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Off-grid Households

Volume 533: debated on Thursday 20 October 2011

2. What progress he is making on ensuring that off-grid households have access to affordable heating fuels in the winter of 2011-12. (75583)

12. What progress he is making on ensuring that off-grid households have access to affordable heating fuels in the winter of 2011-12. (75595)

On Tuesday, the Office of Fair Trading published its study of the off-grid energy market, which found that action is needed to protect heating oil consumers in some areas. Ahead of next winter, the Department has been working with industry and consumer groups in a national campaign to encourage customers to order early and ensure they are well prepared for winter. We have also reminded terminal operators to ensure that they have sufficient salt to maintain access to their depots in the event of snow and ice over the coming winter.

I welcome the study published this week and the debate yesterday, when a lot of contributions were made on this matter. I encourage the Minister, though, to think about extending Ofgem’s protection to consumers so that they can all enjoy greater focus and access to the energy ombudsman.

As my hon. Friend will be aware, I extended an offer to her and other colleagues yesterday to meet me to talk about how we can take forward the work of the Office of Fair Trading to identify potential market abuses that still need to be dealt with, to see how the gas grid can be developed and to check that the appropriate regulation is in place.

The OFT report this week risked letting a number of companies who behaved pretty badly last winter off the hook. Is the Minister not tempted to send some of these issues to the Competition Commission?

The OFT was very clear on this matter. It said that it was looking for guidance from outside input on whether there should be a Competition Commission referral. It has said that it will continue to look into cases of potential market abuse to ensure that consumers are protected.

The Domestic Bulk Liquefied Petroleum Gas Market Investigation (Metered Estates) Order of 2009—excuse me for giving its full title—from the Competition Commission has failed abjectly to increase the ability of metered estates using LPG to change. What is the Minister going to do about that?

The hon. Gentleman raises an important issue. One of the most complex areas to try to get a market to operate in involves entire estates metered by a single access point. I am happy to talk to him further, and to other colleagues who have concerns about this matter, to see whether there are ways to take the situation forward. I share his concerns that people living in such estates do not always get the protection to which we feel they are entitled.

It is the affordability aspect of this matter that concerns me deeply. The OFT report clearly indicates that the experience people once had of getting cheap fuel in the summer months, especially heating oil, no longer exists. We need to look seriously at the affordability aspect, especially for low-income households that have never before been in fuel poverty but are now being driven into that category.

The hon. Gentleman makes a useful point. This summer, we have not seen the drop that one would expect. After a year that has seen unrest in the middle east, it is clear that wholesale prices are higher. It is therefore understandable that the drop has not been so great. We should not fall into a trap, however, of assuming that prices will not ramp up again in the busy period before Christmas and the cold winter. There is a real sense that consumers are ordering early to ensure that their tanks are as full as they can be at this point, because one thing about which we can be absolutely certain is that as we move towards winter, prices will go up further.

A significant number of my constituents are dependent on home heating oil to heat their homes. There have been severe price rises in recent months. Is there not a clear case for regulation in off-grid as well as on-grid energy? Will the Minister consider that urgently?

This issue is more acute in Northern Ireland than any other part of the country. Many more consumers are off-grid in Northern Ireland than elsewhere. This issue therefore has a particular resonance there. The OFT investigation established that 97% of consumers have access to at least four independent providers—“independent” being the critical word. The OFT is prepared to look again at examples of consumers not having access to a sufficient number of operators. In addition, where there is a potential takeover, the OFT will require it to be investigated if it appears to be uncompetitive.