Energy Company Charges

Debate between Ian Swales and Sammy Wilson

Tuesday 4th February 2014 Commons Chamber

[Sammy Wilson (East Antrim) (DUP)]

I congratulate the hon. Member for Harlow (Robert Halfon) on securing this debate through the Backbench Business Committee and on the work that he has done on this issue. When we consider the impact of rising energy bills on people across the United Kingdom, every aspect of those increases should be closely examined.

Northern Ireland has one of the highest levels of energy bills, and we have certainly had the highest increases in recent years. That is the result of a range of issues, including the green energy policies of central Government that add £100 a year to energy bills. On top of that, perverse incentives lead to direct debit increases for consumers.

That all hits Northern Ireland in a number of ways. First, we have the lowest percentage of people in the United Kingdom paying by direct debit—38% as opposed to 55% across the rest of the UK. There are many reasons for that, including a more conservative approach to such things. Fewer people have access to bank accounts and the remoteness of many rural areas means many people cannot pay online. In my constituency, a huge programme is trying to connect people to broadband because of the low level of coverage for thousands of households. Those in remote areas, especially those in the Antrim plateau, do not even have broadband as an option. As a result, 42% of people in Northern Ireland live in fuel poverty. That is exacerbated by perverse incentives that affect how energy bills are structured.

[Ian Swales]

The hon. Gentleman is talking about perverse incentives. Does he agree that people who have access to the internet and pay by direct debit are those who are most likely to switch, which means that the energy companies have a perverse incentive to give them the lowest tariffs to try to keep them?

[Sammy Wilson]

They do. The hon. Gentleman makes a very important point, and in most cases those people have the greatest ability to pay for electricity. In Northern Ireland, for example, those who cannot pay by direct debit or online will pay £55 more a year for their energy bill. That is about half the increase they pay as a result of the green subsidies consumers must pay to the energy companies.