Consumers told: It’s up to you to cut fuel bills

UK Political Editor

Tuesday 18 October 2011

THE Government was last night accused of a "complete betrayal" of hard-pressed households struggling to cope with rising energy bills after they were told to find the cheapest tariffs for themselves.

CHRIS HUHNE: Claimed consumers can save £200 by switching suppliers. PROTEST: Friends of the Earth campaigners yesterday. Picture: PA

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MICHAEL SETTLE UK POLITICAL EDITOR

With nearly one-third of homes north of the Border in fuel poverty, the so-called “big six” providers -- ScottishPower, Scottish & Southern Energy, British Gas, E.ON, Npower and EDF -- pledged to help people reduce their bills and keep their prices on hold this winter.

More than 700,000 households across Scotland are to get letters from their suppliers, advising them on how best they can save on their gas and electricity bills as David Cameron seeks to make the nation’s energy market more competitive to push down costs.The announcement followed a summit yesterday hosted by the Prime Minister and Energy Secretary Chris Huhne involving the firms, consumer groups and regulator Ofgem.However, Labour accused the Coalition of a complete betrayal as the promises came at a time when wholesale energy prices have fallen.Shadow Energy Secretary Caroline Flint said Mr Cameron should have stood up to the companies and told them to lower their prices. She said: “David Cameron’s only response has been to tell the public to wake up and shop around or you’ve only yourself to blame.“This is an insult to people who are worried about paying their bills this winter and shows how out of touch this Tory-led Government is.”Labour leader Ed Miliband said it was “window-dressing”. He urged Mr Cameron to tell the power firms that they should not go ahead with “crippling price rises” this winter.Mr Miliband said increased transparency was needed to stop the “fast buck culture” of energy companies and enable consumers to receive a “fair deal”. “This is a rigged market … that isn’t working to the benefit of consumers. We need big reform,” he insisted.According to Ofgem, last year only 15% of households switched gas supplier and 17% switched electricity supplier.Consumer watchdog Which? has found most people find energy tariffs are too difficult to understand.A spokesman for pensioners’ charity Age Scotland said: “You can switch provider if you want, but all the companies usually put their prices up to similar levels within six months of each other, so there is little point in the long run.”Citizens Advice Scotland head of policy Susan McPhee welcomed the announcements, but added: “The energy companies’ record of supplying such information to customers has not always been very good.”However, Mr Huhne, said: “They can save up to £200 by switching and that’s absolutely key to try and help them make the market more competitive because the best guarantee that you’re getting value for money is to have more people bidding for your business.”The drive comes as a prolonged cold snap is predicted this winter with HomeServe, the emergency insurance provider, warning that consumers could spend more than £500 million on weather-related repairs from broken boilers to burst pipes.To underline just how much energy costs are eating into people’s incomes, inflation is today expected to hit 5% caused in large part by rising gas and electricity prices.The emphasis at the summit in London was not on companies cutting prices but on how households could help themselves by checking the details of their energy deal, switching tariff and/or supplier as well as insulating their homes.“We are making energy companies be competitive,” declared Mr Cameron.He told the big six suppliers that it was “absolutely vital” that consumers, struggling already with rising food and petrol prices, were not also hit by higher fuel bills. A combined gas and electricity bill has now reached a record average of £1345 a year, a rise of more than £200 in 12 months.The summit came as environmentalists said an over-reliance on fossil fuels could push up household bills by around £300 a year by 2020.Friends of the Earth sought to pin the blame for rising prices on a failure to use more renewable sources after critics pointed instead to the impact of green taxes.Last week figures showed the energy giants were set to make £125 from every customer this year; more than eight times the £15 they had estimated in June.Measures agreed yesterday were:l Send letters to eight million consumers, who could save £100 by switching from the quarterly credit billing system;l to send letters to four million vulnerable households, informing them they are eligible for free insulation;l start a campaign to encourage people to consider switching supplier with data made available to aid making comparisons; andl publish a report from Ofgem, recommending ways to improve conduct and transparency in the industry.A Scottish Government spokesman said additional steps already being taken, including a £10m upgrade by Scottish Power to insulate homes.He pointed out how, following price hikes, First Minister Alex Salmond had called for his own energy summit with suppliers in Scotland.“Plans for this are under way, bearing in mind the distinctive Scottish aspects of fuel poverty, including our generally more severe climate, and differences in the housing stock in Scotland, such as a greater preponderance of tenement housing which is harder to insulate,” he added.

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Consumers told: It’s up to you to cut fuel bills

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