Into the mix of the spiralling energy cost crisis came two opinions that were fascinating for different reasons. The first was from the radical accountant Richard Murphy, a professor of accounting practice at Sheffield University Management School, who did a breakdown of energy costs, trying to get to the bottom of why prices were rising so precipitously. I assumed that his thoughts would contain a lot of graphs, which I would fast cease to comprehend the minute they stopped being pie charts, but in fact it was devastatingly simple. Only 36% of “a typical bill” comprises the actual cost of energy, the rest being tax, delivery, billing, customer services, environmental schemes and profit. So even if the price of gas doubles, triples, goes wild, only just over a third of your bill should double, triple or go wild, the other costs being static, give or take inflation. Murphy posed a second question, why should people who get their energy from renewables suffer the same hikes? He ran some speculative numbers on how much of your new bill would go towards energy company profits. He could find no explanation for the coming price rises, beyond exploitation.
The other opinion was from Martin Lewis, the founder of Money Saving Expert, a far less political figure than Murphy. It takes a certain sort of sober person to bring his amount of seriousness and purpose to making sure you’re on exactly the right mobile phone tariff. Speaking to the Today programme last week, he was absolutely fiery. He would not stand by and listen to a Conservative minister blaming the war in Ukraine for the cost of living crisis. He would not accept that anyone could weather the coming squeeze with a bit of planning and tweaking. His predictions were absolutely stark – without serious intervention by the chancellor, poverty was set to become so severe that civil unrest would follow.
When financial experts are this interesting, it is time to really worry. But, also, thank God for interesting accountants dragging corporate flam-flam and political diversion tactics back to reality.
Zoe Williams is a Guardian columnist
