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22 January 2008 - as reported in the Cambridge Evening News

Household bills to soarUtility bills to soar

Families in Cambridgeshire are facing a bills body blow - with huge rises in the price of electricity and gas, and a Council Tax rise more than double the rate of inflation.

Based on proposed increases in Council Tax and utility bills, average households could see their bills rise by between 7.4 per cent and 10.1 per cent - that is an increase of between £160 and £220 a year.

And water companies warned today (Tuesday, 22 January) that their charges would have to rise too.

The quadruple whammy for people's wallets will see:

The spate of power bill increases was sparked when Npower announced it was raising its electricity prices by 12.7 per cent, and gas by 17.2 percent.

EDF Energy then said its electricity tariffs would shoot up by 7.9 per cent, and gas charges by 12.9 per cent.

On Friday, British Gas revealed 15 per cent increases for electricity and gas.

In just over a week's time, Cambridgeshire County Council's cabinet will meet to finalise its Council Tax level for the coming year. The council was bitterly disappointed at the level of Government grant it will receive for 2008-9 - an increase of just 2 per cent - and says that to maintain services, bills will have to go up by 5 per cent.

Council leader Coun. Keith Walters told the News: "We would like to keep Council Tax increases to a minimum, but the Government's derisory settlement leaves us with little choice. It is particularly harsh when neighbouring counties such as Suffolk and Norfolk got so much more."

Suffolk received a 7.3 per cent rise and Norfolk received 9.3 per cent.

Cambridge Water customers will see bills climbing this year, and in the years ahead - to pay for replacement of the region's old pipelines and other infrastructure improvements.

The company is putting up prices by 4 per cent this year for water supply, and charges for sewerage services, payable to Anglian Water, will also go up.

Anglian Water customers are likely to see an increase of 6.98 per cent for water and sewerage services, although the rise has yet to be ratified.

Stephen Kay, chief executive at Cambridge Water company, said: "We are presenting a detailed strategy document to OFWAT today (Tuesday, 22 January) outlining the challenges we face in the next three decades.

As well as the need to supply the 50,000 new homes being built in the Cambridge area with water, we also need to replace water mains under Cambridge's streets, such as Mill Road and East Road, which are now very old.

Despite all this, we are still the second- lowest charger in the country. In the years ahead, I'm sure we will be able to ensure that rises are kept to a minimum."

The grim year looming on the financial front for Cambridgeshire families comes in the wake of a very tough 2007.

Last year, the average family in Cambridge - with a £270,000 variable-rate mortgage and one car - saw household bills soar by £2,380, according to figures worked out by a national newspaper.

On average, mortgage repayments rose by £1,356, food bills rose by £604, and car costs went up by £114.

Robert Johnson, of Cambridge Citizens Advice Bureau, said the ongoing increases would put people under a lot of pressure.

He told the News: "The latest rounds of fuel - gas, electric and petrol price increases too - are significantly higher than pay rises and, more worryingly, benefit increases. With the expected increases due in water bills and Council Tax bills, it will be more than many household budgets can stand.

Money advisers at Cambridge CAB are bracing themselves for a huge increase in clients seeking help with serious debt problems. Although skilled at helping clients to budget to make ends meet, we are now seeing people where those two ends will never meet. Technically they are insolvent.

Pay increases are around 2 per cent to 3 per cent, so the household bills increase is tantamount to an income decrease.

Many people now have very little or no disposable income after paying their essential bills. This means credit cards, loans and so on will be unpaid.

As soon as you know you cannot make a payment you have a debt problem.

Our advice is to get help as early as possible and always seek free advice."

Meanwhile, Liberal Democrats are urging the Government to protect those on low incomes from fuel poverty.

They made the call after figures showed that rises in electricity and gas bills would wipe out the pensioners' winter fuel payments.

Jonathan Chatfield, Lib Dem parliamentary spokesman for South East Cambs, said: "The Government needs to ensure people don't have to make a choice between heating and eating."