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31 July 2008

Fuel Price Crisis

The number one issuefor many of my constituents is the rising cost of living. Food and petrol pricerises have hit everyone hard over the last year, but it is energy prices thatso far have seen the sharpest rise, leaving many people asking how they willcope when winter comes.

Thevery fact that we are discussing fuel poverty in the midst of the July heatshows how serious the situation has become. An estimated 4.5m households alreadyliving in fuel poverty and the situation looks like getting worse before itgets better (you are deemed to be ‘fuel poor' if you need to spend over 10% of yourincome on fuel).

At this time of yeargas and electricity bills are always smaller, but with the winter only a fewmonths away fuel bills will send a chill in more ways than one. This past weekalone has seen British gas announced unprecedented price rises of 35% withother suppliers threatening to follow suit. Even before the latest rises it wasestimated that the average household would have to pay an extra £200 for gas and electricity.

Whencalled to task on fuel prices the Government passes the buck to the energycompanies, who in turn shrug their shoulders and blame wholesale energy costs.Thus far the government's reaction to the problem has been woefully inadequatewith the planned rise in the WinterFuel Payment already dwarfed by the rise in household bills. Ministers need tostart taking action.

Energy suppliers arequick to raise energy bills as wholesale prices rise but when prices fall, thereis usually a long delay before the customer gets any reduction - if any ispassed on at all. In the meantime the oil and utility companies return hugeincreases in profits, massive bonuses for highly paid executives and thegeneral public is left footing the bill.

It was recently revealedthat Energy firms have received amulti-billion-pound windfall thanks to the giveaway of free permits to emitCarbon Dioxide under the European Union's Emissions Trading Scheme. Thisamounts to at least awindfall of some £9bn. With families struggling to pay their bills it would becriminal if this money was simply gifted to energy companies. Politicianscannot dictate the price of energy, but this does not mean there is nothingthat can be done. I have been calling on Gordon Brown to step in and forceenergy companies to use the £9bn windfall to play their part to tackle fuelpoverty. There are a whole range of things that we could do with that money thatwould significantly reduce our energy consumption and the price we have to payfor it.

A significant proportionof the money should go towards a rolling programme to make sure homes areproperly insulated - the amount of heat we lose through our buildings isamongst the worst in Europe. Energy companies should also be obligated to rollout ‘social tariffs' to end the current scandal whereby the most vulnerableoften pay more per unit of energy simply because they may still use pre-paymentmeter. Companies should also install so-called smart meters, which displayreal-time consumption costs, helping to better budget for and manage bills. Andall of this must happen alongside a massive programme of improving householdinsulation and energy efficiency. Energy companies must be made to play theirrole in this change. It is time for people to be place before profit - for anenergy industry making huge sums of money this is not too much to ask.

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This website was established while I was a Member of Parliament. The site content is being kept online as a source of information, but all forms / email have been disabled.