My hon. Friend makes a good point. Parts of rural areas have successfully rolled out super-fast broadband. I must commend the super-fast broadband project in Cornwall; we have very high penetration levels, even in some remote rural areas. She makes a fair point: we need parity across our nation. People living in remote rural areas should not be disadvantaged. As policy makers, we should always consider fairness and parity.
Consumers facing high prices and related competition issues are also bereft of the regulatory protections and consumer support that many on-grid households take
for granted. Ofgem has no responsibility in the off-grid energy sector and the OFT can investigate only how well the market is operating. Off-grid energy customers with a complaint against their supplier have only one recourse: their local trading standards team. Support from such teams differs across the UK and is extremely limited in many places. Some moves have been made towards the self-regulation of the off-grid energy sector. The Federation of Petroleum Suppliers, a trade association whose membership delivers 80% of the UK’s heating oil to homes, has a code of conduct that requires members to
“act with integrity and honesty”.
The federation is apparently preparing a more rigorous code, giving further specification on what would constitute a breach of “integrity and honesty”. However robust that code is, the ultimate sanction will remain loss of membership. Given the number of suppliers who successfully trade without belonging to the federation, that sanction does not constitute such a disincentive.
Inadequate regulation is matched by limited support for off-grid customers. On-grid households can access a range of support, including a dedicated team in Consumer Focus, but many off-grid consumers struggle to find expert advice. In the words of Citizens Advice, when giving evidence on consumer advice for off-grid customers to the all-party group:
“A team in DECC… that we knew we could go to, would be nice... we just need a far more coordinated effort, essentially.”
That stakeholder experience of consumer advice matches that of too many off-grid customers. To assess the off-grid energy sector is to assess a range of frustrations faced by off-grid energy consumers, from high prices, possibly caused in part by a lack of competition in the market, to inadequate regulation and a lack of dedicated consumer advice.
What can be done to tackle those issues to ensure that off-grid customers benefit from assistance commensurate with that directed to on-grid households? The all-party group’s report suggests a number of common-sense changes that would make a real difference to off-grid gas consumers. The benefits system could recognise the high prices that off-grid consumers face. Two particular benefits are specifically designed to assist with the cost of energy: the warm home discount and the winter fuel allowance. Citizens Advice and the Energy Saving Trust support proposals to create a higher rate in the warm home discount to reflect high off-grid prices. Last year, the hon. Member for Angus (Mr Weir) promoted a private Member’s Bill that would have enabled off-grid gas consumers to receive their winter fuel allowance in September, rather than December. That simple change would allow older consumers to purchase heating oil at low summer rates, thereby saving an estimated £200 a year.
To help to secure lower prices in the long term, the OFT could be asked to reopen its study into the off-grid energy market, using more localised data. Such a revised study could provide a more definitive answer about the scale of competition issues in the market and suggest possible resolutions should such problems exist. To provide regulatory protection and consumer support to off-gas households, the Government could set up a dedicated team within the new competition and markets
authority to regulate the sector and support consumers. Community Energy Plus describes the creation of such a body as
“essential to ensure price parity across the market”.