The poor are still paying more for basic utilities and financial services

Payment structures and price plans in utilities and financial services continue to inflict higher costs on the poorest in society. Regulators and the government need to do more.

The poor pay more. It is a well-worn phrase but we must not let that undermine the impact of what it means in real life for real people.
A new report, published today, calculates the premium paid by poor people on essential utilities and access to financial services is as much as 10p in the pound - a significant extra cost for those that are already struggling to make ends meet.

This has a hugely detrimental impact on people's living standards, risking hardship and poverty. Taking what the public determine as an acceptable minimum standard of living in the UK today as its basis, the research shows a single person working full-time earning the minimum wage already falls £52 a week short of having a sufficient income to reach an adequate standard of living. If they're living in a house with high energy needs and subject to a poverty premium, this shortfall increases to £77 per week.

The gap is even greater still for those out of work and in receipt of benefits. If they live in a house with high energy needs, their low-income and the poverty premium combines to leave them some £135 per week short of a socially acceptable standard of living.

These additional costs are driven by a number of factors. For example, in some instances general market failures result in uncompetitive or unfair practices that hit low income consumers particularly hard, as they are less likely to have access to good information and more likely to be risk averse. In particular, worse off consumers are often unable to access the best deals obtained by the most "active" consumers that suppliers are keen to attract. This generates a cross subsidy in favour of better-off groups that is hard to justify.

Specific market failures and lack of competition can also result in the failure to supply products to meet the needs of low income groups at competitive prices. Low-income households can find themselves disadvantaged by the payment methods they tend to favour, different patterns of usage or different credit needs. In some instances cost-reflective premiums - where there is an additional cost of supplying low-income families - result in them facing higher prices, but it is not always clear that the additional price is justified by the additional cost.

So while regulation aims generally to protect consumers by ensuring that markets work in a fair and transparent way, this report begs the question: do low-income consumers need additional protection? And if so, what should regulators and government do?

One response is to ensure fair trading and promote competition, with adequate information for the consumer: this is the central role of regulators. However, it cannot be assumed that this alone will provide sufficient protection to consumers in a weak market position.

At the very least, regulators should monitor the position of low income consumers, looking closely at the products they disproportionately use and whether they are fairly priced. Where problems are identified in the supply of essential services, regulators should have a remit to investigate the structure and level of pricing. In these instances regulators and the government should look together at the case for intervention to ensure basic products are available at affordable prices.

With the cost of living uppermost in many minds, and at a time when many incomes - whether from earnings or benefits - are either static or shrinking, regulators may find themselves with an increasingly important role to play in seeking out and removing poverty premiums. Tentative steps in this direction are already being taken in the financial services and energy markets. Where they are leading, others should follow.

Katie Schmuecker is a Policy and Research Manager for the Joseph Rowntree Foundation (JRF).

New research shows many already falling £52 short of an adequate standard of living. When in a house with high energy needs, this increases to £77. Photograph: Getty Images.
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What David Hockney has to tell us about football

Why the sudden glut of blond footballers? A conversation I had with the artist back in 1966 gave me a clue. . .

In 1966, I went to interview David Hockney at a rather run-down flat in Bayswater, central London. He was 28 and had just won a gold medal at the Royal College of Art.

In his lavatory, I noticed a cut-out photograph from a newspaper of Denis Law scoring a goal. I asked if he was a football fan. He said no, he just liked Denis Law’s thighs.

The sub-editors cut that remark out of the story, to save any gossip or legal problems. In 1966 homosexual activity could still be an offence.

Hockney and a friend had recently been in the United States and had been watching an advert on TV that said “Blondes have more fun”. At two o’clock in the morning, slightly drunk, they both went out, bought some hair dye and became blond. Hockney decided to remain blond from then on, though he has naturally dark hair.

Is it true that blonds have more fun? Lionel Messi presumably thinks so, otherwise why has he greeted this brand-new season with that weird blond hair? We look at his face, his figure, his posture and we know it’s him – then we blink, thinking what the heck, does he realise some joker has been pouring stuff on his head?

He has always been such a staid, old-fashioned-looking lad, never messing around with his hair till now. Neymar, beside him, has gone even blonder, but somehow we expect it of him. He had foony hair even before he left Brazil.

Over here, blonds are popping up all over the shop. Most teams now have a born-again blondie. It must take a fortune for Marouane Fellaini of Man United to brighten up his hair, as he has so much. But it’s already fading. Cheapskate.

Mesut Özil of Arsenal held back, not going the full head, just bits of it, which I suspect is a clue to his wavering, hesitant personality. His colleague Aaron Ramsey has almost the full blond monty. Paul Pogba of Man United has a sort of blond streak, more like a marker pen than a makeover. His colleague Phil Jones has appeared blond, but he seems to have disappeared from the team sheet. Samir Nasri of Man City went startlingly blond, but is on loan to Seville, so we’re not able to enjoy his locks. And Didier Ndong of Sunderland is a striking blond, thanks to gallons of bleach.

Remember the Romanians in the 1998 World Cup? They suddenly appeared blond, every one of them. God, that was brilliant. One of my all-time best World Cup moments, and I was at Wembley in 1966.

So, why do they do it? Well, Hockney was right, in a sense. Not to have more fun – meaning more sex – because top footballers are more than well supplied, but because their normal working lives are on the whole devoid of fun.

They can’t stuff their faces with fast food, drink themselves stupid, stay up all night, take a few silly pills – which is what many of our healthy 25-year-old lads consider a reasonably fun evening. Nor can they spend all their millions on fun hols, such as skiing in the winter, a safari in the spring, or hang-gliding at the weekend. Prem players have to be so boringly sensible these days, or their foreign managers will be screaming at them in their funny foreign accents.

While not on the pitch, or training, which takes up only a few hours a day, the boredom is appalling, endlessly on planes or coaches or in some hotel that could be anywhere.

The only bright spot in the long days is to look in the mirror and think: “Hmm, I wonder what highlights would look like? I’ve done the beard and the tattoos. Now let’s go for blond. Wow, gorgeous.”

They influence each other, being simple souls, so when one dyes his hair, depending on where he is in the macho pecking order, others follow. They put in the day by looking at themselves. Harmless fun. Bless ’em.

But I expect all the faux blonds to have gone by Christmas. Along with Mourinho. I said that to myself the moment he arrived in Manchester, smirking away. Pep will see him off. OK then, let’s say Easter at the latest . . . 

Hunter Davies is a journalist, broadcaster and profilic author perhaps best known for writing about the Beatles. He is an ardent Tottenham fan and writes a regular column on football for the New Statesman.

This article first appeared in the 22 September 2016 issue of the New Statesman, The New Times