What can the government do now to help with energy bills this winter?

We’ve just invested in Air con using inverter technology with heat pump systems. Although the move was designed to keep the place cooler during the incredibly hot weeks we can get in summer, because the outside temps are now so cool the system only provides heat. It harvest the outside air and extracts the ambient heat from that.

What we both found fascinating was the amount of hot air the system produced yesterday, almost silently in production and a great deal more cost effective than using electricity or gas. The Government do provide grants for the heating aspect, but not if the system is also capable of cooling. However, they do only levy a charge of 5% VAT on the entire job. Perhaps this is an area that needs examining?

I feel that the CMA skated round the edges of the problems with domestic energy costs so I am not sure why this is the “Last Chance” saloon for the energy companies. So long as we need energy there will be energy suppliers and unless they are much more heavily regulated they will continue to confuse people with complicated tariff structures, obscure bundling of products, exit penalties, and various tweaks to their terms [for example, standing charges, paperless billing] that bear no relation to the underlying economics and merely distort the unit price.

New energy companies come into the market but they are not achieving critical mass because their volume requirements are too low to compete against the major suppliers which also have massive contracts to commerce, industry, schools, prisons, military establishments, government buildings, airports, hospitals, railways, street lighting, and so on. For them domestic energy is a side-show but if any one of the smaller companies did start to encroach on the market of the Big Six they would be taken over just to eliminate the competition. I am not sure whether the government understands all this and its implications but unless these arrangements are broken up there will not be an open competitive market for domestic energy.

If the government is serious about bringing fairness into domestic energy supply it needs to demonstrate that by progressively rolling back the various levies and obligations that are loaded onto energy prices and put them where they belong – in general taxation. These levies overbearingly impact on poorer consumers and those with higher energy needs; they are a very regressive form of taxation. And much more thought needs to be given to how to help people in hard-to-heat homes that cannot easily be modified so are paying disproportionately for their warmth – it is not always a matter of choice and alternative cheaper fuels are not always available.

I have been reading and re-reading this paragraph from the Intro :

“It’s time for the government to be turning up the heat on energy company bosses. With 70% of energy customers sat on poor value so-called ‘standard’ tariffs, these energy companies should be genuinely competing to win and keep their customers, getting them engaged and switching to better deals, all the while delivering a much higher standard of service.” Leaving aside the unnecessary words “sat” and “so-called“, what is this “higher standard of service” that is being called for? The quality and consistency of our gas and electricity does not seem to vary, it seems to be available round the clock in whatever quantities we need, we do not have to go outside and fetch it indoors in a bucket, and there is no gold-plated version for richer consumers. So I am struggling to comprehend this entire paragraph, and when I come across phrases like “genuinely competing” and “getting them engaged” I start to despair of any sense emerging on the real problems.