British Gas announces bumper profits whilst thousands struggle to make ends meet: Here are 6 steps Labour MEPS are proposing to tackle energy poverty
British Gas reports a £574m annual leap in profits whilst many households struggle to pay their energy bills.
Last week, British Gas announced a 31% rise in household energy profits as wholesale prices for energy hit a five year low; leading to further calls for energy companies to pass on savings to British households.
British Gas, making up over 40% of UK gas accounts, argues that their own price cuts have reduced energy bills for consumers. However, these reductions are punitive and fail to address the underlying problems facing our energy sector, namely lack of competition and energy poverty.
What is energy poverty?
Energy poverty is defined as a household which is unable to support an adequate level of energy supply to achieve basic levels of comfort and health; due to a combination of low income, high-energy prices and inefficient energy homes.
Currently, over 50 million people are affected by energy poverty throughout the EU. This is unacceptable. In my view, energy is essential and access to energy services is a basic social right. The UK government and industry must do more to pass on savings to families.
What can the EU do to tackle energy poverty and enhance competition in the energy sector?
The EU has already taken great steps towards tackling and eradicating energy poverty. However, the New Deal for Energy Consumers, a report I am leading on in the European Parliament, outlines key recommendations to both protect and empower households.
The New Deal outlines 6 key recommendations:
- Eradicate fees or penalties for switching supplier: switching to a cheaper supplier should be easy and simple.
- Promote collective switching schemes and campaigns: large groups of consumers should be able to switch to reduce costs and burden.
- Develop rules for comparison tool websites: it should be easy to compare energy suppliers to get the best independent deal.
- Facilitate self-generation: it should be simple for households to generate, store and use their own energy.
- Promote the use of smart meters: it should be easy to monitor and manage consumption through smart meters.
- Maintain social tariffs: separate social tariffs for low-income and vulnerable citizens should be developed.
These 6 steps aim to provide citizens with stable, affordable, sustainable and transparent energy prices and information. We must empower citizens to produce and store their own clean energy, take energy-saving measures and become active participants in the energy market.
Through our EU membership we can eradicate energy poverty, protect consumers from uncompetitive practices and enhance competition. We cannot do this alone or through isolation. We are stronger when 28 Member States stand-up for vulnerable consumers and tackle big energy companies. Leaving the EU would undoubtedly leave households more vulnerable and energy suppliers more profitable.