Posted: 24 April, 2012 at 1:14 pm

Government writing a “blank cheque” for energy companies – MP

Government writing a “blank cheque” for energy companies – MP

Local MP John Healey has accused the Government of “writing a blank cheque” for energy companies and urged them to “get a grip” of a programme to fit smart meters.

The £12 billion scheme being led by energy companies will be paid for by consumers through bills – but there is no guarantee savings will be passed on, Mr Healey said during an adjournment debate he secured in the House of Commons yesterday.

He added: “The Government need to get a grip on some of the essential elements of the national programme. I am concerned that consumers will end up footing the big national bill without knowing it.

“The cost of the meters in total will be about £12 billion. All costs are going directly on to the bills of consumer, yet there is no requirement to report these costs or show these costs on consumer bills; there is no guarantee that companies will pass the considerable savings on to the consumers in their bills; and above all, there is no control over costs of installation, other than the Government’s assertion that market competition will do the job.

“The Government are writing a blank cheque for the industry.”

Consumer watchdog Which? estimate smart meters will save energy suppliers more than £300m a year, and they have called for the current roll-out strategy to be halted.

Mr Healey said he was “both a supporter and a sceptic” of the smart meter programme, which was started by Labour in Government and aims to install 55 million high-tech gas and electricity meters in all UK households and businesses by 2020.

Potential benefits of the scheme include: an end to estimated energy bills; real-time information on energy use; new tailored tariffs; pay-as-you go options to end the penalty premium that hits the poorest, using pre-payment meters at present; easier switching; and remote connection, disconnection and meter reading.

But the MP added: “The benefits, both environmental and financial, can only be fully realised if there is widespread take up and if consumers use the information to reduce their consumption, to change tariffs and to switch suppliers if needed to get the best deal.

“Confidence, knowledge and trust in the smart meters are therefore essential. Allowing them to run the roll-out without clear Government leadership risks damaging confidence. The Government’s hands-off policy therefore risks the very future of smart meters.”

Mr Healey said there were already reports of mis-selling and if problems were allowed to escalate it could damage confidence, with consumer protection in the energy industry too weak and trust at an all-time low.

The MP also said he was concerned the poorest consumers were being put last.

“Smart meters should do away for good with higher charges for people who prepay for their energy, but none of British Gas’s 400,000 smart meters replaced prepayment meters and Government work on how prepayment will be built into the smart meter specs is being pushed back further into the future.”

Responding, DECC minister Charles Hendry MP said the Government were setting rules through a licence-backed code of practice to make sure consumers have a good experience throughout the installation process.

Notes to editors

1. Read John’s speech and the minister’s response in full on Hansard here: http://www.publications.parliament.uk/pa/cm201212/cmhansrd/cm120423/debtext/120423-0004.htm#1204245003179
2. More information on smart meters and the roll-out is available on the Which? website: http://www.which.co.uk/energy/creating-an-energy-saving-home/guides/smart-meters-and-energy-monitors-explained/
3. Read more about Which?’s call for a stop to the smart meter roll-out here: http://www.which.co.uk/campaigns/energy-and-environment/smart-meter-roll-out/