Fuel Poverty Bill

Part of Prayers – in the House of Commons at 10:49 am on 20 March 2009.

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Photo of Frank Dobson Frank Dobson Labour, Holborn and St Pancras 10:49, 20 March 2009

We all have to recognise, though, that that will leave the Government bound by any decision that we take and subject to something over which, at the moment, they have no control: the variation in fuel prices. If we are really going to deal with the problem of fuel poverty, we need worldwide to do something about fuel prices. Fuel poverty here causes some deaths; fuel poverty in the third world causes hundreds of thousands of deaths. Hundreds of thousands more people have died as a result of the surge in the oil price worldwide, and that is an international disgrace. Indeed, it is even more disgraceful, in that it is a product of what is, in effect, a cartel between the Governments and the oil producers.

Let us consider the apparently reputable oil companies, of which I cite two examples: BP and Shell. Whoever is right about the figures, be it the hon. Member for Somerton and Frome or my hon. Friend the Minister, BP and Shell's profits were so enormous in the last financial year that they are roughly equal to splitting the difference between the two estimates, and that is just in one year. So the cost of a programme that is intended over several years to deal with insulation in the whole of Britain is roughly equal to the outrageous profits of just BP and Shell in the last year for which figures are available. I sometimes feel that people lose a sense of the real scale of what is going on in the oil-producing industries.

The oil companies did not make these profits by producing more oil. In fact, sometimes they make more profit by producing less refined oil, because sometimes, that way they can bump up the price of refined oil. One of the biggest things that happened was a huge increase in the value of the oil companies' stock assets, and so they made these extra profits. When the oil price soars, so does the value of their oil. Everyone in this country knows that, to say the least, they have not been slow in putting up the price to the consumer. They never seem anything like so swift in working to reduce prices when the reductions come. When it is time for the reductions, they say, "Well, there is a time lag," but for some reason or other, when the oil price internationally goes up, there does not seem to be quite as big a time lag between that and the prices they charge to the consumer going up.

Of course, the same point applies to the gas and electricity companies, which were sold off by the Tories when they were public assets at roughly a third of their real value. So even people as stupid as those who ran the Royal Bank of Scotland, had they been investing in the gas and electricity utilities, could have run at a pretty steady profit.