The Guardian's Edward Lawrence wonders whether proposals by the energy secretary will make a difference to vulnerable people. First published by the Guardian on Thursday 29th September 2011.
Winter fuel payments can help with energy costs. Photograph: G. Bowater/Corbis
Last week Chris Huhne, the Liberal Democrat energy secretary, told the party conference that he was determined to get tough with the six biggest energy companies
One of Huhne's proposals – which no doubt will be subject to intense lobbying by the energy companies – was to give Ofgem more regulatory powers. These would involve giving Ofgem in certain circumstances the ability to fine energy companies 10% of their profits.
Sounds sensible doesn't it? The sort of thing no right thinking person could disagree with, given that energy prices have doubled since 2004.
But on closer inspection Chris Huhne resembles King Canute – who famously, so the story goes, had his throne put by the seashore and ordered the waves not to come in. Huhne's words are as futile as Canute's.
The King's courtiers had said he was so great he could command the sea to stop. His gesture was to point out that words, no matter how well intentioned, had no bearing on events that would happen regardless.Why do I think this? Because when Ofgem found that British Gas was negligent in its customer service, it fined them £2.5million. It was reported in the Wall Street Journal as a stiff fine, and evidence the regulator wasn't toothless. The next day – 28th July 2011 – British Gas posted half year profits of £1.3 billion. Some disparity between the stiff fine and the profits.
This isn't only of academic interest to me, although it does expose the rank hypocrisy of government ministers in their desperate attempts to appear tough, whilst actually leaving business to do as they please.
No doubt energy companies would point out in their defence that they are merely passing on the rising cost of fuel to the consumer.
But to me it is personal, given that I am wholly dependant on benefits which have not risen in line with the fuel charges or the cost of living generally, as anyone on benefits is all too aware. The situation looks likely to get even worse. Given that the country is in the grip of a recession and people are losing their jobs, not only will the Treasury be losing taxation revenue, it will also be having to pay more unemployment benefit.
Her Majesty's customs and excise recently estimated that the amount of tax that was uncollected was £35 billion in 2009 -2010. The situation is further exacerbated by the news that the International Monetary Fund has forecast our gross domestic product to rise by 1.1%. The economy is the nautical equivalent of the Titanic just before it encountered the iceberg.Obviously there can be no correlation between people on benefits being afraid to heat their homes because of the cost.
The government will no doubt talk up the winter fuel payment as evidence that it is doing everything it can to encourage people to heat their homes.
Everything to help? Each person gets either £100, £200, or £300 depending on their circumstances.
But as someone haemorrhaging cash, living on benefits with many outgoings and precious few incomings, the winter fuel payment is about as much use as a plasticine football. Although if one doused the plasticine football in paraffin it might be a short-lived source of heat ... But then when it burnt itself out you would be left in the cold again – with only the warm words of the government to heat you.
