Cost of Living
Debate between Jackie Doyle-Price and Mike Crockart
Mike Crockart
I agree entirely. I would add that unfair competitive practices are being used, especially where businesses are concerned. Small businesses are being locked into long-term deals and are missing windows to change to different suppliers. They are penalised by higher charges—sometimes 60% or 80% higher. Energy for small businesses is a serious concern that needs consideration in the Energy Bill.
Jackie Doyle-Price (Thurrock) (Con)
There is another side to the energy market, which is the supply side. Does my hon. Friend agree that after the rapid closure of our coal-fired power stations because of EU regulation, the new supply is not coming down the track fast enough, which will add to higher fuel costs?
Mike Crockart
I agree with the hon. Lady to a point. I believe that the Energy Bill will help to ensure that extra power generation of a cleaner and greener nature will come further down the track. I will say a little about that later, if I have time.
The Energy Bill will ensure that the changes for energy companies become legally enforceable from summer 2014. We are working with the companies and urging them to implement the changes voluntarily ahead of that date, but the signs of such voluntary change are patchy. When I met one of the big six energy companies recently, it spoke animatedly of its plans for the future, but the talk was not of simplification. Instead, it talked about personalising the tariff to my individual circumstances and tailoring the charges to mirror my lifestyle and work pattern. To put it another way, it made it so complex and confusing that the chances of me understanding it and switching my energy supplier were minuscule. That is not the way forward. We want to empower energy customers by untangling the maze of tariffs. The Bill will do just that and make energy suppliers more accountable and more focused on the needs of their consumers.
We are raising awareness of and supporting collective switching schemes. That is one way in which customers can save money on their energy bills. DECC allocated £5 million to 31 successful projects in the Cheaper Energy Together competition, which spans 94 local councils and eight third sector organisations in Great Britain. One of the successful bids came from South East Scotland Together, which is delivered through Changeworks. It received more than £400,000 to help people in my constituency to save money. Such measures to ensure that consumers get the best deals on their energy prices reflect our determination to tackle rising energy bills.
Energy education for consumers is also key. I have spoken in previous debates about the necessity of reducing energy use. Reduction is the one step that will not only help households to reduce their bills, but help us to achieve a greener future. To quote from the report by the Energy and Climate Change Committee,
“Demand-side measures…are potentially the cheapest methods of decarbonising our electricity system…reducing overall demand”.
Knowing how we use energy in our homes and workplaces is key to reduction. That is why the single largest infrastructure project on which the Government are embarking in this Parliament is to roll out smart meters by 2019.
As was acknowledged in a written ministerial statement on 19 December last year, smart meters are the best tool that we have in energy reduction. They have the potential to give customers accurate, real-time information about how much energy they are using and how much it costs. In my constituency, British Gas has installed 837 smart meters. With the average home saving 5% through the use of a smart meter, that is a potential saving of £54,405 in my constituency alone. More importantly, that is 5% of their energy use that we no longer have to generate. It is essential that smart meters have the capacity for real-time management, as well as the ability to record the energy that is fed back into the distribution network from co-generation sources, such as wind turbines and solar panels.
Unfortunately, the pressures on wholesale energy prices mean that household energy bills will probably go up in the medium to longer term. We must be clear that wholesale energy prices are a reason to increase our investment in renewables, which will increase our energy security and help to insulate this country from the unpredictable wholesale market, rather than a reason to run headlong towards the mirage of cheap shale gas. Our commitment to a diverse, low-carbon energy mix is radical and positive. Our reforms will ultimately ensure that people get the best value for money by shielding them from the volatility of global fossil fuel prices.
While we have been building a stronger, greener economy and a fairer society, our support for the people who need those things has not wavered. In government, the Liberal Democrats are helping millions of low-income and vulnerable households with the cost of living through the warm home discount, which is available to about 2 million households. That includes 1 million of the poorest pensioners, who are eligible to receive a rebate of up to £130 on their electricity bill during the winter. There is the winter fuel payment for more than 12.6 million pensioners in 9 million households, and additional cold weather payments, which during this year’s cold snap helped the most vulnerable people in my constituency to keep their homes warm. Last winter, 5.2 million individual payments were made in the UK, worth a total of £129.2 million. That level of support for our most vulnerable is available only because, in 2010, the coalition Government reversed Labour’s plans to reduce the payment to £8.50 and instead made it £25 permanently.
I do not have time to talk in detail about the green deal, our Government’s flagship—[Interruption.] I am astounded that Members seem to find something funny about the possibility of saving hundreds of pounds every year on their constituents’ bills.