Energy Prices and Profits

Jim Shannon Excerpts

Wednesday 4th September 2013 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

I congratulate the Opposition on bringing this matter before the House for consideration. In the minutes available, I want to focus on the latter part of the motion, specifically the reference to putting

“all over-75 year olds on the cheapest tariff.”

I suggest that we should go further and have a lower tariff for the over-75s. Everyday in my constituency office I see clearly the importance of addressing those issues, as other Members have indicated. I also see that the elderly people who come to my office have a clear decision to make between a bit of heat or something to eat. It is as simple as that.

I want to offer a Northern Ireland perspective. Northern Ireland’s biggest energy company, Power NI, increased its household electricity bills in July by 17.8%, which means that every household will have to pay, on average, an extra £90 a year. That might be an inconvenience for some, but the reality for some of our elderly people is that it will mean sacrificing a luxury or a basic item to cover the difference. It will mean a bit of heat or something to eat. That will be the clear decision for them.

I was horrified to learn from a press release on Age Sector Platform’s recent Belfast Pensioners Parliament that in 2012 the number of excess winter deaths in Northern Ireland was 496. All those people were over 65 years of age. The last time all excess winter deaths were older people was 14 years ago. It was high then, but in 2012 it was higher still. It is clear that older people are being hit hardest by the rising cost of energy and the reduction in their incomes. As other hon. Members have suggested, energy providers must ensure that our elderly are on the cheapest tariffs possible. Let us do something for those elderly people. By the way, I say for the benefit of all parties here that the elderly are consistently the people who vote. If they want to do something for their voters, I suggest they do something for the elderly.

Age UK estimates that 1.5 million people aged over 65 and living in rural areas in England are reliant on oil. In other parts of the UK reliance on oil is even higher: it accounts for 11% of households in Wales and 70% in Northern Ireland. The price of oil is prohibitive. Few elderly people can afford to fill their tanks, even with the winter fuel allowance, and therefore cannot heat their homes. It is little wonder, as the shadow Secretary of State said, that 24,000 people in the UK have died as a result of cold-related illnesses over the past year.

We should contrast that with the profits shown over the latest period. I am not against a company making a profit—not for one second—but let us do something for the people who are hardest hit and need the money more. I saw in the Metro newspaper that the profits of the big six energy companies have shot up by 74% since 2009, dwarfing the 13% rise in inflation. British Gas, E.ON, EDF Energy, npower, Scottish Power and SSE have enjoyed a £3.3 billion surge in profits as households have been hit by a 29% rise in bills. Profits from these groups, which provide energy to 98% of homes, rose from £2.15 billion in 2009 to £2.2 billion in 2010, £3.87 billion in 2011 and £3.74 billion in 2012. Against that, the typical domestic dual fuel bill has risen to £1,420 a year compared with £1,100 in May 2010, according to the regulator Ofgem. Surely it is past time that we did the right thing by the most vulnerable—the elderly—and used some of the companies’ profit margins to provide affordable heating. The time has come for the Government to act.