Energy Company Charges

Debate between Sammy Wilson and Bob Stewart

Tuesday 4th February 2014 Commons Chamber

[Sammy Wilson]

They do. The hon. Gentleman makes a very important point, and in most cases those people have the greatest ability to pay for electricity. In Northern Ireland, for example, those who cannot pay by direct debit or online will pay £55 more a year for their energy bill. That is about half the increase they pay as a result of the green subsidies consumers must pay to the energy companies.

[Bob Stewart]

It seems to me that, from the point of view of an energy company, if people can be put on to direct debit payments, all too often those who can afford it will not challenge their bill—they will just say that it is done and dusted. That is a big advantage for the energy companies.

[Sammy Wilson]

It is a huge incentive. The figure has already been quoted. People do not query their direct debits and as a result huge surpluses worth £2 billion across the United Kingdom have built up, meaning that people are in effect lending the energy companies money for nothing and those companies reap the interest. Meanwhile, those who cannot afford to or choose for whatever reason not to pay by direct debit must pay extra.

The companies’ defence is that they have additional costs in dealing with people who do not pay by direct debit. I approached Power NI about that and it identified two additional costs. First, if people pay by cheque, the company pays additional transaction costs. Secondly, if people pay by cheque, even if they pay on time—I did not understand this—the company says that that affects its cash flow. But as long as people pay promptly, whether by direct debit at the end of the month or by cheque at the end of the month, the company’s cash flow is not affected. I do not know what transaction costs the power companies are paying if they have to charge 6% to 8% more when a member of the public pays by cash or cheque. They are certainly not the kinds of transaction costs one would expect in those circumstances.

What action can be taken? First—a number of Members have mentioned this—the power companies must be more transparent. They cannot simply throw the matter aside and glibly say, “We charge people who do not pay by direct debit extra because we have increased costs.” Those costs must be quantified. As I have said, I do not accept that the costs are 6% to 8% higher just because someone chooses to pay at a post office or by sending the power company a cheque.

Secondly, I believe that there is a role for the regulator, whether Ofgem or, in Northern Ireland, the Utility Regulator. The regulator should be on the side of the consumer. In fact, that is one of its objectives and part of its remit. However, when I contacted the Utility Regulator about the cost disparity, I received a letter that might as well have been written by the power company. Indeed, the power company probably would have given a better explanation, rather than the few lines I received from the Utility Regulator. There was no challenge function, no querying of the differences in costs, and no seeking of additional information. It simply stated the differences, which I already knew, and the reasons for them, but there was no indication of whether that would be challenged.

I also believe that there is a role for the Government in this, whether through the Consumer Rights Bill, which is currently going through the House; by encouraging the regulator to act by digging more deeply into the reasons given by the power companies; or indeed, as has been suggested, by finding find ways of increasing competition, which of course would give consumers more options.

It is striking that some of the smaller companies, which are hungry for customers, do not face those additional costs. In fact, some of them do not impose additional charges at all. That is why I cannot believe that there are such huge cost differences for the larger power companies. Perhaps that is the good impact of competition. Why do some companies find that there are huge costs resulting from people paying in a particular way and other companies do not? Or is it that the smaller companies are hungry for customers and wish to compete? If that is the case, I think there is a lesson for the Government: the more competition we have in the power industry, the more chance we have of addressing these issues.

I thank the House for listening to my arguments and the hon. Member for Harlow for securing the debate. I trust that some good will eventually come from this to help those who are on the bottom rung when it comes to their ability to pay their power bills each month.

Remuneration of EU Staff

Debate between Sammy Wilson and Bob Stewart

Tuesday 21st February 2012 Commons Chamber

[Sammy Wilson (East Antrim) (DUP)]

It is a great joy to follow the hon. Member for North East Somerset (Jacob Rees-Mogg)—although, I must say, I do not think that I can follow his eloquence, knowledge and so on.

I want to put on the record where the Democratic Unionist party stands on this issue. Members on both sides of the House have expressed their opinion on the decision to increase salaries and remuneration for those who work in the European Union. That will be financed by taxpayers from the United Kingdom at a time when we are imposing austerity measures on our own population, when our own public servants are being asked to accept pay freezes and when many people in the private sector are taking pay cuts. At the same time, the countries of the EU are telling the people of Greece, Italy and the Irish Republic that their Governments must cut back to the point that jobs are lost and salaries are cut. So for those who make and impose these decisions to then say, “By the way, we’re exempt,” will strike many people as grossly unfair and grotesque.

[Bob Stewart]

There must be huge anger in all EU states, which are all going through exactly the same problems as we are. I just do not understand why other countries in Europe are not as angry as we are in the Chamber about the suggested increase in salaries.

[Sammy Wilson]

That is quite right. Any objective observer is bound to be angry about the fact that there seems to be one set of rules for those cosseted within the structures of the EU, and another for the millions ruled by them and on whom it imposes its wishes. Social disorder is now appearing on the streets of Greece, Italy and other European countries. One can understand why people are angry at the imposition of rules by people who seem totally out of touch and by institutions that, as the hon. Member for North East Somerset clearly explained, are so incestuous in their decision making—they collaborate with each other, supporting one layer of the institution with another layer—so we are bound to get the kind of reaction we have seen.