Social Justice Minister calls for urgent overhaul of energy market

Wales’ social justice minister has called for an urgent overhaul of the energy market.

Jane Hutt warned that energy costs will remain almost double pre-crisis levels despite a decrease in the price cap from April.

She said: “The energy market needs a complete overhaul, so that customers are treated fairly no matter where they live and investment is made into local communities.”

Carolyn Thomas, a Labour backbencher, said it is a disgrace that standing charges, which hit those in fuel poverty the most, have been allowed to increase.

She told the chamber: “Standing charges also disproportionately impact my residents in north Wales, who are subject to the highest standing charges in the UK, and will be paying over £95 more than those in London.”

‘Injustice’

Ms Hutt recognised the injustice faced by people in north Wales, saying she has regularly called on the UK Government to introduce reforms.

She said: “There are two issues – the postcode lottery around the amounts charged, and the fact that costs are applied even when people have used very little or no electricity.”

The minister told the chamber north Wales households are hard done by because they live close to sources of affordable, renewable energy which is exported.

Ms Hutt said she has met the new chair of Ofgem and the Welsh Government has responded to a consultation on standing charges.

She said: “We need a solution that is fair to low-income and low-usage households, and that doesn’t continue to disadvantage households in north Wales.”

‘Destitution’

Delyth Jewell, who represents South Wales East, described the failure of the energy market as an inevitable consequence of privatisation.

Plaid Cymru’s deputy leader said: “It’s failed consumers, who have to pay extortionate prices for the basic necessity of staying warm enough to live.”

Ms Jewell warned that Ofgem’s new price cap will provide scarce comfort for many families.

She said: “It will do little to help households who still have prepayment meters being installed forcibly in their homes, a third of whom have been forced into self-disconnecting this year.

“And let’s not use nice language to hide the truth here – self-disconnecting isn’t a choice, it is enforced privation, it is state-sanctioned destitution.”

‘Social tariff’

Ms Hutt reiterated that major reform is needed as she urged Ofgem and the UK Government to take responsibility.

Criticising a lack of progress, she called for the introduction of a social tariff to help low-income households with their energy bills.

Jack Sargeant, who led a petitions committee inquiry into prepayment meters, warned there is nothing strict or tough about Ofgem’s new code.

He told MSs: “The disability charity, Scope, have recently said there are serious gaps in the new code, meaning that vulnerable people could still be forced onto prepayment meters.”

The Labour MS for Alyn and Deeside criticised Ofgem for failing to provide a response to the petitions committee’s report.

Mr Hutt agreed that it is an unacceptable way to treat a parliamentary inquiry, saying: “We need confidence that Ofgem is treating the Senedd with equal respect to Westminster.”