UK Energy Market

Chris Stephens Excerpts

Wednesday 9th March 2016 Westminster Hall

[Chris Stephens (Glasgow South West) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Percy. I have a sore throat, so you will be pleased to hear that I will not be shouting.

I want to touch briefly on the effects of the energy market in Glasgow. As the hon. Member for Central Suffolk and North Ipswich (Dr Poulter) said, it is easy to fall into the trap of assuming that everyone is online and knows which price comparison site is which. For the savvy and connected, it can be relatively easy to shop around, but in Glasgow, where half our residents have a home internet connection, the continued focus on online opportunities excludes hundreds of thousands of citizens.

Poverty prevents many people from getting online, which in turn prevents them from shopping around and deepens the fuel poverty that they might seek to address. That block on the capacity of the financially and socially excluded reduces incentives for the big six to compete. Why compete for business from those customers when they are heavily handicapped in their choices, due to both the information available to them and the means by which they are able to choose?

There is no incentive for the energy companies to compete in the prepayment market; there is no market to speak of. Hundreds of thousands of customers who have moved into properties with prepayment meters are left with a choice of paying through the nose for their card meter or paying through the nose to get the meter replaced if they pass a credit check.

One constituent of mine was chased by one of the big six for an energy debt accrued on the prepayment meter in his flat. Given that he had moved in while the meter was in situ, there was no possible way for him to have run up a debt. Nevertheless, it was only when my office intervened that sense prevailed. How many other cases like that are out there, with debt recovery agencies chasing innocent victims for non-existent debts run up on a non-existent meter using non-existent energy?

Another constituent—a pensioner on a fixed income—attended my surgery to talk about his electricity costs. His last quarterly bill showed that three quarters of his spending was on standing charges. Although I understand that energy companies need to ensure that the maintenance of infrastructure is funded properly, it surely cannot be beyond their ken to ensure that vulnerable and poor customers such as my constituent do not find themselves afraid to turn the heating on for fear that their next bill will be unpayable.

Comparing costs per unit, per day and per month is just part of the problem. Qualification for the warm home discount scheme, for example, varies from company to company, with some enrolling only those mandated by the scheme and others extending entitlement to recipients of qualifying benefits. Navigating that minefield and finding the company that offers the best terms requires time, patience and, again, an internet connection. One hundred and forty pounds off the electricity bill may not seem a huge amount, but to someone on a means-tested benefit it is invaluable.

Competition in the energy market is not simply about who sells the cheapest kilowatt-hours or who gives the biggest discount on direct debit. A proper market serving the wider population requires that population to have equal access to information, so that they can make informed decisions. Sadly, the number of people still falling into fuel poverty means that far from the situation improving, it has in fact worsened over recent years.