Gas and Electricity Costs

Jim Shannon Excerpts

Tuesday 18th January 2022 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to serve under your chairmanship, Sir Edward. You caught me off guard there; the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil) just asked if I was next and I said, “No, I will be at the end.” However, I am pleased to participate at any stage.

I commend the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) on setting the scene so well. It was a superb introduction, which I think we all endorse and support, because we understand the issues. I am pleased to be here to discuss this important matter. To say I have been contacted by a few constituents about gas and electricity prices would be an understatement. The emails to my office on this are legion, so it is great to be here to air the concerns that are important to the livelihoods of so many. I commend the hon. Member for Newton Abbot (Anne Marie Morris). We all know her position and what happened to her in the last week. In the debate in the Chamber on VAT, the hon. Lady felt constrained and supported a cut. We should put that on the record.

Soaring global gas prices are fuelling a domestic living crisis in the UK and could potentially have economy-wide implications. Energy bills are set to rise by up to £2,000 per year from April, which will be detrimental to those who are already in fuel poverty—people who need help and on whom I will focus. Recent statistic from National Energy Action reveal that an estimated 1.2 million to 1.5 million households across the UK will struggle to pay their electricity or gas bills. Those figures equate to almost the whole population of Northern Ireland, but are spread across the United Kingdom, which is just astonishing. The most vulnerable and those in poverty will be hit.

Back home in Northern Ireland in the past year, gas providers and all six electricity providers have increased their prices. In September, Firmus Energy announced that 50,000 people in its Greater Belfast network would see their gas price rise by a third. SSE Airtricity, which others have referred to, has increased its gas prices by 21.8%, which adds about £112 to the average household bill. Power NI announced that it will increase its electricity price for domestic customers by 21.4% from the start of this month. As we have seen in the press, prices for commercial businesses will also rise by as much as 30% to 40%. Some of the figures quoted by the hon. Member for Na h-Eileanan an Iar tell us just how important this matter is. The figures are truly astronomical and will have a significant impact on those who already struggle to make ends meet.

An emergency fuel payment has been introduced in Northern Ireland by the Minister for Communities, Deirdre Hargey, which I welcome. It is a £200 payment made through the Bryson Charitable Group for those who are vulnerable or in special circumstances and need help. We have taken some steps in Northern Ireland to make that happen. However, the Communities Minister and her respective counterpart in this House must take more of a lead, instead of leaving this responsibility solely to charities, which are doing their very best but need help from our Government to deal with the sheer volume of applications.

We must stand up for those who are directly affected. I stated in the debate on VAT on household bills that I support the green energy push as the only sustainable way forward, but at a time when there is a fuel crisis and pressure on those in financial distress, the £750 that has been referred to should be put on hold for a short term to help our constituents find a way forward. Viable ways to bring down prices must be considered. A plan needs to be put in place to assist those who need help. E3G suggests an extension and increase in winter fuel payments to support those on pension credit and low incomes.

The Minister knows I respect him, and he is always very capable and able to answer questions, but we need an indication of what we can do to help. No doubt all Members are hearing concerns about this issue. It is not about politics; it is about helping those who need it most. I look to the Minister and the Government for reassurance that more financial help will be considered.

It is the most vulnerable who will be most susceptible to gas, electricity and oil prices rising more than in other countries. Therefore, more needs to be done—this is an easy point to make, but it is a fact—to help those who need it most amid the rising electricity, gas and oil prices that we face now, and more so in the future. The hon. Member for Caithness, Sutherland and Easter Ross referred to new technology. Perhaps the Minister will say something about that. It is not his direct responsibility, but perhaps he could say how we might use new technology to reduce prices.

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) on securing today’s timely and critical debate.

We should soon, hopefully, begin to see some economic recovery at the end of a very long couple of years. Unfortunately, there are too many people across the UK who cannot wait indefinitely for things to improve. The cost of living crisis is here, and it is not avoidable. When the price cap was reviewed and bills subsequently rose, I was contacted by many constituents who were worried about the impact it would have on their living costs. It came just at the time when the universal credit uplift was removed and furlough ended.

At the same time, the Government were struggling to keep on top of state pension claims, and vulnerable pensioners were waiting months for their first payment. There was nothing to address that in the Chancellor’s autumn Budget, and the national insurance hike was also missing from the announcement. It was not missing from the minds of taxpayers, though, particularly those on lower incomes, where every penny counts.

Next month we will hear from Ofgem, and its announcement that the price cap will rise once more come April will be no surprise. Recent projections estimate that household bills could rise by over £700 a year. In my constituency, that is almost the equivalent of the average monthly rent. It is almost an extra £59 added to bills each month. Some people might be privileged enough not to miss £59 a month, but they are few and far between. The average weekly family food shop is around £63. The average cost of sending one child to five after-school club sessions is £62. Are those the kinds of sacrifices the Government expect our constituents to make to keep the heating on?

A coalition of 25 charities, including Age UK and Save the Children, have warned that the rise could push the number of families living in fuel poverty from 4 million to a massive 6 million. That is 6 million households, not individuals, although if it were 6 million individuals it would not be acceptable either. Industry has warned that it might take from 18 months to three years for the energy crisis to resolve.

[Jim Shannon]

Has the hon. Lady experienced in her constituency an increase in the number of people who are referred to food banks, as the hon. Member for Newton Abbot described? I know I have in my constituency, where the figure is up by almost two thirds on this time last year. That indicates that there are real pressures on those who did not apply in the past, but are applying now.

[Margaret Ferrier]

The hon. Gentleman is absolutely right. I think we all find the rise in the use of food banks in our constituencies shocking. As the hon. Member for Newton Abbot (Anne Marie Morris) said earlier, people who would not normally have to attend a food bank who are having to do so now, so there definitely is a squeeze on people’s incomes.

These households cannot and should not have to wait up to three years for the energy crisis to resolve, so what is the solution? What can the Government realistically do? The answer does not lie in defunding the BBC, or in small changes to the universal credit taper rate. The only way to ease the burden on families up and down the UK is to tackle the energy price crisis in a pragmatic, meaningful way. Many options have been put forward to the Government, and I urge them in the strongest terms to please consider those options as a matter of urgency.

A reduction to the VAT rate on energy would provide some much needed breathing space for those who need it most. The Government are keen to keep repeating that, as an importer, we are held to the whims of the current market’s rapid and substantial levels of demand. To a great extent, that is true, but a VAT reduction is within the Treasury’s gift and should be given. A windfall tax on North sea oil and gas companies would also mean that it is not the most vulnerable paying the price for this unusually and regrettably high cost. After all, those companies are expected to report almost record-breaking profit levels for this financial year. They have unarguably benefitted considerably, whereas our constituents have suffered and will continue to do so. Suspending or reducing green levies on energy bills could help too, as could expanding the warm home discount, which many hon. Members have mentioned, or increasing universal credit.

Whatever route the Government decide to take, they must do something; it would be heartbreaking to hear the same stories from my constituents for another 18 months or three years when there are solutions, should the Government choose to implement them—I hope that they do.