Memorandum submitted by Mr John Beevers (LCT 54)

 

May I make the following points in relation to your email below.

1) The households of the elderly can fall into fuel poverty even if they have a reasonable income.The reason is that they are always home, and they are vulnerable to the cold. E.G. (Based on a 93 year old in my care.) Pension income 17000 per annum. Annual gas and electric costs 2450. Thus they might fall outside the criteria for social tariffs.

2) Furthermore, social tariffs are not necessarily cheaper than the provider's other tariffs. Also, provider's social tariffs are not easy to find. They seem to be buried in the small print, and do not, for example, appear on comparison websites.

3) Government initiatives ignore the most important aspect of fuel costs. That is, the singular failure of the regulator to introduce real competition. Wholesale gas prices (despite the recent increase in demand) are no higher than they were 5 years ago. (Source -http://markets.ft.com/tearsheets/performance.asp?s=us@ng.1) Oil prices at $76 are similar to 2006 prices. (Source -http://investing.thisismoney.co.uk/companyresearch/100815/Brent_Crude/company_charts.html) These figures don't support the huge retail price increases of the last two years. The governments failure to address this gives rise to speculation that the government want high energy prices to help curtail demand and thus assist them in reaching CO2 targets, and that all the measures that you mention are merely fiddling about at the margin.

4) Rural customers who need bottled gas, oil or solid fuel for heating, seem to have been ignored by the various government initiatives.

5) Winter fuel payments are paid to everyone, including higher rate tax payer. This seems unnecessarily lavish.

6) Government targets, in my experience in both health and education, are mostly unhelpful. They are expensive to administer and motivate people to 'tick boxes' rather than achieve their true objectives. Rarely do government targets and true objectives coincide. An example is the police 'arrest statistics' debacle.

 

January 2010