Energy Bill

Lord Berkeley of Knighton Excerpts

Wednesday 6th November 2013 Lords Chamber

[Viscount Ridley]

My Lords, I support the amendment of the noble Lord, Lord Forsyth. There is no doubt that the policy of putting green subsidies on to consumer bills was designed to disguise and hide the costs and hope that we would not notice. We can disagree about whether the results are going to be pleasing or not, but we have noticed that the consumer has rumbled the ruse, so it is time, as the noble Lord, Lord Campbell-Savours, said, to be transparent and honest. It would help to resolve some of the disagreements we have heard again this afternoon about how much green levies are adding to bills.

There is an infographic on the Government website that says that £286 will be added in 2020. The Department of Energy and Climate Change says that the figure is £199. The Committee on Climate Change, as we have heard this afternoon, says it is only £100. A lot of these calculations leave out VAT, upgrades to the grid and system integration costs. They often make unreliable assumptions about wholesale gas prices and how they are going to change but above all these calculations leave out the indirect bill—the cost of green levies that is added to industrial and commercial users of electricity who then pass it on to individual consumers through the cost of goods and services. A pint of milk will be more expensive because of green levies paid by the dairy and the supermarket. If you look at the quantums involved, this roughly trebles the cost of green levies, two-thirds of which fall on commercial customers.

The way we have of doing things at the moment is underhand, regressive—as has been said—and unfair. Those who heat their homes with electricity are hit the hardest by these green levies. Contrary to what has been said today, 2.9 million people in this country heat their homes with electricity and those include many of the poorest people. Ideally we would remove these costs altogether and put them into taxation. Then the rich would pay more of them and the poor would pay less. If we cannot have that, then let us break it out honestly and transparently and see what there is. To those who say that it cannot be done and that it is too difficult, the noble Lord, Lord Marlesford, has shown me one of his own bills where it has been done very nicely. I think it is definitely possible and it should be done.

[Lord Berkeley of Knighton (CB)]

My Lords, I would like to follow up on that point and also agree with the noble Lord, Lord Forsyth. I feel I represent people in mid-Wales—another area which is profoundly threatened with pylons and wind farms. When I get my council tax bill, the police, the fire services and everything else is listed in just the way the noble Lord, Lord Forsyth, is suggesting. I do not really see any problem in bringing greater transparency which we would all like to see and which might help us to understand how these bills are put together.

[Lord Jenkin of Roding]

Some years ago I moved amendments to an energy Bill to the effect that the bills should actually show the breakdown of the costs on the supplier that is then charged on the bill. I was therefore quite pleased when I found that my electricity bills—I draw my supplies from British Gas—in fact do that. They do not show the details of what it paid up but have the total cost of government, environmental and social schemes. It is 11%. I can understand the desirability of providing people with an opportunity to break that down and find out how that figure is made up.

When we debated this in Committee, the right reverend Prelate the Bishop of Chester made this case very strongly. As it was in Committee there was quite an exchange between him and my noble friend on the Front Bench, at the end of which my noble friend said very firmly:

“My Lords, as I said earlier, I am taking the amendment away and shall reflect on what the right reverend Prelate the Bishop of Chester has raised. Like noble Lords, I am very keen that information is available, simple and understandable, but I am also keen to ensure that I can deliver what I am able to. Part of that is by taking this away and giving it further consideration”.—[Official Report, 9/7/13; col. GC 80.]

That she did, and subsequently sent a letter to those of us on the Committee. I will not read the whole passage, but it is headed “Information on consumer bills” and states:

“I undertook to reflect on”—

the right reverend Prelate the Bishop of Chester’s—

“suggestion that companies should be obliged to include information on consumers’ bills about Government environmental levies and programmes”—

thereafter pointing out that the bills are pretty crowded documents. My bill not only tells me what I have incurred during the quarter in question but what my estimated total consumption will be and how that compares with the estimated total consumption of the previous year. All those things are quite interesting, but one feels, how far does one go?

My noble friend continued:

“I agree that we must be transparent about the impact of Government environmental levies and programmes on consumer bills and that is why the Government has committed to publishing this information annually, through the Price and Bill impacts Report. In addition Ofgem produces fact sheets that provide a breakdown of costs which make up a typical energy bill”.

How many consumers are aware of those documents? Even if they were aware, how would they get hold of them? I understand the difficulty in seeking to break down that 11%. If someone is really interested in that, no doubt they can pursue it by looking it up on the internet, where I am sure that the figures are available. I hope that my noble friend can give us some reassurance about the information. As my noble friend Lord Ridley said, the public have rumbled that already; they now know that that is what is happening; hence the suggestion from the Prime Minister that some of it should be placed on taxation and not on the bills. That will no doubt be considered.

My noble friends Lord Forsyth and Lord Marlesford have a point here. I am not entirely sure that the letter from my noble friend Lady Verma has dealt with that. Can we not be told how people can best get hold of that information if they want to? Why is it not possible for every energy supplier to do what British Gas does on my bills and what Southern Electric does on a sample bill which it has given to me, which shows the cost of government, environmental and social schemes to be 11%. That does not seem an unreasonable thing to ask for, and I shall listen to what my noble friend says with considerable interest.