Energy and fuel poverty - live webchat with Baroness Verma, Parliamentary Under Secretary of State for the Department of Energy & Climate Change

I congratulate the powers that be on the Stay Warm system (I think that is what it is called) where by if you are on a low wage or benefits of some kind you can receive a credit of £139.00 into your account from suppliers it must help people in a big way,I think it is paid before the end of March each year if you qualify,I only found out about it when talking to one of my elderly neighbours who got the information from her luncheon group,so it would be a really good idea to make the information much more available to people who can qualify.

After a 5 year term in office, I can see very little the present Government has done to help anyone, let alone the elderly with what has to be the biggest household expense after a mortgage. We know that all the energy companies are making massive profits. When the wholesale cost of energy goes up, prices to the consumer go up almost immediately and yet as things are at the moment, where wholesale prices have come down significantly, the energy companies have dragged their feet and a couple have given pathetic price cuts in SOME of their tariffs.

The current price cuts the energy companies have promised aren't due to come into effect until after we've got through the coldest part of winter. Why are they not being made to cut them now?

The Warm Home Discount that Glammanana refers to is £140 and correct me if I'm wrong is funded by the energy companies, which no doubt they get back by putting up EVERYONE'S energy prices including those they're giving the discount to. The majority of people who qualify for this discount get it automatically, they don't need to apply. The only thing the Government can take credit for is that they made the energy companies run this scheme, perhaps to compensate for the fact that the other payment the Winter Fuel Payment was in fact reduced by this Government in the winter of 2011/12 from £250 to £200 for the over 60's and from £400 to £300 for the over 80's (the most vulnerable of all people during cold weather). And that is helping how, exactly? How much have energy prices risen since that benefit cut in 2011?

This monthly payment by direct debit has turned into a nice little money spinner for the energy companies too. Why can you not make them pay money back to the customer at the end of each year if they are ending up being in credit more and more. We have just asked our energy company for £800 back. We were in credit to the tune of £1,200 and if we hadn't said anything they would have carried on taking the same monthly payments. It's an absolute scandal that these companies have used the direct debit scheme and monthly payments over the year to actually fund their business. Who else can get interest free borrowing on that scale?? If you made them pay interest to the customer on that money they're holding they'd soon want to pay it back.

Why is the government pushing fracking instead of renewable energy?
When it was voted in in 2010, it said vote blue, get green.

Just as importantly, why has the government done a U-turn on Fracking under national parks and SSSIs ?
A couple of weeks ago, an outright ban on fracking in and under these places was agreed. Now Amber Rudd has said it might not be possible to guarantee that fracking will not take place under these areas.
This means that national parks could be completely ringed by fracking operators fracking under National Parks.

Baroness, the Green Deal was the government's flagship green initiative aimed at improving domestic energy efficiency. It has generated mountains of paperwork and huge amount of effort by private businesses. Not to mention a huge amount of effort by civil servants. Someone in the know once guesstimated that there were about 60 civil servants working for months on end just to get the relevant section of the bill written along with the mountains of rules and regulations.
It would now appear to be a dead duck, lying in the shallows with its feathers bedraggled.
In retrospect it was far too complex a model, leading to a very unappealing interest rate. (all those companies that have to be involved if it is to happen need to cover their costs and turn a tiny profit after all). I won't bore everyone with the list but it is quite long.
If you were still in your present role after the election would you be trying to give CPR to this embarrassing corpse and if not, what would you propose to do about improving the energy efficiency of our housing stock? And how would you address fuel poverty? And could we look forward to any other flagship green initiatives from your department?

Headlines today - dual-fuel customers of the big energy firms have missed big savings by not switching suppliers, according to the Competition and Markets Authority (CMA)

It says that from 2012 to 2014, more than 95% of dual-fuel customers of the big firms would have have saved money by switching tariffs or suppliers. The savings they missed ranged from £158 to £234 a year per customer.

Spokesman from Which? said "Politicians and regulators have put too much faith in competition driving keener prices for consumers - this simply hasn't worked"

What do you have to say about this?

Winter fuel payments - I would love your PERSONAL view (ie not party line) on this. Should they be available to anyone of a certain age regardless of income?

My view is that they should be means tested and any money saved given to those at the other end of the scale who need it most (and for whom the WFP is simply not enough to make a difference)

My question follows muchkin's in that it is about energy firms and how we are meant to know who really has the best deal, whether we are being ripped off and whether it's really necessary to go through the hassle and upheaval of constantly switching. It's one thing for car insurance but at my time of life I don't want to be doing with household bills as well. What is the government doing to help the consumer?

I don't think she is allowed to have a personal view, liggle45.

Of course she's allowed to have a personal view. She may not feel able to post it on here though.

That's what I meant, Ana. Liggle wanted her personal view, on here. She is speaking as a representative of the government, therefore she will not be giving liggle a personal view on here.
On the other hand, her personal view might easily tie in with the government's view. Otherwise, why would she be a government spokesperson in the House of Lords, when many of them are independents?

Dear Baroness,

I'd like to know why the government doesn't ban companies from using regressive tariffs with standing charges, which mean that people who use least are paying proportionally more for their fuel than those who use most. These tariffs are subsidising the profligate users at the expense of the frugal.

I realise that suppliers want tariffs which reflect the economies of scale in running the business, but it seems to me that rewarding people for using more is the wrong priority. It's not environmentally friendly, and on the basis that the poor will tend to be the ones who use least fuel, it's exacerbating fuel poverty too. It has a similar effect on the poor to having no tax allowance, and a basic rate of income tax higher than the top rate.

My electricity tariff is £69 +13.74p/unit, so taking that as an example, an average user (3300kWh PA) would be paying £552, with £275 for low user on 1650kWh PA and £701 for a high user on 4600kWh PA. (Low/average/high categories as defined by OFGEM.)

Now imagine scrapping the standing charge and changing the unit charge to 15.83p: low, average and high users would now pay £261, £552, and £728 respectively. That amounts to a 5% discount for the environmentally friendly frugal user who may well be on a tight budget, and a 4% increase for the heavy user who contributes more to carbon emissions. The average user pays the same.

Better still, consider the following scenario: change the unit price to 19.0p and give consumers the first 400kWh PA free of charge. Now the same low average and high users will pay £238, £552, and £798. As before, the average user still pays the same, but compared with the original tariff with a standing charge, the frugal user now gets a 13% discount, and the high user pays 14% more.

The first suggestion is better that the status quo because it is neutral, so that every user pays proportionally the same for their fuel rather than penalising the frugal. However, the second example is better still because it is progressive, and proportionally increases the cost as you use more fuel, which not only creates the right incentives for the environment, but also goes some way to alleviating fuel poverty. The actual figures are just an example to illustrate the point of course, it's the principle of using progressive tariffs that I'm arguing for.

I think that this policy should be applied to gas and electricity, but even more to water, in which rateable value tariffs are the most regressive system of all.

The winter fuel allowance is an anachronism, since most customers pay a regular monthly amount throughout the year, rather than filling a coal bunker in winter.

It would also be fairer, and save energy, if each household had a basic allowance at a lower rate, based on the people in the household, and usage above this was charged at a higher rate.

Why don't more switch -perhaps our experience is not typical, but the hassle we have had is unbelievable. Having spent two years trying to get an accurate fuel bill from company A our duel fuel contract came to an end with the energy company still billing us for gas in a different house instead of our own, somehow they had managed to conflate two addresses and put the meter readings from the other house on our bill, we didn't know what the problem was for a long time as they kept telling us there was an admin error but refused to say what it was. Fortunately we kept accurate meter readings, worked out what we should be paying and accrued the money, otherwise we would have had a massive bill to pay. We tried to switch to duel fuel with company B when the contract ended but company A refused to let us switch the gas until they had sorted their inaccurate termination bill out but they did let us switch the electricity. Months later they sorted it and finally said we could switch the gas, meantime we'd been stuck on their higher tariff for gas with company A and on the higher tariff for electricity with company B as they couldn't get the gas situation sorted for the duel fuel lower tariff deal we'd signed up for. Company B now told us the lower tariff deal we'd signed up to was no longer valid so we tried to switch again. We did to Company C, we switched online and confirmed a low tariff deal over the phone, then they sent a confirmation letter which said we were on their higher standard tariff. We've tried calling their call centre for the last three weeks, we get put on hold until the lines go dead and then we start again or we get diverted to another 'overflow centre' who can't sort the problem, they are just there to sign up people onto new deals. We still don't know what tariff we are going to be billed for, the lower one we agreed or the standard one. Our conclusion is the energy companies are a chaotic mess- too many people working in call centres chasing new customers and no one in the back room sorting out the mistakes when details are entered incorrectly into computers! We have kept a record of letters, phone calls, exchanges of emails with call centres, customer service teams, complaint centres, ombudsmen etc. etc. on a spread sheet - it runs to four pages - switching simple???? I'm sure by now you are thinking 'poor doddery old dears- it must be their fault' but as newly retired ex senior managers we think our admin skills are rather above average, heaven help those who don't keep accurate records.

I've switched quite a few times. Every time we moved we switched to Ecotricity, and have had no problems whatsoever. Why can't the big six companies work the system the same way?
Ecotricity consistently has the fewest complaints.

What do you think about this research from Ageuk?

www.ageuk.org/latest-news/winter-fuel-payments-prevents-12000-deaths-each-year/

That's a lot of deaths prevented each year, for not much money.
If the payments are means tested lots of people will not claim them, out of misplaced pride.
Do you think the payments should be integrated in the state pension?

I think there are probably quite a lot of elderly people who can well afford to heat their home but choose not to as they will not spend the money. I know one or two. My DG has her state pension, she lives in a council bungalow. She and I have two priorities. She eats well (I make sure of that) and her little bungalow is toasty warm. I have her heating set for her. She has never smoked, drank or went to bingo etc. There will be no inheritance when she goes and she doesn't have thousands squirreled away unlike a couple of her friends (one of whom admits to visiting grandma because her house is so much warmer and her husband refuses to have the heating on). I appreciate that the winter fuel allowance will be a great help to some , but won't make a difference to others who will use it for additional treats. Meanwhile there are some young people and young families who really can't afford to heat their homes and they get no help whatsoever. I'm sorry but I think it shoukd be a mean tested benefit to all households (no matter what the age) with an income below a certain level and nothing to do with age at all.

Apologies for the rant and the rubbish grammar.

What do you think of the people who deny climate change is even real?!

Hello there, I'd like to know why loyal customers of energy companies are being penalised (and overcharged)...for being loyal! It seems that, once again, corporations are putting themselves before vulnerable individuals, like older people who can not afford to be penalised in this way.

Hi Baroness

I would like to ask what the governments plans are in regards to giving more financial support to energy efficiency programs??

Sorry I have two (much more specific) qs! Fuel poverty is a such a huge and rapidly increasing problem...

Are there any reforms being planned for benefits that address the needs of those in fuel poverty?...

And does the planned Universal Credit include provision that will address fuel poverty in this country?

So you do not believe ageuk's research on the basis that you know a couple people who do not appear to spend £200 on their fuel bills in the winter,is that right, gillybob?
At the moment it looks as though I have been overpaying my gas bill by more than £30 per month over the last year, but I know it will not look so healthy the next bill I get.

Questions for Baroness Verma; are there any plans to means test the winter fuel payment? Why or why not?

Oh don't be silly durhamjen I did not say that at all and you know it !

I said that I know of cases where the elderly will not use their heating because they will not pay the bills!! I do know of two particuilar cases and I expect there will be many more similar elderly people who sit freezing in front of a one bar gas fire with a few thousand tucked away for the grandchildrens inheritence.