SPF: OUR CAMPAIGN ON ENERGY PRICES
For many pensioners, fuel poverty is a very real issue and the recent, and projected, energy price rises are only set to make the situation much worse. For too long, the choice between eating and heating has been a harsh reality for many people across society. Against this backdrop, it is hardly surprising that latest statistics show that the average life expectancy rates are now in decline.
The Scottish Pensioners’ Forum believes that the lack of effective regulation under Ofgem has resulted in a broken and not fit for purpose ‘energy’ market. Regulation is still no substitute for real social responsibility. On 26th August 2022, our hand delivered letter to Ofgem made it clear on behalf of our members and affiliates that Ofgem:
- Appears to lack a clear customer focus either at Board or Management level with its decision making skewed in favour of generators, distributors and suppliers
- Appears to give priority to commercial rather than consumer interests without any mechanism in place to limit company bonuses and dividend payments, with many being posted / forwarded to overseas jurisdictions
- Seems to have no effective mechanism for ensuring networks are robust enough to cope with British weather
- Has, by allowing a whole host of additional charges to be imposed, many of which should be government responsibility, permitted daily standing charges to rise at a faster rate than unit charges with the result that despite customers economising on energy use, a significant portion of their bill will remain unaffected
- Has licensed a plethora of new entrants to the energy supply market without ensuring their financial strength culminating in more than 30 of them going bust in the past year, with the resultant costs loaded onto customer’s bills
- Embeds regional variations in both unit and daily charges, especially in electricity, despite the whole system being largely interconnected. It is a fact, that electricity generated in Scotland and sent down grid to London is cheaper there than in Scotland. Scottish consumers face higher energy charges than any other part of the UK
- Disadvantages many vulnerable customers by permitting higher charges for pre-payment meters and non-direct debit accounts
- Has not ensured that customer credits built up as a result of excessive direct debit payments are fully protected. Its action in this area has come too little, too late
- Allowed customers to bear the cost of the roll-out of ‘smart’ meters which, increasingly, appear to be neither ‘smart’, totally reliable or cost effective. The Scottish Pensioners’ Forum therefore demanded that Ofgem:
- Is restructured to make it fully publicly accountable and embed a clear-cut customer focus
- Caps the profits of the generators, distributors and suppliers, also ensuring these are not ‘creamed off’ in excessive bonuses and overseas dividend or interest payments
- Ensures the stricter regulation of suppliers to ensure their financial health, restricts excessive direct debit payments and that customer credits are legally protected
- Equalises daily and unit rate charges across the UK as a whole
- Removes all elements of the daily standing charge aside from basic network charges.
According to energy campaigners, Ofgem is currently presiding over a shambles. Due to its failure to scrutinise the finances of approximately 30 energy supply companies’ pre-licence, these companies have since gone bust, leaving consumers to pick up the bill whilst allowing millions of pounds in profits to be syphoned off by their directors.
Energy consumers in Scotland already suffer higher energy costs than anywhere else in the UK, yet they now face quarterly increases to their bills. According to an OFGEM spokesperson this is due to the “very real risk of suppliers going bust, which would heap yet more costs onto bills”
In a strongly worded press release, Rose Jackson, SPF Chair commented: “It is a ridiculous situation that consumers should pay for the failure of suppliers who generate nothing but a culture of fear surrounding rising energy bills. At a time when consumers are generally facing massive hikes in their energy costs, many Scottish pensioners are facing the stark choice between eating and heating this winter.
“According to Ofgem’s own research in 2014, almost 80% of Scots were rationing their winter energy use and prices were nowhere near those predicted over the next few months – the consequences of this crisis are going to be catastrophic for so many. “Britain is lauded as one of the world’s largest and most stable economies, yet it cannot secure basic necessities for the most vulnerable people in society.'
Money expert, Martin Lewis, was right when accusing Ofgem of having sold consumers down the river!
The organisation has failed to protect the interests of customers, preferring to insulate the fat cats in their boardrooms instead. Ofgem has lost its focus!”
