"Government must force hand of energy companies to spend £9bn windfall" - Mick Bates AM (Montgomeryshire Liberal Democrats)

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Montgomeryshire Liberal Democrats <montlibdems@gmail.com>

"Government must force hand of energy companies to spend £9bn windfall" - Mick Bates AM

November 27, 2008 12:00 AM

Montgomeryshire AM Mick Bates is calling for the Government to force the hand of energy companies to spend their £9bn windfall, as figures obtained by the Liberal Democrats last month indicated that up to 80% of single pensioners are likely to be living in fuel poverty this winter, with around 175,000 in Wales.

The Government has announced plans to auction a second tranche of carbon permits as part of the Emissions Trading Scheme. Energy companies are estimated to have made a profit of £9 billion from the original permits which the Government gave them for free. The Liberal Democrats have argued that the energy companies should be forced to use these windfall profits to reduce their bills.

The new Secretary of State for Energy and Climate Change Ed Miliband has set a deadline of 1st December for energy companies to prove their charges for pre-payment meters are fair, following a report from Consumer Focus which suggests that the poorest consumers are paying about half a billion pounds more than they should be through pre-payment.

Commenting, Welsh Liberal Democrat AM Mick Bates, said:

"Fuel poverty will be a serious concern for many in Wales this winter and it is appalling that energy companies are making such huge profits with pre-payment consumers paying half a billion pounds more that they should be.

"Oil prices may be falling, but energy companies are keeping their prices high, while the poorest people in Wales are living in cold, damp homes because they cannot afford to pay their bills.

"It is a disgrace that energy companies have enjoyed a £9bn cash windfall from the Emissions Trading Scheme and while I am pleased that the Government have set a deadline for the companies to prove pre-payment charges are fair, they will have to take firm action to help consumers. The Government must force the energy companies to invest these windfall profits in cheaper bills for vulnerable people through social tariffs.

"The Government should back a roll-out of Smart Meters across the country. These meters can help in delivering carbon and fuel poverty targets through reducing energy usage by between 3-15% through changes in behaviour and could have saved Welsh consumers £58 million.

"Energy companies need to act to help their customers - but if they won't, the Government must force them to."

Notes:

Figures on the level of single pensioner fuel poverty, compiled by the Office of National Statistics and based on information from the Bank of England, are attached.

There are approximately 225,000 single pensioners in Wales, meaning over 175,000 will be affected.

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