Gas and Electricity Costs

Debate between Yvonne Fovargue and Angus Brendan MacNeil

Tuesday 18th January 2022 Westminster Hall

[Yvonne Fovargue (Makerfield) (Lab)]

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 the debate.

People will die. Those are not my words; they are not the words of an Opposition politician. They are the words of Martin Lewis, who was voted the most trusted man in Britain. Heating bills are going up by more than £700 a year in April and they are likely to go up more in October. According to the Joseph Rowntree Foundation, 54% of single adults and 25% of single parents spend more than half their income on heating. That is simply not sustainable, especially when they are facing other increased costs. We are in one of the world’s richest economies, yet people are looking at the stark choice of eating or heating.

Wages are not keeping up with inflation, which in particular penalises low-income people, who spend much more of their income on essentials. The solution cannot be an increase in personal debt. Christians Against Poverty has reported a 41% increase in people requesting help from it in January, while searches for fuel help on the Citizens Advice website have gone up phenomenally. We have to find a way to deal with the debt crisis, but the first step is to deal with the fuel price increase. That is urgent. It has been caused by not only the higher wholesale prices, but the explosion and lack of regulation in new energy companies entering the market and offering low and unsustainable prices to switchers. That is supposed to increase competition, but it has always failed the most vulnerable and it penalises many who cannot or do not want to switch. We have to look at that.

What can we do? An immediate cut to VAT on fuel would be a quick fix to start. I agree that it is a blunt instrument, but it is easy, quick and would help a number of people. However, it cannot be the only measure. We need to increase the warm home discount and widen the eligibility for that scheme, and we need to fund it from a different source. It cannot be funded from a levy on all electricity bills, because that will penalise everybody again.

I agree that we have to look at greener and more sustainable means of producing electricity.

[Angus Brendan MacNeil]

The hon. Lady is making an interesting speech. I want to pick up on an interesting point made by the hon. Member for Bath (Wera Hobhouse). At the moment, the UK consumes about 41.8 GWe. People can check that on their telephone apps quite easily. Some 16.9% of that electricity is from wind, but that figure could be greater. Wind has been supported by the Government’s contracts for difference. Is there not a question as to why wind is being bundled into those energy prices? Why, as the hon. Member for Bath suggested, are companies profiting by bundling it into energy prices, when it is actually supported by the Government? We all know that the marginal cost of producing wind energy is zero. Our wind energy output could be greater, had things been built on the Scottish islands with a minor bit of Government planning over the years.

[Yvonne Fovargue]

We need to look at all the ways in which energy is produced and we need a mix of energy. We have to look at the green levy as well. At the moment it is a levy on all bills, so the poorest are paying the most.

We need to look at a social or below-cost tariff funded by the energy industry: each gas or electricity supplier should pay a sum into a central pot, based on the number of customers, which could then be redistributed to people in fuel poverty. We should not forget the people on prepayment meters; often, they are the poorest and have been in difficulty with their bills before. There is no way that people on prepayment meters should be paying the amounts they are paying for gas and electricity even now. There should be help and adequate protection for those people.

We have to accept that people should spend only a certain proportion of their income on energy. I am not saying where we should draw the line, but more than 10% is far too much—without even getting into the eye-watering figures we have heard from the Joseph Rowntree Foundation.

People on low incomes budget very carefully, but it is a bit like spinning plates—they pay one bill, they pay another bill, they look at the next bill. With the cost of electricity and gas forecast to increase so much, those plates will come crashing to the ground. That is why we need to act now to make sure that people are not, as one of my constituents said, out of their minds with worry. People need real help to keep the heating on, pay all their other bills and eat properly. If we are not careful, it will not only be free socks that energy companies offer; they will have to offer food parcels as well—ones that do not need heating up.