It is called “greedflation”. Companies are using the assumption that prices are going up to shove through price increases that cannot otherwise be justified.
The prices for tomatoes grown in the UK are up by 20%, because of higher energy costs and the need to find growers to pick them. Fair enough. But they go up by 30% in the supermarket because the suppliers know you are expecting the price to increase and they push it up a bit more for that extra profit margin.
Greedflation. Having spent 40 years observing corporates at close range, I never expect companies to behave any better than they have to. They will behave as badly as they can – it is how the unfettered free market operates. Having just got back from the US, and the low wage, low tax, low regulation economy there that many would like to see here, I have seen that up close. It is not pleasant.
Greed in the UK
But even I was surprised to see my insurance premiums, on our second car – yes, OK, first world problems – jump by 53%. That’s a little over £200 to a bit above £300 a year. The car, a 12-year-old city runabout, sits behind my house. Nothing has changed over the past year, except that Diamond, part of the publicly-quoted Admiral Group, wants another 50% plus to insure it.
Greedflation. The increased payment kicks in automatically unless you challenge it, which many will not. I did, and they reduced the premium over the phone to £266.78. That would be a near-30% increase.
So, we’ll rip you off by 50% plus? You don’t like it? So how does 30% sound? Any better?
The operative I spoke to had no real justification for any of this. There was some wittering about higher crime rates in my area. Except that we have been with Diamond for six years, during which we moved from southwest London to a sedate, largely crime-free market town in Suffolk. The sort of place where if someone steals a hubcap, it will probably make the front page of the local paper. Surely our rates should have gone down, not up by 50%?
The customer is no longer king
Using my contacts, I spoke to Admiral’s public relations people in preparation for this piece. They promised the consumer relations people would ring me with an explanation. It is now more than a day later, and they have not.
Oh, no, sorry. I do have an email registering my “complaint” and saying they will respond “within four weeks”. Except that my insurance runs out at the start of July. I have two choices. Take their hugely inflated premiums before I have to drive around uninsured, a criminal offence, or find another insurer.
I did the latter, oddly enough. About a third of what Diamond wanted to insure a car that goes about three miles, on average, a week. To the local supermarket.
These corporates treat you with contempt. You are just a profit centre. A cow to be milked. No need to reply if you complain. Why bother? Who cares? Just another milk cow. They despise you, even as they rip you off.