18:59 - The House divided: - Ayes: 234 / Noes: 314 - Question accordingly negatived.
Caroline Flint (Don Valley) (Lab)
I beg to move,
That this House notes that the typical annual dual fuel energy bill has now hit a record high of £1,400; notes with concern the warning from the Fuel Poverty Advisory Group that 300,000 extra households could be pushed into fuel poverty this winter; further notes analysis by National Energy Action which shows that support for fuel poor and low income households will fall dramatically under the Energy Company Obligation; believes that the most sustainable way for households to cut their energy bills is to make their homes more energy efficient; and calls on the Government to ensure that the Green Deal is offered on fair terms and at affordable interest rates to the public, without punitive upfront assessment fees or early repayment fines, to ensure that appropriate action is taken against energy companies that have not met their obligations under the Community Energy Saving Programme or the Carbon Emissions Reduction Target, and to extend the deadline for Warm Front until the full budget for 2012-13 has been committed to expenditure.
As the cold weather sets in and parts of Britain are plunged into sub-zero temperatures, millions of families up and down the country, who are already reeling from the latest wave of energy price hikes, who have been hit by the strivers’ tax and who are facing an even bigger bill to renew their rail season tickets, now find that even the most basic human task of heating their homes has got a little bit harder than it should be. Today, the average family’s annual energy bill stands at a record high of £1,400, up by nearly £300 since the last election.
There are things beyond the control of any Government. No Government can control the weather from day to day or global gas prices, but the test of any Government is the way they respond to those events and the choices they make. I want to address the choices that this Government have made and show what we would do instead.
When we heard that a written ministerial statement was forthcoming today, it crossed my mind that the Government might have thought about our motion’s proposals and seen sense. Instead, the statement says nothing and does even less. I am afraid that it is not worth the paper it is printed on.
No doubt the Secretary of State will tell us that everything is okay. He will tell us that the warm home discount is helping low-income and vulnerable households, but he will not admit that it was the previous Labour Government who legislated for a compulsory rebate from the energy companies to their poorest customers. Nor will he mention that, under the Government’s scheme, hundreds of families with children are still not getting the help to which they are entitled. He will tell us about the support for local energy schemes that was announced yesterday and the energy company obligation, but he will not say how, even when those are taken into account, the level of support that this Government are providing for vulnerable, low-income and fuel-poor households has halved from what it was last year and that it is a fraction of that in years before that. He will say that it does not matter that Warm Front is ending or that the carbon emissions reduction target and the community energy saving programme have finished, because ECO is being introduced. However, over the next 10 years, the Government expect ECO to lift only 250,000 households out of fuel poverty. That is 50,000 fewer than will fall into fuel poverty this winter alone.
Mr Jim Cunningham (Coventry South) (Lab)
Does my right hon. Friend agree that 850,000 more people are now in debt to their energy suppliers? What does she think the Government should do about that?
Caroline Flint
It is very worrying, as my hon. Friend has stated, that Consumer Focus has indicated that both electricity and gas customers—often the same household will pay both bills—are finding that the debt that they owe their energy supplier is going up. That should be an indication that more needs to be done.
Caroline Lucas (Brighton, Pavilion) (Green)
Does the right hon. Lady agree that it is a scandal that under this Government, for the first time in 30 years, there is no Treasury-funded scheme to insulate people’s homes? Does she support the call to use the revenue from the carbon floor price or the emissions trading scheme on fuel-poverty measures?
Caroline Flint
I agree; as I will say in my speech, when Warm Front closes on Saturday, it will be the first time since the 1970s that a British Government have not provided an energy efficiency programme. That is a shame. In answer to the hon. Lady’s second question, I believe that we should look at how we can better deal with the issue of energy efficiency. Although the motion does not cover the suggestion that she has made, we have outlined how we can use some money that is already available to get to some of the most vulnerable households.
The difference between Warm Front and ECO is that the Government pay for Warm Front, whereas consumers pay for ECO through their bills. Starting ECO is therefore no excuse for ending Warm Front before the budget is spent.
As a result of the choices that this Government have made, more people are being pushed into fuel poverty, more people are being forced to choose between eating and heating, and pensioners are going to bed early to seek warmth in a house that they cannot afford to heat. Not only Labour Members are saying that. Transform UK predicts that more than 9 million households will be in fuel poverty by 2016. The Hills fuel poverty review, which was commissioned by this Government, but about which we have heard little since its publication, warned that unless Ministers change course, 200,000 more people are set to be in fuel poverty in the next four years and millions of families will be pushed into even deeper fuel poverty. Before Christmas, the Government’s advisers on fuel poverty, the Fuel Poverty Advisory Group, predicted that 300,000 more people will fall into fuel poverty this winter.
Mr John Redwood (Wokingham) (Con)
I agree with the right hon. Lady that we want lower energy bills. Does she understand that America followed a much more successful policy than the EU by going for cheap gas? Would she recommend that the EU learns from America so that we can have cheaper gas for all our people as well?
Caroline Flint
We have to look at the diversity of our energy supply, but it is unfounded to suggest that there is a silver bullet in relation to gas, because it is unknown as yet. There is another side to what America has done. For example, 40 million people in America are involved in collective switching schemes and, at a local level, community energy generation programmes have been supported through investment. There are things that we can learn from our cousins in America and elsewhere.
However, we are debating the choices that have been made by this Government. The fact that expert organisations are telling all of us as policy makers that the number of people in fuel poverty is going up means that we have to address it. It has not happened by chance or by accident; it has happened because of the choices that this Government have made. They have chosen to end Warm Front. They have chosen to cut winter fuel payments. They have chosen to cut dramatically the support for vulnerable, low-income and fuel-poor households. I am afraid that that is something that they have to face up to.
Ian Mearns (Gateshead) (Lab)
Will my right hon. Friend reflect on the fact that this ministerial team, in its different guises during this Parliament, and having had a destructive influence on the industry and on jobs in my constituency through the hasty downgrading of input tariffs, has now sneaked out the announcement that it will do away with the Warm Front scheme, which will further erode jobs in my constituency and have a devastating impact on the potential for people to get their houses insulated?
Caroline Flint
My hon. Friend is right. One side of this debate is about how we can help those who are fuel poor and tackle housing stock that leaks energy through its walls, roofs and windows. Another side is about hope for the future and addressing, through new forms of energy and energy efficiency, the prospect of real growth and jobs. I will say a little more about the number of jobs that are being lost.
Caroline Flint
I will give way to my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) and then I will make a bit of progress. I might take more interventions later.
Andrew Gwynne (Denton and Reddish) (Lab)
In a previous reply my right hon. Friend spoke about collective switching schemes. May I inform her that, as of this afternoon, 15,034 UK residents have signed up to the Labour-controlled Greater Manchester Combined Authority’s Fair Energy initiative? That will help them benefit from substantial combined purchasing power across the Greater Manchester city region’s 10 councils, and lower household bills as a result. Is that not a result of Labour in action?
Caroline Flint
It very much is an example of what Labour councils can do at local level and I am proud that the British Labour party was the first political party in British history to launch its own energy collective switching scheme.
Caroline Flint
I will make a little progress. A great political myth of our age is that there are no alternatives to the choices that the Government have made, but the truth is that if they can find £3 billion for a tax cut for the highest earners in the country—worth on average £107,000 a year for 8,000 people earning more than £1 million a year—they could have found some money to have kept Warm Front going, to have not cut winter fuel payments, or even to have invested in the green deal to keep interest rates down. However, they did not.
If the Minister wants to compare records I would be happy to do so. Time and again we have heard Ministers claim that fuel poverty went up under the previous Labour Government, which is just not true. Let me lay the myth to rest with a few facts.
Caroline Flint
No.
The simplest test of any Government’s record is to compare the number of people in fuel poverty when they left office with the number when they took office.
Caroline Flint
If the hon. Lady would like to listen to some facts she might learn something. Figures published not by Labour but by the Minister’s Department paint a very different picture to the one the Government try to portray. In 1996, the year before Labour entered office, 6.5 million households were in fuel poverty. In 2010, the year we left office, that number had fallen to 4.75 million—nearly 2 million fewer households in fuel poverty. That can be spun however people like, but those are the facts. Under Labour, fuel poverty went down, not up. That happened because of choices we made—choices to introduce winter fuel payments, to invest in energy efficiency through Warm Front and the decent homes programme, and to ensure that all new homes for the future will be energy efficient and zero carbon. We made a choice to invest in our health services, hospitals and communities to protect the ill, the elderly and the poor from the cold—[Interruption.] The hon. Member for St Albans (Mrs Main) asks from the Government Benches what that has to do with it, but as she should know, a good health service helps to prevent cold-related deaths.
Those are policies for which the Labour party fought and argued, often in the face of opposition. They are policies that Conservative Members pretended to support and pledged to protect when they knocked on doors seeking people’s votes, but which they quickly dumped as soon as they agreed to trade with their coalition partners.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
The right hon. Lady does not raise the standard of debate when she uses statistics in that way and does not engage with the real issue of how we measure fuel poverty. That is why the Government asked Professor John Hills to carry out a review of how we measure fuel poverty. The right hon. Lady knows that fuel poverty has been correlated more with the price of gas, and at one stage, because of the way fuel poverty statistics work, the Queen was deemed to be in fuel poverty. We want to reform those statistics so that we have a better debate and a better way of targeting money on those in fuel poverty. Does she agree with that?
Caroline Flint
Well, the Government certainly are not doing the job of tackling fuel poverty, and that will be outlined further in my speech and in the motion. Who in the House would disagree that the best way for people to save money on their bills is to improve their energy efficiency? That does not just keep out the cold for one year, it does so every year. If ever a Government set out to prove that they were out of touch and completely lacked any common sense, they would begin by making it harder for people to make their homes energy efficient.
Caroline Flint
I will perhaps take an intervention a little later, but I have taken quite a lot of interventions and I want to make some progress.
Let me come on to the green deal. We have always said that we want such a scheme to work. All three parties went into the general election with a pay-as-you-save scheme in their manifestos, and the pilot started under the previous Labour Government. Properly executed, it could really help to cut people’s bills and create jobs. In the build-up to the launch of the green deal, the Government have not been shy of making big claims for this policy. Ministers have proclaimed that it would reach 14 million homes by 2020, and 26 million by 2030. We were promised that it would create up to 100,000 jobs by 2015. They told us it would be the biggest home improvement scheme since the second world war. That is not the scheme before us today.
Under this scheme, just to find out eligibility and what measures are available, someone might have to pay £100 or more. This is a scheme where, instead of using the green investment bank to make green deal loans good value—as happens in Germany—interest rates could be as high as 8%. People could end up paying more in interest repayments and charges than the original measures cost. This is a scheme where, if people try to do the right thing and pay off their loan early, or have to pay it off because they are moving house and the new owner does not want to take on the green deal, they will be hit with penalty payments running to thousands of pounds. Yes, the Government who preach about debt will penalise people who want to pay off their debts. Under this scheme, according to the Government’s own impact assessment, the number of lofts lagged every year will plummet by more than 80%. This is a scheme that has so far seen nearly 2,000 people in the insulation industry lose their jobs, and 1,000 more put on notice of redundancy. For all the hype, this is set to be the green disaster, and the public will vote with their feet. Given the choice of deal or no deal, the public, in their millions, will be saying no deal.
Let us look at the obligations on energy companies. Not only have the Government made a mess of their flagship policy, but they have failed to get the energy companies to keep their side of the deal. In government, we put tough obligations on the big energy companies to make them offer energy efficiency measures for free, or at a very low cost, to households in deprived areas. Those programmes were known as the community energy saving programme and the carbon emissions reduction target, and they came into force on 1 October 2009 and ended on 31 December last year. Ministers and Ofgem have therefore had two and a half years to keep the policy on track. Instead, they sat back and did nothing, as month after month companies failed to stay on course, and they watched, in the final few months, as the energy giants threw money at the problem of take-up, which they should have dealt with far sooner and more effectively, instead of leaving their customers to foot the bill.
Ministers cannot say that they did not have any warning. On 16 May last year, I told the Government in this House that the energy companies were not on track to meet their targets. Let me remind the House what the Minister of State, Department of Energy and Climate Change, the right hon. Member for Bexhill and Battle (Gregory Barker) said in response:
“we fully expect them to deliver their obligations and we will make sure that they do.”—[Official Report, 16 May 2012; Vol. 545, c. 554.]
Now that the scheme has closed, will the Minister tell us whether he has kept his word and made sure that the energy companies met their obligations, or will he now admit that because of his complacency the energy companies have missed their targets? As a result, families across the country are facing a cold winter with poorly insulated homes when they could have been helped. If those companies have failed to honour their obligations, will he tell the House that he will expect Ofgem, as it states in the motion, to use its full range of powers to take tough action to ensure that companies know that there is a price to pay if they do not do what is required of them?
Charles Hendry
The point I wanted to make earlier—I am grateful to the right hon. Lady for giving way—is that in the interests of transparency can she confirm that the number of people in fuel poverty started to come down in about 1995 or 1996, as wholesale prices came down? They continued to decline until 2005, when they bottomed out at approximately 1 million, and then rose inexorably to 3 million, 4 million and 5 million from that point onwards as wholesale prices increased. That was not a matter of political success or failure; it was a matter of wholesale prices more than anything else.
Caroline Flint
I do not accept that it is just a matter of wholesale prices. There are issues about prices and I recognise the experience that the hon. Gentleman brings to the Chamber on this issue, but the truth is that if we had not had the decent homes programme, the Warm Front scheme and other measures to help tackle homes that leak energy, in both social and private housing, we could have left office with more people in the grip of fuel poverty. The truth is that the numbers went down.
Under Labour, the Warm Front scheme helped well over 2 million households insulate their homes, improve their energy efficiency and cut their bills. No one would pretend that the scheme is perfect—no scheme of such a size ever is. I have dealt with cases in my constituency where people have not received the kind of service expected, but when Warm Front closes on Saturday, the Government will be, as I have said, the first Administration since the 1970s not to have a Government-funded energy efficiency programme. I do not think that that is a fine record to set.
In its final year, it is no exaggeration to say that Ministers have run the scheme into the ground. The number of people receiving help this year is on course to hit an all-time low. Between 2006 and 2010, nearly 250,000 people were helped each year, but so far this year fewer than 22,000 households have been accepted for help—not 80,000, as the Prime Minister told the House earlier today. In the Secretary of State’s own constituency, just seven households have received assistance in the last year. I am not sure whether that will feature in his election literature in 2015.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
I understand that the Warm Front scheme helped a lot of people, but the right hon. Lady will recognise that the Public Accounts Committee report on Warm Front said that it was badly targeted, that about 75% of households were not expected to be in fuel poverty and that it did not really help any countryside house that is off the gas grid.
Caroline Flint
Labour has already said that those families and homes off the gas grid should come under better regulation supervised by a new energy watchdog. I take the point from the hon. Lady and others who are concerned about that. As I have already said, I am not suggesting that Warm Front is perfect. These schemes always need to be assessed to see whether they are delivering, but the truth is that 2 million homes were helped. Warm Front helped to ensure that people’s homes up and down the country were warmer.
Mr Iain McKenzie (Inverclyde) (Lab)
Does my right hon. Friend agree that it is a disgrace that 60% of homes in the country that can take cavity wall insulation have still not received it and that only 2% of those with solid walls have been insulated?
Caroline Flint
Absolutely, and the question is this: what have the Government been doing for the past two and a half years? [Interruption.] Well, for a start, 2 million homes received a Warm Front grant under Labour. What is this Government’s record? Let us talk about that. Even families who have been accepted as eligible for help under Warm Front are facing huge delays. Despite being asked parliamentary questions, so far the Government have refused to reveal the average waiting time, but yesterday morning on “Daybreak” I learnt of a single mum called Susannah Hickling who was forced to wait nine months.
From asking other parliamentary questions, I have uncovered a huge backlog. In response to a question on 18 December, the Government were forced to admit that of nearly 22,000 successful applications for Warm Front grants—fewer than we have had in previous times—just 6,000 have resulted in any work, meaning that nearly 16,000 families who have been told that they will receive help are still waiting, in the middle of winter. I understand that the Government are now saying that the backlog is only 14,000. That is hardly a sign of success. If that is the case, I hope that the Secretary of State will update the House on how many households are waiting and when they can expect the work to be done.
On top of that, a further 9,000 people have applied for assistance but are still anxiously waiting to know whether they will get any help before Warm Front closes for good. Notwithstanding the insulation or energy efficiency measures that have finally been installed, the amount of help that people end up receiving has been quietly slashed by two thirds compared with last year. This year, the average level of grant provided under Warm Front is just £997, but last year it was more than three times as much at more than £3,000. In short, we have a scheme in its dying days under which people are receiving less help than ever before, with a massive backlog and thousands of families being given the cold shoulder.
Disgraceful though that is, it gets worse. Despite all the hardship—the cuts in funding, the reduced help, the delays—the Government have been forced to come clean and reveal that more than half the budget is predicted to remain unspent. In answer to a parliamentary question from me on 12 December, the Government confirmed that, from a total budget of £100 million this financial year, just £34.8 million has spent, while another £15.1 million has been committed but not yet spent. That means that more than £50 million that this Government chose to set aside to help low-income households through Warm Front might not even be spent at all. Given that the average Warm Front grant this year has been just under £1,000, that means that some 50,000 low-income or vulnerable households could have received help but will not, unless the scheme is extended and Saturday’s deadline is pushed back.
Let me ask the Secretary of State a straightforward question. What possible justification can there be for shutting down a scheme and turning away people in need when only half the budget has been spent? If he cannot answer that question, will he not see sense today and agree to extend the Warm Front scheme until the entire budget has been spent or committed to expenditure? No one is asking for more money or for the budget to be increased. We are simply saying that if the Government have chosen to set aside £100 million for Warm Front this year, they should at least ensure that this support reaches the people it was intended to reach.
Gloria De Piero
It is a particular outrage and a disgrace—call it what you will—that there is money left over given that I and, I am sure, colleagues across the House are being contacted by constituents, including vulnerable and elderly people, who are trying to get help from Warm Front, but who have been told that they must wait or have not had the answer that they need in these freezing temperatures. It is nothing short of a disgrace.
Caroline Flint
It is indeed a disgrace. I do not say this without thinking about it first, but I think this Government have basically driven the scheme into the ground.
It makes it even more unforgiveable that we find ourselves in exactly the same situation as last year, when, despite repeated warnings, the Government had an underspend in the previous financial year of £50.6 million in the Warm Front scheme. Instead of that money helping people to reduce their energy use and cut their bills, it went back to the Treasury—presumably to help to fill the holes in the Chancellor’s borrowing targets. Why were Ministers not on the case? They have known since October 2010 that Warm Front was due to end this Saturday. After last year’s debacle, if I were a Minister I would have been all over this issue and not waiting for another car crash. Indeed, if I can access that information through parliamentary questions, Ministers should have known about the underspend, the backlog and the thousands of applications still waiting to be decided on. If they knew there was a problem, why were they not on the sofas of “Daybreak” or “This Morning”, or out in the country promoting the scheme and ensuring that people knew the help was available? The Government are keen on performance-related pay; perhaps they should start with the pay of Ministers at the Department of Energy and Climate Change.
Richard Fuller
I am extraordinarily grateful to the right hon. Lady for giving way. Perhaps my question will move her on to something more constructive and what we can do to improve some of the schemes. She has mentioned the Warm Front scheme and some of the problems with the backlog, but the Public Accounts Committee found that only 35% of the households that were likely to be fuel-poor would be eligible. Does she not think that it behoves us to look at improvements to the scheme? What would she recommend constructively that we could do better?
Caroline Flint
I will tell the hon. Gentleman what I recommend. There is £50 million in the Warm Front budget. The Government should delay the closure of the scheme and extend it so that more people can get what they need. Indeed, only 22 people in his constituency got Warm Front in the last year. Is he happy with that? Is he satisfied that £50 million will go back to the Treasury, rather than helping people in Bedford and every other part of this country? I suggest that he put that in his press release for his local paper, explaining why he will sit on £50 million before letting it disappear from the communities in Bedford and everywhere else in the country.
Sometimes there are Opposition motions whose purpose is to express a clear dividing line between us and the Government; sometimes they will contain policies or proposals with which we know the Government will not agree; on the odd occasion they will even be used to make a political point or two. In preparing today’s motion, however, we focused on common-sense solutions to some of the problems relating to Warm Front, the green deal and the obligations of the energy companies, in order to ensure that our energy efficiency schemes deliver, that help reaches those who need it most and that, even in these difficult times, people who are struggling are not needlessly left out in the cold when money is available and has been committed to help them. It is in that spirit that I urge all hon. Members to support a green deal that is a good deal, tougher action on the energy companies if they fail to meet their obligations, and the extension of Warm Front until its entire budget has been spent. I commend the motion to the House.
Mr Deputy Speaker (Mr Nigel Evans)
Order. Seventeen people have indicated that they wish to take part in the debate. The wind-ups will start at 6.40 pm, so we have a limited amount of time for Back-Bench contributions. I shall wait to see how long Mr Davey’s contribution takes before I announce the time limit on Back-Bench speeches, but hon. Members should not think too far outside the five-minute box.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
I am grateful to the Opposition for this opportunity to set out the many things the Government are doing this winter, and in the winters to come, to help people to keep their energy bills as low as possible and to keep their houses warm. I am under no illusion about how hard it is out there this winter. Times are tough, many people’s incomes are not going up, and the cost of necessities such as food is rising. I understand that higher energy prices are hitting some people hard, so let me make it very clear that rising energy bills are one of my greatest concerns.
We need to set the story straight on why energy bills have been rising. They have been driven remorselessly up by wholesale fossil fuel prices, as the right hon. Member for Don Valley (Caroline Flint) admitted. Global gas prices were 50% higher in the five years to 2011 than in the previous five years, and they have continued to rise. Sustained higher world oil and gas prices have taken some by surprise because, in the past, prices have fallen when the developed world has experienced recession and low growth. But today, probably for the first time in modern history, the fast-growing economies of China, India, Brazil and other parts of the emerging world are all demanding oil and gas. So world oil and gas prices have remained stubbornly high, and are likely to remain high.
Mark Reckless (Rochester and Strood) (Con)
My right hon. Friend referred initially not to rising oil and gas prices but to rising fossil fuel prices. Is it not the case that, although coal prices have fallen significantly, we are seeing no benefit from that because we are closing coal-fired power stations, including Kingsnorth in my constituency on 17 December, because of an EU directive?
Mr Davey
My hon. Friend is not quite explaining the situation fully. There is an awful lot of coal being burnt in this country and elsewhere, because of its low price, but that has not changed the picture because of the high price of gas.
Britain cannot control the global market. We cannot drive down international wholesale prices, but we must still do everything we can to help the people and businesses facing those rising global prices, especially the most vulnerable and those in fuel poverty—and, despite what the right hon. Member for Don Valley said, we are doing that.
Government policy is designed specifically to drive a wedge between global energy prices and energy bills, now and in the future. It is designed to enable us to cushion and insulate people from the hikes in global fossil fuel prices as best we can. The coalition has a plan to tackle ever-rising energy bills. When the Labour Government were in power, they talked big but did very little. They did not effectively target help on those who needed it most, they did not establish a new market in home energy efficiency and they did not reform the electricity market. We are doing those things. We are acting, whereas they just talked.
Caroline Lucas
Will the Secretary of State explain how promoting a major new nuclear power programme, which will require a subsidy of about £4 billion a year and which will inevitably push up prices, is compatible with trying to reduce the impacts on people in fuel poverty? It is going to make energy far more expensive.
Mr Davey
Two things surprise me about the hon. Lady’s question. First, she seems to know the details of the ongoing negotiations between EDF and the Government. I pay tribute to her if she knows them, but I have to tell her that her figures are completely wrong. Secondly, I would have thought that, given the real threat of catastrophic climate change, low-carbon energy would have changed a number of people’s views on nuclear power, if we can make it cost effective without public subsidy, in line with the Government’s policy.
David T. C. Davies (Monmouth) (Con)
Does my right hon. Friend agree that it is deliciously ironic that the Green party should be attacking the coalition Government for pursuing a form of energy generation that requires some kind of subsidy when it is determined to festoon the country with wind farms that require enormous subsidies to generate anything at all?
Charles Hendry
I was delighted to go to the constituency of my hon. Friend the Member for Monmouth (David T. C. Davies) to help open a wind-turbine manufacturing plant, which is keen to take advantage of this technology. That was not, however, the point I wanted to make in this intervention. Does the Secretary of State agree that the Labour did not just talk, but blocked progress? When the Minister of State, my right hon. Friend the Member for Bexhill and Battle (Gregory Barker), and I proposed a green deal as an amendment to the Energy Bill under the last Labour Government, Labour vetoed it. We could have seen progress two years earlier than it has happened.
Mr Davey
My hon. Friend is absolutely right, and he is an authority in the House on this issue. It was not just the green deal or nuclear or other things that Labour failed to do when in government; it failed to get investment into the energy system in the UK, and we are having to make up the backlog.
We are helping people now, in the short term, by intervening directly—getting extra money into the pockets of those who need it to pay their bills and looking after those who are struggling most—through the warm home discount. We are helping people now and in the medium term by helping everyone to be able to help themselves to cut their bills by saving energy through the green deal. We are ensuring through the Energy Bill that our country and future generations are not hit by future volatile fossil fuel prices, as we are being hit by major reforms for a more competitive, more diverse market of suppliers and energy sources. Let me deal with each of those areas in turn
Richard Fuller
We all recognise the differences between this Government and the last Government. This time money is short, whereas the last Government spent like drunken sailors money that they did not have. When we deal with fuel poverty, we thus want to ensure that the funding is focused on those who really need it. Will the Secretary of State address the issue that under the last Government schemes were not targeted on those who really needed them, and tell us what this Government are doing about it?
Mr Davey
My hon. Friend is absolutely right, and I am coming on to talk about that right now. Looking at the actions we are taking, it is clear that we are helping the poorest and most vulnerable with targeted extra money to help with winter bills. We need to make sure that those who feel the cold most sharply and those who can least afford to pay can put on the heating in the knowledge they will receive extra help to pay for it. For many pensioners, winter fuel payments make a valuable contribution to paying their energy bills. That is why we have protected winter fuel payments in line with the budget set out by Labour. Last year, we made over 12 million payments to over 9 million households at a cost of around £2.6 billion.
We are doing more for the poorest pensioners and for many other vulnerable households through cold weather payments. When the coalition came to office, cold weather payments were at £8.50 a week and had only temporarily been raised to £25. As cold weather payments target the most vulnerable when they need it the most, the coalition decided, despite the tough financial situation, to keep cold weather payments at £25 a week and to make that permanent, investing an extra £50 million a year. About 4.2 million people are currently eligible—older people on pension credit, disabled adults, families with children under five on an income-related benefit. They can now be sure that—year in, year out—if the temperature drops dramatically, they will get help with energy bills. We should be proud of that.
Mr Davey
I want to make a bit more progress.
In addition to the winter fuel allowance and cold weather payments, the coalition brought in the warm home discount—a legal obligation on the energy companies that we introduced for direct cuts to the energy bills of the most vulnerable. The Opposition rarely mention this, although to be fair to the right hon. Member for Don Valley she mentioned it today. She will know that so far this winter, more than 1 million low-income pensioners have already received the warm home discount to help keep them warm—and, with them, almost a million other vulnerable households with mandatory rebates worth £288 million this year alone, automatically cutting the bills of the most vulnerable by £130 a year. The Opposition do not normally mention that because it is clear evidence that we are doing everything we can to tackle fuel poverty, despite the financial situation we inherited. Even before cold weather payments can be claimed, a poor pensioner over 80 is guaranteed to receive £430 of help with their energy bill. Under Labour, a vulnerable household was not guaranteed anything, but with the coalition’s warm home discount, they can get £130 off for sure. That is real help.
Nia Griffith (Llanelli) (Lab)
How can the Secretary of State say that a pensioner over the age of 80 was not entitled to £400 under Labour, when they were entitled to £400 under Labour’s winter fuel scheme? Will he come clean and tell the House that his Government have cut that to £300, at the same time as cutting the £250 to £200? Can he tell us one week in this winter in which the cold weather payment has been paid to people in the UK?
Mr Davey
First, cold weather payments are related to the weather, which the coalition Government do not control, as the right hon. Member for Don Valley was at least good enough to acknowledge. I am afraid that the hon. Lady’s figures are wrong. Under Labour, £300 of winter fuel payments went to all pensioners, but through the warm home discount we guarantee £130 off their bills from the energy companies, so that amounts to £430 off for elderly pensioners. That did not happen under Labour.
Hywel Williams (Arfon) (PC)
One thing the Government could do is make winter fuel payments earlier so that people who are off grid and buy large amounts of oil, gas, coal or wood got more value from the money the Government are giving them. Will he consider that? Such a proposal was made by my hon. Friend the Member for Angus (Mr Weir) in a Bill that was blocked by Government Members.
Mr Davey
As the hon. Gentleman will know, the Department for Work and Pensions administers that benefit, and I am sure that he has made that request to the Secretary of State for that Department. My Department has been encouraging people in many parts of the country who are off grid to buy early, because they can get much better deals than if they leave it until later.
Although the extra payments are welcome to those who get them, they are not received by everybody. They do not address the fundamental problem of homes and appliances that waste energy and money. Britain’s draughty homes account for a quarter of the UK’s greenhouse gas emissions. Millions of homes do not have full double glazing. More than half do not have enough insulation or an efficient condensing boiler. Most do not even have proper heating controls. The single most effective means of bringing bills down for people, including for the most vulnerable, is to help people waste less energy. Energy efficiency is about using less energy to provide the same warmth, or more. That means lower bills and lower carbon emissions.
Caroline Flint
I quote the written ministerial statement from today:
“The Warm Front scheme has been an important policy in tackling fuel poverty among private sector households in England though the installation of a range of heating, insulation and other energy efficiency measures”
and since 2000 it
“has helped around 2.3 million households vulnerable to fuel poverty.”
Given that this budget has a £50 million underspend, will the Secretary of State explain why he is not urging his colleagues in Government to extend the Warm Front deadline so that the budget can be spent to help the very people he has just been talking about?
Mr Davey
I am coming to the Warm Front scheme, because the right hon. Member for Don Valley made much of the fact that we are closing it down. Under the previous Government, the Warm Front scheme was the vehicle by which some vulnerable households were helped, but we consider the scale of the fuel poverty challenge to be much greater, and, as she has admitted, there were problems with the scheme. We are far more ambitious, because fuel poverty must be tackled and Britain has some of the oldest and, therefore, draughtiest, housing stock in Europe. If we are serious about climate change and tackling high energy bills, we should not help just those who are at risk of fuel poverty, although they should of course be a priority. We believe that everyone should have the opportunity to green-proof their house and achieve lower energy bills in the process.
Warm Front will be closing, as announced more than two years ago, but applications will continue to be accepted up to 19 January, and the work will be followed through, for all who apply up to 19 January. I have set out to the House today in a written statement how that transition will work. Even before 19 January, we brought in Warm Front’s successor—the affordable warmth scheme, which the right hon. Lady did not mention, and which is part of our new energy company obligation. Affordable warmth is up and operating, and low-income households who previously could get Warm Front can now get affordable warmth. It and the energy company obligation, which are both now in operation, will support our most ambitious policy of all—the green deal.
This is a transformative moment. We shall see the full launch of the green deal this month. From 28 January, all households will be eligible for it. They will be able to make energy-saving improvements that will be paid for, over time, through their energy bills and the savings that they make. This is an affordable way of retrofitting millions of homes, making them cheaper to heat and lowering carbon emissions at the same time.
The right hon. Member for Don Valley rightly wanted to talk about Warm Front and the details of its budget. I shall deal with that now, although she herself admitted that there will problems with Warm Front. As she said, we have spent £38.4 million of the £100 million budget, and £15.5 is committed. We expect to spend about £70 million by the end of the year. We will not return the remaining £30 million to the Treasury, as the right hon. Lady implied, because we want to do all that we can to address fuel poverty, and we have worked hard to ensure that the money is spent on tackling it, organising a local authority competition for cash from a special fuel poverty fund. I told the House yesterday that about £30 million was being provided for local authorities across the country to spend on local energy efficiency projects for low-income and vulnerable households. There will be no waste. As it comes to the end of its life, Warm Front is being recycled, and what is replacing it is infinitely better.
Opposition Members seem to think that Warm Front was a fantastic scheme, but people had to apply for it, whereas under affordable warmth the energy companies will have to go out and find people in order to help them. I should have expected Opposition Members to support that.
Joan Walley (Stoke-on-Trent North) (Lab)
The Government announced yesterday that extra money would be available under the affordable warmth scheme. In Stoke-on-Trent, it will amount to £290,000, which could help 200 homes. However, when a quarter of the population are in fuel poverty, that is a drop in the ocean.
Caroline Flint
When—in, I believe, October 2012—the Secretary of State announced the competition for local authorities seeking to win money to help energy efficiency locally, did he make it clear that it would be Warm Front money? He has said that £30 million will go towards the scheme. What is happening to the other £20 million of Warm Front underspend?
Mr Davey
The right hon. Lady was clearly not listening when I said that we expected that amount to be spent by the end of the year. [Interruption.] It would help if the right hon. Lady listened now. She will know that uncertainties are involved in schemes such as this—even Labour could not macro-manage everything—but we expect to spend about £70 million.
The right hon. Lady asked whether we had announced that the money would come from the Warm Front scheme. We did not do so, because we were not absolutely sure what we would be spending on Warm Front by the end of the year. I wanted to ensure that we were making fuel poverty a priority, and that any underspend from Warm Front or anywhere else was targeted at it. Now the right hon. Lady is criticising me—
Caroline Flint
I am happy to withdraw it, but I will look into the facts to establish whether it was made clear in that announcement that the money would come from Warm Front.
Mr Davey
We did not need to.
Through targeted intervention to help the most vulnerable and by helping people to insulate their homes, we can help them to keep their bills down, but if we are to keep bills as low as possible in the long term, we shall need to ensure that there is a competitive market of diverse suppliers and diverse energy sources in which consumers can obtain the best possible deal. The Energy Bill, which is now before Parliament, is designed to do just that. We had a full debate on Second Reading just before Christmas, so I shall not go into the details of the Bill now, but I will say something about tariff switching, because I think that that has already been raised in the debate.
Switching has been the principal way to ensure suppliers compete for customers and to enable more suppliers into the market, but some statistics suggest the system is not working as well as it might and the majority of consumers do not seek out the best deals. Some 75% of consumers are on their supplier’s standard variable rate tariff, which tends to be more expensive. We therefore need to shake up the market.
We shall do so in two ways. First, we must help the vast majority of consumers who do not shop around to get the cheapest tariff their supplier offers that is in line with their current preferences. Secondly, we need to help and encourage people to shop around for even better deals, with better and more helpful and simple information on bills.
Many Members will by now know about my personal focus—some might say obsession—on collective switching, as it can help cut bills, promote competition and address fuel poverty. That is a collective solution to fuel poverty that the Labour party never thought of in 13 years. It is about encouraging people no longer to be passive consumers of energy, but to be active consumers, clubbing together to strike a better deal than they can get alone, and using the weight of thousands of voices—or whole local authority areas—to drive a harder bargain. It was not the Labour party that first pushed this idea into the political debate; it was this coalition Government and, if I dare say so, I and the Liberal Democrats in particular. This is about rekindling the spirit of co-operatives.
I have spoken many times about the many examples of this policy working, including examples in Belgium, the Consumers Association’s “Big Switch”, and examples involving South Lakeland district council and Cornwall Together. Yesterday, I announced the winners of “cheaper energy together”, a £5-million competition I set up last year to stimulate collective switching across the UK. I was thrilled so many councils and community groups applied. There were 114 bids, and the 31 successful bids cover 94 different local councils, so this year millions of people will have the opportunity to take part in collective switching schemes.
New ideas such as collective switching are part of the answer to high energy bills and fuel poverty, but no single measure will bring bills down, keep bills down and end fuel poverty. Today I have outlined a series of measures that will help people, both this winter and in winters to come, to keep warm at an affordable price, to save energy and to change the dynamic in the markets. While no Government can control global energy prices, we will do everything we can to limit the impact on people.
Taking all our policies together, by 2020 the average household energy bill will be 7%, or £94, lower than if this Government were not pursuing our energy and climate change policies. Last year, our independent review of fuel poverty suggested that our policies are reducing fuel poverty: we are doing the right things. That is good news, but there is no room for complacency.
No party in this House has a monopoly on compassion. When there are reports of people having to choose between heating and eating, we are rightly determined to make sure that we help the most vulnerable. I will do everything I can with my colleagues across Government, as well as working across the House and with business and consumer groups alike, to make sure that the choice between heating and eating becomes a thing of the past.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. A five-minute time limit on speeches is in place, and if Members shave a bit off their allowed time all of them will be called. Members should also be aware that if there are a lot of interventions, Members will be dropped off the list.
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)
This is one of the very few issues that can unite households across the United Kingdom. Labour Members have demonstrated that our party believes it is important to speak up for consumers, who are at the sharp end of ever-rising energy costs. Families and households are struggling to pay their bills. Let there be no doubt about the hardship that is being caused to millions of families and people, old and young, working and non-working.
Set against that background, it is important to understand that consumers have no appetite for rhetoric. They want Government intervention. They are demanding a fair price for the necessities of gas and electricity. We parliamentarians should be on the side of the consumers and be demanding transparency from the energy suppliers.
Mr Jim Cunningham
The energy companies have paid out £7 billion in dividends. Does my right hon. Friend agree that some of that money could have been used to lower energy costs for the needy in this country?
Mr Clarke
My hon. Friend has made an excellent point.
Just before our Christmas recess, I raised this issue with the Prime Minister when I said:
“let us be transparent…as one body has advised, approaching 9 million households suffer from fuel poverty, which is the highest since records began? Will he explain to the House and our constituents, as we approach Christmas, what the Government are prepared to do about the horrible scandal of fuel poverty?”
To be fair, the Prime Minister agreed with me in his reply, saying that I was
“entirely right that fuel poverty is a scandal and that it needs to be dealt with”.—[Official Report, 19 December 2012; Vol. 555, c. 851-52.]
However, he challenged my figures. Today, in common with my right hon. Friend the Member for Don Valley (Caroline Flint), I put on the record the fact that they came from the Government’s own advisers. The Energy Secretary must know that that is the case. If we are going to set the record straight, as I believe I have just done, we may learn what plans the Government have to help to reduce the horrendous levels of fuel poverty, which are clearly identified in the report I referred to and clearly understood by hon. Members on both sides of the House.
No fuel poverty figures are available on a Scottish constituency basis. Lanarkshire has two councils, and at this point I wish to thank my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) for the excellent point he made about councils getting together—mainly Labour councils—to protect their constituents against the excesses of the prices being imposed on them. North Lanarkshire council has 37,000 households in fuel poverty, which represents 26% of the housing stock. The adjacent South Lanarkshire council has 45,000 households in fuel poverty, which represents 32% of the housing stock. Given those shocking levels of fuel poverty, my Lanarkshire MP colleagues are supporting an initiative that has resulted in my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex) and I meeting the leadership of the North Lanarkshire and South Lanarkshire councils—again, that took place just before Christmas. I do not want to overstate the position, but the response from the Lanarkshire council leaders and the situation we have reached are deeply encouraging. Although it is important to hold the Government to account for their policies, it is now incumbent on Opposition Members to be more thoughtful and innovative. That is what my right hon. Friend the Member for Don Valley and my hon. Friend the Member for Denton and Reddish are aiming to do. Our duty is to offer alternative solutions, as we are doing.
On 23 January 2007, I said:
“It is my intention to explore every avenue with all relevant bodies. I have written to Ofgem—the Office of Gas and Electricity Markets—which has a duty to consumers, and to the Office of Fair Trading, which has a duty to ensure that, frankly, a cartel is not operating against the public interest.”—[Official Report, 23 January 2007; Vol. 455, c. 381WH.]
I am more convinced today than I was then about the probability of a cartel of energy companies being in operation. For example, I tabled three very simple parliamentary questions asking for facts that consumers are entitled to know, but not one was the subject of a reply. If we are talking about transparency, right hon. and hon. Members of this House are entitled to replies to the questions they put. If we are to hear from the Prime Minister information that is clearly wrong and if his Ministers give us the impression that they are living in another world, we are entitled to ask what the facts are. We are entitled to build on those facts, which we know because of our own experience in our constituencies. On the evidence so far, what is happening on fuel poverty suggests that it is time that this House asserted itself and said enough is enough.
David T. C. Davies (Monmouth) (Con)
We are all united today in lamenting the fact that so many people are suffering as a result of fuel poverty. I listened with great interest as the Minister, the shadow Minister and right hon. and hon. Members discussed what they would do about it—all the schemes that they have put in place, the Warm Front scheme, cold weather payments, the green deal, the affordable warmth scheme, collective switching, bashing the energy companies, subsidising people to put insulation in their lofts, and whether pensioners were getting £300 or £400 under Labour. There was no agreement about that, but it struck me that there was not a great deal of difference in what any of them were suggesting. The only difference was that Opposition Members were promising to do more of it and spend even more money, although of course they have no money because, as they admitted, they spent it all. There was very little difference.
We are failing to address a fundamental question. The energy policies of all parties in the House are predicated on the fact that man-made carbon dioxide emissions are causing global warming, that this is a problem and something must be done, and that the something that must be done is to change the way in which we generate electricity so that we do it through renewables and fund this through subsidies, which have to be passed on to consumers. Of course more people are suffering from fuel poverty under this Government and the previous Government. They always will, because we are pursuing policies that are increasing the cost of energy and we should be honest about that.
If we are to be honest about that, we would have to be honest about something else as well: the problem that we are trying to confront does not appear to be a problem. In 15 years, according to the Met Office website, there has been no increase in temperature. Let us think about that for a minute. Since 1992 the Intergovernmental Panel on Climate Change has been chucking out predictions, one after another, telling us that there are going to be monumental rises in temperature as a result of the fact that we are putting carbon dioxide into the atmosphere.
In the 150 years of industrialisation, the temperature increase has been around 0.7° and much of that will be due to the fact that we were coming out of a period of unusual cooling anyway from about the time that we industrialised. But for the past 15 years there has been no increase whatever. All the industrialisation that has gone on in China, India, Brazil and all those other countries has not led to a trace of an increase in global warming, which is another reason why so many people will stay in fuel poverty: they will continue to have to spend large amounts of money heating their homes.
I have spent a great deal of time looking into this issue. I voted for the various carbon taxes and the climate change Bills, and I am coming to regret the fact that I did. But I did not have the information that is now out there. For ages I could not even find the Met Office figures that show that there have been no increases. If there are no increases, it is surely reasonable to conclude that something other than carbon dioxide is affecting the atmosphere and climatic and temperature changes. If that is so, perhaps we need to rethink our entire energy policy—all of us.
I have come to the conclusion that it is time to do away with the carbon taxes, the subsidies and all the rest of it, to allow energy companies to generate electricity as cheaply as they can and to sell it to consumers as cheaply as they can. I look at America, where this approach has been tried out. The price of electricity for domestic users has halved in the United States as a result of the exploitation of shale gas through fracking. Obviously, Ministers will get no support from the environmentalists, but they will get no support from them anyway.
The first Member who intervened on the Minister was the hon. Member for Brighton, Pavilion (Caroline Lucas), the Green party Member, complaining about subsidies. I have never heard anything so ludicrous as a member of the Green party complaining about energy subsidies and energy price increases. We have followed its policies to some extent and obviously all renewable energies need subsidies and they will always lead to an increased cost, which is passed straight on to the consumer.
Caroline Lucas
I did not want to interrupt the hon. Gentleman because I did not want to give him any encouragement whatever, but he has now challenged me. Does he accept that fuel bills are rising now because of rising gas prices, not because of anything to do with support for renewables?
David T. C. Davies
I can assure the hon. Lady that I need absolutely no encouragement whatsoever. It would be a pleasure to discuss this issue with her at some point. She will understand that gas prices in the United States have not just halved—they are around a quarter of what they were a few years ago as a result of the exploitation of shale gas. I am tempted to suggest that she should join me in supporting that exciting new technology, but I have a feeling that I know what the answer will be. Of course she will not support it, and she will not support the Severn barrage, either, even though that would allow us to generate electricity without carbon emissions. She will not support nuclear power, even though that allows us to generate electricity without the carbon emissions that she would suggest are the greatest threat to our climate.
David Mowat (Warrington South) (Con)
My hon. Friend is making a very interesting speech. He has mentioned the United States and the fact that gas prices have gone down by a factor of four. The other interesting thing about the United States is that it was the OECD country that reduced carbon emissions the most last year, by replacing coal with gas—exactly the opposite of what Germany is doing.
David T. C. Davies
I thank my hon. Friend for that point. I am out of time and I will not impose on you, Mr Deputy Speaker.
Tear up the carbon taxes, tear up the subsidies—let us start again, deliver the cheap energy we know is out there and end fuel poverty that way.
Joan Walley (Stoke-on-Trent North) (Lab)
As I follow the hon. Member for Monmouth (David T. C. Davies), and having heard the exchanges just now, I know that I am on the side of the Secretary of State. It is vital that whatever the Government do on energy policy puts into effect the Climate Change Act 2008. If hon. Members, in the five minutes they have in which to make a speech, go on and on about the issues of climate change and scepticism—as we have just heard from the hon. Gentleman—we will not deal with the large number of people who, as we sit here, are unable to deal with the cold in their own homes.
Five minutes is not a proper amount of time in which to rush through a speech, but if there is any way that the Secretary of State could use the revenue from the European emissions trading scheme and the carbon floor price to provide the additional resources needed to eradicate fuel poverty once and for all, that would be just one contribution to this wide-ranging and complex debate that could make a difference to people in my constituency and across the UK.
As we heard from my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr Clarke), as many as 9 million people will experience fuel poverty by 2016. We must deal with that and doing so would I believe give heart to the 25% of households in Stoke-on-Trent who are in fuel poverty. Last week, the cold weather payment was triggered. That means that those people are having to decide whether to heat their homes or to feed their families. Our constituents are having to make those choices, so our debate today is timely. Although I welcome the money announced yesterday that will improve however many households, it will not produce effects on the scale needed to deal with the hardship that people face.
We have heard about the Warm Front scheme, and although it had its problems, the fact that it will end this Saturday—although we were given prior notice—raises the question of what will happen to that funding. I do not think that it should just go back to the Treasury or that the Department of Energy and Climate Change should just say that there will be extra money for different programmes. We need additional money and I urge the Government to consider that in the context of the current crisis.
Many Members want to speak, so I shall be brief. The green deal is fine for those who will be able to take out loans at 7% interest rates, but that will not be an option for the majority of people in my constituency. If we can increase expenditure on energy efficiency, that will create jobs, putting money back into local economies to make a difference.
The energy company obligation—the ECO scheme—will probably be of some help in Stoke-on-Trent. As we worked so hard to set up the warm zone scheme, into which I had a big input over the years, we are now well placed to know where the households are that can be targeted.
My final point is about district heating networks, which we must consider from the point of view of innovation. We need to look at what the Department for Business, Innovation and Skills is doing and how the Treasury is making money available. We also need to look at best practice in other European countries. If the Government are going to have a heat strategy that tries to increase the use of waste industrial heat in urban centres, that is exactly what Stoke-on-Trent would benefit from. The Government have set up a competition on carbon capture and storage. Why could they not think about giving technical support to ways of introducing district heating systems and providing some of the capital, preferably using money from the UK Green Investment Bank?
We need to step up the way in which we are dealing with fuel poverty and the whole energy agenda by viewing it as a crisis. It is not only about the need to decarbonise the economy; the crisis is also there in the homes and lives of our constituents. In this debate—I welcome the fact that it is an Opposition debate—we must find a way of moving the whole agenda forward.
Mike Crockart (Edinburgh West) (LD)
I will start on a positive note. The motion states that
“the most sustainable way for households to cut their energy bills is to make their homes more energy efficient”.
I could not agree more, as I said in my speech on Second Reading of the Energy Bill. To recap:
“Energy saving is the quickest and cheapest way to cut carbon emissions and so should be at the heart of…reform.”—[Official Report, 19 December 2012; Vol. 555, c. 930.]
However, I struggle with much of the rest of the motion, as Labour’s record on fuel poverty was appalling. Between 2004 and 2009, the number of households in fuel poverty rose from 2 million to 5.5 million, with the burden falling disproportionately on vulnerable households. If we accept the shadow Secretary of State’s logic, this was entirely—or at least mainly—down to choices made by the then Government. Under Labour, fuel poverty among vulnerable households trebled in just six years, with an increase of 500,000 from 2006 to 2007, just before the financial crash. In 2008, the Fuel Poverty Advisory Group went as far as to say:
“The Government appears to have given up on the legally binding 2010 Fuel Poverty Target”.
I am prepared to admit that a lot of that was due to wholesale energy prices, and that is what one does in a grown-up debate when one is searching for solutions and consensus. But it is a pity that Labour Front Benchers do not seem capable of that.
In Government, we are introducing measures to help millions of low-income and vulnerable households to meet the cost of heating their homes through the energy company obligation and the warm home discount scheme. There are winter fuel payments for more than 12.6 million pensioners in 9 million households and additional cold weather payments. We have welcomed the report by Professor John Hills that suggested a move away from the current definition of fuel poverty. The review is right to say that we should direct support to those who need it most rather than merely those with very large, difficult-to-heat houses, regardless of their income. I am pleased to say that we are not taking, and will not take, our lead on the issue from Labour, because this Government are committed to sustainable and affordable energy reform that will help people today while protecting our planet, our jobs and the economy in future.
In the medium to longer term, unfortunately, pressures on wholesale energy prices will probably mean that household energy bills go up. However, we have introduced new measures to ensure that energy companies are up front with people about the tariff they are on, and we are making suppliers more accountable to consumers by strengthening Ofgem’s role. Let us be clear: wholesale energy prices are a reason for increasing our investment in renewables to increase our energy security and help to insulate this country from the unpredictable wholesale market instead of running headlong towards the mirage of cheap shale gas. These reforms are radical and positive, and they will ensure that people get the best value for money.
Measures announced by the Government to ensure that consumers get the best deals on their energy prices reflect our determination to tackle rising energy bills. This is not just for fuel-poor households. Which? has stated that 82% of consumers list the cost of energy and fuel as a top financial concern, and it is even worse for those who are off-grid. We are therefore encouraging increased competition in the sector, and we have also made sure that providers are up front with consumers about whether they are on the cheapest tariff. Only yesterday it was announced that the £5 million made available by this Government to set up collective switching schemes has been awarded to 31 successful bids. One of those is Changeworks, which has formed a group of several Scottish local authorities, including Edinburgh, as well as Kingdom housing association. I welcome the £414,000 that they have received to assist with that.
As I have said here before, the best way for most consumers to reduce the impact of rising bills is through energy efficiency measures. The green deal will have a positive impact on the energy efficiency of households. As the report of the Fuel Poverty Advisory Group states, it provides
“an opportunity to establish an effective framework that can deliver against the twin objectives of eradicating fuel poverty and significantly reducing carbon emissions”.
Time is beating me.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
Will the hon. Gentleman give way?
Mike Crockart
No, I will not, because—[Interruption.] If the hon. Lady listens for a moment, she will learn that I have missed out on the opportunity to speak at the end of debates in the past because other hon. Members have taken interventions, so I will not do that.
Finally, the Fuel Poverty Advisory Group notes a lack of public knowledge and awareness of Government schemes aimed at improving energy efficiency. That is certainly a concern and I am sure that the Minister is taking it seriously. As local Members, however, we need to assume our own responsibility, so I encourage each and every Member to set an example by becoming an early adopter and having our own houses assessed and improved under the green deal.
Hywel Williams (Arfon) (PC)
Fuel poverty varies a great deal around the UK. The rate in Northern Ireland is 44%, which is explicable by the lack of gas up the pipe—more people are off-grid. The rate in Scotland is 28%, in Wales 26% and in England 16%. The Bevan Foundation estimates that fuel poverty in Wales is high, with 332,000 households in fuel poverty. Figures are also available for the regions of England. Fuel poverty hits rural England very hard indeed, but it is interesting that the rate in the south of England is 11.5%.
Wales is disproportionately hit by higher fuel bills. Incomes in Wales are lower and the percentage of people’s incomes devoted to energy is higher, and that, of course, leads to fuel poverty. We are also hit hard by Government policy on benefits. If benefits are to go up by only 1%, including, I might add, benefits for hard-working families, fuel inflation will, clearly, be much higher. That is not unique to Wales, but it is hitting us particularly hard, given the level of wages in Wales and the number of people who are dependent on in-work benefits.
Jim Shannon (Strangford) (DUP)
Some 86,000 pensioners in the United Kingdom fail to claim all of their pension credits, 12,000 fail to claim their full housing benefit and 24,000 died in the last calendar year owing to cold-related illnesses. Is it not time that the Minister, along with the Department for Work and Pensions, make every effort to ensure that all those moneys that are not claimed are claimed by those vulnerable people who need it most?
Hywel Williams
That is a very good point. I hope that the Government’s pension policy will address some of that under-claiming. I will refer later to a particular aspect of this question—namely winter payments—which the hon. Gentleman will certainly be interested in.
There is less availability of mains gas in Wales, Northern Ireland, Scotland and rural England. That leads to rural areas being dependent on off-grid fuel, which is a point that I made to the Secretary of State earlier. People have to adopt and then pay for alternatives that are, of themselves, much more expensive and, of course, they have to pay up front. I came across a case last week of a pensioner who had been saving hard all year, essentially to put £600-worth of fuel into a tank in her garden. It was quite a strain.
Delivery in winter, particularly of gas, can be difficult, as we found in north-west Wales two years ago, when some households with pensioners could not heat their houses because the lorry could not get up to the house and they could not afford to put money up front earlier in the year. It is all very well to talk about switching and getting the best deal but, as I said earlier, pensioners would be much better off if they could spend the money given to them by the Government earlier in the year, when coal and gas are cheaper. They would get more bangs for the buck—I am sorry for that particular remark, but they would get more for their money.
There is limited potential for switching because of the cost. People cannot change the equipment easily if they are off-grid. For example, converting a solid fuel stove to gas costs a great deal of money. Switching suppliers is less common among those with off-grid fuel than for those with electricity or mains gas. The Office of Fair Trading figures for 2011 show that 3.7% of people with such solid, liquid and gas fuels switched supplier. People who depend on cylinder gas, although I concede that they are very few, are in an even more difficult situation.
I was glad that my hon. Friend the Member for Angus (Mr Weir) introduced a private Member’s Bill to allow winter fuel payments to be made earlier in the year, but it was blocked. I hope that the Government will look at that idea sympathetically.
Wales is in the bizarre situation of being rich in mineral and renewable sources of energy, but having one of the highest levels of fuel poverty in the UK. We are energy rich and fuel poor. According to the Welsh Government, we have the potential to produce double the amount of electricity that we need. According to the Department of Energy and Climate Change here in London, Wales is a net exporter of electricity, and yet energy prices in Wales are among the highest.
We in Plaid Cymru have called for planning decisions on energy to be devolved. It is our belief that that would improve the situation markedly. Last year, my hon. Friend the Member for Carmarthen East and Dinefwr (Jonathan Edwards) presented a simple and reasonable Bill to devolve energy planning policy to the Welsh Government.
Hywel Williams
I will resist, given that I am nearly at the end of my remarks and other people want to speak.
We want to see devolution that puts Wales on an equal footing with Scotland and Northern Ireland. Unfortunately, that was resisted by Government Members, with a few honourable exceptions.
As many Members have said, people should not have to choose between heating and eating—not in the UK and certainly not in energy-rich Wales.
Kwasi Kwarteng (Spelthorne) (Con)
I am very grateful for the opportunity to speak in this important debate.
At the outset, we must establish a couple of facts. First, as we all know, the British Government are even now borrowing £100 billion a year, so the budget is very constrained. Secondly, despite the budgetary constraints and the economic pressure that we are all under, the coalition Government remain pledged to keeping the winter fuel allowance and to their environmental commitments in the green deal. Those are significant facts.
If we look at fuel prices—I notice that the right hon. Member for Don Valley (Caroline Flint) is chuntering in a sedentary position—over the past 20 or 30 years, it is an indisputable fact that privatisation led, in its initial phase, to a fall in prices. Competition and a degree of free enterprise reduced costs.
We all know that over the past 10 years in particular, costs have increased. That has been caused by two factors. The first, which has been alluded to by the Front-Bench speakers, is the increase in fossil fuel prices and energy prices. People have talked about the rise of China. The fact that it is developing quickly and consuming a huge amount of energy has put prices up.
The second factor, to which my hon. Friend the Member for Monmouth (David T. C. Davies) alluded, is green legislation. Members from across the House hold different views about the nature or reality—or the unreality if that is what they feel—of climate change. However, it is indisputable that the green legislation that was introduced to decarbonise our economy has added to fuel costs in the short run.
Neil Parish (Tiverton and Honiton) (Con)
As we use tariffs to increase electricity produced from wind turbines and solar power, we are subsidising that electricity through consumers. That will, in itself, push up the price of energy and bring about more fuel poverty. We must recognise that.
Kwasi Kwarteng
There must be a realisation that we cannot expect to regulate and put more taxes on activities, while at the same time expecting those activities to be cheaper. There must be some give in all of this. The Government have managed a balancing act pretty well in very difficult times. We can look—I intend to do so in the second half of my speech—at the record of the previous Labour Government, certainly between 1997 and 2010. In many ways they were deeply irresponsible on this issue.
Another factor that drives up costs is supply. In this rather lengthy debate on which we have embarked, no one—apart from a few comments from Opposition Members bashing private companies—has mentioned supply, yet that is crucial to cost. The previous Labour Government did nothing to secure this country’s long-term energy future. There was no planning or provision for energy supply.
Christopher Pincher (Tamworth) (Con)
My hon. Friend makes a point about supply. Is it not the case that during Labour’s years we started with 15 energy suppliers and ended with six? The Labour party reduced, not increased, the supply.
Kwasi Kwarteng
I am grateful to my hon. Friend for that pertinent remark. Not only was there a reduction, but there was no recognition of any long-term strategic need of this country.
Kwasi Kwarteng
Forgive me. There was, however, a considerable amount of spending, and as the right hon. Member for Don Valley (Caroline Flint) has acknowledged, that spending was not particularly smart. It was not directed to the most vulnerable; Labour simply spread it around in their usual style and hoped they would get results as a consequence. Again, that was a deeply irresponsible way in which to conduct the public finances.
Caroline Flint
In a mature way I was honest about acknowledging that big Government schemes often have situations in which the service is not as good as it might be. Is the hon. Gentleman saying that helping 2 million people through Warm Front was not worth doing?
Kwasi Kwarteng
I am not saying that for a second. I am saying that it is one thing to spend money, but quite another to spend it effectively. Under the previous Labour Government, yes, it is true, the money was spent; they were world champions at spending public money and no one disputes that. I am, however, disputing whether that money was spent effectively. Many people—indeed, the electorate in 2010—believed that that money was not spent particularly effectively.
In the remaining moments of my speech let us look more closely at Labour’s record. As the hon. Member for Edinburgh West (Mike Crockart) pointed out, fuel poverty increased hugely during the Labour years. I am not so partisan as to say that it was all Labour’s fault, and I have acknowledged that there were rising fuel costs and that we were in a commodity cycle which meant that fuel costs were going to go up. It is a fact, however—such facts cannot simply be wished away—that fuel poverty increased dramatically under the previous Labour Government for the reasons I have outlined.
It is nauseating for Government Members to be lectured on fuel poverty by the right hon. Member for Don Valley and her friends, when their record was so dismal. The Government Front Bench are trying to do exactly the right thing under straitened economic circumstances and with difficult public finances. They are trying to get a fair deal not only for our constituents, but for businesses up and down the country. There is a recognition that a lot of interests are being balanced in a fair way.
Sarah Champion (Rotherham) (Lab)
I would like to bring to the debate an issue that a number of my constituents have asked me to raise: direct debit payments to energy companies. As the Secretary of State recognised in his opening comments, the cost of living is rising, energy bills are soaring and there are increasing concerns about job security, and so people are trying to manage their finances responsibly. Debt is a major worry for low-income families, as it is for us all. According to research by Save the Children and YouGov, 71% of parents on the lowest incomes are worried that energy bills will push them into debt. Heating the home is always a priority.
Direct debit appears to be a good way to predict and manage your monthly expenditure, and energy companies often offer incentives if you pay by direct debit. Many of my constituents have taken up the offer, thinking that they are saving money and acting prudently. Across the country, 65% of people are paying by direct debit. For a few months, the arrangement works. Then the energy companies send a letter saying that the direct debit payments are going up, often by more than 50%. The companies say that this is to account for “increased usage”, and that the original estimate they gave, which was the reason to switch to them, was inaccurate. From my personal experience, customers are not given alternative methods of payment or told by how much usage has increased, just that extra money will be taken from their account. That is presented as a fact and is not a point for debate, leaving no option but to accept and pay the increased amount, regardless of the impact on the household budget.
This summer, my right hon. Friend the Member for Don Valley (Caroline Flint) wrote to all of the big six energy providers. Only SSE and npower responded. Npower, the biggest provider of energy in Yorkshire and so most pertinent to Rotherham, stated that more than 3.7 million domestic customers were in credit to it. Surely that figure proves that the majority of people do not need their direct debit to be increased. Npower also stated that the average level of credit is £106.89—£106.89 of my constituents’ money is sitting in the energy companies accounts. My constituents are not receiving interest on that money. They cannot draw it down to pay for their children’s clothes or food. In fact, they probably do not even know that they have this money, as the energy companies do not tell them unless they leave or specifically ask the question.
A study by the respected Institute for Public Policy Research think-tank found that as many as 5 million homes were being overcharged by their energy supplier, with some households paying £300 a year more than necessary—that cannot be right. Why are the Government and Ofgem letting this happen? Money is really tight at the moment. Some people in Rotherham are forced to go to loan sharks to make ends meet, saddling themselves with mind-numbing interest rates when all the time the energy companies have their money in their fat accounts. Many of my constituents are at zero at the end of each week. They have to micro-manage their budgets just to keep out of debt. That planning and prudence are completely thrown out of the window when the energy companies increase their direct debit payments unannounced.
Currently, there is nothing that people can do about this situation, as most people are tied into contracts. While the savvier may change suppliers at the end of their contract, we know that the majority do not. Switching between energy companies reached its lowest level ever in the first quarter of last year. Partly, this is due to people being disillusioned with the energy companies—thinking they are all the same—and partly it is apathy, but often it is because of the complexity of the process. This is especially the case with people over-75, who are the least likely to investigate cheaper tariffs and switch suppliers. They are the least IT literate and the least aware of the savings they could make by switching. I am very supportive of our campaign to make all energy companies put over-75s on the lowest tariff. That simple act would ensure that up to 4 million pensioners would benefit from lower energy bills. From the pensioners I have spoken to in Rotherham, the security of knowing they are on the lowest rate would give them great peace of mind and help considerably in managing their pensions.
The current situation regarding direct debits is that neither the Government nor Ofgem even require energy companies to report on how much the customer is in credit. We need to abolish Ofgem and replace it with a tough regulator with a statutory duty to monitor wholesale and retail energy prices and ensure that the suppliers pass on these savings. A strong regulator could tackle the shady dealings occurring with direct debits. To restore faith in the energy companies, we need them to be transparent and accountable, and the Government need to take strong action to make that happen. At the moment, suppliers seem to be riding roughshod over us all, seemingly without caring about the impact of their decisions.
Andrew Jones (Harrogate and Knaresborough) (Con)
This is a timely debate, given the weather outside and the big increases in fuel prices over the past few years, which are causing real problems for people. It is highly appropriate, therefore, that we are discussing this issue.
Ensuring that people stay warm requires progress in many areas: energy supply, energy efficiency, market reform and taking advantage of the opportunities that new technologies will provide. Progress in one area alone will not deliver us the desired outcome of cheaper bills for households and businesses. Market changes across the world are an important driver of costs, of course. Global demand has been growing, and that influences what happens here in the UK. We must recognise that wholesale prices have doubled here since 2007. The issue of supply is not covered by the motion, but increased supply will cut bills, so it should be recognised. I therefore support the Government’s initiatives to increase supply, whether it is the renewal of nuclear, opportunities presented by shale gas or the expansion of renewables. The answer lies in multiple solutions and multiple sources. Over the past few years, we have been too casual in recognising the importance of ensuring long-term, secure and affordable supply.
The motion states that energy efficiency is one of the most important ways of cutting bills sustainably. I completely agree that it is an important factor. We have made progress on that over the past few years, but the progress needs to be faster and better targeted. It is a complicated area, with that complication coming from different places. We all know that there are different ways of making our homes more energy efficient, but some times the range of options can be daunting. The installation of renewable energy also presents significant opportunities, but again the range of options is daunting. Do I choose solar, ground source, air source, water source, heat pumps, photovoltaic or biomass?
It is not easy to navigate those options, yet I remain a huge fan of renewables and would like to draw the House’s attention to my personal experience while a councillor on Harrogate borough council. We installed ground source heat pumps in council properties, starting in more rural areas that were off mains gas. Our motive was to bring cheap, clean power to homes that would not otherwise have had it. We were the first council in the country to do that, and it was a great success.
Caroline Lucas
I am pleased to support the hon. Gentleman’s enthusiasm for renewables. Does he agree that community-owned energy can play an important part, not only in increasing supply, but in getting fuel bills down, because communities can share in the profits? Would he urge his Government to bring forward their community energy strategy without further delay?
Andrew Jones
I think that community ownership will play an important part in the future, and I am sure that my right hon. Friend the Minister will pick up on that point later.
I have to say that retrofitting was expensive, because we were not just fitting heat pumps, but fully insulating homes. Nevertheless, the cost of heating fell for the homes with the pumps, and carbon emissions were much reduced as well. It required some changes in behaviour in how residents used their power, but that was easily communicated, and I spoke to many residents who were basically extremely positive about what had happened.
Ministers deserve credit for the green deal. I have seen the high upfront costs that insulation and energy efficiency improvements bring, and removing the challenges of these upfront costs will remove one of the biggest barriers to progress. Under the green deal, bill payers will be able to get their energy efficiency improvements without having to pay upfront, as businesses will provide the capital and consumers will pay back the costs over time through their energy bills. I like some elements of the scheme in particular, but I will emphasise just two things: the way businesses can be included and the way the scheme will be extended to the private rented sector.
The range of tariffs has been highlighted as something that can be confusing. I agreed with the points that the hon. Member for Rotherham (Sarah Champion) made. It has been hard—probably deliberately so—for people to see which tariff was right for them. It took me months just to get my supplier to merge my personal accounts, including gas, to take advantage of a dual-fuel tariff, and I was not even changing suppliers. My personal experience is mirrored up and down the country. It is simply far too hard to make changes, so I applaud the Prime Minister’s work to cut through all this and ensure that by next year everyone is on the lowest tariff that is right for their needs.
A further area of complexity is the range of schemes that are available to help. Sometimes they are hard to access or even know about in the first place. Last month I visited two constituents, Mr and Mrs Courtman, who needed a new boiler installed, as theirs was breaking down and they urgently needed reliable heat at home for their health. Unable to afford a replacement, they turned to the local council’s home improvement agency to see whether help was available. Help was available; the point is that it came through the SSAFA—the Soldiers, Sailors and Airmen’s Families Association—and an npower scheme. However, Mr and Mrs Courtman were not even npower customers, so how could they even become aware of the scheme? It is hard to know where to go. That is why I produced a guide called “How to Save Money on Your Energy Bills”—alongside other colleagues in the House—which I have been distributing locally in Harrogate and Knaresborough and which has been well received.
Let me end by reiterating the point that market simplification, Government assistance and new technologies all have important roles to play, but it is long-term work to boost capacity that will be critical to delivering what we all want for the future.
Steve Reed (Croydon North) (Lab)
It is in poorer areas such as Croydon North where rising energy prices really hurt. More people there than on average depend on prepayment meters and fewer homes are likely to be insulated, because they were built before cavity walls were a requirement. An above-average number of local households are fuel-poor. When rising fuel bills are combined with the high cost of housing and rising train, bus and tube fares, the result is a big squeeze on the disposable incomes of hard-working local people. National and local government must take a lead in giving people the power to change things, because empowering consumers can help to deliver greater fairness.
First, it is time for the energy regulator Ofgem to end the unfairness of the poorest paying higher energy tariffs than the rich. Why should a millionaire in a mansion pay a lower tariff than a hard-pressed family on an estate? One of the starkest examples is that of prepayment meters. Around 6 million people in the UK—many among those on the lowest incomes—use such meters. Most are unable to switch accounts or take advantage of deals to save money, including by using direct debit and fixed-rate contracts. The meters cost substantially more than the standard tariffs offered by energy companies, so the poorest end up paying hundreds of pounds more every year than those on middle and higher incomes. That is unfair and should be put right by a regulator on the side of consumers.
Secondly, it is time to end rip-off energy exit fees. Millions of people face charges of up to £100 in exit fees just because they want to switch their accounts to a lower tariff. That is anti-competitive and contradicts the Government’s advice to customers that switching accounts will save them money. The Government must change the law to make switching energy tariffs free, as other places have, including the Australian state of Victoria.
Thirdly, it is time to get serious about insulation. Last year the Energy Saving Trust said that London was at the bottom of the league table for insulating homes. From 2008, just 5.1% of London’s homes received insulation, compared with 16% in the north-east, which was the best performing region. The Government’s green deal scheme was launched in October to give people the chance to insulate their homes, yet interest rates on green deal loans are as much as 8%, as my right hon. Friend the Member for Don Valley (Caroline Flint) said. To make the green deal work, Ministers must ensure that finance is available at an affordable rate.
Finally, we need to encourage more energy-purchasing co-operatives to start up, to provide competition for the big six. That will require changes to the Energy Bill, which is currently going through Parliament. In 2011, residents on a Brixton housing estate set up the Brixton Energy solar 1 scheme, which was the UK’s first inner-city, co-operatively owned energy-generation project. It has been a huge success, generating renewable energy, providing an annual return of 3% for investors and delivering savings for residents through lower household energy bills. We need the support of the Government to champion co-operative energy in order to catch up with countries such as the United States, where 42 million citizens are members of energy co-operatives. I salute those councils, some of which have been mentioned today, that have already set up collective energy switching schemes to secure lower energy prices for local residents.
Fuel poverty is not an inevitability. The Government should support communities that are already taking action, and they must act themselves to ensure that we have an energy market that is fairer for everyone, with a level playing field for community energy generation and with no household excluded from accessing the lowest tariffs.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
I should like to kick off by saying how worth while it is to hold this debate today, given that it is going to be very cold over the next few days, and probably for the rest of the winter as well. I am delighted to be able to speak from a pretty unusual position, in that I am an urban Tory. There are not many of us outside London. I am delighted that I do not have a single piece of farmland in my constituency, or very much in the way of suburbia either. There is real deprivation there, however. There is a 20-year difference in life expectancy between one end of the city and the other. The issues that we are discussing today are very important indeed.
Fuel poverty needs to be taken seriously, and at the end of the day, we are dealing with three areas. The first is energy security: can we supply enough energy for ourselves in this country? The second is the need to deal with CO2 emissions. The third is the need to target our welfare to ensure that we are delivering it to those who desperately need it.
The previous Labour Government failed to deliver proper energy capacity. It is likely that, in the next couple of years, we will be reduced to about 4% capacity, although it has been as high as 14% in the past. We have failed as a country to deliver a proper set of energy facilities, and we now need to ensure that we include nuclear power in those facilities, although I know that some people here will not be keen on that. We also need to ensure that we have a proper amount of renewables. Devonport dockyard in my constituency is going to have a marine energy park, and I was delighted that the Minister of State, Department of Energy and Climate Change, my right hon. Friend the Member for Bexhill and Battle (Gregory Barker) was able to come down to Plymouth to announce that. It is a very positive development that will also help the growth agenda. We need to ensure that we have sufficient energy capacity.
Last year, I paid a visit to the British Antarctic Survey, which has done an enormous amount of drilling down into the ice. It has pulled out a good 800,000 years worth of ice and examined it. Its research shows that, except during the past 300 years, there have not been high levels of CO2 emissions. The past 300 years of industrialisation have made a very big difference indeed, however. Unless we do something about all that, things are going to get much more expensive. Hon. Members will have seen on their televisions over the past couple of months that the whole of Devon and Cornwall has been under floods, as my hon. Friend the Member for Truro and Falmouth (Sarah Newton) knows. It is going to become increasingly expensive to deal with those issues.
It is also important that we target our welfare. I read a paper recently that made it clear that in 2009—this was not when we were in power, I am sorry to say—the Public Accounts Committee found that 75% of the households receiving Warm Front support would have been unlikely to fall into fuel poverty. We need to take a positive approach to that matter.
I very much welcome all that my right hon. Friend the Minister has done on the green deal, but I believe that we need to have a much more joined-up Government. A lot of people live in affordable and rented homes, and we must ensure that the new buildings that the housing associations are delivering will be compliant with our energy campaign standards and that they will be much greener. Similarly, we must ensure that the improvements being carried out to Ministry of Defence properties will be environmentally friendly. I have had a great many discussions in the past two and a half years, but I believe that this is one of the most important debates that we have had.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
It is a statement of the obvious to say that fuel poverty is a function of both the cost of fuel and the income of the household of the consumers involved. We all know that over the next few years there are going to be massive changes in the benefits system because of the Government’s welfare reform measures. I shall not go into the rights and wrongs of them, which can be done on another day, but it is quite clear that such changes bring a great risk that those who are already vulnerable and on low incomes will lose out even more. That is true not necessarily because of the changes to benefits—I have said I am not raising that issue today—but because under any new system, major change or major upheaval in the applicable criteria bring the real risk of people falling through the net. Their applications for support from fuel companies might not get through at the right time.
That point has been made in an excellent report from Citizens Advice Scotland on energy issues recently brought to the attention of its citizens advice bureaux. The report states:
“With several years of upheaval ahead for the benefits system, suppliers should be proactive in monitoring usage, particularly amongst prepayment customers. Where customers are self-disconnecting, suppliers should proactively contact those customers…Arrears should be identified quickly by suppliers and communicated to customers to allow them to address the issue before the debt becomes unaffordable.”
I shall not go into any more detail, but this is a good report. I can send a copy to the Minister, who I hope will agree to read it and to take account of its suggestions. The Government must take that on board to ensure that what is being done through the green deal is closely linked to changes in the benefit system. This applies not just to the Government, but to suppliers, who need to keep an eye on what is happening.
My second point relates to the Government promise to make energy companies offer the lowest tariffs to their customers. I do not think we heard much about that in the Secretary of State’s opening speech, and there is still a lot of uncertainty, as we all know, about how that is going to operate. What still appears to be the case is that any benefits from that new policy will not go to those on prepayment meters—an issue raised by my hon. Friend the Member for Croydon North (Steve Reed). I urge the Government to make it absolutely clear when this policy is developed that those on prepayment meters should automatically be given the cheapest tariff that the supplier offers. There should be no qualification or hesitation about that.
My final point relates to how the green deal will operate in Scotland. The Minister will know that, because the energy company obligation is a UK or Great Britain-wide measure while the green deal equivalent is delivered in effect by the Scottish Government, the responsibility falls on two Governments to ensure that the system works as effectively as possible. I raised this matter with the Minister, who was helpful in providing some information about it. I have to tell him, however, that there is still a great deal of uncertainty within the industry and among consumers in Scotland about how the green deal will operate in Scotland. That is partly because of the role of the different Governments and partly because of the need to work on solid-wall properties, reflecting the peculiarities of the Scottish system of property ownership. As my hon. Friend the Member for Edinburgh West (Mike Crockart) will know, that can sometimes vary between different cities. I hope the Minister will ensure that attention is paid to making the green deal work effectively in Scotland and in all our constituencies.
I am a great supporter of the principles behind the green deal. That is why I find it a tragedy that such a very good idea has not to date shown its full potential. As the Minister well knows, the Insulation Industry Forum has pointed out that although it strongly supports the green deal,
“the delays in the Government’s implementation of it have now begun to destroy some of our businesses as well as undermining the Coalition’s green ambitions for the country.”
That is, as I say, a tragedy. I hope that the defects in the implementation of the scheme so far can be repaired, so that all of us who support the green deal in principle can see it bring the benefits that we want to all our constituents.
Mrs Anne Main (St Albans) (Con)
It is a shame that the shadow Secretary of State took such a combative and shrill tone at the beginning of this important debate, because no one has a handle on caring about their constituents. I was privileged to serve on the Energy Bill Committee in the previous Parliament, and I noticed that the then Government took no measures to tackle the complexity of tariffs or the issue of those who are fuel poor and who use metered fuel, although the Labour party is raising those issues today. I encourage the Minister to keep up his good work, because we do not have money to throw around as the previous Government did. In all the comments from the right hon. Member for Don Valley (Caroline Flint), including from a sedentary position, I have yet to hear whether Labour would continue Warm Front in some form after 2016 or introduce another scheme. Perhaps she will enlighten us in the winding-up speeches.
Mrs Main
I will not, because she did not give way to me when she was being particularly vociferous on how good Labour was on fuel poverty.
As I said in a debate on fuel poverty in the previous Parliament, my constituency is usually regarded as an affluent one, but it does have areas of multiple deprivation needs. In 2006, St Albans had 2,400 households in fuel poverty; in 2008, it had 3,500; in 2010, according to the latest figures available, there were even more. A degree of humility about such calculations is, therefore, important. It should also be recognised that in constituencies such as mine, a higher amount of family income is spent on rent and mortgages, so many people feel fuel-poor, whether or not they are technically in fuel poverty. I welcome the fact that under this coalition Government most families will be put on the best tariff that suits them if that is possible.
We have very little time to debate the matter today, but the green deal will be an affordable way of tackling fuel poverty. I believe we would be casual with taxpayers’ money if we simply splashed out the dosh—the right hon. Lady said that it was £50 million, but the correct figure is £30 million, which will be reinvested. The Labour party would have continued the Warm Front deal, which, as Members on both sides of the House have said, was fraught with difficulties. When elderly constituents of mine were told how intrusive the Warm Front deal would be in terms of where the boilers would be located, and how they had to go along with what they were being offered, rather than having it tailored to suit their needs, they backed out of it, and were left with nothing. Rather than imposing something, the green deal gives people choices to tailor a system to suit their household.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
My hon. Friend is making a characteristically brilliant speech that succinctly crystallises what many of us had been thinking. She has put her finger on one important point: under the Warm Front scheme, one company was a monopoly provider with the contract for the whole country. Under the ECO and affordable warmth, real competition and consumer choice will be allowed, meaning better value for the bill payer and more choice for the people who have installations in their homes.
Mrs Main
I thank the Minister for that strong clarification. People said to me that they would have liked to take up some of the opportunities offered by Warm Front, but they did not like the installers, who were sometimes rude and ineffective, they did not like being dictated to about how their house would be operated on to make it more efficient, and they did not like a take-it-or-leave-it package without the opportunity to pick and mix. What the Minister refers to is yet another proposal from the coalition Government that is much better for the consumer.
Gregory Barker
My hon. Friend has given practical reasons why hundreds of Members of Parliament on both sides of the House received thousands of complaints about the Warm Front scheme.
Mrs Main
I thank the Minister for that comment. That is why it would be ridiculous just to insist that Warm Front continues and to splash the money about until it is gone. The coalition Government have a forward-thinking plan on how to offer consumers what best suits them, including the best deal on tariffs, and how to help all families, whether or not they are technically in fuel poverty.
I hope that if nothing else comes out of the debate, we agree that we should not waste energy. Whether or not we agree on climate change, wasting energy will be ruinous for people in the future.
Oliver Colvile
There is a tendency for electricity from the national grid to be dissipated because it has to travel so far. We need to ensure that much more is available locally.
Mrs Main
I thank my hon. Friend for his intervention. I hope that he will forgive me if I do not explore the issue he has raised.
I pay tribute to RES in my constituency, which has developed numerous innovative ways of finding renewable energy solutions. I think that we should have a pick-and-mix arrangement—a whole basket of energy solutions. The last Government were in complete denial. When we were debating the Energy Bill, I observed on many occasions that they seemed to have no solutions. The present Government, however, are having to find a way forward.
Rather than making shrill proclamations about our taking everyone to hell in a handcart, the right hon. Member for Don Valley should welcome the fact that we are giving consumers a better choice, and that we have agreed to support the poor and the vulnerable. We work within the Government budget because, in the end, it is taxpayers’ money that is being spent. I think that this Government are forward thinking enough to find the right way forward, and to do what is right for the consumer.
Steve McCabe (Birmingham, Selly Oak) (Lab)
As I listen to the debate, I wonder how many people in Selly Oak are sitting shivering tonight, frightened to turn on their heating, or worrying that what they are buying is disappearing owing to the draughts and lack of insulation. In February last year, in response to a survey that I carried out among my constituents, 63% said that they were using less heating in their homes as a result of energy price rises, while 43% said that they were cutting back on other items to afford their energy bills. Consumer Focus points out that the number of households in debt to their electricity supplier has risen by more than 25%—1 million households—yet the energy companies are on target to see their profit margins rise by 14%.
Let me ask a question that others have asked. Why, at a time when the number of people struggling with fuel costs is on the increase, have the Government spent only half the budget of the Warm Front scheme and turned down thousands of people? Nearly 13,500 families have been rejected. Given all the problems with the green deal, what would be wrong with extending Warm Front for another year, or at least until after the total budget has been spent? That would not only help those most in need, but help the insulation industry, which is experiencing job losses because funding is being withdrawn prematurely. Nearly 200 jobs have gone in the west midlands, and about 100 people have been given notice of redundancy.
Gregory Barker
The hon. Gentleman may not have picked up the Secretary of State’s words earlier. We can confirm today that the whole Warm Front budget will be spent on measures for the fuel-poor. We will be introducing Warm Front measures, but they will not be introduced exclusively through Warm Front. The balance—the underspend—will be spent on exactly the same people, but through a local authority competition that will deliver the measures more quickly and effectively.
Steve McCabe
I did indeed hear the Secretary of State’s words. What I understood quite clearly from them was that he is filching money from the Warm Front scheme to pay for a scheme that he announced some time ago, and that he did not tell us at the time that he was robbing Warm Front. It is what, in the trade, is normally called sleight of hand.
Ongoing concern about green deal finance means that it is unlikely to get going until around autumn this year, if ever. The Government’s own impact assessment shows that their plans will cause the loft and cavity wall insulation industry to fall off a cliff. Why does the Minister not act now? He does not have to say that it was the idea of my right hon. Friend the Member for Don Valley (Caroline Flint); he could announce an interim plan in a couple of weeks, and take all the credit himself. That would be OK: we would not tell anyone.
I want to be fair to the Government, so I will assume that they did not set out to rob people as they are doing through so many of their other policies. I think that on this occasion their problem is that they simply do not know what they are doing. As a flagship policy, the green deal is costly and complex. The scandal of punitive up-front assessment fees needs to be tackled as a matter of urgency before the whole idea falls into disrepute, and the Government need to look again at the interest rates associated with the project. At 7.5%, it will be far cheaper for those who have the cash to pay up front for improvements than to use the green deal, and, of course, those who cannot raise the cash will simply shiver or find themselves exploited by a Government scheme that is beginning to look like it was modelled on payday loans. Then there is the helpful penalty charge if people want to pay it off early, which means they will be rinsed for another few thousand pounds. I am afraid that any objective analysis of this programme suggests it will fail, and the Minister really ought to act now before it is too late.
There is speculation about the abolition of Ofgem. What I and my constituents want is a regulator with some teeth and some backbone who will stand up for their rights, who will not be conned over wholesale price rises and who will force energy suppliers to pass on price cuts when wholesale energy costs fall.
Mr Robin Walker (Worcester) (Con)
Given what the hon. Gentleman is saying about the regulator, does he regret the fact that when the Leader of the Opposition was Energy Secretary he left a situation in which fines levied by Ofgem on the industry were given back to the industry, so this coalition Government are having to change the law to make sure fines levied by Ofgem will be given back to consumers?
Steve McCabe
I do not think there is any problem with the regulator redistributing that money if it is to the benefit of people. I would be a bit wary of talking about fining people, however. I also remember that this Government’s first direct hit on energy consumers was the VAT rise they imposed not long after coming to power.
We need a tougher regulator because at present the energy companies are running rings around Ofgem. An Institute for Public Policy Research study found that as many as 5 million homes are being overcharged by their supplier, and some households are paying almost £300 per year more than they need to pay. It also states that if the market was a truly competitive market, that could knock £70 off the average household bill at a stroke.
It is not too late for the Minister to take corrective action on Warm Front and the green deal and to help thousands of families and elderly people, as well as protecting jobs. If he does not take some corrective action in respect of the regulator, we will be mortgaging our homes to pay our fuel bills before this Government leave office.
Chris Evans (Islwyn) (Lab/Co-op)
I do not believe that any Member attending this debate does not want to see the eradication of fuel poverty. I do not believe that this Government want to stand over 26,000 winter deaths every year, or 65 people dying of cold each week, or more people dying of cold than die in road accidents every year. I do not believe that the Government want to stand aside and see so many people suffer and die from cold.
One aspect of this debate worries me, however. Since I was elected to the House, I have had two Westminster Hall debates on fuel poverty and I have spoken in a number of debates on energy prices, and on each occasion the Government have said, “We’re going to do something to eradicate fuel poverty. We’re going to help people who are struggling to pay their bills.” I wonder, however.
Today, so many Government Members have blamed the last Labour Government for presiding over what they claim were 13 years of increasing fuel poverty, but those Members are saying and doing nothing to help people. Tonight, there may be people sitting in front of their television who may go to bed early with an extra pullover or coat on, because they are fearful of lighting an extra bar on their electric fire or turning up their central heating a little more, as their fuel bill has gone up by £107 in the last two years. What Government Members are saying does absolutely nothing for people in that position. Those people do not care about the green deal, they do not care about energy markets, and they do not care about the profits of the energy companies. A Save the Children survey found that half of all families are cutting back on food in order to be able to pay their fuel bills.
Fuel poverty is a moral issue. It has an impact on so many Departments and areas of government. The chief medical officer has said that cold-related illnesses and diseases cost the NHS £850 million a year. Children are the ones who suffer the most. Poverty affects the oldest people in society and the youngest. What does poverty mean? It is all very well quoting statistics, but what it really means is children going home to cold, damp houses and being written off before they start—that is a shame. We need also to consider the people with cancer or a disability. The winter fuel payment is a good scheme, but it does not stretch to the most vulnerable in society and perhaps it needs to be better targeted.
However, I wish to discuss a simple solution today. The Government are imposing carbon taxes on energy companies to wean us off our obsession with fossil fuels, but the money raised by the taxes—the European emissions trading scheme and the carbon floor price—is not being passed on to the consumer for them to get insulation. The taxes are being passed on by the energy company and the consumer has to pick up the bill, and we must change that.
In five years’ time, carbon taxes will have raised £4 billion for the Government. That money should be directed towards insulation, boilers and the other things that can keep people warm and reduce the loss of energy. Of course, these things are already available—people can buy a new boiler—but that costs money. If we moved the revenue from carbon taxes towards the consumer, we could give everybody a grant to improve their insulation. The problem with fuel poverty comes down to one thing: the price of gas, coal and oil has gone through the roof. If we cannot stand up to the energy companies, the Government should fund insulation programmes to stop energy escaping. This country has more winter deaths than Norway and Sweden, and that is because those colder countries understand that insulation is important. That is why the Government need to invest. James Maxton, the great socialist, said that poverty is man-made and therefore subject to change. We have to take action today to change fuel poverty for so many people.
Nia Griffith (Llanelli) (Lab)
This Government are failing to tackle fuel poverty because they have not managed to tackle the energy companies and bring in the tough regulation needed to make them moderate their prices. As we have said, we would make the energy market more transparent and create a tough new energy watchdog to replace Ofgem.
I will cite just one example of why we need a much tougher watchdog. Ofgem allowed Swalec, which is now part of SSE, to double its standing charge between September 2011 and October 2012—a massive 100% increase. Since October 2012, Swalec has been charging customers a standing charge of £100 a year for their electricity and an additional £100 a year should the customer also get their gas from Swalec. Such charges just feed into the bills of my constituents. Swalec’s prices are of particular concern to people in south and west Wales, because Swalec is the traditional supplier for the area, and Wales has one of the lowest percentages of people who have switched energy company for their electricity.
That doubling of the standing charge in less than 15 months is hitting low users disproportionately hard, punishing people who are struggling to keep their bills down and who switch off appliances whenever they can. No matter how much they switch off, whether to save money or to save the planet, Swalec is taking £100 off them just to stay connected—£200 if they get gas from Swalec as well. I am sure that if these people had computers, they would be thrilled to know that the SSE site tells them that £50 per customer per fuel is profit—is that not wonderful news for them? It is an absolute kick in the teeth for loyal customers. SSE knows jolly well that many customers who have stuck with the traditional south Wales company for years are probably the least likely to switch provider. It is all very well to say that customers can shop around, but unless people have easy internet access it is impossible to compare the prices. Even where people do have that access, the process can be extremely confusing. In any case, people are wary of switching. They hear horror stories and they are worried about being caught out by some sort of penalty charges for switching, or worried about the goalposts being moved just after they have switched and finding that things have changed yet again.
As my hon. Friend the Member for Rotherham (Sarah Champion) explained, people are wary also of going on to direct debit because they are pretty well convinced that the companies take more than they should be taking, and that they will take advantage at every turn to make sure that the money is in the banks of the energy companies, rather than in the pockets of the people that they are taking it off. The energy companies tell us that that is for simplification purposes, but I am cynical about that. By increasing the standing charge, energy companies avoid the problem of having to decrease energy prices if there are fluctuations in price. They have heard that that is what people are talking about. They have heard that we, the politicians, would like to see them decrease energy prices, but if they stick the increase on the standing charge, they will not need to do that.
Energy companies have also heard that we might want them to put people on to the cheapest tariff. So what are they doing? They are raising the cheapest tariff, aren’t they? They are making energy more expensive for the lowest users. The cynic in me says that the companies have good reasons for upping the standing charge. The effect is regressive. Like any form of regressive taxation, it means that those who have the least money are proportionately punished the most.
It is right and proper that the Government’s cold weather payments should be raised when energy prices are rocketing, but they are for exceptional circumstances. For the vast majority of the UK it is not often that temperatures for an entire seven-day period average zero. It is far more likely that there are three or four days of cold weather, then a slightly milder period, then more cold weather and so on. There are fluctuations, so the number of times during the year when people will be able to claim those payments is extremely limited.
Finally, I wish to say a word about the Warm Front scheme. I am horrified to hear that £50 million is not being spent on good insulating programmes. I contrast that with the Welsh Government, who are continuing with their Arbed and Nest schemes, which they have adapted. They have looked at many different ways—
Gregory Barker
I can assure the hon. Lady that that is exactly what is happening. Any underspend from the Warm Front scheme is being spent on exactly the type of measures that she mentioned.
Nia Griffith
So are we clear, then, that that money has been ring-fenced and that it is in addition to any other planned money that was going to come into energy schemes anyway?
Gregory Barker
We are scaling up the proposals that we had for the community challenge in order to deliver into that programme a much greater amount of money than would otherwise have flowed.
Nia Griffith
I hope the Government will follow the example of the Welsh Government, who have also drawn down European money. I am sure the UK Government could do that for the areas of the UK where that might be possible. The Welsh Government have rolled out a number of programmes in their Arbed and Nest schemes, which cover a range of different types of property, particularly those that are hard to heat and those that are part of social housing, as well as properties that are privately owned.
Richard Fuller (Bedford) (Con)
Thank you, Mr Deputy Speaker, for permitting me to speak. This is the first time that I have spoken in an energy-related debate so I will be grateful for forbearance if I do not know all the terminology.
I came to the House with very positive feelings about the Warm Front scheme. Prior to the general election in 2010 I was contacted by an elderly gentleman, who said, “I have never contacted anyone before, I have voted for your party all along, and I have a problem with my heating at home.” He had served his country, always done the right thing and brought up his family, but he was on his own, he was in his 80s and he had no heating at home. I engaged with the company—I think it was Carillion at the time in the region—and it did a superb job in following up. It had been complicated for him to get help but the company did an excellent job in supporting him. It was wonderful to see that reaction. It is a great sadness that he has since passed away.
I do not lightly criticise the Warm Front scheme. It was a very good scheme in that instance, but we have to face facts. It is a shame that the shadow Minister did not respond as positively as she might have done to my inquiry. When money is short, we have to make sure that it goes to those who most need it. That is incredibly important. We cannot pretend to people that we can spend money that we do not have to help people who perhaps do not need it just because they would like to have it at the cost of directing money towards those people who really need it. I applaud the Government for ensuring that, when there is less money available, they protect the money for, and focus it on, the most vulnerable.
Most of my comments relate to how the Government are trying to focus on ensuring that all the taxpayers’ money that is being spent goes to those who most require it. Will the Minister assure us that the Government is targeting taxpayers’ money for people in fuel poverty more on those on the lower decile incomes and on those who are most vulnerable? What measures is he taking to ensure that that happens?
Directing money towards those who most need it is important, but ensuring that it gets there—and does so effectively—matters, too. I was intrigued by the response to a letter from the shadow Secretary of State to my right hon. Friend the Minister of State on the installation times under the Warm Front scheme. I noted that during the last period of the Labour Government, the time it took to install insulation or heating was very long. The installation of insulation took 30 working days, on average, under the previous Government and it took 60 or 70 working days for heating. I noticed that that had come down during the past couple of years and I would be interested if the Minister had further comments about the efficiency of the Government’s proposals to tackle fuel poverty, ensuring that the work and necessary steps are done as quickly as they can be, and about how they are holding the insulation and energy companies to account as quickly and frequently as they can.
A number of hon. Members on both sides of the House have said that the underlying causes of fuel poverty are multiple. I applaud the Government for considering a more rational view of assessing fuel poverty—I think the Secretary of State mentioned that the Queen would be counted at one stage, so that clearly needs to be considered. The statistics on fuel poverty in different parts of the United Kingdom show that there are clearly issues. My interest obviously lies with the town of Bedford and also with England.
Nigel Adams (Selby and Ainsty) (Con)
I accept everything my hon. Friend says about Warm Front. Does he accept the findings of the Public Accounts Committee that the majority of people who were likely to benefit from, and be targeted by, that scheme were less likely to be in fuel poverty?
Richard Fuller
My hon. Friend makes precisely the right point: we need to ensure that money is focused on those who most need it and that that money gets to those people as efficiently and effectively as possible. That is what I heard in the Secretary of State’s speech today, which was focused very positively on what could be done rather than on, if I may say so to the right hon. Member for Don Valley (Caroline Flint), throwing around statistics that were not particularly relevant to what could be done right now. When we look at the statistics, we can see that underlying issues lead Governments to take certain actions. I am interested to hear what the right hon. Lady or her colleague, the hon. Member for Liverpool, Wavertree (Luciana Berger), will have to say when they wind up, but it would have been nice to have heard some more positive engagement from the Labour Front Benchers. It would have been nice to have heard what they would do and what positive suggestions they would propose. Opposition is not just about shouting one’s point of view—it is often about engaging with statistics and answers and coming forward with positive solutions. I am sure that my right hon. Friend the Minister will be very positive.
Mr Deputy Speaker (Mr Nigel Evans)
Order. Before the hon. Lady intervenes, I remind the hon. Gentleman that when the clock hits 6.40, I will ask him to resume his seat.
Sarah Newton
Is it not important that we learn the lessons from the ridiculous situation in which people who were off-grid were made to have oil as their central heating system, which they could not afford after the first time the system was filled? Under our schemes, they can now have something sustainable, such as a ground source heat pump.
Richard Fuller
I appreciate that positive contribution from my hon. Friend. I guess that sums up what I would like to say: as many Members on both sides of the House have said, many constituents are facing tough decisions on their heating this winter. We are beholden to engage positively in support of the Government in the initiatives they have taken. It is critical that the Government—I look to the Minister for an answer today—ensure that their initiatives are focused on those who most need the support—that is, the most vulnerable. If he is doing that, he is doing this country a great service.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
This debate has been lively and informed, with eloquent and powerful contributions from those on both sides of the House. It has shown once again that we have an energy Department that is in chaos and unable to deliver its policies, and it is the public who are paying the price in higher energy bills.
As many hon. Friends have said, particularly my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe), Ministers cannot hide the shambolic management of the Warm Front scheme. Over the past two years, the scheme’s budget has been cut by two thirds, and the number of people getting help from it has fallen from nearly 250,000 homes per year three years ago to fewer than 22,000 households so far being selected for help this year. I listened carefully to the speech by the hon. Member for Bedford (Richard Fuller), but the situation is contrary to what we have heard from Government Members. The criteria for people who want to apply for Warm Front explicitly say that in order to qualify people must have a poorly insulated home or not have a working central heating system, and, further, must have a household income of £15,860 or less. I strongly believe that when the scheme was created back in 2000 it was a good scheme. In fact, it is important to note that in the statement that was released by the Department today the Minister of State, the right hon. Member for Bexhill and Battle (Gregory Barker), said:
“The Warm Front scheme has been an important policy in tackling fuel poverty among private sector households”.
Under this Government, the amount of support that each household is receiving has fallen and there is a massive backlog of people who want help but cannot get it. To add insult to injury, in addition to the £50 million of underspend last year there is £50.6 million this year. I have listened carefully to representations from both Ministers. I have also had time to go through the press statement that was released back in October, which makes no mention of the fact that the pot of money for local authorities was going to be taken away from the Warm Front scheme. Why did Ministers not announce that at the time? Was it part of a deliberate strategy to undermine Warm Front so that people did not take it up? I listened to what the Minister said a moment ago, but there is not an exact match in relation to the underspend. Further to that, thousands of people this winter are suffering with high heating bills.
My right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr Clarke) reminded us of the price that people up and down the country are paying for this incompetence, with huge increases in the price of gas and electricity. Energy bills have risen by almost £300 since this Government came to power, and the average fuel bill now stands at a record £1,400. I have spoken to many people in my constituency who cannot afford to turn on their heating even on the coldest of days. Those who have least are being hit the hardest. My hon. Friends the Members for Stoke-on-Trent North (Joan Walley) and for Islwyn (Chris Evans) mentioned the rise in fuel poverty in our country. As the hon. Member for Arfon (Hywel Williams) and other hon. Members said, our constituents are having to make the choice between heating their homes and putting food on the table. The Government’s own fuel poverty advisers are warning them that this winter 300,000 more households will go into fuel poverty.
In his opening remarks, the Secretary of State referred to the energy company obligation, but he did not say that according to his own impact assessment the Government expect to see by 2023—10 years’ time—a reduction of 250,000 in the number of homes in fuel poverty. To have a reduction of only 250,000 in 10 years is a very sad state of affairs, and it is less than the increase in fuel poverty that will occur this winter.
My hon. Friends the Members for Llanelli (Nia Griffith) and for Rotherham (Sarah Champion) rightly highlighted the problems that their constituents and people right across our country are facing and suffering because of the increase in direct debit payments. This is against the background of the startling fact from Save the Children and YouGov that 71% of parents on the lowest incomes are worried about their energy bills pushing them into debt. My hon. Friend the Member for Birmingham, Selly Oak pointed out that nearly 1 million people are in debt to their energy company; that is information from Consumer Focus.
As my right hon. Friend the Member for Don Valley (Caroline Flint) highlighted in her opening speech, the Government’s mismanagement of the Warm Front scheme is not the only thing that we are concerned about. A number of Members from all parties have talked about the green deal. Ministers have promised us this flagship scheme, but we are worried that what they have delivered so far is more like a submarine, because it is so far below the radar that polling shows that most people have not even heard of it, let alone want to take it up. [Interruption.] The Minister of State, Department of Energy and Climate Change, the right hon. Member for Bexhill and Battle says from a sedentary position that the scheme has not started, which is in stark contrast to what the Secretary of State told Building magazine, namely that the green deal had started on 1 October.
As has been said many times, all parties support the principles behind the green deal. The former Energy Minister, the hon. Member for Wealden (Charles Hendry) intervened earlier and made a point about an amendment tabled to the 2010 Energy Bill. The reason why that amendment was not accepted is that Labour was already running a pay-as-you-save energy efficiency scheme—a green deal pilot was already running when the amendment was tabled.
We do not believe that expecting people to pay £100 just to get an assessment, or to pay double the up-front cost of the measures because of high interest rate payments, will inspire the millions of people who need to take up the green deal scheme in order urgently to improve the energy efficiency of properties and homes up and down the country. We have some of the most energy-inefficient properties in Europe.
The hon. Member for Bedford asked about practical solutions. I would ask him to refer to our motion, which makes some practical suggestions. Likewise, we highlighted all our concerns about the green deal when we discussed it during the Committee stage of the Energy Bill, but we are still talking about them a year and a half down the line.
The hon. Members for St Albans (Mrs Main), for Edinburgh West (Mike Crockart) and for Harrogate and Knaresborough (Andrew Jones) talked in positive terms about the green deal, but I would ask the hon. Member for Edinburgh West, who talked about a report by the Fuel Poverty Advisory Group, to look at the group’s most recent report. It raises serious concerns that we will all be subsidising expensive works for people who can afford to insulate their homes, rather than distributing money to people who cannot afford to heat their homes in the first place. In the FPAG’s evidence to the Environmental Audit Committee, it notes that it
“has consistently stated that the Green Deal per se will not benefit the fuel poor.”
I was disappointed that the Secretary of State did not respond to a serious point raised by my right hon. Friend the Member for Don Valley, so I shall raise it again. My hon. Friend the Member for Edinburgh North and Leith (Mark Lazarowicz) was right to highlight the tragic figures released today by the Insulation Industry Forum, which show that, so far, 1,782 jobs have been lost in the insulation sector—800 of them in the past two weeks—and that a further 1,100 insulation workers have been put on notice of redundancy. I urge the Minister to respond to that, because those are people up and down the country who are now not in work and struggling to get by.
Ministers cannot say that they were not warned. Last year the Association for the Conservation of Energy projected that there would be up to 16,000 job losses in the sector if the Government did not seriously address the issue of the transition from previous schemes to the green deal and the energy company obligation. We know that in the run-up to Christmas more than 34,000 insulation works were cancelled as a result of energy companies withdrawing their funding ahead of the CERT and CESP deadline. We also know that a further 27,284 installations have been put on hold because new funding is not yet available. If Ministers had acted to put in place a smooth transition from CERT and CESP to the green deal and ECO, this work could then have gone ahead and job losses could have been avoided.
It is not as if there is no work that could be done now. I refer Ministers to a report on page 2 of The Independent today. Despite Ministers’ claims to the contrary, DECC’s own estimates show that at least 8 million homes in the UK still need loft insulation and 5.8 million need cavity wall insulation. Is it not time that Ministers got around the table with the industry and sorted out this mess?
It is clear from this afternoon’s debate that Ministers have taken their eyes off the ball. The motion proposes simple things that the Government could do today to clear up the mess and fix the green deal by taking tough action to force the energy companies to keep their obligations and extending Warm Front so that help is given to those who need it most during the current cold snap. I urge all Members on both sides to support the motion and I commend it to the House.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
We have heard many excellent speakers from across the House and I am grateful for the opportunity to conclude the debate.
Unfortunately, the many excellent speakers did not include either of the speakers from the Opposition Front Bench. That really is sad when we are debating such a serious issue. Any sensible, objective observer would recognise that this has been a problem under successive Governments. Labour did not have a magic wand. During the last Parliament from 2005 to 2010, when the right hon. Member for Don Valley (Caroline Flint) was in government, fuel poverty rose substantially, as my hon. Friend the Member for Wealden (Charles Hendry) pointed out. The right hon. Lady is in total denial about that fact. It does her credibility no good if all she does is to make narrow partisan points, because there are a lot of people on both sides of the House who speak with a great deal of knowledge. We might not always agree and we might not share the same conclusions, but to be in total denial of the basic facts and to trot out ridiculous partisan points lowers the tone of the debate across the whole Chamber. When Members on both sides of the House have spoken with such passion, it is a shame that those on the Opposition Front Bench, particularly in opening the debate, looked as if they were auditioning for a part in “The Thick of It”. It really is a little beneath them.
I am more concerned not that the Opposition Front Benchers have undermined their own political credibility, but that they are trying to score party political points by talking down the green deal. In doing so, they are talking down all those small and medium-sized enterprises that are investing in the green deal and all those people who are trying to inspire confidence to get people to invest in order to bring forward what I am certain will be the most transformational energy efficiency programme that this country has ever seen—a programme that is built for the long term. All the Opposition want to do is to use the efforts of people in business and their employees to score cheap party political points. I am sorry that that is how they have decided to play this important issue, which ought to command significant cross-party consensus. In opposition, we tried, where possible, to build that consensus. Obviously, they are going to plough a very different route.
This week’s cold weather has focused our minds on those who are at the bottom of the ladder, struggling to keep warm. The coalition understands the urgency and scale of the challenge. We are not going to make cheap political points or pretend that the situation is anything other than very concerning. However, unlike the Labour party, which had 13 years in government to do something transformational, the coalition Government have a plan. Not only do we have a plan, but after only two and a half years, we are taking action—very real action. We have already passed the substantial Energy Act 2011 and are well on the way to taking another substantial Energy Bill through Parliament. The Labour Government had 13 White Papers, and what did they have to show for it in the end? More than 5 million people in fuel poverty. We are doing a great deal that we can be proud of.
During the debate, we heard a number of positive contributions. There was a measured and sensible contribution from my hon. Friend the Member for Edinburgh West (Mike Crockart). There was a powerful demolition of Labour’s policies, which were irresponsible with consumers’ and taxpayers’ money, from my hon. Friend the Member for Spelthorne (Kwasi Kwarteng). He clearly pointed out that, yes, we can do good, and Warm Front made a difference to a lot of people. In terms of value for money, however, that extraordinary amount could have been spent much, much better. The fact that it was a monopoly provider, that there was no competition from other firms and no choice for people at the bottom of the ladder, was not to the scheme’s credit. Under the ECO—an integral part of the green deal—we will deliver much better value and, pound for pound, many more measures than we were able to provide with Warm Front. Year on year, significantly more people will be helped through ECO than were helped through Warm Front. The fact is that the Labour party confuses spending large amounts of money with getting the best outcome.
My hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones) spoke with great expertise and passion not only about energy efficiency but about renewable energy. That point was picked up by another champion of the sector, my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile), who showed how we can marry those two agendas—in fact, we need to need to marry them as we go forward.
Perhaps the most candid and powerful speech of the afternoon came from my hon. Friend the Member for St Albans (Mrs Main), who really put the record straight on fuel poverty and effectively blew the whistle on Labour’s claims. She was right to say that whatever we think about climate change and renewable energy, it is always wrong to waste energy and for people to live in poorly insulated, poorly heated homes.
We must remember that reaching out to the most fuel poor and vulnerable is not easy. That was recognised by Professor John Hills and it is not a precise science. Often the households we are trying to reach—I know that Labour Members also want to reach those people because they see them in their constituencies and surgeries—are very dysfunctional. Often, people are in temporary accommodation, and certainly not their own accommodation. They do not read a daily newspaper and might be hard to reach because they probably do not read the information provided by the local council. Trying to get to those hard-to-reach homes is a difficult job, which is why we need a new approach.
We could have carried on with Warm Front and the status quo, but it would have taken us over 80 years. In fact, we may never have got there because over the past five years, despite the amount of money that Labour threw at the problem, fuel poverty was going up. We need a transformation in the way we deliver fuel poverty solutions, as well as delivering more investment. The green deal and the ECO are our best possible shot.
I do not deny that the green deal is not perfect, and I have no doubt that we will want to improve the scheme in light of experience. However, those on the Opposition Front Bench are trying to write it off before we have even begun to roll it out and the first green deal plan has been signed, and before it has really got going. I think that is despicable. I am pleased to say that Labour councils up and down the country are not taking the same negative partisan approach. Talk to Manchester, Birmingham, Leeds or Newcastle. Those councils do not have that narrow partisan view of the world that we have seen demonstrated tonight. They are taking a responsible view—as are many Opposition Back Benchers—and working with us in the interests of the fuel poor to deliver better outcomes for people in their areas.
My hon. Friend the Member for Bedford (Richard Fuller) asked me to assure him that we will target our fuel poverty solutions in the best possible way. There will be tighter criteria. Pound for pound the ECO will be more effective and transparent than Warm Front. It will not be a monopoly and it will deliver a better service and greater choice.
We know that the cost of living is a huge concern to all our constituents. That is why the coalition Government are taking radical action, and instead of Labour’s countless White Papers—
Ms Rosie Winterton (Doncaster Central) (Lab)
claimed to move the closure (Standing Order No. 36).
Question put forthwith, That the Question be now put.
Question agreed to.
Main Question accordingly put.