Telecoms and automotive industries seek solutions amidst cost of living crisis

The UK’s biggest broadband and mobile companies have agreed to improve low-cost offers to help customers stay connected as the cost of living soars.

The bosses of BT Group, Openreach, Virgin Media O2, Vodafone, Three, TalkTalk and Sky made a number of commitments to support vulnerable customers during a Government-led summit at Downing Street yesterday (Monday 27 June).

The measures include allowing people struggling with their bills to switch to cheaper packages or agreeing manageable payment plans, exploring tariffs, improving existing deals and better promoting these more affordable options.

Telecoms providers, with the help of government, will also raise awareness of low-cost products to people on Universal Credit.

While social tariffs, or discounted deals, are already available to customers who receive certain government benefits, anyone struggling to pay their mobile or broadband bill can now “expect support from their provider if they ask for it,” according to the Department for Digital, Culture, Media & Sport.

Digital Secretary Nadine Dorries said: “Families across the country face increased anxiety about keeping up with bills, so today I agreed with broadband and mobile industry bosses what more can be done to support people during this difficult time.

“I’m pleased to report the industry is listening and has signed up to new commitments offering customers struggling with the cost of living help to stay connected. Those who need support should contact their supplier to see what is available.”

Dame Clare Moriarty, chief executive of Citizens Advice, said the pledges “must progress to tougher, permanent protections.”

She added: “We still see too many examples of sharp practice like overcharging loyal customers, inflation-busting mid-contract price rises and a shockingly low take-up of social tariffs. So this is by no means job done.”

Meanwhile, the soaring cost of energy - affecting millions of consumers - is also hitting industry hard. According to the Society of Motor Manufacturers and Traders (SMMT), UK vehicle-makers are facing a 50 per cent increase in energy costs this year.

Analysis by the SMMT states that the sector’s annual energy bill – already £50m more than its European Union rivals – will rise by an additional £90m in 2022.

UK electricity prices are the most expensive of any European automotive manufacturing country and 59 per cent above the EU average, according to the SMMT. The industry body says this means UK firms could have saved nearly £50m annually if they were buying energy in the EU even before this year’s spike in prices.

The additional cost of producing vehicles and components in the UK is putting manufacturers at a competitive disadvantage, the SMMT warned.

Speaking at the organisation’s annual summit in central London, Mike Hawes, the SMMT's chief executive, said challenges such as the coronavirus pandemic, parts shortages and trade uncertainty are “immense,” but addressing the UK’s high energy costs is “the industry’s number one ask” as they are hitting manufacturers “extraordinarily hard.”

The Government must do “all it can to create stability and help keep us globally competitive”, Hawes said.

He welcomed the news that electric vehicle battery manufacturers are benefitting from support as energy-intensive businesses, but cautioned that manufacturers are not benefitting from a cap on energy prices and that “we need energy costs to be competitive for all the automotive industry.”

Hawes warned that inflation, energy shortages, rising fuel prices and the cost-of-living crisis give the impression the UK faces “the return of the 1970s.” He acknowledged the automotive industry is being “hit hard just like it was hit then”, but he insisted there is a “big difference.”

He said: “Go back to the ’70s, typified by poor management, poor labour relations, hence poor quality. That’s not the situation now. We have a global reputation for engineering excellence, innovation, admired and desirable brands from across the country.

“We have a strong foundation. We’re still a powerhouse of international trade, with great wealth, contributing billions to the economy and supporting thousands of livelihoods in every corner of the country.”

However, he also noted that circumstances in recent years “have not been easy,” with Brexit a “trauma” that is “not yet done.”

In a pre-recorded video message for the industry summit, Chancellor Rishi Sunak told the audience of automotive leaders that the sector is “incredibly important to the UK economy” and “that’s why the Government is doing more to support you.”

Sunak said this support includes a commitment for £2.5bn of investment since 2020 to support the transition to zero-emission vehicles.