Another year of price hikes on way

The increase in electricity charges announced yesterday by the Commission for Electricity Regulation will have a serious impact, both directly and indirectly, on the consumer when it becomes effective next January.

This latest 5% increase for the ESB makes an aggregate escalation in their charges of almost 25% spread over the last three years. It will be the latest in what seems to be a never-ending litany of price increases to be imposed on a much-suffering public.

Small and medium businesses will have to find 4% more to pay for their electricity bill while industrial users will face a 6% increase.

The recent power blackouts in the US and London underlined the extent to which people depend on electricity. In that regard, the growing demand for it here underscores the urgency of the construction of a new power station, which energy regulator Tom Reeves has already advertised for private companies to build.

The ESB is precluded from tendering for this project, and, in any case, has its own problems in that it offers discounts to large customers who accept a reduction of their supply in order to relieve pressure on the company’s national grid.

Hopefully, the ESB has a strategy in place to prevent such similar circumstances arising here.

This latest price increase will not be appreciated by consumers in the domestic, industrial and business sectors.

Although the company may assert that it is in line with inflation, this hike will serve to add considerably to the inflation rate already borne by everybody across a very wide range of services and goods over the past 12 months. Household budgets are already being squeezed ever tighter by more costly food, education, health services, transport and gas.

The Government preaches restraint in order to bring the rate of inflation down from being the highest in the eurozone, yet is itself a major contributor to it.

In remaining aloof, appearing to be almost indifferent to the cost of living, the Government is maintaining a hands-off attitude which is relentlessly making Ireland a ridiculously expensive country in which to live.

It is a pointless and cynical exercise for Government ministers and spokespeople to exhort consumers to shop around for value, when their only choice is between dear and dearer.

In a period when job losses are being announced on a weekly basis and the unemployment rate is at 4.5% industry and the business sector will face higher costs from the New Year, which will certainly impinge on their competitiveness.

That is not being helped by the high cost of insurance which companies and small businesses have to meet and is another considerable factor compounding the problems facing firms, especially small indigenous ones which provide vital clusters of employment.

The Irish Small and Medium-sized Enterprises Association (ISME) not too long ago told an Oireachtas committee that insurance costs for its members had risen by 53% on average in this year alone.

The New Year increase for the ESB means that another year of high inflation and high prices is around the corner, yet again.