London Energy Costs

MQT on 2013-11-20
Session date: 
November 20, 2013
Question By: 
Murad Qureshi
Labour Group
Asked Of: 
The Mayor


What have you done to insulate Londoners from the impact of another round of double-digit price rises by 'the big six'?

Supplementary Questions: 


Answer for London Energy Costs

Answer for London Energy Costs

Answered By: 
The Mayor

Thank you, Murad.  You are asking about the huge energy price increases by the big six.  There is a very interesting thing going on in Britain, which is that the gas prices are in fact quite low per unit and the consumption is very high.  What we are doing to cut the costs is, of course, we have already retrofitted 99,000 homes in London, saving homeowners up to about £180 per year.  We continue to try to advise people through know-your-rights campaigns and everything else about how they can minimise their energy costs and how they can pay their energy bills most efficiently.


Murad Qureshi (AM):  I hear what you are saying, Mr Mayor, but the keyword in the question was “insulate” and what you have done to help Londoners face the cost of living crisis this winter.  You mentioned your own programme of the home energy efficiency, the RE:NEW programme, but it delivered well below its own targets last term.  We have had the energy companies reneging on their eco obligations, particularly in London, and it is clear that they will not be doing anything further on that front if you listen to EDF, particularly.  The national Green Deal programme has become a bit of a joke with only 219 properties getting eco works done nationally.  I just want to know: have you done anything to dissuade the energy companies against these crippling price increases and to make sure the energy companies undertake their obligations in London in particular instead of sending light bulbs?


Boris Johnson (Mayor of London):  Yes.  For instance, with British Gas and other energy companies, we are making sure that they spend their eco funds on helping us to insulate Londoners and we have a further 60,000 homes in the pipeline and 500 public sector buildings additionally trying to reduce the energy bills overall.  Right at the beginning in my oral update, I pointed out that we have a programme now with Islington to capture excess heat and help about 500 homes across the city.


Murad Qureshi (AM):  That is TfL.  That is not an energy company, Mr Mayor, with all respects.


Jennette Arnold OBE (AM):  It is Islington’s own energy company.


Murad Qureshi (AM):  OK.  That is the local authority, not one of these six energy companies ‑‑


Boris Johnson (Mayor of London):  No, it is TfL.


Murad Qureshi (AM):  You are just going off the point here, Mr Mayor.  Can I just point out another reality on fuel poverty?  The reality is a 1% increase in energy prices nationally pushes 40,000 households into fuel poverty.  If you look at the cold homes crisis and results from 2011/2012, we had 2,800 excess winter deaths in London.  Do you have at all a ballpark figure of the number of families in fuel poverty at this present moment?


Boris Johnson (Mayor of London):  I can certainly say that just off the top of my head I think there are probably 180,000 elderly people anyway in London who face that problem.  It is very acute and I understand the difficulty people face.  I think it was John Major [former Prime Minister] the other day who made this point very vividly.  Some families are facing a real crisis.  These energy companies face very considerable increases in their green responsibilities and their green taxes and ‑‑


Murad Qureshi (AM):  I am not asking you that question, Mr Mayor.  I am actually asking what you are doing.


Boris Johnson (Mayor of London):  I can tell you what we are doing.  We are retrofitting tens of thousands of homes.  We are continuing to run very big know-your-rights campaigns and we are trying to help Londoners to access the funds they need to get them through the winter.  I in no way underestimate the scale of the problem.


Murad Qureshi (AM):  According to figures for 2011 from the Office of National Statistics, we have 300,000 households in fuel poverty and that is about 10% of London households.  You can imagine how much that is going to increase now with these crippling increases.


I also want to be clear with the John Major comments, actually.  Only this week, you were prepared to get out of bed to defend the super-rich in your column in the Telegraph, yet you do not seem to be prepared to beat up the energy companies.


Boris Johnson (Mayor of London):  Do not be ridiculous.


Murad Qureshi (AM):  EDF has done very well out of the Olympics and all the marketing they had.  They operate like a private utility here and when they go across the Channel they would not dare do the things they do here in the UK in France.  I suggest ‑‑


Boris Johnson (Mayor of London):  I would beat up anybody but ‑‑


Murad Qureshi (AM):  I have not finished my question, Mr Mayor.  I suggest you actually support John Major’s suggestion of a one-off windfall tax on excess properties and energy companies because there are families in London choosing between heating and food on the table.  That is the reality for many tens of thousands of households in London this winter.


Boris Johnson (Mayor of London):  I understand that and certainly, if there was an easy way of doing this, I would.  What I do not think is credible is for Labour people to argue that energy companies are now charging too much when they festooned those companies with regulation, when they piled tax upon tax, when they saw a huge reduction in the number of energy suppliers ‑‑


Murad Qureshi (AM):  I would rather see it be done on their profit margins than the general taxation bill for Londoners.


Boris Johnson (Mayor of London):  ‑‑ and they now claim to be able to somehow magically cut the bills.  That is not credible.  In London, we face a shortage of electricity substations.  We face a serious shortage of power.


Murad Qureshi (AM):  You are going to be supporting their price hikes for the future?


Boris Johnson (Mayor of London):  We need to keep investing in our energy supply.  Otherwise, quite frankly, you can have a quick fix.  You can have a quick Wonga-like fix.


Murad Qureshi (AM):  You are going to accept their crippling price increases for the foreseeable future?


Boris Johnson (Mayor of London):  Murad, you can have a Wonga-like fix, but then the bills will go up in the future.  I think you have to look at some of the ways the energy companies have been regulated.  You have to look at the decisions that were taken to spend vast sums on totally pointless or only marginally useful wind farms over thirteen years.  You did absolutely nothing to tackle the problems of supply.


Murad Qureshi (AM):  Chair, I have made my point.  I did not want to go into supply issues.

Boris Johnson (Mayor of London):  If you do not have enough supply, you cannot expect the energy to be produced at a reasonable price.  That was the fundamental problem that Labour failed to tackle because you did not have the guts to go and build the nuclear power stations 20 years ago that this country needs.  You fudged the issue year after year and we are reaping the whirlwind now.