PRESS RELEASE
July 30th, 2008
From the office of DUNCAN MCNEIL, MSP for Greenock and Inverclyde
Fair deal for energy customers
Local MSP Duncan McNeil is backing a plan that could hand the area’s most vulnerable people major savings on their bills.
The UK’s leading energy suppliers recently agreed to spend £150 million a year on initiatives to help the fuel poor by March 2011, including the introduction of further ‘social tariffs’ that offer special rates to disadvantaged customers.
Now Mr McNeil is backing a parliamentary motion that seeks to hold the energy companies to their promises.
Lodged by his MSP colleague David Stewart, it calls for consistent and clear definition of a social tariff.
This is so that the special rates being offered by energy suppliers are guaranteed to be the lowest possible tariff on offer – not always the case under the present guidelines.
The current recommendations also state a social tariff rate has to be ‘at least as good as the suppliers standard direct debit tariff’ – excluding thousands of people who already pay by this method from further assistance.
Greenock and Inverclyde MSP Duncan McNeil also believes more has to be done to help the 543,000 ‘fuel poor’ Scottish households with the threat of further price increases on the horizon.
He said: “We have to ensure that these are not empty promises and this assistance get to the people who need it.
“The sharp rise in fuel prices over the last few years has pushed thousands of people into fuel poverty and something must be done ease the burden on these homes.
“There is a very real threat that prices will continue to rise sharply and leave many homes feeling the squeeze.
“So we must act now to ensure the everyday things that many of us take for granted to become out of reach to others and force people into debts.”
Fuel poverty is defined as a household that spends more than 10 per cent of its dometsic income on fuel.
The parliamentary motion has received cross-party support and has found favour with pressure groups like Energywatch.
Mr McNeil also praised one supplier, Scottish and Sothern Energy, which has taken steps to clarify its social tariffs and has pledged to quadruple the number of customers who benefit, giving relief to 100,000 homes.
Ian Marchant, chief executive of SSE, said: “"The next biggest contribution which suppliers can make is to ensure social tariffs are genuine.
“Vulnerable customers need the lowest prices available, not simply a tariff labelled ‘social’, and that principle is at the heart of our new Code of Practice.
“Many previous claims about spending on ‘social’ tariffs do not conform to this principle.
“Our social tariff does, and we are going to quadruple the number of customers who benefit from it.”
ENDS
Copy of motion:
S3M-02294 David Stewart (Highlands and Islands) (Scottish Labour): Social Energy Tariffs— That the Parliament notes the agreement for the UK’s energy suppliers to spend £150 million a year on initiatives to help the fuel poor by March 2011; views with concern the fact that initiatives being proposed include social tariffs that are more expensive than the supplier’s best offer; notes that Ofgem’s definition sets the threshold for a social tariff rate as being “at least as good as the suppliers standard direct debit tariff”; further notes that since many fuel-poor households currently pay by direct debit, a significant proportion of people living in fuel poverty are effectively excluded from any additional assistance; believes that recent price increases and the potential for further price increases means there is an urgent need for additional assistance that reaches fuel-poor households, and supports representations made to Ofgem and the major energy suppliers by Energywatch and a coalition of NGOs that would require social tariffs offered to those hit hardest by increasing energy prices to mean the lowest tariffs that suppliers offer on the market.
ENDS