Energy Company Charges

Jim Shannon Excerpts

Tuesday 4th February 2014 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Member for Harlow (Robert Halfon) on his crusading efforts on many issues in this House. He has talked about fuel costs in the past, and now he has turned to energy bills and tariffs. I commend him for his energetic investigation across the whole of the United Kingdom of Great Britain and Northern Ireland to ascertain the charges and costs that are involved.

This is a very pertinent issue. I am sure that many hon. Members’ constituents are facing the same difficulties as mine. In July, Northern Ireland’s biggest energy company, Power NI, increased its household electricity bills by 17.8%, which meant that the average household supplied by the company paid an extra £90 per year. There was a lot of disquiet across the whole of Northern Ireland about that increase. While it might be an inconvenience to many people, and to many others it might mean the sacrifice of a luxury to cover the difference, for some of the elderly in my constituency it will mean that they have to make the choice between a bit of heat or something to eat. This debate could have been entitled, “Heat or Eat?” For some of the people I represent, and some of those we all represent in this House, it is as specific and dire as that.

[Bob Stewart]

Why does the hon. Gentleman think that the charges in Northern Ireland, a part of the United Kingdom, seem to go up proportionately more than in the rest of the United Kingdom?

[Jim Shannon]

I wish I had the answer to that question, but I do not. My hon. Friend the Member for East Antrim (Sammy Wilson) and the hon. Member for South Down (Ms Ritchie) both said how much more expensive the charges are in Northern Ireland than anywhere else in the United Kingdom. As my hon. Friend outlined, the Utility Regulator in Northern Ireland does not seem to have the teeth that are needed to ensure that companies reduce their prices. We need to address these issues. I thank the hon. Gentleman for his intervention, but unfortunately I do not have the answer that we would very much wish to have.

[Dr McCrea]

Does my hon. Friend agree that across the United Kingdom, until the present time, the energy companies have, in many ways, got away with the additional charges? I trust that the exposure brought about by this debate will assist in doing something about that.

[Jim Shannon]

I thank my hon. Friend for that helpful intervention, which clearly highlights the issue that we are all trying to bring to the Minister’s attention.

I want to speak particularly for the elderly people in my constituency and across the whole of the United Kingdom. At the Belfast pensioners parliament, Age Sector Platform gave a horrifying statistic: the number of winter excess deaths in Northern Ireland in 2012 was 486. Almost 500 people died because of their exposure to the winter weather. All of them were aged over 65, so we clearly need to address that age category. It is clear that older people are being hit hardest by the rising cost of energy and their reduced incomes. The energy providers must ensure that the elderly are on the cheapest tariffs possible. That is not happening. Even when they are told of the advantages, the language is so complicated they cannot understand it. We would do well to be able to understand it ourselves.

A good starting point would be to remove the charge for those who do not pay by direct debit. The simple fact is that many elderly people prefer to pay by cash or cheque, not by direct debit. Although it is simple for you, Madam Deputy Speaker, and sometimes even for me, to use online banking, it is clear that it is not as simple for elderly people, who should not be penalised to the tune of £114 a year just because they like to collect their pension from the post office. I underline the point made by the hon. Member for Harlow about the social contact that elderly people enjoy in the post office when they pay their bills by cash, rather than by direct debit. Many do not have regular visitors, so that social contact means much to them and its importance cannot be underlined enough.

I am a former business owner and I much preferred it when customers paid cash, for no other reason than that it meant I would get my money! Indeed, at times I would offer a small discount—or even a big one—as an incentive for that payment method. Now another option applies and the people who are hit hardest are those least able to afford it.

Northern Ireland—this point has not been made yet—does not have access to all of the alternative sources of energy. My hon. Friend the Member for South Antrim (Dr McCrea) and I have discussed the fact that parts of Northern Ireland and my constituency do not have access to gas. I wish they did. Many of my constituents on the Ards peninsula and in Ballygowan, Saintfield and Ballynahinch would love gas to be introduced to the area, and perhaps that will happen one day.

Our food bank in Newtownards is also involved in running the Christians Against Poverty scheme to help people who have debts to get on top of their issues and live on a budget. More and more people are deciding to get help to control their finances.

[Mr Gregory Campbell (East Londonderry) (DUP)]

Does my hon. Friend agree that Christians Against Poverty has had to involve itself with more and more people, particularly elderly and vulnerable people, in Northern Ireland and across the UK precisely because of the impersonal way in which many of the power companies deal with those who get into financial difficulties?

[Jim Shannon]

I thank my hon. Friend for that intervention. How true that is in my constituency and others across the whole of the United Kingdom.

Two months ago a new Christians Against Poverty scheme was set up in Ballynahinch in my constituency and there was great demand for it as a result of the impersonal attitude of some Departments and the complexity of financial matters. People have come together with Christians Against Poverty on the back of the food banks. I am one of the many Members who welcome food banks. I see them as a plus point for many parts of the community. They bring people together who energise themselves to help others who are less well-off, which is a trait we have not seen too much of in society in the past. It is good to see it.

Time is flying by, so I will move on quickly. Even a 5% reduction to a household budget will make a big difference, and that is why I welcome food banks and the good work of Christians Against Poverty. People are struggling, but the industry is not, and although I am firmly in favour of the free market, I am most certainly not in favour of profiteering, which is what seems to be happening.

I was horrified to read 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, npower, Scottish Power and SSE have enjoyed a £3.3 billion surge in profits, while households have been hit by a 29% rise in bills. My goodness, how obscene it is that on one side they are raking it in, and on the other side they are losing out. The word “perverse” was used earlier, and I could not describe it better.

For many people whose pay has been frozen and for many of those in small businesses whose hours have been cut to allow the owner to stay open, such a situation is a gross injustice. A profit must be made—let me make it quite clear that we are not against profit—but there comes a stage at which we must ask whether enough is enough. Profits from the groups that provide energy to 98% of homes rose from £2.15 billion in 2009 to £2.22 billion in 2010, £3.87 billion in 2011 and £3.74 billion in 2012, while the typical domestic dual fuel bill now stands at £1,420 a year compared with £1,100 in May 2010, according to the regulator, Ofgem. Surely it is time that the energy companies did the right thing by the most vulnerable—the elderly—and used some of their profit margins to provide affordable heating or, at the very least, not to penalise those people who use cash and cheques and do not feel comfortable paying by direct debit. The companies are clearly getting paid, and that, not the method of payment, is what is important.

As other hon. Members have done, I am putting forward a case on behalf of my constituents that enough is enough and that something must change soon. The question whether to heat or to eat is not one that anyone in the United Kingdom of Great Britain and Northern Ireland should have to ask or answer. Although we will do all in our power to help, the many businesses that are seen to be taking advantage must take their place, do their part and help our elderly people.