Energy summit’s ‘warm words won’t heat homes this winter’

THEY were billed as crunch talks with major energy providers to combat soaring energy bills for cash-strapped households.

But yesterday’s much heralded Westminster energy summit was lambasted as nothing more than “warm words” as the talks failed to result in concrete pledges on utility bill prices – or the simplification of the complicated tariff structures currently on offer by power firms.

Instead, a string of measures encouraging consumers to switch tariffs and ensure they are on the cheapest available deal were agreed with the “Big Six” energy companies at the meeting in London.

Agreements made at the summit, which was attended by Prime Minister David Cameron and Energy Secretary Chris Huhne, as well as representatives of power firms and leading consumer groups, included government letters to four million vulnerable households – paid for by energy firms – informing them they were eligible for free insulation; a campaign to encourage people to consider switching supplier and a commitment to provide energy use data in electronic form to aid making comparisons.

In addition, more than 720,000 Scottish households are to be contacted by their energy supplier to tell them how they can save money by changing payment method.

Britain’s major power companies have agreed that they will write to all of their eight million quarterly credit customers across the UK in a move which could save individuals £100 a year.

Ofgem is also to issue a report before the end of the year recommending ways to improve conduct and transparency in the industry.

Ahead of the summit, both ScottishPower and Scottish Gas owner British Gas became the latest of the Big Six suppliers to freeze their prices for the winter, following in the footsteps of Scottish and Southern Energy and nPower. As part of its “winter warmer” package, Scottish Gas also launched a discount for low-income customers, a free insulation offer and flexible payment plans.

ScottishPower has introduced a check to ensure that all customers are on the cheapest tariff, a scheme to ensure vulnerable customers can heat their homes and flexible payment options.

Consumer groups welcomed the moves agreed at the summit, but warned that more needed to be done to rescue households from fuel poverty – when more than 10 per cent of household income is spent on paying utility bills.

“We remain concerned about the sheer scale of this problem,” said Susan McPhee, head of policy at Citizens Advice Scotland.

“One in three Scottish households is in fuel poverty, and many more are heading that way. The new measures need to be implemented quickly, and they must only be the start. Much more needs to be done to ensure a fair deal for consumers.”

“The energy companies are agreeing to measures that should have been put in place long ago,” added Richard Lloyd, director of Which?.

“It’s good to see the Prime Minister and the major suppliers accepting that the energy market needs to improve, and some immediate help for people struggling to pay their energy bills this winter. The government now needs to do more to ensure this wasn’t just a talking shop.”

Ann Robinson, director of consumer policy at uSwitch, added: “I think the measures to get people to switch are excellent. However, there was a big piece missing in trying to get energy companies to simplify tariffs and that will take some time to sort out.”

An Ofgem report due to be published later this year is to investigate the wholesale prices paid by energy firms.

Mr Cameron told the companies at the summit it was “absolutely vital” that consumers struggling already with rising food and petrol prices were not also hit by higher fuel bills.

Ministers were determined to be seen taking action on the issue after Labour leader Ed Miliband made tackling the “rigged” energy market one of his key policies.

Speaking after the summit, Mr Cameron said: “We are making energy companies be competitive. They’re permanently being watched by Ofgem to make sure it is a competitive market, and we are making them make their energy available so that others can come in and provide customers with a good service.”

Mr Miliband said at the weekend that firms should use soaring profits to cut “crippling” bills after figures suggested annual profits per customer had risen to £125 – from just £15 in June. Those figures, produced by Ofgem, were disputed by suppliers. However, no agreement was reached with energy companies over pricing.

Shadow energy secretary Caroline Flint described the measures as “cold comfort” for families. “The government’s warm words won’t heat homes during a bitter winter,” she said.

Tom Greatrex, MP for Rutherglen and Hamilton West, and Labour’s shadow energy minister, said: “It is an insult to say that we can all save £200 by shopping around for the best tariff.

“If it were that easy, 21 million households would change their tariff today. They know there are over 400 tariffs and it is a nightmare trying to find the right one – even the energy minister says he couldn’t work out the best tariff.”

A Scottish Government spokesman said: “Scottish ministers have met with a number of the energy companies on an individual basis to highlight concerns about prices, and to encourage them to do all they can to mitigate the impact on consumers. As a result of these meetings, a number of energy companies have taken additional actions.”