The Petition of residents of Scunthorpe,
Declares that the Petitioners support gas and electricity bills being frozen.
The Petitioners therefore request that the House of Commons urges the Government to introduce legislation that will freeze gas and electricity bills.
And the Petitioners remain, etc.—[Presented by Nic Dakin, Official Report, 27 November 2013; Vol. 571, c. 375.]
[P001300]
The Petition of a resident of the UK,
Declares that under Prime Minister David Cameron gas and electricity bills have gone up by £300 for the average household and further that the Leader of the Opposition Ed Miliband will freeze gas and electricity bills until 2017.
The Petitioner therefore requests that the House of Commons supports Labour’s proposals to freeze energy bills.
And the Petitioner remains, etc.—[Presented by Tom Blenkinsop, Official Report, 27 November 2013; Vol. 571, c. 375.]
[P001301]
Observations from the Secretary of State for Energy and Climate Change:
The Government believe that the introduction of price controls, for example through a price freeze, would be likely to limit competition and could have a detrimental impact on the investment we need to deliver secure energy supplies. It could lead to suppliers increasing prices before the freeze comes in to protect themselves against unpredictable hikes in the price companies pay for energy on commodity markets during the period of the freeze.
We know rising energy prices are hitting many households hard at a difficult time. While the Government cannot control the price of energy in the global market, they can help bill payers by reducing the impact of social and environmental programmes on their bills. The Government have recently announced proposals that will allow energy companies to reduce the bills of British households by £50 on average, helping to reduce the impact of recent price rises. This builds on the help given to hard-working people through income tax cuts, the council tax freeze and the fuel duty freeze.
On 2 December the Government confirmed they will reduce the current cost of levies by:
Establishing a rebate saving the average customer £12 on their bill, for the next two years, worth a total of £600 million.
Reducing the cost of the Energy Company Obligation (ECO), an insulation scheme delivered by major energy suppliers. Companies have announced that this will result of savings of around £30-£35 off bills, on average, this year. The existing dedicated support in ECO for low income and vulnerable households will be maintained and extended from March 2015 until March 2017.
In addition, electricity distribution network companies are willing to take voluntary action to reduce network costs in 2014-15. This would allow a further one-off reduction of an average of around £5 on electricity bills, which energy suppliers will be able to pass on to their customers as well.
All of the major energy suppliers have announced how they will pass the benefits of this package to their customers. The value of the benefit will vary between companies, but, on average, this package, including VAT, will be worth around £50 to households, compared to what would have happened without these changes.
Consumer affordability is central to UK energy policy. The best way to achieve this is through an effective competitive market in energy that works in the interest of consumers.
We are reforming the retail energy market, making it simpler clearer and fairer; limiting the number of tariffs available, so that consumers are not faced with a bamboozling array of confusing tariffs. We are making sure that consumers are on the cheapest tariff with their supplier that is in line with their preferences with no one left behind on poor value out of date tariffs. Consumers will be provided with personalised information on the projected annual cost of their energy and will be told if their supplier has a tariff available which would be cheaper for them. These reforms of the retail market will put the power back into the hands of consumers, and help them to shop around for better deals. It will help the 84% that do not switch and could be missing out on savings of up to £158.
The Government have announced that Ofgem will undertake an annual review into the state of competition in the energy markets. This will also set out what reforms are underway to further enhance competition and any additional steps that should be taken. We recognise more needs to be done to understand the finances of the suppliers and ensure they are communicated transparently to build trust in the industry. So the Government have asked Ofgem to deliver a full report on the transparency of financial accounts of the largest energy companies and ways this could be improved.
In the meantime, we are seeing evidence that the Government’s measures to assist small suppliers enter the market and grow are working. In 2011 there were no independent suppliers with a customer base greater than 50,000 now we have three independents with over 100,000 customers and a further eight new companies have entered the market since May 2010.
We are also taking practical steps to help people with their bills this winter and beyond:
We are making sure the most vulnerable households get direct financial help from their supplier. The Warm Home Discount will help around 2 million households this year, including well over a million of the poorest pensioners who will receive £135 off their electricity bill.
We are helping people to use less energy by providing new ways to pay for and install energy saving home improvements through the Green Deal and Energy Company Obligation. The Government have recently announced new measures that will boost energy efficiency even further by introducing new schemes for home-movers, landlords and public sector buildings, worth £540 million over three years.
We have launched the Big Energy Saving Network of voluntary organisations and community groups which will help the most vulnerable get the best energy deal for them and access to available help.
Year round help is available from the Energy Saving Advice Service (ESAS), a phone service set up by the Government, on 0300 123 1234. ESAS provides advice on how to reduce bills and make homes more energy efficient. Details can also be found at www.direct.gov.uk/energyhelp.