The NPC has written to the Ofgem Chief Executive, Jonathan Brearley, about recent changes to the energy price cap and oil fired systems.
You can read and download both letters below.
NPC letter to Ofgem on the Energy Price Cap
Dear Mr. Brearley,
The National Pensioners Convention (NPC) is the largest campaigning organisation for pensioners in the UK. We have 1.1 million members across the country and we are unique in that the organisation is run by pensioners for pensioners.
We would like to refer to your letter of 24 May to Rt. Hon. Rishi Sunak MP (Chancellor of the Exchequer), and Rt. Hon. Kwasi Kwarteng MP (Secretary of State for Business, Energy & Industrial Strategy), in regard to the price increases that we expect to see in October.
In paragraph two of your letter, it appears that Ofgem are resigned to capping energy costs in the same old way. We would suggest that perhaps a better way to make a decision on the cap would be to take account of the huge profits being made by oil companies. Ofgem could either deduct profits from the wholesale cost of fuel and lessen the cap, or it could set the cap at a lower level and oil companies can take the rest out of their still very nice profit margins.
Although the government has announced emergency measures, they are not enough to cover the huge cost of living increases across the board. They have also delayed one off payments and so do not relieve the pressures households are under today and tomorrow. They also do not take a long term view of pensioner poverty, which will only get worse rather than better without measures to deal with a state pension that is the most inadequate in Europe and indeed the world. The value of the state pension has eroded over the last decade despite the triple lock and therefore more pensioners face poverty as its purchasing power has reduced.
Whatever the reason(s) for the huge inflationary prices of fuel, ordinary people are now suffering real hardship. It is not just the cost of energy to heat homes and cook meals, it is car fuel, food, rents, council tax, increases in interest rates on mortgages and loans, indeed all the everyday things we have to pay for to live.
The NPC believe that Ofgem and the government should sit down together and look at immediate and long term measures you can take collectively that will help the customers you are there to protect. The systems applied by energy companies are excluding those with the least income at a time when the need is greater.
We make some suggestions and ask the inevitable questions that would seem to pensioners to be logical and reasonable as a way of rationalising costs to customers and prevent discrimination through exclusion.
1. Standing charges: It has always been a mystery why we pay on a daily basis to have a meter in our homes that enables energy providers to produce bills for us to pay. We understand that meters do need replacing now and then, but this charge must generate a substantial amount of income for energy providers that is more than the cost of fitting and maintaining meters. Reducing or removing these charges would help every household.
2. Winter Fuel Allowance: The NPC would want to see a permanent increase in the level of the winter fuel allowance for pensioners to £500. There are two reasons for this. The allowance has been frozen for the last 11 years whereas utility bills have risen and risen. When first implemented, the allowance roughly covered a third of household energy bills. Today, we are lucky if it covers one eighth. Secondly, older people spend a higher percentage of their fixed income on energy costs.
3. Why are companies allowed to discriminate against those without the option to use Direct Debit and those who monitor their spending through key/card meters. Digital exclusion affects millions of older people as well as those with disabilities and low incomes. All customers should be treated equally out of respect for their custom and not have to pay different tariffs because they are unable to use online services or bank cards.
4. VAT on energy. Energy is an essential part of living, enabling us to keep warm in the colder days, cook our meals, watch our TV, run out computers and all the other daily uses of machinery. Is it not enough that energy companies make a profit without the added burden of 5% on our already inflated bills? Removing this would not necessarily make our bills affordable, but it would mean a little less out of our pockets.
5. The glaring missed opportunity to immediately invest in the insulation of cold, damp housing to bring properties up to a decent standard, which would mitigate the cost of energy to householders.
We ask for a collective response to this letter. We do this because we are concerned that government policy decisions are made in isolation of each other without any understanding of the impact one upon another. Life is difficult enough as you age, this is not the time to abandon anyone let alone the pensioner population. Ofgem and the government can, and should, do more to protect customers now and in the future.
Download the letter on the Energy Price Cap
NPC letter to Ofgem on the Oil Fired Systems
Dear Mr. Brearley,
Re: Oil Fired Systems
Further to our letter dated 30 May 2022 in regard to the issue of energy and the Chancellors support package, I have been reminded by some of our members that it would appear none of these measures apply to those using oil fired systems.
Those of our members who live in rural districts or in areas where gas pipelines are not appropriate are forced to use oil fired systems that have always been more expensive and inflation has made this considerably worse with no regulator or price cap controls.
In the months since October when it was 42p per litre, it rose to around £1.30 per litre before settling back to around 95p a litre now. Taking the price today, over the winter months the cost averages out at £1900 with the potential for further increase due to inflation.
The Chancellor makes no reference to oil fired systems in his package of support and that is very worrying for those paying increased prices. We wonder whether Ofgem has a stance on this method of heating and if you would be kind enough to raise with the government the fact that this section of the population does not appear to be receiving the same assistance as those on traditional heating systems like gas and electric.
From the environmental perspective, many of these systems are used in residences that are listed and therefore come with limited government help to cover the cost of the delicate work needed to convert them.
We would very much appreciate your thoughts on this matter and any assistance you can give in raising the profile at government level to ensure that everyone receives help in these very difficult time.
Download the letter about Oil Fired Systems