At last year’s Labour conference, Ed Miliband and Caroline Flint’s announcement to freeze energy bills made the political weather. But a price freeze alone cannot fix the energy problems looming ahead, so what is Labour’s offer beyond the energy freeze? This was the question put to a panel of experts at a Progress fringe meeting at this year’s Labour party conference in Manchester.
Ruth Cadbury, Labour’s parliamentary candidate for Brentford and Isleworth, was chair for the session. She opened the meeting by reminding us that, despite it being a warm and sunny Sunday in September, the price of heating was still a worrying issue for her constituents who have seen incomes stand still and costs of living go up. And on the day in which thousands of people were taking to the streets in support of action to tackle climate change, it was important to remember that where we get our energy and how we use it is also a significant matter of climate change too.
Jonathan Reynolds, shadow minister for energy and climate change, was the first speaker. He highlighted how Labour’s offer to consumers was going to go much further than the price freeze alone. Fixing people’s energy bills and upgrading the energy network requires a three-tiered approach – first, the market needs to be reformed so that it works in favour of the consumer again. Second, we need to help people to use less energy, and Jonny flagged up Caroline Flint’s forthcoming announcement about Labour’s plans to insulate millions of homes. Finally, people need to be empowered to understand how to use energy more appropriately through technologies such as smart meters. Focusing on this third tier, he emphasised that the smart meter rollout must be focused on benefits for customers and trials so far have seen household energy use fall by 3-9 per cent and 90 per cent of bills being accurate. To roll this out more widely, though, Jonny pointed out that the cost of smart meters have to be kept under control and, if the poorest households are to see any benefits, they need to work for pre-payment meters too.
Claire Maugham, director of communications at Smart Energy GB, the organisation tasked with engaging consumers on the rollout of smart meters, agreed that this was an essential part of the energy market reforms needed. She explained that four in 10 consumers they had spoken to did not feel they had right information to know if a bill was accurate. While there has been an increase in the information available to consumers, there is a glass ceiling on this as we are limited by the technology – our energy meters were designed in the 1880s. Smart meters will provide so much more information that no market reforms will be fully effective without the rollout.
Clare Francis, editor-in-chief of MoneySupermarket, supported the need for greater energy efficiency, but added that even without any new technologies households could save £200 a year by switching suppliers. Unfortunately, though, consumers are not taking advantage of this as they see all energy providers as the same and see switching as too much hassle. As well as new technologies, we need more work to help people understand how to make the most of the information we already have.
Polly Billington, Labour’s parliamentary candidate for Thurrock, added to Clare’s points about consumers being suspicious of energy companies. She said that the people she meets are actually livid about an energy market that does not work for them and sees huge profits coming hand in hand with rising bills. As a result of this lack of trust, voters from a range of political backgrounds are reaching the conclusion that renationalisation is the answer. While that is not necessarily the right solution, Polly argued that simply making a few consumers a bit more savvy will not work either because that is still twisting people into a market does not work. We need large-scale market reform, to build an energy market that works for consumers – which will include locally owned generation. If we do not, then we cannot build trust, and without trust it will be difficult to make the changes we need.
Lawrence Slade, chief operating officer of Energy UK, explained that smart energy is key to everything the energy industry wants to do in the future. The smart meter is the way consumer will interface with this and so is vital to making the modernisation of energy infrastructure happen. At the same time, the industry is also making the transition to low carbon future, which means the days of cheap energy are gone, he argued. Energy efficiency will be key to keeping the bills down and smart meters will help by showing how much energy is being lost and motivate people to insulate or pick more energy efficient white goods. Switching suppliers and insulating will be important but understanding how you use energy will be key to keeping bills low in the future.
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If you missed Consumers and the energy market: What’s Labour’s offer beyond the freeze? at Labour party conference you can catch up with the discussion here
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Melanie Smallman is co-chair of SERA, the Labour environment campaign, and deputydDirector of the UK Hub for Responsible Research and Innovation