It is the cost of power that makes balancing the books impossible for millions of Brits

 

In the wake of George Osborne’s much heralded Autumn Statement yesterday, the media is in full picking over the bones mode. The main headline seems to be that we are still screwed and we are on target to stay screwed until 2018. I wonder exactly what is supposed to happen in 2018 which is going to magically make everything  fine and dandy again? Maybe there are secret sites up and down the land where superbly funded start up companies are building a new breed of super-factories which will employ hundreds of thousands of Brits at a tenner an hour. Maybe there are already fantastic designs for a new breed of British made cars and phones and all singing and dancing white goods that will wipe German goods off the map in those magical months of 2018.

Well, as a fiction author I reckon I can get a handle on outrageous fiction and the secret factory idea is as outrageous as any fiction can get. The 2018 thing smacks much more of think of a number and hope for the best.

Osborne seems to be hoping for the best in many ways and it is hard not to get the feeling that he has spent many hours fiddling away at his spreadsheets until he managed to make the figures balance. We all know that UK Plc’s outgoings are a country mile apart from incomings and something is going to have to give. In fact, a whole load of things are going to have to give. But fiddling around on a spreadsheet does not always reflect reality.

So what is the reality as seen from the reception desk at First Base? The reality is that the figures simply ain’t going to add up for an increasing number of people who are a hundred percent reliant on State Benefits to keep their heads above water.

Maybe on the surface of things George can make things add up for a bog standard unemployed individual in the Britain of 2012. In most cases they get their rent paid and their Council Tax paid which leaves them with about £60 a week to keep body and soul together. The sums have not really changed much over the last ten years and the news is yet to carry stories of anyone starving to death. So nailing down a 1% per year increase for three years seems just about manageable on the surface of things. Can an individual manage to eat for £3.50 a day? Sure they can. We are really familiar with that figure because it is the budget we work to when buying in stuff for our food parcels. Tesco sell cornflakes for 31p a box which makes a 50p breakfast well and truly possible. Beans on toast is still a 50p meal. A plate of rice with a sauce can still give change out of a quid. It is never going to be the Savoy Grill, but you can still get by at £3.50 a day. £25 a week.

It has become an accepted norm of Western life that having a TV to watch is an absolute requirement to our lives. Sure, we won’t die without the box to fill the hours, but we would probably feel more or less dead without it. Tele costs £3.50 a week for the law abiding citizen who pays up for a TV licence. So that leaves £31.50 a week for everything else. In reality, if all you have in your pocket after eating and box watching is £31.50, the only something else you can afford is power.

Here is the first area where George’s spreadsheet has missed a key reality. If you are working, it generally means leaving the house well before nine in the morning and not getting home until after five. Let’s say you are out and about from 8 to 6. That means 10 hours when the heating can be switched off. Let’s say you go to bed at 11 and sleep until 7. That means another 8 hours when the heating can be switched off. This means that you only have to pay to keep the place warm for 6 hours. This all changes when you are on the dole. Now maybe George expects all the unemployed to walk the streets knocking doors and begging for work for ten hours a day, but that isn’t all that realistic. There just are not enough doors to knock. In reality, unemployed people tend to stay home most of the time and once winter kicks in, that means they have to shell out to keep some kind of heating on. Is that really so extravagant?

So here’s the thing. Is it possible to keep a house warm for say 15 hours a day at £4.50 a day? I don’t think it is, especially when all you have is a Pay As You Go meter which excludes you from doing any deals for lower prices with the power companies.

And that is now.

How does George’s spreadsheet look when we jump into the Tardis and take a trip three years into the future? Well, we now know that benefits will rise by 1% per annum. So in 2015 basic dole will have ticked up to £62. Food? Well it seems pretty nailed on that food will go up by at least 10% a year as a billion and a half Chinamen have more supermarkets to shop in. This means the food bill will go from £25 a week now to £27.50 a week in 2013 to £30 a week in 2014 to £33 a week in 2015. Let’s say the TV licence stays put. This means that in three years time the cost of food and tele will be £36.50 a week. So that leaves £25.50 for everything else.

OK. Let’s just make the assumption that the £31.50 an unemployed individual has right now to pay for power is indeed enough to keep the lights and heaters on. How is that figure about to change? For the sake of easy maths, let’s go for a 10% a year increase. £35 a week in 2013, £38.50 in 2014, £42.50 in 2015. And how much was left after food and tele in 2015? £25.50.

You don’t have to have A levels maths to see that there is no chance in hell of anyone who is unemployed in 2015 being in a position to pay for food AND power. As for clothes, toiletries, cleaning products….. forget it.

By 2015 millions who are unemployed, signed off sick or on the State Pension will have a stark choice to make - do you want to eat or do you want to stay warm? There will be no chance of having both. As things stand now there is no chance in hell of finding anyone who will give you any cash for power. There are however places where free food is available. Already we are seeing this starting to play out. When people have to make the choice between food or power, they tend to choose power and look to the Voluntary Sector for their food. This choice will be made by millions more over the coming months and years. Right now the Voluntary Sector is just about managing to keep up. Will that continue to be the case? Well George’s spreadsheet seems to think that it will be.

Well, let’s all hope that George’s spreadsheet is right.