Energy Prices, Profits and Poverty - Energy and Climate Change Contents

Annex: Transcript of public meeting

Public meeting with the Energy and Climate Change Committee

on Thursday 7 February 2013

Members present:

Mr Tim Yeo (Chair)

Mr Peter Lilley

John Robertson


Guest speakers

Sarah Beattie-Smith, Citizens Advice Scotland, Graeme Mullin, G-Heat, and
Norman Kerr, Energy Action Scotland, were in attendance.

Q1 Chair: Good afternoon, and a warm welcome to this very open meeting. I am Tim Yeo. I chair the Energy and Climate Change Select Committee in the House of Commons, and I have also been a Member of Parliament since 1983. Thank you for coming along. These meetings depend entirely on attracting a decent audience and I am delighted we have done that today. I am joined by my colleagues John Robertson—who is very well known to you and I hope his chances at future elections will not be permanently damaged if I say he is a good friend of mine, even though I am a Conservative; we have worked happily on the Energy Select Committee for the last two and a half years—and Peter Lilley, on my left, who has just joined the Committee last year and who has been a colleague of mine in the House for the last 30 years.

Mr Lilley: Elected the same day.

Chair: The same day, exactly.

Mr Lilley: With Tony Blair.

Chair: As well as Gordon Brown, all on the same day. What a quartet. Pity two of them did not turn out quite so well, but I will not say what two I am referring to.

  Anyway, what I want this to be is Parliament listens: that the purpose of this is to hear from you. But before we get to that part of the meeting, I will just say a word or two about how the Select Committee process works in Parliament and then John will also say a few words, and Peter, and then we have some participants from a number of organisations who will introduce themselves presently.

  The Select Committees are appointed by the House. Their membership reflects the party balance, so our Committee has 11 members, which means five Conservatives, five Labour and one Liberal Democrat, so the minority parties—they are not all Liberal Democrats, but the minority parties are always represented on the Committee. The Chair is now directly elected by the whole House, for the first time in 2010. The work of the Committees normally focuses on an individual Government Department. Nearly all the Select Committees have a specific focus on a Department, and obviously in our case it is on the Department of Energy and Climate Change.

  I would have had more of my colleagues here this afternoon, but we have a clash with the Bill Committee. The Energy Bill is currently before the House of Commons. There is a Committee looking at it clause by clause; it was sitting today, and several of the members of my Committee are also members of that Committee and so they could not be here. That Bill is very relevant to some of the things that we are going to talk about this afternoon.

  The way the Select Committee operates is that we choose the subjects that we want to look at. Our agenda is entirely under our own control. Obviously it has to relate in some way to the work of the Department of Energy, but it is a pretty broad agenda, and we have more topics that we would like to investigate than we have time for. We have a small staff, an excellent staff of seven people who help us, but time is a big constraint. The process is that we choose a subject, which we think is relevant or important or perhaps where the Government is about to make a decision, we receive evidence—written evidence—and we call some people to give oral evidence at public meetings, which take place once a week. We produce a report that will contain the recommendations, and the Government is required to respond to that report and those recommendations normally within 60 days of its publication.

  Our recent reports have included shale gas and nuclear. We did a report on the draft Energy Bill when it was published last summer, and a number of our recommendations on that draft were incorporated when the Bill finally appeared in final form in November. We are about to start doing some work on smart-meters, but we have a particular concern with consumers. Before Christmas we published a report called Consumer Engagement with Energy Markets. After the work we did on that we did have some quite serious concerns about how the energy markets are working and how the companies are operating. There does appear to be a lack of trust among the public in the energy companies. There is not much engagement with the public about the issues. I do not think there is a good understanding of what drives prices up, and they have certainly been going up in the last five years. I think many consumers do not know where to turn to for advice. A particular concern for us is that the most vulnerable consumers tend to be the ones who are least likely to switch their energy supplier; they have the least understanding of the advantages they can gain.

  Energy efficiency is absolutely at the heart of all this. The Green Deal was launched in the last two weeks, and energy efficiency measures can help, but even there there is not as much take-up of some of the energy efficiency measures as we would like even though they are financially often directly very beneficial.

  The purpose of today is to try to promote a debate. We would like to explore how we can get more engagement from consumers, how we can tackle fuel poverty, how we can improve competition and a variety of other things. That is enough from me. I will pass firstly now to John and then to Peter.

John Robertson: Thanks very much. Can everybody hear me? I do not particularly want to hold a mic, but it is all right. First of all, can I thank you for coming to Anniesland College, which opened in 1964, and this new building came in just after Christmas in 2008. It is a pleasure to have you all here; this is obviously the heart of my constituency, and I know many of you are constituents.

One of the reasons that we came here was mainly because I shout the loudest on the Committee sometimes, and I believe that part of the problem was we did not really listen to real people and it was important, therefore, maybe to get real people along to get real questions that we will take back when we have the Big Six, in particular, up to give evidence in a short time and then followed by the Minister, who will have to answer the questions that I hope you are going to ask us today. Basically what I am saying here is we are here not because we want to give you a message but we want to take your message back to make sure that these people, who run our country, who make the policies, will listen to what real people have a problem with.

  Part of the problem has been, as Tim has said, is trying to get people to be more efficient. We hear that a lot of the people are switching from company to company, and we hear a lot about, "There's too many carrots", and nobody really understands what the process is. I honestly believe the energy companies do that deliberately so they can rip us off, and it is our job to make sure they will not do that in the future.

  The tariffs are going to come down. We are not quite sure where that goes, but we will make sure we keep on top of them. One thing is for sure the prices will not come down because they seem to go up every other month, and then when they start getting cheap gas the prices do not come down quick enough. So, our job is to keep on top of them to make sure they do and deal with real people. I think it is important that people see what is coming and the like.

  I am pleased that we have so many people from companies who do know how to help you, and hopefully the questions you are going to give us will put us further down the road. Certainly as your constituency MP once we get the report I will get you a copy, and you can read it yourself and find out did he do anything; and that is my job. At the end of the day when you go to the ballot box will determine whether I have done what I said I would do and what you wanted me to do.

  It is great to see you here, and I look forward to your questions. Thanks very much.

Mr Lilley: Can I add my thanks to you all for coming and for Anniesland College for hosting this evening. I think it is very important for us, as a Select Committee, to get out and hear people's views. When I was the Secretary for Social Security, and before that Trade and Industry, I found that every time I went out and visited a benefit office and talked to claimants or talked to people in the office I never failed to learn something that I had not been told by my officials. I am pretty sure that we will learn things tonight that we would not otherwise have known or would only have found out belatedly.

  I know there is great concern and even anger in my constituency, among my constituents, about the rise in heating bills, and they want us to hear their concerns to try to establish the causes of those increases and to examine the measures that can be taken by Government to mitigate them, particularly for those in fuel poverty.

  As Tim said, I am new the boy on the Committee. I have only been on a couple of months. I still cannot understand all the acronyms that are used in this area, and I have a very simple-minded view, which is that it should be the job of the Department of Energy and Climate Change to give us the cheapest possible energy. Both because we want our heating bills to be as low as possible, particularly for those on low incomes and in fuel poverty, and because also we want to rebalance the economy towards manufacturing and cheap energy will help do that and create jobs in that sector.

  I also have a confession to make. I am among a small minority, a very small minority, of Members of Parliament who have been highly critical both of the last Government and of this Government for the over-emphasis, in our view, they give to the objective of combating climate change. I was one of five who voted against the Climate Change Act not because I do not believe in global warning—I studied physics at university; I know it is a reality—but I have also looked at the economics. To my amazement I discovered that the likely benefits of that Bill—in the Government's own estimate, the maximum benefits were half the likely costs, so it seemed to be self-evident one should vote against it and find some better way of doing things. Then I looked further and found, again from the Government's own guru on these matters, Lord Stern, all the increased costs we are bearing now, from switching from fossil fuels to more expensive types of making energy—those costs are going to exceed any benefits for more than a century. So, what we are doing is designed to make people better off more than a century ahead, and I would like your views as to whether you think that is sensible, especially as Lord Stern thinks that by 200 years' time, on his worst possible scenario, the worst possible implications of global warming if we do nothing at all—people will still be seven times better off than we are now. Should we be making ourselves worse off so that they can instead be 10 times better off? Again, that is something we ought to ask about.

  We need to look at where costs come from in our heating bills. We know part of it is imported fuel. We cannot do much about that in the short term. It is about half of it and has been a big source of the increase. Another part is the cost of generating transmission and distribution, which is a fixed cost for the short term. There is not much we can do about that. Then there is profit, and we know very little about how much profit the gas and energy companies are making. Ofgem, the regulator, puts the figure at about 6% of the bill, but I am as sceptical of them as I am of the Government and we, in the course of our inquiry, want to see whether that is true or whether it is more or less.

  Also, the element that we never look at—and that is the cost that the Government is imposing on fuel bills. At the moment it is quite small, but on the Government's own figures by 2020 the average household energy bill will increase by £280 as the result of moving to high-cost energy but will be reduced by the measures they hope will have the effect of reducing the amount of energy we use, more insulation and so on, by £370. It will be up to you to give your views as to whether you think they will deliver on the promise of higher costs and whether they will also deliver on the promise of lower consumption. I have to say I am rather sceptical about the latter.

  We look forward to your views. I am told that I must give you a sort of health warning like they do on phone things that this meeting will be recorded for training purposes, or at least we have a Hansard official with us from the House of Commons Transcription Service, which will ensure that a full record is kept of what passes. If you have any further points you want to make after the discussion is over, please can I encourage you to submit them to us in written evidence to our inquiry so that we can take that on board as well as what we hear today. Thank you very much.

Chair: Peter, thank you; now, from Energy Action Scotland, Norman.

Norman Kerr: I will move away from the speaker. The batting order tonight, folks, I am going to do the high-level policy stuff, and then we are going to hear about a bit of the forward-facing things that are happening and then from G-Heat very much on the local side of where we are. Energy Action Scotland, I am sure many of you have never heard of us, and that is because we are not a public-facing campaigning organisation. A lot of what we do is working with fuel utilities, with housing providers, housing associations, local authorities, manufacturers of insulation materials, and we do a lot of work to lobby, if that is still a word that we can use, Government both here in Scotland and at Westminster on energy and fuel poverty policy.

  Energy Action Scotland celebrates—no, it does not; it marks—its 30 years in business; we were formed in 1983, and sadly we are still here because we still have fuel poverty. In a Scotland-wide context fuel poverty in Scotland runs around about 40% of the population, and a lot of that is caused by the fact that we have many rural communities, communities that are off the gas grid and houses, very much in the area here, are very difficult to treat, and certainly we have already heard, this evening, about reducing the demand for energy and for a lot of houses in this particular area that is quite a tall order when you look at the construction of the house.

  Fuel poverty, now at 40%, almost 900,000 households in Scotland, has fallen. It fell to somewhere in the region of 220,000 households in 2004, and that was caused mainly by the deregulation of the energy market when we saw prices go down, but unfortunately since 2004 prices have gone back up and we are now seeing the adverse effect of that in terms of more fuel per households. The cost of energy is something that, although Members of the Committee are looking at it, we are also asking to be looked at, because we have a fairly simplistic view and unfortunately it is a very complicated area, because the companies tell us they make between £25 and £65 profit per organisation. The biggest single factor in your bill is the wholesale cost. The cost of buying and selling the electricity before it gets to you amounts for something like 42% of your total bill, and to be honest that is a bit of a black hole that we do not really understand. Ofgem have just launched a market liquidity review; in other words, they are looking at that cost. We believe that a lot of savings can be made if we get the wholesale market right. Just recently, last week, we had a situation where it was recorded that the UK was selling gas to Europe at a very low price while buying liquefied natural gas from Asia at a much higher price. So, we are selling it at a loss but buying it in from elsewhere at a cost that then impacts on each of our bills.

  We certainly welcome the Committee's look at fuel poverty and energy price but also the energy bill, because I do believe that we have an opportunity. If I can just stay with bills—and certainly Mr Lilley talked about bills rising—currently for your bill, your electricity bill, whether you know it or not, you contribute around about £100 to the energy companies who then do a variety of work with that money, but that money is not theirs; it is yours, as we have said, but they collect it because Government have placed levies upon them to do so. Those levies will continue to rise, and you will continue to pay more.

  One of the things that we are very keen to look at is how that is done, because an OAP in a one-bedroom flat will pay exactly the same as a family of five living in a five-bedroom home using much more energy. So, we have a very regressive and blunt nature of collecting of taxes, and we need to review that because that is contributing to the cost of your bills and contributing to fuel poverty.

  I am conscious of time, so I think there is a lot on the policy side that really requires a lot of stones to be turned over and delved in much deeper, but I think in terms of the human impact and the cost I will now hand over to Sarah Beattie-Smith from Citizens Advice.

Sarah Beattie-Smith: Thanks. Like Norman says, I am Sarah. I work for Citizens Advice Scotland. We are the umbrella body for all the CABs in Scotland, and there is 61 of them across the country and you can get advice from 250 different places. You can get it online and on the phone as well, and there is some information about us over there.

  We recently published a report about the kind of issues that people come into CAB with around energy, and there are an awful lot of people coming in for fuel debts because they simply cannot pay. It is no surprise that the big message from that report is energy costs too much and people cannot afford it. I am not telling you anything you don't know there.

  I think it is interesting that we are talking about fuel poverty. To me sometimes I think fuel poverty is really just a subset of poverty, pure and simple. I think it is something that we are all pretty familiar with, but it also helps to think about fuel poverty; it has a particular price of it, because it means that you can treat that element of poverty, and there are certain things that can be done. There are three things that tend to cause fuel poverty. There are three elements of it. One is your energy efficiency of your home; so, if your heat is leaking out through the roof, that is no good. It is going to push the cost of your energy up, and that is going to mean that you are spending more on it. There are things like your income. How much you have coming in is obviously going to have a bearing on how much is going out on your energy, but there is also the cost of energy itself from your company.

  The cost of energy is something that we have perhaps the least control over. Like Norman says, there are a lot of questions about how those bills are made up and how wholesale prices are set. What we see is people on low incomes essentially and most of my experience with the CAB is looking at people who really just can't afford to pay. We are seeing increasing numbers of people coming through the doors who have not eaten in days. They cannot afford to heat their homes—whose income has collapsed because they are relying on benefits that are no longer there, whose wages have not gone up in years, who have lost their jobs and it takes an age to get any benefit. There are some really dire things out there happening now, and you are looking at welfare reform just around the corner. Some bits of it have already hit, and there is over £2 billion going to come out of the Scottish economy because of the impact of welfare reform.

  Not to paint a huge doom and gloom picture, but that is the kind of context that we are operating in. If you are looking at how to tackle fuel poverty, and one of those three causes of fuel poverty is low income, we are not doing too brilliantly on that, and there is an awful lot more that needs to be done on boosting people's income and investing in jobs, a living wage and a benefit system that works for people. Those would all be nice things.

  Just to run quickly through some of the points that have been put forward by the others so far, I think on the transparency issue most of us have no idea of how our bills are made up. It is just something that comes through the door, and if you want to put the kettle on or you want a hot home, you are going to have to pay that bill one way or another. People are trying to pay their loans and things as well as that, it is pretty unhelpful.

  I would refute the points about climate change and wanting to pay for that. I think you might expect that your Government would be where your taxes go and that those taxes then support those most in need, but instead what we have is a system where energy companies are being used as a default taxman so we all pay our energy bills and some of that money then goes back in in helping people who cannot pay for those energy bills but that increases the price for everyone else as well. Whereas you might think that if we all just paid our taxes to Government then Government could invest in fuel poverty measures. Government can be doing the things like helping people who are in fuel poverty in insulating their homes. I think there is a big question around that.

  Just to quickly move on, I think Ofgem—we quite like Ofgem. They seem to do a pretty good job of regulating the market. Sometimes they could do things a wee bit faster because sometimes your energy companies are doing things they are not supposed to, like doing doorstep sales that they are really not supposed to and taking advantage of vulnerable consumers, and some of those things could be tackled a wee bit faster, but generally we quite like them.

  I would just say finally, I think one of the things that is always said that consumers can do to help themselves in this situation as well is maximising your income, and we can do that at the CAB by seeing if you are entitled to a benefits that could help you to get out of any debt. You are often told that you should be switching but there are only so many companies out there. There are so many tariffs, and there are only so many times that you can switch before your choices run out, so there needs to be something done about bringing bills down, trying to cap them in some way. I would argue that some of the schemes that have been started recently, the energy company obligations, which is a new way of tacking fuel poverty from a UK level is not particularly amazing in doing what it is supposed to do.

  The Green Deal, which is an amazing new policy where you can get a loan to get energy efficiency measures in your home like solar panels or really fancy insulation, is only available for homeowners. There are difficulties in their long-term credit that it is basically a loan that you take on yourself and I would question whether that maybe not the role of Government once again to be a massive roll-out, creating jobs for industries to do insulation and so on.

  That is basically the position of our organisation, but I would really like to hear from you guys as well as to what you think can be done. I will pass over to Graeme.

Graeme Mullin: Thanks very much, Sarah. For anybody that does not know me, which might be quite a few of you, my name is Graeme Mullin and I look after a project in Glasgow called G-Heat, which is the Glasgow Home Energy Advice Team. As Norman has gone over some of the policy stuff and Sarah has gone over some stuff to do with Citizens Advice—we certainly operate on the ground in Glasgow.

  The G-Heat service is a Glasgow City Council service, and it is open to people across the city; it does not matter whether they are renting, and it does not matter whether people own the home, rent from housing associations or private landlords. Anybody can take advantage of the service.

  We have eight advisors that work across Glasgow who do home visit energy advice aspects. They give advice on tariffs. They give advice on how to help people understand the heating systems to the best of their ability. They look at things like billing, and we also offer quite a strong advocacy service where you might come across people who have specific issues relating to energy companies that they need to contact on the client's behalf. This probably takes up the largest part of the work that the G-Heat advisor will do. We find that a lot of the people that come to us, and a lot of people who are referred to us have specific problems with billing or they cannot contact the utility company just due to other poverty issues. What we generally find is the G-Heat service works best because it is in the home; they can give the advice face to face in the home. They can look at things like metering. They can look at people's usage. They can look at people's fuel bills and they can help people understand how their fuel bills transmit into what they paying at the end of the month.

  Much of the advice that is out there at the moment, in terms of energy efficiency, in terms of fuel poverty, is done over the phone or it is done online. We find, and certainly the advice workers in Glasgow find, a lot of the stuff can be lost in translation over the phone. A lot of the stuff that is put on online—maybe people do not have access to the internet and perhaps people do not understand some of the terminology that is used, so getting somebody to be able to give you that type of advice face to face in the home is certainly very important.

  One of the points I would like to pick up on that John mentioned about the tariff and about choice of tariff. Generally at policy level it is very big on the switching and talking about tariffs, availability, and there is a big encouragement for people out there to switch between companies. I think between the Big Six companies at the moment there are around 400 or 300 utility tariffs on the market. I agree with John about the confused marketing. I think it is partially deliberate where people take a look at it, they cannot understand and they are immediately turned off by it. I think tariffs and changing and switching is a little bit of a red herring. The advice that I get passed back to me from the home energy advisors, day-to-day, when they are in people's home is we should really be looking at a more holistic approach where they look at people's debt, they look at people's usage and they help people understand how what they are using converts into the end of month bill, they do not always understand what they are paying for at any given time.

  If you go around the supermarket you see how much something costs before it goes into the basket. If you are filling up the car with fuel you can see how much has gone in or how much you are paying for but utilities are something that we use and we are not always perfectly sure how much we are using and how much it is costing. With that in mind the switching in the tariff is only a small part of it. The holistic approach that G-Heat advisors tend to take would be to look at all aspects from how people use a central heating system, do they understand how to use it, are they getting the maximum efficiency from it, right up to understanding their bills and right up to the advocacy service that they give.

  Sarah mentioned general poverty issues that people deal with. We find a lot of people who have to deal with the utility company about billing or about points and so on are already in debt with practically every other aspect of their life. Fuel debt is a massive part of that. The majority of the contact the utility companies have with the consumer is done over the phone. What we try to get is people who have issues accruing from a debt to contact the utility company perhaps to try to sort out problems that are not their own doing. We come across many instances of incorrect billing; people maybe have meters or on tariffs that their heating system cannot support. That is when the advocacy service kicks in, and we have to do quite a lot of work on behalf of the client direct with the utility company. I guess that is where the frustration comes in and I hear the frustrations from the team every day. The utility company's response to people who are in debt tends to be more of a reaction to credit control first and foremost, "How quickly can we get the money back? How much can you afford to pay back?" rather than understanding how the person got into debt and how they can try to help them with the consumption and help them get back out of that debt. I believe that we probably all pay it, and that is a kind of "computer says no" culture if you remember it from the TV show, where somebody sitting in a call centre will make a decision on somebody's usage without knowing anything about them and without maybe knowing the problems that they are suffering from at home. Again it is probably where the service from G-Heat works, and what we can offer is we can see in the home the circumstances that the people are suffering from. We can look at their heater. We can look at their metering. We can look at their billing. We generally find that when we contact the utility companies and we convey some of that information to them we can have a bit of an influence and a bit of an impact. So the service, for anybody who does not use it or know about it, is available the length and breadth of Glasgow.

  We have one or two of my advisors in the room tonight and some other advisors from other advice agencies in Glasgow here as well; make use of them, and ask them questions maybe at the end here. I am certainly happy to answer to any questions, but hopefully that gives you a little bit of a flavour as to maybe what is happening at a more local level and a more coalface level in Glasgow. Thanks.

Chair: Thank you very much, and now is the moment for the public debate. Can I ask you for the first time you ask a question please to say who you are and if you represent an organisation what that organisation is? Who wants to go first? We have two roving microphones, one at the back and then that the lady in the third row there.

Q2 Speaker 1: Hello, my name is [...]. I am just here myself today. I would like to congratulate you for coming up to Glasgow and hope you enjoy your stay. I have a few points to make. I think it was Peter Lilley that spoke there a minute ago, and he was saying, and I agree with him, that there is no real difference between the last Government and this Government, because I was poor in the last Government and I am still poor in this Government, so who is responsible for it? I really don't care, but I want a solution to it, and I have not heard many solutions as to how you are going to solve the poverty industry.

In terms of the chap across here, he was speaking about a black hole in terms of fuel. The black hole is a speculation of the markets, and you say it yourself: the fuel is going out, one road, and it is coming in at a higher price on our road. Is it actually leaving the country? It could be sitting in a tanker here getting moved across on the Great Western Road there and put in an oil tank and you buy it in Asia, the underdog, at 50%. So, if you don't understand and then you didn't understand it, you will have to pull your socks up and hoist them up a wee bit.

  Secondly, just recently you have changed the tariffs in relation here on the panels on the roofs that people were getting a tariff themselves, they were getting money back. They were able to produce their own electricity effectively. That was direct competition with the monopoly of the utilities. That was a small approach but if that was spread across the country between that, micro wind and somebody's house, anyway that you can produce fuel on your own property then that is direct competition to these utilities. If that was happening across the board the utilities would soon drop the prices so you didn't have to do that. Currently there is no competition, and by your own admission what you are saying there is you really don't understand the market; and it is not a criticism. It is an observation to—what you say is you really don't understand the market. You don't have control of the market, therefore you are really not protecting me as a person or as a citizen of the country so you really needed to get control of it.

Chair: Just on the point you make about the reduction in the feed-in tariff for solar PV. it is important to remember that the cost of that tariff, which is a sort of subsidy for solar PV, that cost is borne directly by you as an electricity consumer. The subsidy that solar and other low carbon technologies receive in the form either of renewable obligation certificates or in future feed-in tariffs or contracts for difference is not free it does get paid. It gets paid by consumers so if the Government had maintained those feed-in tariffs for solar at the levels that they were two years ago, which were delivering large profits to the homes who installed them that would have been at the expense of other electricity consumers. It is important to appreciate that those costs have to be paid for.

  I will take the lady in the third row here.

Q3 Speaker 2: I am Ms M, Glasgow Housing Association. I do the same job as Graeme, basically front line, on the ground. Basically my problem is we had an article in a key magazine that was also issued in the Glasgow Evening Times regarding smart-meters, obviously they are compulsory and everyone is to get them. My concern is that a smart-meter supposedly is to send messages back to the supplier to let them know what readings are so we can take away estimated billing, which is very dear. Whether your meter is read or not you are still receiving estimated billing, and it is causing a lot of confusion.

We had a gentleman where there was no reading taken, or should I say fed back, where the meter was working for 18 months so they continued to reduce his bills and then tried to back-bill him for a bill of £1,000 but it is faulty equipment. Where is the responsibility in that and how are the smart-meters going to work and who is going to be answerable when they are not?

Chair: I am not sure who is responsible in the case of a faulty meter at present. I am an enthusiast for the potential benefits of smart-meters, which I hope will give people good information that will enable them to use their energy much more efficiently than they do at the moment and give them much more control over their consumption. We should not be very far away from the position where you can be on your way home and decide what room you want to heat up from your telephone. That would be a considerable advance. It would lead to much less wastage of energy. The Committee is just about to start doing some work on smart-meters, but I do not know whether one of my colleagues wants to answer the point about who can be held responsible for a company that has a faulty meter that leads to someone being backbilled by a very large amount. Anyone have an idea about that? Any volunteers?

Norman Kerr: The company itself should be responsible. The company have a duty, if you said the meter was faulty, to investigate that and replace the meter.

Speaker 2: Basically that should happen, whereas they consistently reduced his costs, told him to pay, told him to pay, told him to pay. We was an elderly gentleman, pensionable age, unwell, very unwell, paid immediately as they asked and as they required but basically they told him, "You used the electricity, you must pay". They wrote it off. The article says about along the lines of me getting my teeth in it and not letting it go.

Chair: Your local MP is about to come to the rescue.

Speaker 2: To be honest with you this, I do obviously a lot of this—

John Robertson: It does not matter. If your local MP got this, then I would expect him or her to contact the company and basically give them a short shrift. These things happen all the time and the people, unfortunately, just accept it and carry on. What should happen is the company are obliged, if nothing else, to fix it and also to give the person a good goal payment of some description so that they do not have to pay it all back. If it was one of my constituents I would go and talk to the company immediately to make sure that they were not going to pay the full amount. Having said that that does not necessarily mean they would get everything back but it certainly would—

Speaker 2: I don't think you are understanding the question. What I am really saying is basically that is what I did—I didn't have to use an MP—I did everything myself—but my point is that why do we not have this element built in around about this smart-meter where he has still not getting the registration back to see that the meter is not responding; it is not sending a signal back. Why is this not highlighted? Because basically it would just—they send it like that.

John Robertson: If I am right, and I am not 100% sure I am right, but there is new variant of smart-meter coming out, smart-meter 2. The first smart-meter that came out gave the individual in the house information. The information did not transfer on to your telephone line and go through to the other end. The new smart-meters allow you to do that where they will take a meter reading straight from the telephone line that goes to the smart-meter and they will take it away. Under those circumstances you would be right. If it is an old smart-meter, if it was one of the first group then they did not transfer the information—

Speaker 2: There were not fit for purpose, basically.

John Robertson: It is the old story, people wanted to know what they were doing and people thought it was a great idea. Personally I was not all that keen on the first group of smart-meters. Certainly the idea of being able to use your telephone and doing all the other things that you want to do in relation to power is important and will be useful. It also lets you know if anything is happening in your house when you are not there and you can find out these things but the first lot of smart-meters were, in my opinion, not fit for purpose.

Q4 Chair: Another topic; the lady immediately behind that.

Speaker 3: Hi there. Evelyn Milligan, Shettleston Energy Advice.

Chair: Yes, we can hear you. Yes.

Speaker 3: I have a couple of points. The first one is a continuation on the smart-meter. I am not sure if you are aware that that can easily be switched to a pay-as-you-go meter. At the moment some are not paying and obviously people should pay but there is quite a lot of letters and information having to be done and also a warrant has to be authorised by the Justice of the Peace to change someone from a private meter to a pay-as-you-go. Obviously there is forced entry sometimes into the property. My concern is—and it is the same with a smart-meter, which can be done at the press of a button in the supplier's office so I am just wondering if you can feed back to the suppliers to make sure that all the systems that are in place at the moment for that being done appropriately are being carried out and to get that guarantee.

Chair: That is an interesting point for the work we are about to do. If it becomes too easy for a supplier to change the basis of someone's tariff and force them to go on to the pay-as-you-go there would need to be safeguards to prevent that from being done without proper cause. I am glad you have raised that. It is a point we can look at. We are literally just about to start work on this, so thank you for bringing that up.

Q5 Speaker 3: Can I make one other point?

Chair: You can if you are quick about it, yes. There are others.

Speaker 3: I will do my best. Recently I think you tried to have a go at making the supplier simplify the prices. Five of them have a daily standing charge and one doesn't, which is British Gas. I think most energy advisors would have preferred to make them do away with the daily standing charge altogether so that the prices were transparent. What happened is I think it is possible just one company. It was easier to meet them and to address their daily standing charge.

Regarding British Gas, they have a daily standing charge, and they have still got the three tier pricing system so it is quite confusing and for a lot of people it is hard for them to understand that. It would have been simpler if you had done away with the daily standing charge, okay the unit prices for gas, electricity, would have gone up, but it would have made it easier for us to explain that to people.

Chair: Yes, I think that point is very well made and I think there is a lot of support for what you suggest that a charge that simply is what you have used is easier to understand. There is another debate allied to that about whether we should introduce what people have called a rising block tariff that means that if you are quite careful about your use of energy and you are only slightly above the average use, or below it, you would pay at a certain tariff. If you are very extravagant and you can measure an expectation for the size of the household and the size of the premises and so on and maybe you should pay more for the extra bit rather than less. That would be encouraging people to think carefully about their energy usage. That has not been adopted as policy and some people will criticise it, but I think it is interesting because almost every consumer can find ways of using their energy more efficiently and the more we incentivise that the better it is in all sorts of ways. It may even reduce the peak demand for electricity particularly, which would reduce the cost of the extra investment we have to make in order to meet that demand so I think there is an interesting debate. The basic point you make is a very strong one and certainly one that I would be sympathetic with.

  We cannot hear you, and even more importantly the Hansard reporter will not pick up what you are saying. Please use the microphone.

Q6 Speaker 2: Sorry about that. Basically I have wee bit of concern with that because a daily standing charge is a one-off payment per day. Obviously at this point in time you are talking about consumption and obviously people overusing consumption. If you were to put an incentive onto—it would be every unit was then higher because basically the terminology is, "If you have no standing charge the unit price is higher. If you have a standing charge the unit price is lower". With a one-off payment of 20 pence, bearing in mind, using British Gas for example, they will start off at 24 pence for the first 40 units and then it drops down to about 15 pence. Do you know what I mean? I have a background in sales. I think we need to get the pricing of the per unit right before we take away daily standing charges.

Mr Lilley: The lady before mentioned the complexity of tariffs and there is also complexity of people's household circumstances. To some extent one reflects the other so it is unnecessary or just confusing. One thing we suggested in our report, which should at least be considered, was developing a sort of app that would be available both for advisors and individuals where you could just feed in your, like your tax code, your tariff or data from your bill and it would work out what the best tariff for you was assuming your future consumption was the same as it had been in the last year or recent quarters. That ought not to be beyond the wit of man to be able to do that and then even people like me who find these tariffs very confusing would be able to work out what is the cheapest.

Chair: While we are waiting for another question, can I just do a poll of the audience? How many people here have switched their supplier? Okay; that is a bit more than half I would guess. How many people have never done so? Okay; it is just interesting. Among an audience that is quite interested in these issues by definition, which is why you are here, and smart enough to know what to do half of the audience have never done so. Another question: yes, I have one in the front row, and then a lady—can we take two or three, we will take you first and the lady at the end of that row there, and then the gentleman right at the back.

Q7 Speaker 4: Hi, my name is [...] and I work for—

Chair: A bit nearer the mic please.

Speaker 4: Sorry, which is a charity on the south side of Glasgow and our aim is to reduce carbon and help people to reduce their energy bills. Sorry.

Chair: Yes, it is but hold it close; almost kiss it.

Speaker 4: Right. In the south side of Glasgow, in Govern Hill, there is a square mile where there is over 2,900 landlords, so that is privately rented accommodation. Some of the poorest people live in privately rented accommodation not social housing. Some of the poorest people live in privately rented accommodation. They are living where the energy efficiency is very poor, with no investment and white goods use up loads of energy because they are ancient. There are pre-payment meters they cannot get rid of. I understand that there are a few measures to combat this but they just do not seem to work at all. The vast majority of people in privately rented accommodation are the least able to control their energy bills. The system has just completely failed people who are renting privately.

Chair: That is a well made point. I am going to take a couple at a time so we get more people in. The lady at the end there, second row.

Q8 Speaker 5: Thank you. My name is [...], and I just came here myself. I am just representing my building. Our problem is that we cannot switch suppliers. We cannot regulate our own heat. We cannot turn it off or on because it is a communal heating system. It is probably in excess of 60 years old, and we are unable to get funding where we are to do precise funding. Pretty much it is a building with low income and elderly vulnerable people. It is a poor area but purely because of our postcodes we were unable to get it.

We are hopeful that through Green Deal that we will get this funding but, as that lady was saying there, from the Citizens Advice, it may be a loan that our building cannot really afford to have. The disappointing thing about that is that we have two buildings on either side that were built at the very same time, very similar, all the same building materials and they both got funding assessed for a new heating system. As I say just because of our postcodes it was decided years ago, we tried to contest it, but it will take about 16 years to fix. So, we are in a pretty bad position. Some of our quarterly bills have reached £790 we are pulling in a company that are pretty much charging anything they like so we are in a really bad position and we just don't know what to do about it.

  Sorry, just before you start, one of the ladies on the ground floor is 80 years old and she has emphysema. The building is not fit for purpose. It has asbestos and the factor are saying, "In order to try to put you through for this new funding coming up. You will need to pay £170 each". We have just got a quarterly bill of £460 from them. That is one of the lowest bills that we have had. It is pretty much the lack of help from the factor. Just to put that out there because I know that is not something that maybe has been touched on yet.

John Robertson: Whereabouts are you?

Speaker 5: Mossview Quadrant in Cardonald.

John Robertson: That is not mine, he says thankfully. The new energy company's obligation may help in that, which is taking over from this so hopefully that will make a difference to you. I cannot tell you because you are not mine so I will not be able to follow it up as they say but that could help you in that respect but I just want to keep an eye on it and find out. If you have problems then go and see your equivalent of me and your MSP on the housing.

That brings me to the housing problem, which is basically England and Wales are different and I am not sure if the same thing will apply up here or not where private lets will have to be a minimum of—no, just England and Wales, is it? Okay. So that would solve a lot of your problems so go and see your MSP on this one and what they are doing is in a couple of years' time they are bringing in a level where everybody who is a private let must have a standard of or the equivalent of a certain band, Band D, I think it is. My friend at the end—

  On the type of accommodation that you are renting through somebody they have to have a certain standard. If you think about it most of the lets that you are talking about are Band F and G. These would just—no private. This is private let. What you are talking about is of private people she is not talking about council lets. No, because they would have to have income.

  Speaker 6: What band are you talking about?

  Speaker 7: Energy efficiency of building.

  Speaker 6: (inaudible - 18:55:15)

John Robertson: Unfortunately housing in Scotland, first of all, but everything that affects it.

  Speaker 6: (inaudible - 18:55:29)

John Robertson: It does not necessarily mean that she will help you of course.

  Speaker 6: (inaudible - 18:55:34)

John Robertson: The thing as a Labour Member of Parliament I would say that, would I not?

Chair: It is a very serious issue, and John says there is a particular problem with the Scottish housing heritage, the stock here. Some of it is very difficult to improve but it is a problem that we are acutely conscious of, south of the border as well, which is why the regulations have been changed to compel private landlords, who often do have old and rather substandard property that are let to quite poor tenants, will not be able to continue like this under the new arrangements.

  We have quite a few people now there is—

  Speaker 6: Can I just—

Chair: Very quickly.

  Speaker 6: It is not just a Scottish problem. If you look at Victorian stone tenement building it is mainly huge glass windows so it is really important that sash and case windows are in Green Deal or the eco package otherwise huge areas of Glasgow will not benefit from Green Deal or eco package because that is the most energy efficient measure you could do?

Chair: Okay. The Committee also has a watching brief on the Green Deal. We are going to see how it goes. So the gentleman in the middle there has put his hand up there, and then one lady further back and a gentleman here too, and the lady there.

Q9 Speaker 7: I am David Kennedy. I am one of Graeme's G-Heat advisors. My old politics lecturer used to always say that a lot of this stuff that happened in the House of Commons, to him it was like pantomime. He used to say if you want to see the Commons at its best go to a Select Committee. He has retired now but we are all present tonight and we will welcome the parliamentarians. I am very glad you have taken your time to come up. Just taking the point that Lucy made in the front row, the area of Glasgow she is talking about and the housing conditions are so poor that it has been raised specific in the Scottish Parliament with concerns. What we decided to do is in G-Heat is to do visits with interpreters. I have done visits with a Slovak interpreter, a Polish interpreter and a Somalian interpreter. Not all at the same time, but it is a good way of reaching for the hard to reach groups there and just take the holistic approach. The last time I went there, when I finished I phoned the council and said, "Can you fix the drain because I had to swim to get into the front door", because it was that bad. There definitely are challenges but I think we can ensure that we do reach the hard to reach groups.

  Also I think it is important to remember that although conditions are particularly bad in the private rental sector, I have been quite shocked at the middle class areas and people struggling to pay their bills sometimes. Just because maybe someone lives in a nice-looking private estate does not mean that they are finding their bills easy to manage. Sometimes they have very high levels of debt and are almost in tears when you visit them.

Chair: Okay; right at the back and then there are two on this side as well. That is you.

Q10 Speaker 8: It is just to mention about—

Chair: Name please first.

Speaker 8: Sorry, [...]. It is just to mention about the amount of public awareness. There was a grant of £130 for pensioners that has been awarded and I do not think it has been made widely aware enough for people. I know that my mum did hear about it on the telly just before Christmas and phoned up about it and she was given the run around by the energy supplier that she phoned, which was British Gas, saying it did not exist. Then when she eventually managed to get to speak to somebody they said, "Oh, I don't know why the Chancellor was on the telly telling people about it, because they shut the books several weeks ago", and you were not allowed to claim for it. Why are people mentioning things that exist and not properly advertising it or putting the advice in the newspaper?

  The other thing is that British Gas obviously had access to my mum's personal details and when my dad died she was given a lot of pressure to take out additional maintenance contracts on different things around the home. When there was plumbing work needing done that she claimed for and they said that she would not be insured for this type of taps and different work that was required to be done around the home after putting the pressure on, saying she was a widow and she would be vulnerable. It is just that they have access to this personal information and they are not always using it wisely.

Chair: Okay, I will take a couple from this side now please. Yes, the gentleman towards the back with the light grey shirt; yes, with his hand up, please, and then one rather near the front. We will try to respond to the points in a moment.

Q11 Speaker 9: My name is [...]. I am representing Haemophilia Scotland. Can I just refer to the point this gentleman here made. I am a wee bit concerned that there is a danger that the notion of fuel poverty is referring primarily to those not in employment and in socially deprived areas. Although these people obviously need the most attention and most direct action I believe there is a danger that there is a very large constituency somewhere in the middle of people who are in good jobs with good incomes who also suffer fuel poverty and who, like me, dread their quarterly bills coming in. I was interested in Norrie's figure, 40%. Norrie, you are saying of Scottish people is just in fuel poverty, I am sure the lady at CAB Scotland is seeing more and more people, even just four or five years ago, who are middle class people who are feeling their energy bills, it would not have been a problem are now experiencing this issue. I want the assurance from the politicians on the Committee that they their understanding of the term "fuel poverty" affects not just the most vulnerable people in society. It affects everyone.

Chair: On that point there is a statistical definition of "fuel poverty", and that is an absolute measure. The kind of people who may fall into that category may well have changed over the last few years but it is a quantified measurement.

  A gentleman just a little bit further at the front here.

John Robertson: Before you take the mic, can I just say there is nearly a million people now in Scotland who hit the fuel poverty area, and I have raised it on a number of occasions in Parliament, believe me, and it is one we will look at and are looking at.

Mr Lilley: I think the Government commissioned a new definition of fuel poverty, or an analysis of how it might change from Professor Hills, who is an expert in poverty and low income households. I do not think it has yet been adopted. He has only just reported, and I certainly have not yet read his report, but there is, therefore, consideration as to whether the existing definition, which is simply households where a certain percentage of their income is consumed by their fuel bills, should be adapted in some way. I think your point is one that is being considered.

Q12 Speaker 10: My name is [...]. I am just a concerned home owner from a local area down here. One of my concerns, why doesn't the Government step in and do something about all the profits that we read in the paper that the gas board and the electricity board are making? Cut their costs, surely that would help this heavy billing that everybody is getting.

Another point I would like to make as well, I hear you talking about smart-meters and things like that. I have all kinds of meters in my house. My gas and electricity bill just now is £400 a month. I go into all the suppliers, I say, "This is extortionate. I cannot afford to pay this". You cannot get anybody to come out. You cannot get anybody to check your meters. They are putting in smart-meters. You can watch them. You can watch the lights coming on. What do you do? I am shouting at my three kids every day, "Get out of that shower". We cannot afford the gas to run the shower every day, let alone twice a day. That is how bad it is getting. The Government has to step in and do something about the money they are making. I am fed up reading in the papers they make multi-million pounds every year and I am struggling to pay my bill. I have to go and work six days a week to try to meet the bills in the household to keep the household together. I would be better packing my job in and going on to the dole, let them pay for it. I think that is a shocking attitude for me to take. I have worked all my life and I am really concerned about the way it is going. I cannot think for the day I retire because I cannot afford to. It is shocking the way the general public have to try to deal with this.

Chair: Two of the three MPs here are over retirement age, but that is a matter of choice, I dare say. On the question of profits, clearly profits should be at a reasonable level. We do have to see sufficient profits to attract the investment. We need over £100 million of investment in new generation and transmission capacity in this decade, and to attract that—I do not think taxpayers are keen to fund it—we have to allow companies to make profits. But there are concerns naturally, and we have touched on these and we will return to this issue, that the companies, the Big Six particularly who have a very dominant position in the market, may well be exploiting their market power. In particular, prices do seem to go up sometimes faster than they come down. If you track the relationship between the wholesale and the retail prices, there is a suspicion, I think—the expression "up like a rocket and down like a feather" has been used to describe the way in which the pricing works out. I think that is a legitimate point. It is hard to respond exactly. When you say £400 a month it sounds an awful lot of money to me, but I do not know how large your house is and how many people live there and so on.

Speaker 10: It is not that big, I can assure you—

  Chair: I do think it is worth, therefore, getting advice. I would have thought that the scope for some energy efficiency measures if a bill is as high as that is probably quite considerable. That advice is available if sought.

  Mr Lilley: Sounds like an ideal candidate for the Green Deal, of which I am not normally a wholly convinced advocate but in your case it sounds sensible.

Graeme Mullin: Yes, we would be quite happy to come out and get one of the G-Heat advisers to maybe go through some of the things with you. If you want to grab myself or one of the advisers before you go, certainly I am sure we can give some advice.

Q13 Speaker 10: They do not want to know your problems. You go down and they will ask, "What do you have in your house? How many fridges do you have? How many televisions do you have? Oh, you should not be using that amount of electricity" but still you have to pay your standing order every month or you have no gas or electricity. That is how serious it starts to get, and it really gets me down that that is the way you have to live.

Graeme Mullin: Yes, and that is the problems that the G-Heat team and the advice that is given through Glasgow that they come across every day. As I say, most of the contact with the utilities is done over the phone and you do not have the face to face, so if we can send somebody in person maybe to try to push it the right way and maybe liaise on your behalf with the utility company, we will certainly try to help.

If I can just come back to Catherine's point as well just about the warm home discount of £130, it is a constant source of frustration for us that we come across people every day, every week, who should be eligible for the warm home discount and the utility company do not recognise it. It generally takes us to make a phone call on the client's behalf to get them registered for it. It is not very well publicised on the website or by the utility companies so it is probably one of the bigger criticisms that we come across. Again, we come across people who maybe have huge debt issues that we handle advocacy cases for with utility suppliers and we go in and find out that they could have the warm home discount, so that is £130 better off they could be. Again, the default setting for utilities seems to be how quickly can they try to recover the money rather than how can they look at the person's circumstances and how can they help. It is a view that we share and that we come across day to day.

  Chair: I am aware that some people who have already contributed are trying to get in again, but at the moment I am favouring people who have not yet had a chance to say anything. I will start with the gentleman right at the back and then the lady in green, second row back there.

Q14 Speaker 11: My name is [...], and I suppose I represent my children. I would like to say how much I agree with the first speaker. The way these energy companies are behaving, I think they have been taking lessons off the banks in the way that they ship gas out, ship it back in, change the price. To be quite honest, Centrica, BP, whoever is buying the gas in Malaysia, this is the same company that is exporting the same gas out of the country and bringing it back in. These people are running rings round you in the same way that the banks ran rings round you. One way of dealing with it would be perhaps renationalisation. Perhaps nationalisation was a good thing after all, this would not be happening, but we know which party decided to open up this market and it is a big free for all and we will all get the best deal. All we actually have is a cartel and it is the same cartel that we had with the oil companies and the seven sisters, only it is the Big Six now, one of the sisters is dead.

Maybe one way you could deal with it is to take a golden share in each of these companies the same way that when Rolls-Royce was put out the Government held a golden share so they could basically say to Rolls-Royce, "This is what you will do". Perhaps sometimes you tend to think that politicians are just basically in bed with these people because you mentioned about retiring coming up. Where will you retire to? A seat in the boardroom? This is exactly what happens. There is a revolving door between Parliament, big companies, seats on boards, remuneration committees. The people can be fooled some of the time but not all of the time.

One more thing, when you talk about a million people here in Scotland being in fuel poverty, it is not so much a million people, it is 20% of the population. Do you have any answers to this? Twenty per cent of the population are living in fuel poverty. What percentage is now also going to be living in food poverty? A country that has so much resource and they contribute so much, and yet we live in a state of abject poverty. We are going back to the days of Dickens here. We either heat our homes or we starve. We should not be making the choice of can I afford to buy a pair of shoes.

Chair: Okay, you have made a very powerful point there, which goes a bit wider than energy and, indeed, I think when we talk about fuel poverty many of us feel that the solution to that does not lie only in energy policy. It may lie partly in energy policy; it lies more widely in how we tackle the problem of poverty generally. I will let others respond in more detail to your points, but I would just like to let the lady in green there with her hand up.

Q15 Speaker 12: My name is [...]. I am voluntary chair of Community Central Hall in Maryhill, which is a community organisation, a very large one. We are situated in what is regarded as one of the four most deprived constituencies in Britain.

I would like to draw together a couple of points that people have been making, I think it is important because we have to ask what is Government policy going to do about it. Now, first of all, Glasgow has particular problems. We are one of the most dense cities in Europe for living. The majority of our residents live in flats in Glasgow and that is our basic housing. When you talk about the energy efficiency measures and the incentives, the people who stand to benefit most are suburban areas because that is where you can benefit from solar panels, from all kinds of measures and many generation systems, and you can benefit from the feed-in tariffs. But who pays for feed-in tariffs? The consumers who live in older housing, in flats that are very dense, often poorly built and for which there are minimal measures that can be taken. These are the people who suffer also from the standing charges. It is not just the people who are in fuel poverty at present but most of Glasgow is probably marginalised because of their own situation. That is also a large percentage of the population. I think this is a policy that needs to be addressed because it is not just rented private housing, it is not just—socially registered housing accounts for about 40% of our catchment area, but the rest of the housing is either private rented or privately owned. Because a person is an owner-occupier it does not mean to say that they are wealthy either or that they can afford the situation. They are very often at the mercy of factors who have interest in maximising their income. They are very often intimidated by them. There have been factoring Bills in Parliament but they are not enough. It needs to go further. But also, the problems of many older people living in this housing need to be addressed as well because all this is related to it. When you give preference to one section of the population you may well damage others. I think policy is very insufficient in this area and it needs to be addressed.

  Chair: Thank you. John, do you want to talk—

John Robertson: Yes. Peter I know well and Anna I also know well. What surprised me is I am probably on the side of the audience as far as I am not in their party. Having said that, I understand exactly what you are saying. It is nothing, I have to say, that I have not said in my own way. What I do know is that in fairness to my colleagues this Select Committee has been very good in not being political, and I mean that by not taking up a political stance like some other areas of Parliament, particularly I have to say in Scotland where the committees here have become more and more political. We do believe that we try to do the best we can. Yes, it is very difficult. Yes, there are a lot of people in poverty and, yes, there is a lot we want to do. The housing in Scotland is not great and we know the problems Glasgow have. Again, it is something that we have to strive to improve. What I will say is that my colleagues at the end there who have worked very closely—sadly, I suppose in a way—Citizens Advice and also G-Heat, who have done a lot of work for me, and I know Energy Action is good as well and they have helped me out in a number of areas. If anybody needs any help, these are the people to talk to. They are the experts on this. All I can do is try to persuade the Government to go down a different road. We do give them a hard time. I have to say our Chairman is an excellent chairman and he gives his Secretary of State more than a hard time when he comes up and it is something that I quite enjoy doing because I think they deserve it. Let me finish on this. I do believe that the Big Six are ripping us off and I do believe that we as politicians have to bring them to account, but I also believe that this Government will not do it without us pushing and shoving them down that road.

  Mr Lilley: On the question of most of the benefits going to the suburbs, it is very important that we make sure that that is not the case. Indeed, earlier the Committee went and saw a community heating power scheme here in Glasgow, which is ground breaking and is basically entirely social housing, not suburban housing. That could be a model for elsewhere if it all stacks up economically.

On the gentleman who said the rise in bills is all due to the Big Six energy companies, well, that is partly what we are looking into. In a sense, I hope we find he is right because if that is the case then we can deal with it. If they have been increasing their profits, they are British companies; those profits will be within our domain. We can seize that money back or if it is monopoly profit, monopoly power driving up profits above what is necessary to remunerate the investment that is being put in and to attract future investment, then the whole anti-monopoly power of the state should come down and ensure that does not happen. But I am not sure that that is the case. Obviously, we cannot nationalise the oil fields or the gas fields in Malaysia or Nigeria. The Malaysian and Nigerian Governments can if they like, but we cannot. Any profits that are being made out there are outside the control of the British Government. We can control the margins that energy companies are levying on top of the cost of imported gas and oil and coal, but we cannot really influence the world price and the world price has gone up. IPPR, which is a left of centre think tank, says that the bulk of the rise in energy prices is due to the increased cost of fuel and the wholesale cost that creates. Ofgem says the margin has gone up from about £30 on the average bill to £85. Now, I do not trust those margins and it may, of course, have gone up from a higher figure to an even higher figure. One reason I do not trust them is because it shows five years ago they were all making a loss. Although I am a capitalist, I believe in market forces, I do not think oil companies voluntarily subsidise us, oil or energy companies, so there is something funny about those figures. We have to get to the bottom of it, but I very much doubt whether we will find that the bulk of energy bills is there for taking back. Most of it is due to higher world prices, which we suffer from.


Q16 Chair: I think we are going to be out of time as some of us have to go back to London on the flight in a little while. I know that people are keen to get in again, but I will just ask if anyone else on the panel wants to say anything by way of winding up.

Norman Kerr: Can I say something on housing? A number of people have spoken about housing tonight. John Robertson mentioned the fact that there is a different regulation in housing and housing down south will be regulated in terms of its energy efficiency from 2018. That does not apply to Scotland and I think it is incumbent upon organisations like ourselves and those who represent householders to press the Scottish Parliament to ensure that that legislation comes in here. But I will also say in terms of fuel poverty the work that John Hills has undertaken in terms of redefining fuel poverty will thankfully only apply south of the border and the Scottish Parliament have said that they will maintain the definition of fuel poverty in Scotland that gives us greater scope to include a whole range of more vulnerable people, as was mentioned up there, in terms of how we support people. So there is a bit of yes, some things are good down south but some things are bad up here, and I think we have to look at what the best of those things are and push politicians both in Westminster and at Holyrood to move in the right way.

  Chair: Okay. I am sorry we cannot accommodate people for a second round, but we have been talking for nearly an hour and a half now and we are driven by the timetable. No, I am sorry, we took a question from you earlier on, I am really sorry. I would just like to reiterate what John has said that this Committee is absolutely determined to act in the consumer interest. Peter has made the same point that if there are abuses, whether they are by Government or by companies or regulators or any agency that is involved here, we will address those and get to the bottom of them. We do try to operate as far as possible by consensus. We think we have a much greater influence if there is a group of 11 MPs from three parties all agreeing, and I think the evidence shows in the last couple of years that our reports and recommendations are taken very seriously by the Government and, indeed, by the industry. I am very grateful to you all for coming along. I hope you regard this as a useful exercise. In one of our reports we called for an honest conversation between consumers, businesses, academics, regulators, politicians, Government and so on, and this is part of that process of trying to promote the honest conversation. It has been a very valuable session for us and we have staff from the Committee here and staff from Parliament who will take note of what has been said. Thank you all for coming along.

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