Energy companies sounded the alarm last week. They see that a growing number of households are experiencing difficulties due to the ever rising energy prices and other inflation. Who are the people who are sinking through the bottom?
While the terraces are full of spritz-sipping sunbathers and Schiphol has again taken measures to limit the crowds for this autumn, part of the Netherlands is in crisis. At least that’s what the energy companies say. They see that a growing number of households are no longer able to pay their energy bills. Automatic debits bounce off and more and more energy customers end up in a collection process.
This was to be expected after months of double-digit inflation and doubling gas prices, says former professor of poverty interventions Roeland van Geuns. Even before the energy crisis, one in three households already had difficulty making ends meet. They had too little or no financial buffer at all. That is to say: too little to be able to replace a broken refrigerator and washing machine in one go. “When inflation hits and wages and benefits are adjusted retrospectively at best, one and one is two.”
Nibud previously calculated that a third of households struggle with getting around the budget. Minima in particular would be short of pieces to put the puzzle together. Van Geuns also sees that the increased prices hit the low incomes the hardest, because a larger part of their income is spent on energy and groceries. ‘But it doesn’t hit all low incomes equally hard. Those on social assistance with a fixed energy contract may have it better than a middle income with a variable contract.’
Payment arrears
Although payment arrears are always somewhat higher in August (because of the summer holidays) and December (Christmas gifts), the lecturer finds the signals from the energy companies cause for concern. The energy bill is usually not the first that is not paid. ‘That’s the one for health insurance. Because people know that they can always go to the doctor, even if they have not paid the insurance. They know about the energy bill: if I don’t pay it, I will be closed in due course.’
The fact that the energy bill remains unchanged can therefore mean that some households are already in much deeper trouble than previously thought. And that while the biggest blow has yet to come: according to Gaslicht.com, anyone who now has to conclude a new energy contract will lose almost 6,500 euros on gas and light. That is 4,000 euros more than a year ago, Nu.nl calculated.
In addition, according to professor of debt and collection Nadja Jungmann of the Hogeschool Utrecht, many households already build up a debt without being aware of it. At Vattenfall alone, 40 percent of customers pay a monthly amount that is too low. For 200 thousand customers, this is even 200 euros too little in relation to consumption; they can expect a substantial additional tax. Eneco and Essent recognize that image. “Those are staggering numbers,” Jungmann said. ‘Under the radar, this is how big problems arise.’
The solution to this will not be readily available, she fears. ‘If you had debts up to now, for example because you had been clumsy with money, were divorced or had become ill, you went to the municipality to apply for debt relief,’ says Jungmann. ‘Now the debt counseling service says: we cannot help you with this. Because no energy company will cancel your debt if it is already known that you cannot pay the next bill either.’
Customization of the cabinet
The experts are therefore in full agreement: to prevent serious problems, the cabinet must intervene. And that should be a lot more efficient than it did before with the energy surcharge for low incomes and the VAT reduction on energy and fuel. ‘The energy surcharge also ended up with people with fixed energy contracts in well-insulated houses,’ says Jungmann. ‘And regarding the VAT: we have solar panels on the roof. Over a whole year we paid a minimal amount for energy, I didn’t need that VAT reduction.’
How should it be? Van Geuns once again mentions the magic word: customization. ‘At the very least you want to make a link between the amount of the energy bill and the income and compensate on that basis,’ he says. This would mean that energy companies would have to exchange information with the government, which would naturally lead to privacy concerns. ‘An idea would be to see if you can solve those AVG problems through an emergency law.’
Perhaps more obvious is an increase in the minimum wage, coupled with benefits. Earlier, the government promised to do this step by step by 7 percent over four years. But Van Geuns finds that insufficient. ‘7 percent equals 70 cents. That minimum wage should be at least 12 euros per hour and I don’t think we should wait too long with that.’ Van Geuns will have to be patient for a while: the cabinet is in recess and will most likely not come up with a decision before Prinsjesdag.
Angelique van den Heuvel works 32 hours in childcare
‘I earn around 2,000 euros per month. Until recently, I was able to get by just fine. I could do my shopping at Albert Heijn without thinking, once a year on vacation. But my energy contract expired in December. Eneco recommended a variable contract, because gas prices would fall again in the spring. Everyone knows what happened then: instead of 175 euros per month, I now pay 300 euros.
‘I live with two children in a social rented house on the corner with energy label G. In winter it is freezing cold here, with luck 13 degrees. When you talk, the clouds come out of your mouth. Fortunately, I had bought three electric blankets in time, so that we can sit on the couch in the evening. Once my son had to read something for school before going to sleep. When I went to see him, he was lying in bed with his gloves on. That hurt me the most.
‘I grant everyone on welfare that compensation of 800 euros, but why does the cabinet not compensate on the basis of energy label? And what really amazes me is the laxity of housing construction. I had been living here for less than a week and then a contractor was already standing at the door who would make things more sustainable. Four years later, it still hasn’t happened, and then we got a 40 euro rent increase from 1 July.
‘In the meantime, I try to save money in all sorts of ways. The Hoogvliet closes at 9 am, so I go shopping at a quarter to 9 because everything is discounted then. Instead of chips from Lays, I buy the 48 cent peanut flips. That’s not a big deal. But when you hear that energy prices may double again from December, I’m afraid I’ll go under.’
René van der Mark (52) has a WIA benefit (IVA)
‘I had to laugh terribly at that call to set the thermostat to 19 degrees. My heater is only on when my parents come over. With a contract of 80 euros per month, my energy costs are low. When my contract expires next year, it will be a squeeze. That energy surcharge of 800 euros is a drop in the ocean.
‘I mainly feel the energy costs passed on now. Last year my groceries cost a tenner a day, now 25 euros. For my endive stew tonight I need potatoes, milk and a piece of meat, right? For years I have only eaten in the evening, my daughter who lives at home does have lunch.
‘I can’t save on my car. As a chronically ill person I need it to drive to the hospital. I have already stopped taking some pills. My cat could go to the shelter, but it belongs to our family. Paying my bills eats me up all day. If it doesn’t work, I won’t pay. I can’t break iron with my hands, can I?’
Francisca Drijver (63) has been on welfare for over thirty years
‘Because of an untreatable hernia, I am in the ‘hopeless cases’ bin of social assistance. In all those years I have become a champion of tying strings. But when the energy crisis broke out and I heard the amount at the cash register, I was shocked in the Rotterdam style. I notice it especially in cheese and meat. I am not a vegetarian, but you will naturally eat less of it.
‘I have a variable energy contract and now pay 168 euros a month. I’m not afraid of what’s to come. There are always more things to deny yourself and priorities to lower. The basic necessities of life are different for everyone. I eat twice a day instead of three and it doesn’t kill me. I have been shopping at Lidl for years and I only go to the hairdresser when I can no longer see anything. It’s a sad situation, of course, but I’m talking about it. It’s not complaining, but carrying.’