Hayes in the House: Heating Oil
The conflict in the Middle East has, once again, exposed how we have blindly allowed the means of production for much of what we consume to be outsourced abroad. In doing so, we favour vast supply chains that span the globe, often exploiting those who make or grow the goods we enjoy.
During periods of global stability, the enthusiasts for unbridled free trade are quick to praise the apparent effectiveness of their economic model – presumably oblivious to the inherent, profound risks to national economic security resulting from a dependence on foreign goods. In recent less stable times, as supply chains were crippled by a world-wide pandemic and war in Ukraine, economic liberal eyes ought to have been opened to the vulnerability global shocks bring; instead, having abandoned the domestic production which could have mitigated their impact, we reeled from both these unexpected crises. Recent events in Iran illustrate again just how the misguided liberal fascination with globalisation undermines Britain’s national interest.
The plain truth is that we manufacture too little and import too much.
Oil prices spiked by around 50% following the joint US-Israeli attack on Iran. Our reckless over reliance on external supply has meant we have little ability to withstand economic shocks. Knowing that the cost of crude oil working downstream will hit the pockets of my constituents, I know too that the Government must protect consumers from the worst results of this instability. The earliest effects are already hitting those dependent on heating oil as a primary source of energy.
Across the UK, there are 1.7 million such homes and businesses, with a disproportionately high number in rural areas like ours. Given that 40% of heating oil used in the UK comes from the Middle East, the industry is especially vulnerable to price rises, leaving the most disadvantaged without affordable energy.
Heating oil suppliers tend to be smaller firms from which consumers purchase as and when they need oil, rather than benefitting from the protection long-term contracts would bring. Concerningly, traders are not covered by Ofgem’s price cap – which prevents large companies from raising prices unfairly.
The absence of this price cap has resulted in, since the conflict broke out, predatory profiteering by heating oil suppliers, as the Chancellor of the Exchequer acknowledged. This was first brought to my attention by constituents who have seen their fuel prices double overnight. Since then, I have identified numerous cases of suppliers reneging on previously agreed orders, citing the need to ration, only to quote the same quantity of oil but at a greatly inflated price. Worse still, a constituent told me that a particular supplier refused to quote a price until after the delivery had been made – so robbing them of the chance to compare other suppliers’ prices or even to prepare for what they were obliged to pay!
Informed by local people’s experience, I am determined to fight for their interests in Parliament and, accordingly, I have called on the Secretary of State for Energy to implement a price cap that is tethered to supply costs. While I welcome the Government’s decision to provide £50 million for low-income families, that alone will not be enough to abate the problem for numerous others.
Not a single one of my constituents should be faced with fuel costs that make them fear for the future. So, I invite anyone who relies on heating oil and feels they have been treated unfairly to contact me – they can be confident that I will do all I can to help.