The Daily Echo 13 March 2008

Written by Sandra Gidley MP on Thu 13th Mar 2008

Last weekend the Liberal Democrats held their Spring Conference in Liverpool. At conference we usually have a couple of emergency debates and this year we debated energy prices and the vast profits made by the utility companies.

A few weeks ago British Gas announced that their profits had increased from £95million last year to £640million this year. That's a whopping 570% increase.

Alongside this there were 23,900 excess winter deaths last year and many of these can be directly attributed to the knock on effects of being too cold. If people are too cold there is a proven link with an increase in respiratory and cardiovascular problems.

There were also 4million households which spent more than ten percent of their disposable household income on gas and electricity and for some this meant having to make a choice between heating and eating.

Many of the poorer households also pay for their fuel by meter and such customers are penalised by the utility companies and generally pay over the odds.

The winter fuel payment can help pensioners but there are other groups who can be affected by the cold who do not receive this payment - for example the disabled and young children.

The warm front scheme can also help those on benefits by providing better insulation and other energy saving appliances. The only problem with this is that there are often delays in getting the work done as there only appear to be a limited number of suppliers.

When the gas and electricity companies were privatised we were told that competition would drive prices down. The reality is that it is almost impossible to assess what is a fair deal and what isn't and there is some evidence that a quarter of the people changing tariffs actually ended up spending more on their fuel than if they had stayed with their original supplier.

I am told that, in the future, households will be fitted with smart meters which are capable of displaying consumption costs and being read remotely. Energywatch recommended this as long ago as 2005 but concluded that "the current structure of the energy market means it is highly unlikely such meters will become widespread without further action".

There is no reason why smart meters couldn't be provided with software that also makes it easier for the consumer to compare prices and predict future bills with different suppliers. That would really drive competition but clearly the utility companies would not find the idea attractive. Maybe now is the time for the Government to take action.

Published with kind permission of the Daily Echo