015 election by convincing a large enough minority that welfare scroungers are stealing their money. They cannot admit that a real fear of hunger afflicts hundreds of thousands. Hence, Lord Freud, the government's adviser on welfare reform, had to explain away food banks by saying: "There is an almost infinite demand for a free good."

My visit to the food bank showed that our leaders' ignorance has become a deliberate refusal to face a social crisis. Of course, the volunteers help working families and students as well as the unemployed and pensioners. Everyone apart from ministers knows about in-work poverty. As preposterous is the Tory notion that the banks are filled with freeloaders.

You cannot just swan in. You get nothing unless a charity or public agency has assessed your need and given you a voucher. The trust is at pains to make sure that the beggars – for hundreds of thousands of beggars is what Britain now has – receive a balanced diet. To feed a couple for five days, it gives: one medium pack of cereal, 80 teabags, a carton of milk, two cans apiece of soup, beans, tomatoes and vegetables, two portions of meat and fish, fruit, rice pudding, sugar, pasta and juice. That this is hardly a feast is confirmed by the short list of "treats", which, "when available", consist of "one bar of chocolate and one jar of jam".

Sharon Cumberbatch, who runs the centre, tells me that she is so worried that shame will deter her potential clients that she packages food in supermarket bags so no one need know its source. The clients, when I met them, reinforced her point that they were not the brazen freeloaders of Tory nightmare. They trembled when they told me how they did not know how they would make it into the new year.

Most of all, it was the volunteers who were a living reproof to a coalition that can cannot correct its errors. They not only distribute food but collect it. They stand outside supermarkets all day asking strangers to buy the tinned food they need or hand out leaflets in the streets or plead with businesses to help. Sharon Cumberbatch is unemployed but she works to help others for nothing. Her colleagues said they manned the bank because hunger in modern Britain was a sign of a country that was falling apart. Or as one volunteer, Richard Moorhead, put it to me: "I am gobsmacked that people are going hungry. I'm ashamed."

The coalition can call such attitudes political if it wants – in the broadest sense they are. But they are also patriotic, neighbourly, charitable and kind. They come from people who represent a Britain the Conservative party once claimed a kinship with, and now cannot bring itself to talk to.

From Roy Hodgson to Carol Thatcher, this fixation on celebrity gaffes tells us nothing about racism

Britain is a nation in denial. While celebrity stories grab the headlines, true discrimination is thriving and largely ignored

• 
• • Joseph Harker
  • The Guardian, Tuesday 22 October 2013

‘It was great that we celebrated Jessica Ennis and Mo Farah at London 2012, but the common conclusion, that this proved our nation was at ease with diversity, was pure delusion.' Photograph: David Davies/PA

In the past seven days two stories have shown how little we know about race in modern Britain. First, the one that dominated the headlines: what Roy Hodgson said to the England team at half-time in their World Cup qualifier, and what he meant by using the word "monkey" to refer to a black player. Everyone, it seemed, had an opinion. Comment columnists and sports writers weighed in. Radio stations ran phone-ins. Arguments raged.

There's no doubt that, given the history of monkey chants at football grounds during the 70s and 80s, Hodgson was at the very least stupid and incredibly insensitive to use such a word in reference to one of his own team. It's right that he apologised. But what concerns me about this story is not whether Hodgson's a racist but the way it skews our understanding of how racism impacts on modern society. Media reporting is now all about what TV and sports personalities say, rather than what ordinary people do out there in the real world. And the discussions are always centred on whether the alleged target was justified in being "offended".

So the stories we hear are: should Carol Thatcher have called a black tennis player a "golliwog"; should England football captain John Terry have called an opponent a "fucking black cunt"; should Ron Atkinson have called a footballer a "fucking lazy thick nigger"? How should they be punished? Should they be sacked? And in too many cases the abusers quickly become martyrs, the new victims of a nation gripped by political correctness – you just can't say anything nowadays, can you?

And liberal commentators have caught on too. When talking about such issues as sexism, or gay rights, or disability, or antisemitism, their regular refrain is: "Imagine if they'd been talking about black people, just think of the fuss that would have been made."

And added to this, controversial comments by black personalities are seized upon as proof that there's an equal and opposite racism coming from the other side: Rio Ferdinand agreeing that Ashley Cole was a "choc-ice" – outrageous; Diane Abbott tweeting that "White people love playing 'divide & rule'" – the woman who campaigns against racism turns out to be just as racist herself.

In the endless coverage of all this, let's not pretend we're actually talking of racism; these are celebrity gaffe stories for the search-engine age. Though the issues are, for black people, irritating and possibly offensive, they are as relevant to racism as a cough is to tuberculosis. The fact you were once upset by a tweet doesn't mean you understand what racism's about.

The second race story last week addressed the real issues. An undercover BBC London investigation into lettings agents showed the massive extent to which black people are being denied homes – without them even knowing it. One reporter posed as a landlord and asked the agents not to show his rental property to African-Caribbean people. The agents – even the Asian ones – readily agreed. To test the agents' willingness, two other reporters, one black, one white, posed as prospective tenants. As the agents had promised, the black hopeful was told the property had gone; the white prospect was invited for a viewing.

Ten agents were found to be discriminating in this way; even more shocking, one of them said on (hidden) camera: "Ninety-nine per cent of my landlords don't want Afro-Caribbeans or any troublesome people." If true, and there's no reason to doubt his claim, it throws open all sorts of questions about how widespread discrimination is in modern Britain. This investigation, after all, took place in a city often held up as being at ease with difference. If it's happening in London, it can happen, and probably does, anywhere in Britain. And to cap it all, the black "rejects" would have no idea they were being discriminated against; they wouldn't have suspected a thing, unless this happened over and over again – in which case they'd risk being labelled paranoid for blaming it on their skin colour.

This is the true story of racism in the UK: how it is still so casual, and how it excludes and disenfranchises thousands. It's a story, though, which attracted minimal media attention. A news article in the Guardian and the Telegraph, but no interest from any other newspaper, and no battalions of columnists giving their opinions.

No celebrities involved; only black people affected. No story. As they say, if a tree falls in the forest and no one hears it, does it make a sound? If blatant racism occurs, and no one reports it, does it exist?

How things have changed. In 1988 a similar investigation took place by undercover BBC reporters in the city of Bristol. The documentary Black and White, broadcast over five successive weekdays, exposed discrimination in jobs, housing and the leisure industry and shocked the nation. Stunned viewers asked themselves how this could be happening in a country they believed to be so tolerant, and where discrimination was supposed to be illegal.

The documentary had a massive impact, opening people's minds to the fact that racism wasn't simply about National Front marches, skinhead thugs, abuse and violence. Geoff Small, the black undercover reporter, recalls: "For weeks afterwards, white people would approach me in the street and offer their sympathy and sincere apologies for what I'd gone through." Now, however, we look back on the 70s and 80s with a sneer. We believe we're so much more sophisticated now. Alf Garnett and the Black and White Minstrel show have gone; we've heard all about police racism through Stephen Lawrence; we see black faces presenting TV shows; many minorities have been successful in business; and we've even had black faces in the cabinet. For Christ's sake, even the President of the United States is black!

These steps, important though they are, are mainly about individual achievement; and the problem is that now, in this allegedly postracial era, the rose-tinted glasses of our diversity training are in fact blinding us to the reality for most black people – which has changed little in the intervening years. In case we need reminding, jobless rates are twice as high for black people as for whites, unemployment is a staggering 56% for young black men; black pupils are less likely than their white peers to get five good GCSEs and are routinely marked down by their teachers; they are three times more likely to be permanently excluded than the overall school population; stop and search rates are over five times higher for black people; and black people are five times more likely to be jailed.

But the story Britain likes to tell itself is that discrimination has gone away – that now we're used to black and brown people living among us, the barriers have come down. It was great that we celebrated Jessica Ennis and Mo Farah at London 2012, but the common conclusion, that this proved our nation was at ease with diversity, was pure delusion. As is the dominant view that the rise in interracial relationships and "beautiful" mixed-race babies shows that racism is on the way out.

The fact it persists undiminished is, it seems, too much for our society to take. And to keep the fantasy in place, we look for excuses: if there are more black jobless it's because of their poor attitude to work; if they perform badly at school it's their laziness and culture; if they're overrepresented in the criminal justice system then they're just naturally more aggressive. If black people could only sort out these self-inflicted problems themselves, everything would be OK. After all, doesn't every business say it welcomes job applicants from all backgrounds? The doors are open, why aren't you coming in?

Needless to say, this proves problematic for genuine anti-racists. It's the problem doctors used to have in "proving" that smoking causes cancer. You can't show it in individual cases, but when you track the increase in smoking and compare it to the increase in cancer rates, it becomes obvious. As for inequality, the general statistics show the racial disparities but individual cases are almost impossible to prove, allowing the deniers to claim that no barriers exist.

We certainly need the facts and figures, but what history shows is that most of us only react to this kind of thing when we see it with our own eyes. Would the abuse allegations at Abu Ghraib prison in Iraq ever have been believed were it not for the photographic proof? Statistics, unfortunately, can be manipulated and argued over endlessly. But seeing individuals act in a certain way is far more damning. What if, for instance, the BBC team had gone undercover with recruitment agents, or in the teachers' common room, or the judges' golf club? And what about the police? Ten years ago another undercover BBC investigation caused a storm after exposing the raw racism among trainee officers, most of whom used terms of racial abuse on a daily basis.

To investigate all these would, of course, be a significant undertaking; but we need to change the terms of the debate. If we are to achieve genuine equality, which most people say they want, then we need to show how racism can operate, indeed thrive, without a sign telling the world it exists. Without visible proof, we look set for years more discrimination, and years more denial.

You can starve on benefits in this country

It's hard to say to a nation that hates benefit claimants: 'Your perception is wrong. The system is flawed,' says Jack Monroe in the first of a new series called Austerity Bites

• 
• • Jack Monroe
  • The Guardian, Wednesday 18 September 2013

A Trussell Trust food bank … missed or delayed benefit payments account for most referrals. Photograph: Sophia Evans for the Guardian

How can anyone possibly "starve on benefits"? "Something doesn't add up." Responses to my blog and comment pieces about life on the breadline are filled with these kinds of musings. After all, everyone has an anecdote about a mate or a neighbour who has all the latest gadgets and designer sportswear for their children, "and they've been on benefits since, like, for ever".

Yet you don't know to look at someone whether their trainers came from JD Sports or Oxfam, or if they wash their hair in Charles Worthington or Sainsbury's baby shampoo. You don't know whether the young man in the town centre with a takeaway in the middle of the day is a night-shift worker or a student or, heaven forbid, has the day off work. Not everyone works Monday to Friday, 9-5. Someone needs to staff the checkouts at night so the 9-5ers can pick up a bottle of Bolly after work. The 999 control room staff work day and night shifts across all of the emergency services. And someone needs to clean those supermarkets and those offices.

You don't know whether the young woman walking down the street with a black baby and a lanky blond nine-year-old on her arm is a foster carer or a "slut". I was that young woman taking the kids to the shops to give my parents, who were foster carers, five minutes' peace. I was always met with whispers and stares, because people judge and people assume. One woman told me that I "should have kept my legs shut". I told her that I was a virgin, and, funnily enough, she didn't have a comeback.

So, in an attempt to explain again and again that life is not as black and white, and the "free money" is not as easy to come by as certain newspapers would have you believe, I find myself a stuck record, plastering my personal circumstances across the media in an effort to make people understand.

When I first needed to claim housing benefit, the payments were delayed, leaving me in arrears. I had to involve my MP and the town clerk, but the rent arrears were already piling up. When payments are delayed, bills bounce, leaving you with hundreds of pounds in bank charges, on top of your rent arrears. When you go back to work, you need to pay for a month's fees in advance to secure your child's nursery place. The money allocated to benefits is for housing, food and bills. But when it is not paid in full, or not paid on time, when you have to wait 11 weeks for it due to "administrative backlog", the money also has to pay for late payment fees, bank charges and rent arrears.

This mess is not unique to me. According to the Trussell Trust, the most cited reason for referral to food banks is delayed and missed benefit payments. Meaning, yes, Mr Gove, you were half right that food bank use is down to financial mismanagement, but it is the financial mismanagement of the Department for Work and Pensions, and the financial mismanagement of local authorities that administer housing benefit. Not quite the fault of the "feckless poor".

While it is easy for people to pontificate on what I could have done differently (taken my former employer to a tribunal would be first on my list if I could relive the past two years) or berate my "absent" friends and family (to whom I was too embarrassed and humiliated to admit how bad things were) – it is much harder to put your head above the parapet and say to a nation that hates benefit claimants: "Your perception is wrong. The system is flawed. People are getting hurt. Something has to change."

If bankers leave the country, it would be no loss

Ignore their howls of protest. 

They took home unheard of sums. Only in Britain do ministers dance to their tune. But public fury cannot be defied for ever

• 
• • Simon Jenkins
  • The Guardian, Wednesday 6 March 2013

Illustration by Belle Mellor

The peasants are revolting across Europe. They want bankers' blood and mean to get it. Until now, public response to the credit crunch has been one of general bafflement and wrist-slapping. The banks persuaded the world it was all an act of fate. As it was, they were too big to fail and their leaders too saintly to atone for it. For four years, British banks were showered with nearly half a trillion pounds of public and printed money. They duly recovered and stayed rich, while everyone else went poor.

The worm has turned. The banks and government alike have failed to deliver recovery. The people want revenge, and have found it – of all places – in the European parliament. It has declared that EU bankers cannot get bonuses bigger than their salaries, or twice as big if shareholders approve. This applies wherever EU bankers work, and to any overseas banker working in the EU.

Meanwhile, a Swiss referendum now requires top executives to seek explicit shareholder approval for their pay, with a ban on golden hellos and goodbyes. The Netherlands is talking of a tighter 20% cap on bonuses. Even laissez-faire Britain has seen the National Association of Pension Funds demand that boards keep executive pay rises down to inflation.

Europe's once omnipotent banking lobby has been all but neutered by the scale of scandal. The German government caved in to the EU parliament under pressure from the opposition Social Democrats. This was after the Libor scandal revealed Deutsche Bank cutting one trader's bonus by £34m, thus implying a staggering original sum. The Swiss campaign was kicked into life by the drugs firm Novartis giving its departing chairman a $76m gift. Some 68% of Swiss voted for the new curb.

Only in Britain do ministers still dance to the bankers' tune. Last month RBS executives brushed aside their state shareholder and paid themselves £600m in bonuses after posting a £5bn loss. Loss-making Lloyds dipped into its till and gave senior staff an extra £365m. Money-laundering HSBC announced 78 of its London executives would take home more than £1m each. They all say bonuses were unrelated to fines or losses, but they always say that. George Osborne was humiliated in Brussels on Tuesday by having to plead their fruitless cause.

Last year the City of London's much-heralded "shareholder spring" got nowhere. Revolts against executive pay at WPP, Barclays, Trinity Mirror and elsewhere had little noticeable impact. While overall pay stagnated, that of top executives rose 12%. Opinion polls showed the public overwhelmingly hostile to top pay. Only the government and the London mayor stand between the very rich and a furious public. The peasants' revolt means that even British ministers cannot defy opinion for ever.

The reality is that the banking community has allowed this thirst for revenge to build up for over four years, and it just did not care. Ever since the 1980s and financial deregulation, the profession took home sums of money unheard of in any other line of work.

This had nothing to do with free markets, except within a tight group of high-rolling traders. Modern bankers derive "economic rent" from exploiting oligopolistic cartels in financial services, with shareholders kept at one remove. The astronomical traders' bonuses are asymmetric returns on cash that properly belongs to depositors and shareholders whose money bears the risk. In any other business such bonuses would be regarded as theft from the firm.

For four years the British government – Labour and the coalition – huffed and puffed but was too terrified of the banks to act. Regulators were suborned by lobbyists and ministers, their offices packed with seconded bankers, and did as they were told. They gave huge sums to the banks in the belief that this was benefiting the demand economy. In Britain, some £400bn of cash was "pumped into the economy" via the banks. They merely traded or hoarded it, to their ever greater enrichment. The money vanished. A thousand pounds handed to every British citizen would have had more impact on the economy.

Last year, as if learning nothing, the Treasury gave the banks another £80bn to boost business and mortgage lending. This week it was predictably revealed that lending to small businesses actually fell as result. It was like giving money to a drunk and telling him to support his children. Never in the history of money can policy have been so glaringly inept. The banks laughed.

No trade unions are fiercer in defending their interests than the rich professions. As we saw this week with lawyers, cut their largesse and they threaten to take it out on the poor, the economy, the government, everyone. The banks howl that the bonus cap means their greed will go "offshore". This seems exaggerated. But the EU curbs could possibly see the start of the high-rollers moving out of over-regulated Europe towards the Americas and Asia.

This would not be wholly good news for Britain: finance has been the boom industry of the past quarter-century. But more likely is that the more toxic activities will go, and that is no loss. Either way, the banks have themselves to blame. They flew their golden wings too near the sun, and rage has melted them. They have only one plea on their side. The culture of greed in the City was nothing to the culture of ineptitude at the Bank of England and the Treasury. They pumped out the money. Never in British economic history can so much have been so wasted on so fruitless a cause. And still no hint of remorse.

Three decades after privatisation, monopoly power is still king

IoS investigation: The great British energy rip-off 

The "big six" energy firms were last night accused of maintaining a "stranglehold" over millions of consumers, after new figures showed that they each control more than two-thirds of the market in different regions across the UK.

An average of 70 per cent of households across all regions use the same electricity supplier, with the proportion rising to 85 per cent in some areas, undermining claims by the Government and Ofgem, the regulator, that the energy market is operating competitively.

The figures, uncovered by Labour, are published in the wake of the confusion over the future of energy bills after David Cameron pledged in the Commons to force companies to offer householders the "lowest tariff" – a promise that within hours was exposed as unworkable. The Prime Minister clashed with the Liberal Democrat Energy Secretary, Ed Davey, who backed Ofgem's proposals, published on Friday, for a simplified tariff system that encouraged consumers to switch between firms.

The official figures show that companies supplying electricity to homes where they inherited the network from the former utility boards are operating a near monopoly, making a mockery of the idea that customers routinely switch firms to get better deals.

Separate data from the Department for Energy and Climate Change (DECC) reveals that customers who have stayed with their old electricity supplier are paying more than those who have switched. DECC analysis shows that these "home suppliers" charge an average of £31 a year more than non-home suppliers for electricity – in effect placing a premium on loyalty.

The research emerged on the eve of British Energy Saving Week amid an outcry that energy firms are pushing up fuel bills beyond the rate of inflation, adding between £80 and £112 to the average annual household bill.

Although deregulation of the energy market in the 1980s supposedly led to more competition, the reality is more similar to a monopoly within each region of the UK.

The largest five electricity suppliers dominate the regions they inherited from utility boards more than two decades ago, while British Gas still retains the largest share of the retail gas market nationwide. This is despite consumers being encouraged by price comparison websites to shop around for the cheapest supplier. When the gas and electricity networks were first privatised, price caps were in operation, but a decade ago Ofgem removed controls because competition had, in theory, been established.

Yet figures published in Parliament in a written answer to the shadow Energy Secretary, Caroline Flint, show that there is little real competition. Firms last night claimed the figures show the loyalty of customers they inherited from the boards, but Ms Flint said the companies appear to be exploiting consumers' unwillingness to shop around. With a baffling array of more than 500 tariffs on offer, consumers are often loath to switch.

In Northern Scotland, SSE, the firm that inherited the network from the North of Scotland Hydro Board, has retained an 85 per cent share of the retail electricity market, while in south Wales, SSE has an 82 per cent share and in the Southern region it has an 80 per cent share.

Scottish Power has an 82 per cent share in southern Scotland, and a 73 per cent share in north Wales. EDF has remained dominant in London with a 74 per cent share; in the South-east, it supplies electricity to 73 per cent of homes; and in the South-west, it has 71 per cent.

Npower remains the dominant supplier in the West Midlands, with 65 per cent of the retail market; in Yorkshire, it has a 65 per cent share; and in the North-east, 64 per cent. E.ON has a 69 per cent share in the East Midlands; 68 per cent in the Eastern region; and 67 per cent in the North-west.
The sixth major energy firm, British Gas, has held on to 76 per cent of gas-only accounts across the UK. The figures do not apply to dual fuel accounts, but nearly 10 million households are on electricity only, and 4.6 million have gas only.

Ms Flint said: "It's no wonder the energy giants are shame-faced about hiking up energy bills when they have a stranglehold over the energy market. People talk about the 'big six', but in most parts of the country there's only one big supplier in town. The fact that 70 per cent of people in any region all use the same electricity supplier suggests that the energy market is not functioning properly. It cannot be right that customers who have stuck with their old electricity supplier pay a premium for their loyalty.
"The time has come to create a tough new regulator to police the energy market properly, and force the energy companies to pass on price cuts to the public."

A spokesman for Npower said: "We have a larger than expected share in the West Midlands because our history is in the Midlands. A lot of people were Midlands Electricity Board customers and many of them remained so [under the new name]. The rate of turnover has been quite significant, people have left and people come back. It is about loyalty – many people still refer to us as 'the Midlands Electricity Board' as they refer to British Gas as 'the Gas Board'. They are with us because we are incredibly good value. It is the same in the North-east. We feel very much part of the community in these areas."

A spokesman for E.ON said: "Many of our customers, while staying with us, will have regularly changed products. As such it would be wrong to say they are not engaged in the energy market – they are, and have chosen to stay with us. Some 69 per cent of our customers overall have switched supplier or tariff in the past three years.

"It is important that we treat every customer as an individual and as such being on the right tariff for your own individual circumstances is vital. In recent weeks we have made checking you're on the right tariff easier than ever, and it is this simplicity and comparability that our customers are responding to. By making things simpler and more comparable, as well as continuing to provide help and advice that will make homes more energy efficient, we can really help our customers and ensure they are on the best deal for them."

A Scottish Power spokesman said: "The British energy market is one of the most competitive in Europe, and Scottish Power welcomes anything that encourages or supports this competition."
SSE said in a statement: "We would fully expect our customer retention rates to be higher than those of our competitors because of our exceptional standards of service, for which we are consistently recognised as the best in the business by the likes of Consumer Focus and uSwitch.

"There's no doubt that greater levels of consumer engagement in the market would be a positive thing. However, switching rates in the UK compare very favourably with those in other European energy markets, and with other retail service markets such as fixed and mobile telecommunication, insurance, mortgages and personal current accounts."

How easy is it to reduce your energy bill?

If a seasoned investigator has trouble, what hope for the average consumer? Here’s what I discovered after many frustrating minutes on hold:

Npower

My current provider, Npower, predicts my spend for the next 12 months will be £208.37 for 1,620 kWh of electricity and £531.78 for 11,260 kWh of gas – all helpfully displayed in my latest bill, but irrelevant because it was generated two days before they announced an 8.8 per cent price hike. Sneaky.

British Gas

After an automated apology for any delay due to “a high volume of customer calls” came some advice: “If you’re calling for our fix and fall tarif,f go online to sign up and register your details. If you have received a coupon about this offer, please complete it and return the pre-paid envelope. If you are calling about a fixed contract that ends in either 2013, 2014 or 2015, your prices are not affected by our recent price increase.”

I simply want to find out if you can beat my existing deal.

“Press 1 to change your account name or address or if you are moving house. Press 2 to give us your meter reading or find out your balance, pay your bill or to let us know you are going to pay your bill or you have paid your bill. Press 3 if you have any questions about your central heating or home care or press 4 to talk to one of our team.”

Hooray. Well, nearly. I sit through more suggestions to “go online for further information”. A pause, then a human voice. “You probably were sent that estimate prior to their price rise announcement.” True. “Our best deal is the online variable until November 2013, which includes the price increases taken into effect. We can do a 6 per cent discount from your total bill for direct debit.”

“That will cost you around £229 for electricity and £532 for gas. A little bit more than your estimate, but your prices will go up remember”.

So your prices are fixed, then?

“No, we have another “fix and fall” tariff which is not discounted but is fixed until March 2014. That might make more sense to you.

“If our prices go up, yours won’t do, but if prices go down, yours go down – and you get a fixed premium of 3 per cent.”

“That comes to £253.34 for electricity and £583 for gas.”

£100 more! “Ah, but your charges…”

Yes, yes, they will be going up.

To be fair, she did recommend I call npower to check how much my bill would apparently be going up by. That was easier but it still took 17 minutes.

E.ON (no freephone)

It took less than a minute to speak with someone and we were straight down to business: full address and phone number (“in case you get cut off”) before we were on to the tariffs. Four on offer: standard, E.ON energy discount (“3 per cent cheaper than standard for 12 months but you’re not protected against price rises”), fixed one year or fixed two years. It was like remortgaging a house.,

Standard came to £787.93 and the energy discount was £752.69. Fixed one came to £776.48 – “no premium, mind” – and fixed two £816.39 – “a bit of a gamble as it is 5 per cent above standard unit rate but you’re protected against price rises.”

The good news: E.ON was not among the four of the “big six” energy companies which had recently announced price rises for 2012. The bad: “but it’s more than likely we will put them up for 2013”. Hmmm.

That took four minutes.

EDF

Oh dear. I gave up trying after being on hold for 15 minutes listening to what sounded like Morcheeba. Rubbish.

SSE

After seven minutes on hold, I was mercifully told there were only two tariffs the company provides – standard and capped. My quote was £28 more expensive than npower, but SSE credits your account with £100 when you switch and their rate is capped for two years meaning, like British Gas, it won’t go up, but could come down. And SSE “was the only energy company that reduced their prices last year”. In addition, my gas and electricity standard charge of 16.44 pence per day would come down to 14.8p with paperless billing. “I’m here until 2pm if you want to switch,” a very helpful Eddie told me.

Scottish Power

I had tapped in my numbers to their online quote generator which gave me an estimated bill of £816.57. But on the phone, a quote using the same figures was better: £755. This for a deal fixed until March 2014 without a cancellation fee. Did I want to know the unit price? I certainly did. “Scottish Power’s first quarter electricity unit price is 21.74p for the first 225 units going down to 10.99, compared with Npower’s current unit price of 16.93 reducing to 13.39. Our primary gas units are 8.10 going down to 3.01 with Npower’s at 7.89 reducing to 3.51.” I regretted the request for more detail.

So much to choose from. Do I ditch and switch, fix or stick? I have no idea. I tried calling Npower to see what their updated estimate would be for next year, but their systems were down. I’ll have to call back on Monday.

Paul Gallagher