Sky News business correspondent Joel Hills

Today the bosses of the UK's six big energy firms have appeared before the parliamentary business and enterprise select committee. The boss of Scottish and Southern, Ian Marchant joined the chief executive of British Gas, Sam Laidlaw, by saying that gas prices will continue to move up. They point out that by putting up prices suppliers are merely covering costs, not profiteering - indeed profits, he says, are paper thin. MPs were also reminded that UK consumers pay less for their gas than many of our European neighbours.

Gas and electricity prices have almost doubled in the last five years and with further rises of around 40% expected by the end of the winter MPs are getting worried. There are calls for the government to reduce the pressure on wholesale gas prices (the price company's like British Gas pay for the gas they then sell to us) and force the industry to deliver affordable energy for Britain's poorest.

The consumer watchdog though is unmoved. EnergyWatch warns that unless the government ends what it calls the "toxic" market link between oil and gas prices (oil is used to produce the electricity we use, so too is gas), unless the Competition Commission is ordered to shake-up the way the energy market works, unless suppliers are ordered to offer their lowest prices to their poorest customers (EnergyWatch says the poorest are often charged the highest rates for their energy) then the result will be disastrous. It predicts that another 40% increase in energy prices will leave 6 million households living in fuel poverty (defined as when more than 10% of household income is spent on fuel bills).

There's more evidence today that the housing market slump may prove deeper and more prolonged than many predicted as the number of mortgage approvals plummeted by more than half over the last year. The British Bankers' Association says fewer than 28 thousand loans were made for home purchases in May. That's a 56.1 per cent fall since the same time in 2007 and is the biggest annual fall since records began in 1997. David Dooks of the BBA told Sky News the fall in approvals was largely due to the sharp rise in mortgage rates hitting customers in the wake of the credit crunch in the financial markets. He also told us that "only the re-mortgaging business is holding up, where people need or want to take advantage of deals with other lenders." More worryingly, he expects the mortgage market to remain tough until at least the end of the year.

Comments

[Jeremiah1974 25 Jun 2008 11:07:52]

Many people predicted that the house price crash was coming and that it would be long and hard.

But who listened?

Credit Crunch, Property Bubble, Commodities Bubble, Private Banks issuing Fiat currency. It's all linked.

But who is listening?

[Elizabeth Davies Cape Town 24 Jun 2008 14:02:13]

Everyone needs somewhere to live and most of the year in Britain is cold, if the economy is in the doldrums...I'm afraid it is the choice of a "roof or a cold place".
History always repeats itself what goes up must come down. It will just be very unpleasant for most while the country is in the present fix.
Time for Labour to go,bring in a fresh Conservative government with new ideas methinks, a change is needed for a rest from boom,boom and then bust!

[Khalid 24 Jun 2008 13:40:22]

Sir
If I may say so, what a load of twaddle these utility giants utter before a select committee, listening to whom I wondered, is this for real.
Reports most recent, and I add, independent reports, have shown a rise in profits never seen before, yet consumers are enforced to pay through the nose because of many a pre-pay meter, which if the select committee were to look at closely, pays the suppliers before the suppliers gives them energy. So, you might say that the utility giants have the consumers by a double barrel gun, yet cater for the richest amongst their shareholders.
It is high time these select committees saw the wood from the trees, stop forthwith this nonsense surrounding pay by direct debit etc, as the fact of the matter is this, it is not denied that during winter months usage goes up, whilst during the summer months it falls and as such, those that pay monthly will have had their accounts balanced by the end of the account anniversary.
But, oh no, that isn’t good enough for the pug trough, what they do is further penalise the consumer based upon the highest usage (i.e. winter) demand a direct debit payment which does not reflect actuals, and yet claim poverty. Pull the other one.
So, whether they select their own committee or whatever, how can a person pay 50% less for paying by direct debit yet not afforded the same discount by paying by internet banking, which is a direct debit if you think about it, and i hasten to add pay promptly?
If this government had any backbone, it would rip these giants apart, have on standard price plan and do away with this nonsense that has been created within many a marketing material promoting discounts even god cant get, no matter how he pays.
So, use your [Imagination] before we turn off the [Music & Lights]