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Chris Ruane (Vale of Clwyd) (Lab)
I rise to speak about fuel poverty in Wales. Fuel poverty is defined as when 10% or more of a household income is spent on fuel. Wales has the highest rate of fuel poverty in the whole UK, with 420,000 households, which is 30%, in fuel poverty. To put that in perspective, the figure compares with just 11% in the south-east, so that for Wales is nearly three times higher. The ward in Wales with the highest rate of fuel poverty is Rhyl West, which is in my constituency. The ward with the 10th highest rate is Rhyl South West, where I have many relatives, in which I grew up on a big council estate.
In Rhyl West, 900 hotels and guest houses have been turned over to houses in multiple occupation, and the landlords have made no investment to insulate and improve those homes. They have made money out of misery, charging £85 a week in housing benefit for substandard homes. That is a big problem in my constituency and in Wales.
There is a perfect storm, because disposable income in Wales is going down and fuel bills are going up. Since 2010, the average household fuel bill has gone up by £300 a year. In the past year alone, it has gone up by 7%, and over the next two years, it will rise by a further 7%.
Jessica Morden (Newport East) (Lab)
Does my hon. Friend agree that many of our constituents’ disposable incomes will be hit even harder by the impact of the bedroom tax in April, when people will be forced to choose between heating their homes or cutting down on food in order to pay the extra rent?
Chris Ruane
I agree entirely and will come to that issue shortly. The TUC in Wales reports that Wales has the lowest levels of disposable income, but the highest falls in living standards. The situation is going to get worse, as my hon. Friend rightly said, because council tax for the poorest will be introduced, although the Welsh Government have mitigated the effect of that by setting aside £22 million for the next year to stop the rise hitting the poorest. Owing to the bedroom tax, someone who has lived in their council house for 50 years but does not want to move, because they love their house and community, will have to find an additional £25 a week. The benefits freeze of 1% could result in people on benefits actually freezing. There is also wage stagflation in Wales.
At the same time, the Government and their allies are giving £44,000 a year extra to a person who earns £1 million a year. The total package is worth £3 billion. Imagine what good work could be done if that money were used to employ unemployed people to insulate the homes of the poorest and most vulnerable.
Glyn Davies (Montgomeryshire) (Con)
Does the hon. Gentleman accept that for the whole 13 years of the previous Labour Government, the top rate of tax was 40p? Next year it will be 45p. How on earth can he stand up and say what he just said?
Chris Ruane
I can do it quite easily and I will do it again. Whichever way the hon. Gentleman slices it, the Labour Government introduced a rate of 50%, but the Conservatives and their Liberal allies have taken it down to 45%. That means additional money in the pockets of millionaires and billionaires, and less money in the pockets of the most vulnerable. That is Robin Hood in reverse; it is Robbing Hood—taking money from the poorest and giving it to the richest.
I do not want to sound too negative, so let me say what could be done. Local authorities need to work with the Department of Energy and Climate Change and the Department for Communities and Local Government, and more widely across the Government, to ensure that they play a full role in encouraging collective switching, because that process can lead to big discounts of £200. DECC needs to promote that more with local authorities, because people are not switching at the rate they should be. There might be many reasons for that. For example, an elderly person may be going blind or have early-onset dementia, while poorer people may be functionally illiterate or have no access to computers. There is a whole swathe of people who should be switching but are not, so local authorities should be co-operating with DECC and other Departments to organise collective switching.
Local authorities should introduce community energy initiatives, perhaps with the encouragement of central Government grants. A lot can be done by local authorities. In my constituency, Denbighshire county council used £35 million of prudential borrowing to upgrade fully its 3,000 council houses with double glazing, gas and insulation—it did a fantastic job. It also co-operated with me and Crispin Jones, the director of Eaga Partnership in Wales, to connect 125 former Ministry of Defence soldiers’ and officers’ houses to the gas grid.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
I congratulate the hon. Gentleman on securing this important debate. Before I was a Member, I used to work for Citizens Advice. As part of that role, I was strategic adviser for National Energy Action Cymru, and I also served on the Welsh Government’s fuel poverty advisory group. It was of great interest to us that Wales is a net exporter of electricity, producing nearly twice the amount we need for ourselves, yet we have the highest levels of fuel poverty. Can the hon. Gentleman explain that discrepancy?
Chris Ruane
I will come on to that point, and there is a particular north Wales angle to the debate. I pay tribute to the hon. Gentleman’s work with Citizens Advice and on fuel poverty.
A lot can be done by local government, but more can be done by national Government. The Labour Government introduced the winter fuel allowance and helped pensioners in the middle of winter by giving them £200 or £300 to pay their gas and electricity bills. That Government also reduced VAT to 15%, but the Conservative Government, with their allies, increased it to 20%. In 2001, Labour introduced the home energy efficiency scheme. Over the past 12 years in Wales, £150 million was spent insulating and improving the energy efficiency of 127,000 properties. A property that has been improved can cut its gas and electricity bills by up to 25%.
Roger Williams (Brecon and Radnorshire) (LD)
The hon. Gentleman talks about VAT but, of course, VAT is charged at 5% on energy and, as far as I know, it has stayed at that level during this Parliament.
Chris Ruane
The hon. Gentleman might be right about that, but wider cuts are affecting the disposable income of all families, especially the poorest.
The Prime Minister talks a good talk but he does not walk a good walk. He promised from the Dispatch Box that he would force the energy companies to offer the lowest tariffs to the poorest people, but nothing happened—he did not know the detail. The Government need to do much more. Pressure needs to be put on the energy companies and the big bonuses they are handing out at the same time as they increase prices massively. In the past year, two chief executives have left their energy companies. One was given a £13.5 million golden handshake and the other got £15 million. That is obscene at a time when people will be freezing to death—dying of hypothermia in their own homes.
There needs to be an inquiry into the ups and downs of gas prices. When supply is tight, gas prices shoot up, but when it is loosened, they gently come down. The time lag and price lag need to be fully investigated, because people are being ripped off. If customers are middle class and have a steady income, so they pay by direct debit, they are offered a discount of £100, but if people have to fill their electricity or gas meter with 50p and £1 coins, they are charged the maximum, and that is wrong.
There needs to be certainty and unity within the Government on energy policy. We see the antics of Ministers who are opposed to solar farms in the fens. There are MPs—some from north Wales—who are opposed to offshore wind farms, MPs who are opposed to onshore wind farms, and MPs who are opposed to the feed-in tariff. They know what they are against, but they do not know they are for, and the uncertainty and lack of unity has led to a lack of investment in the renewable energy market in my constituency and throughout the UK.
Chris Ruane
I have given way to the hon. Gentleman once; that is all he is getting from me.
The Government have introduced the energy company obligation, for which I give them credit, and £1.2 billion has been set aside for the whole of the UK—[Interruption.] I urge the Minister—he is yakking away over there—to ensure that Wales gets its fair share of that ECO money.
Susan Elan Jones (Clwyd South) (Lab)
I wonder whether the hon. Member for Brecon and Radnorshire (Roger Williams) was going to point out that the 5% VAT rate for energy came about due to a successful Labour rebellion in the dying days of John Major’s Government. There may be a good analogy there for us in what will hopefully be the dying days of the current Government.
Susan Elan Jones
I am grateful to the hon. Gentleman for his noise.
Does my hon. Friend agree that this matter is one of the most moral issues because it disproportionately affects people on low incomes and pensioners? That is a really important issue right across Wales.
Chris Ruane
Those affected are the most vulnerable and elderly pensioners, and, specifically in Wales, they are also those who are off grid but cannot get connected to gas because of topography, geology or geography. Dyserth is an off-grid town in my constituency. I was successful in getting gas connected to Bodelwyddan, because it was low-lying, but unsuccessful with Dyserth.
As the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) said, Wales is a net exporter of energy. North Wales, in particular, is playing its role in renewable energies, and my constituency will have the biggest array of offshore wind farms in the world. I switched on 30 turbines at North Hoyle some eight years ago, and when he was Secretary of State for Wales, my right hon. Friend the Member for Neath (Mr Hain) switched on another 30 turbines at Rhyl Flats. Behind those, we will have 200 turbines at Gwynt y Môr and the 2,000 wind turbines at the Rhiannon wind farm array. When I was switching on the North Hoyle turbines, the Prime Minister was describing them as “giant bird blenders”, at the same time as sticking a mini turbine on his own roof in Notting Hill. He was looking both ways.
North Wales has in Wrexham the Sharp solar panel factory, which is the biggest producer of solar panels in western Europe. Sharp made its future plans when Labour introduced the feed-in tariff. It cranked up production and got all the workers in place only for the current Government to say that they were going to scrap the tariff. We and companies such as Sharp need certainty.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
Will the hon. Gentleman give way?
Chris Ruane
The Minister will have plenty of time to address all these issues later.
North Wales has Wylfa nuclear power station, which will hopefully be replaced shortly. In Dinorwig, we have Electric Mountain, which is a hydroelectric power centre with a lake at the top of the mountain. It can produce electricity in seconds to respond to demand at peak times, such as at the end of “Coronation Street”. My constituency has all these fantastic renewables. Looking to the future, we have the OpTIC centre, which is working on fusion power. In the rest of Wales, we have the possibility of the Severn barrage, which could create 5% of the UK’s electricity needs. There is the Irish interconnector from Dublin to Prestatyn in my constituency, which will allow energy to go from north Wales to Ireland. We also have non-renewables in Wales, as we have the gas terminal in Milford Haven that brings a great deal of gas to the UK, as well as the Connah’s Quay gas-fired power station in north Wales. We create energy in Wales, but we have the highest energy bills in the UK. It is the same with water: we capture water and export it, but we have the highest water bills in the UK.
With 420,000 families living in fuel poverty, Wales already has a higher proportion of households in fuel poverty than any region in England. The problem will only get worse unless the UK Government act. The Welsh Government are doing what they can to improve energy efficiency in Wales and they have an excellent record. However, on the fundamentals of fuel poverty—lower incomes and rising bills—it is the austerity and inaction of the Tory-led Government that are hitting Welsh households hard. The Chancellor has an opportunity in tomorrow’s Budget to ease the strain that his policies are putting on families in Wales. He should adopt Labour’s proposal to force energy companies to pool the power that they generate and make it available to any retailer, as well as the requirement that energy companies put all over-75s on their cheapest tariff. In Wales, that would mean more than 250,000 pensioners being up to £200 better off. That proposal could be part of a Budget that would be much fairer than last year’s, which everybody, including some Government Members, rebelled against, and which asked millions to pay more so that millionaires could pay less.
Roger Williams (Brecon and Radnorshire) (LD)
It is a great pleasure to serve under your chairmanship, Mrs Riordan. I congratulate the hon. Member for Vale of Clwyd (Chris Ruane) on securing this important debate. It is useful to remind ourselves that cold weather means misery for the many people who have to choose between heating their home or finding something to eat. That situation needs to be addressed, and I am sure that the Minister will set out what the coalition Government are doing.
The hon. Gentleman is sometimes known as the hon. Member for Rhyl because of his passion about his constituents there. I have fond memories of Rhyl, because I spent the first holiday that I can remember there, although during that time I unfortunately also had my first tooth extraction, so my memories are mixed. I am sure, however, that the hon. Gentleman would want me to say that Rhyl is a very fine place to have a holiday.
The hon. Gentleman mentioned the scheme in his constituency whereby MOD houses have been joined up to mains gas. One way of remedying fuel poverty is to ensure that as many people as possible have access to mains gas. Many people in my constituency do not have that benefit and suffer as a result. Will the Minister say whether there are any plans for communities in my constituency, such as Coelbren, Abercraf or Llangynidr, to have access to a scheme that would subsidise connection to the mains, because that would make a great deal of difference to those communities?
My second point is about cold weather payments, although this is not directed specifically at the Minister because his Department is not responsible. In their last two years of existence, the Labour Government increased the cold weather payment from £8.50 to £25. That was perhaps seen as a sweetener prior to the general election, but I am pleased that the coalition Government have made that £25 payment permanent, because it makes a real difference to a number of our constituents. However, some of our constituents do not benefit to the extent that they should, as eligibility for the payment is worked out by linking each postcode area to a particular weather station.
That system works reasonably well when an area is linked to a weather station that has the same type of weather and is the same height above sea level. Unfortunately, Coelbren in my constituency is badly served by the process. For a very long time—during my time in this place as well as that of my predecessor—we have campaigned for it not to be associated with a postcode that runs all the way down to the sea at Baglan. Coelbren is linked to the weather station at St Athan, which is almost at sea level as well.
Coelbren, which is 800 feet above sea level, often does not benefit from cold weather payments, whereas Ystradgynlais, which is at an altitude of probably 200 or 300 feet below, does benefit from the payments, because it is linked to Tredegar, believe it or not. While I do not want to do any disservice to Ystradgynlais at all, because I believe its linkage is fair, the linkage of Coelbren to St Athan is undoubtedly unfair. The area of its postcode is very long and thin, and I know that the hon. Member for Swansea East (Mrs James) would agree, because she has local knowledge of it.
I shall be taking a group of constituents from Coelbren to see the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb), to see whether an exception can be made for that area, because it has been done a great disservice. It is an old coal-mining area with a lot of local authority housing that has not been brought up to the best standards of heat efficiency. A lot of elderly people living there would benefit from cold weather payments, so we shall make a last-ditch appeal for Coelbren to be served better by cold weather payments, because that would make a lot of difference to those people’s comfort and to whether they are in fuel poverty.
Mrs Linda Riordan (in the Chair)
Order. As allowed by Mr Speaker, I shall now impose a time limit. To give all Members who wish to contribute to the debate the opportunity to do so, I intend to allow each speaker seven minutes. I call Nia Griffith.
Nia Griffith (Llanelli) (Lab)
Thank you very much, Mrs Riordan. The figures for Wales on fuel poverty are very stark indeed because more than a quarter of all households are affected, with a much higher figure in some areas. The housing stock in many areas is fairly old, and we also have a prevalence of coal fires. If people have a coal fire, they need an air flow to keep it going, and consequently we have had many poorly insulated properties. The Welsh Government are doing a good job of trying to remedy the situation through the Arbed and Nest programmes, but the legacy remains, and some homes are very hard to heat and to make energy-efficient.
We also have the major problem that a number of homes are not on mains gas, and they are not only isolated farmhouses, but whole villages. That is often the case because those villages were mining areas in which coal was the predominant fuel, meaning that gas was not seen as a priority.
Jonathan Edwards
The hon. Lady and I represent the area that contains the anthracite coal field, where the gas network was vehemently opposed. We are all dependent on solid fuels in my village of Penygroes, for instance, and throughout the Amman and Gwendraeth valleys, which she represents. Does she agree that it would be really helpful if payment of the winter fuel allowance was brought forward for those who are reliant on oil, gas bottles or coal so that they would be able to buy those fuels in the summer, when they are cheaper?
Nia Griffith
The hon. Gentleman is absolutely right. The November payment is made at exactly the time when solid fuel is at its most expensive, and it would be much better if people had the money earlier so that they could then spend it in preparation for the winter.
There is a particular problem for homes that are not on mains gas, because that limits people’s choice of fuel. They might use solid fuel, more electricity, or bottled gas for cooking. More recently, of course, people have been using liquefied petroleum gas, but some areas face a problem because one supplier of LPG gas has a monopoly. I corresponded with Chris Huhne about that matter when he was Secretary of State for Energy and Climate Change, so I hope that the Minister will be able to continue work to examine LPG competition, particularly when people are trapped into continuing with the same supplier because a whole estate is supplied by one supplier, which creates a difficult situation.
The major problem involving some of the insulation and energy efficiency programmes is a real slap in the face when that is combined with the cuts to the feed-in tariff that the Government brought in. Housing associations, which house some of the most vulnerable people who are often in fuel poverty, were going to roll out a comprehensive solar panelling programme to lower people’s bills and generate additional cash through the feed-in tariff, which would then enable them to improve yet more homes. Following the cut, those programmes are completely gone, which is a real tragedy for those people who would have benefited.
I congratulate the Government on ensuring that cold weather payments keep up with inflation, but Wales rarely experiences seven continuous days with an average temperature of 0º. We are far more likely to see the temperature fluctuate, so the payment is not the answer that we would like to think it is. It is definitely important for emergencies, but it is not something that the Government can be proud of because, at the same time, they have taken £100 off the £400 winter fuel allowance for the over-80s, and £50 off the £250 winter fuel allowance for other pensioners. That has left people over the past two years with an even greater struggle to pay their bills than previously.
It is worrying that the Government have not got a grip on energy companies that are letting prices go up and up. They really need to step in and have a far stronger regulator, which is certainly something that Labour would be doing in government. One thing that has distressed me most is the issue of SWALEC—now SSE—which is a large supplier in south Wales. Because many people tend to be loyal to their original company, they have not switched from their supplier, and that particularly applies to people who are perhaps elderly, or not in a position to make price comparisons on a website. Such people often stick with their original supplier.
The supplier has chosen to impose a standing charge of £100 for people’s electricity, and if they also have gas supplied by the company, they do not get a decrease or a discount—they pay another £100 for the privilege. When I took that up with the supplier, saying that it was absolutely outrageous that the standing charge had rocketed to the extent that the poorest families were paying £200 before they used even 1W of electricity or one therm of gas, I received the answer that the practice was encouraged by the regulator, because it would simplify things. However, it is clear that that is a regressive way of charging people, because those who are trying to scrimp and save—such people are often single pensioners, who make a terrific effort, perhaps by heating only one room and being very careful about what they use—are being hit the hardest.
I am cynical about the motives behind the charge, and one reason why is that I am aware that energy companies know that politicians are trying to suggest that they might offer the lowest tariff to the most vulnerable customers. If the lowest tariff is upped, a buffer is created against politicians doing that. Additionally, bills go up every time energy prices rise. Again, as politicians, we would like to see energy companies decreasing their charges when prices fall, but of course a standing charge will not be decreased. It seems to me that that is an extremely sly ploy to fix a price that will not be hit by the whim of politicians and that will escape such scrutiny. If that is what the regulator is recommending, I ask the Minister to have a serious discussion with it about whether that is the best way forward. I have singled out one company, because it is one in Wales whose actions hit a lot of my constituents.
Chris Ruane
The company that my hon. Friend has singled out, SSE, is the company that spent £15 million on a golden handshake for its chief executive.
Nia Griffith
That is a real inversion of priorities.
Many other companies are carrying out that practice. In fact, there are few that offer tariffs that do not involve a fixed standing charge. However, the one to which I am referring is particularly obnoxious, because a high proportion of the money that a low-income family ends up paying goes on just the standing charge.
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
I have a brief question arising from the previous intervention. Will the hon. Lady inform us whether the contracts that resulted in those big pay-offs were entered into under the previous Government?
Nia Griffith
I expect that the hon. Gentleman will answer his own question when he has the chance to speak later, but it is certainly not something that I am going to deal with now.
I want to get back to the families I have been dealing with and the people I see from day to day. I ask the Minister to examine very carefully the ways in which energy companies set their bills and to consider whether there is any way in which he can alleviate some of the desperate fuel poverty that we are seeing in our communities.
Glyn Davies (Montgomeryshire) (Con)
I look forward to speaking under your chairmanship, Mrs Riordan. I thank the hon. Member for Vale of Clwyd (Chris Ruane) —I, too, sometimes think of him as the hon. Member for Rhyl—for bringing forward for debate one of the most important issues that we face as Members of Parliament. I may not have agreed with everything that he said in his presentation of the argument, but there is no doubt at all that fuel poverty—the choice between eating and heating that so many people now face—is one of the biggest challenges that we have to address.
Much of what happens is probably beyond our ability to deal with. I do not want to make a political point, but what we saw between 2004 and 2009 was an absolutely massive increase in fuel poverty. We have seen the Library figures. The number of households in fuel poverty in this country increased from 2.5 million to 5.5 million between 2004 and 2009. The reason why I do not want to make this a political point—I suppose I could do if I wanted—is that I accept that an awful lot of that was probably beyond the ability of the former Government to control.
Chris Ruane
If the hon. Gentleman has the figures with him, will he tell those of us gathered here today what the figures were in 1994—the first figures in the document—in comparison? They were far higher.
Glyn Davies
The first figures are for 1996, but I just made reference to the figures for the period from 2004 to 2009, which saw a massive increase. I simply wanted to draw attention to the fact that even though the Government at the time would have been very committed to protecting people from fuel poverty, there were international conditions that resulted in a massive increase. That is why I congratulate the hon. Gentleman on bringing forward a debate on such an important issue. It is one that faces us all. It is a particularly serious issue in Wales, and there are a number of reasons for that.
Clearly, one reason is that we have less insulated housing stock in Wales. The Welsh Government are seeking to deal with that issue, and here at Westminster we have the drive towards the green deal. Across Britain, we are tackling the issue of home insulation, which is massively important. However, there is one issue that we must always be careful of: all these things add costs to new housing; they make it very difficult to build. One of the worries that we have is that we should be focusing all our attention on making sure that properties are well insulated. That is why I so disagree with the sprinkler system that is being introduced in Wales. That puts a high value on new houses when that value should be coming from making houses more insulated.
The second issue is the higher dependence in Wales on oil, which is more expensive. That is an historical issue. And of course, in Wales—this is a big issue in Rhyl and certainly in the north of my constituency—average wages are lower, which increases the level of fuel poverty.
I commented initially on the huge rise in fuel poverty between 2004 and 2009, much of which was due to the international market, which is outside our control. We are seeing now the pressure that comes from international gas prices—probably the biggest contributor to the increase in energy prices that we have seen—which are outside our control. That means that we must be particularly careful about the additional things, which might not have quite as much impact but are within our control. That is why I want to refer again to an issue that I think my right hon. Friend the Minister will be tired of hearing me talk about: the impact of the environmental taxes that are put on the bottom of our energy bills. We are always told how little a factor that is compared with the international market. We cannot influence the latter, but we can influence the former, and I want to explain why we should reduce that increase.
Mr Mark Williams (Ceredigion) (LD)
I welcome my hon. Friend’s comments. He talks about action that we can take. One thing that we can do on oil prices is actively encourage, particularly in rural areas, the development of oil syndicates. The Department of Energy and Climate Change has taken some action on that. Would he encourage DECC to take more action to encourage the development of oil syndicates and get those prices down, particularly in rural areas that are off-grid and have no other options?
Glyn Davies
I thank the hon. Gentleman for his intervention and I certainly agree with him. I have encouraged DECC to do a number of things recently in relation to energy and oil prices. One thing it should not be doing is building wind farms and destroying the countryside in mid-Wales.
We must consider seriously the issue of shale gas. I know that there are an awful lot of conditions and we must be very careful about how we go forward with shale gas, but as a nation we must take the issue seriously. We have to take it forward and understand whether there is potential there to help us with energy prices.
Nia Griffith
Will the hon. Gentleman accept that in areas such as mine, where we have the Loughor estuary, which is famous for its cockles, the sort of drilling and exploration to which he refers could have devastating effects, both in terms of flooding along the coast and on the industry itself, because of the disturbance of the wildlife?
Glyn Davies
The hon. Lady makes a fair point, which is why I think that we must be incredibly careful. We have to do a great deal of research. It is right that Cuadrilla, the company involved, is making certain that it goes to an awful lot of trouble. If there is somewhere in Britain that is unsuitable, we should not be allowing shale gas drilling there. We can allow it only where the potential for bringing down energy prices is such that we have to go forward with testing and seeing what the potential is.
Most of my objection to onshore wind is due to the impact on not only my constituency but the whole of mid-Wales and, indeed, much of rural Britain—much of the wild land of Britain. There is no doubt at all that the level of subsidy that is paid to the international companies that are going forward with the proposals is obscene. It is the biggest transfer of money from the poor people, very often, to massively rich foreign development companies. This transfer of money is the opposite of what we should be seeing, the like of which I have never seen before. The whole thing is obscene. The Government have reduced the level of subsidy by about 10%—I think the order might have been signed off in the past couple of weeks—but there is much more scope for that.
Other hon. Members have referred to the level of subsidy in relation to solar panels, but the same money will produce an awful lot more solar panels. There was a shock to the system when the new levels were brought in. There was what we hoped was a temporary slowdown in the number of solar developments that went forward. My sense is that that is recovering. I think we are now getting a lot more development for the same money.
The trouble with onshore wind is that it hits people in two ways. One is fuel poverty. Onshore wind hits the poorest people; indeed, it hits everybody. The Government force them to hand over money that is then given to mega foreign companies, which can bribe their way, through community benefit, into the hearts of local people. Well, in mid-Wales, that has not been successful; it is having no impact at all.
The other aspect is that energy prices are driving jobs overseas. More and more companies find that the cost of the energy they need to run their businesses is just too high. We talk about all the jobs that renewable energy and onshore wind will create, but the truth is they will drive jobs and business overseas—not just to Europe, but outside Europe, and that will be devastating.
In general, however, today’s debate is about fuel poverty. I am very supportive of what the hon. Member for Clwyd West—
Glyn Davies
Perhaps we should settle on Rhyl. This is a right issue, and it is hugely important. I congratulate the hon. Gentleman on raising it, and I think we will return to it.
Mrs Siân C. James (Swansea East) (Lab)
Fuel Poverty in Wales has reached an unacceptably high level, and despite much intervention by the UK and Welsh Governments, the problem is not improving; indeed, it is increasing at an alarming rate. We have heard some of the facts and figures, but according to Fuel Poverty Charter in Wales, 33.5% of the population or, in numerical terms, 425,161 Welsh households spend more than 10% of their income on heating bills. That figure grows daily, and Transform UK predicts that more than 9 million households across the UK will be in fuel poverty by 2016. What we really need in Wales is energy-efficient homes, decent incomes and affordable, reasonably priced utility bills. If we address those three issues, we will have a fighting chance of reducing fuel poverty for many of our constituents.
Fuel poverty is nothing new to us, because we have a legacy of poor housing stock. The quality of housing can be improved only if there is investment now to enable public and private landlords to drive up standards and ensure that all housing stock is dry and safe and meets basic needs. It is depressing to hear people in our surgeries talk about living in damp, poorly insulated homes. The excuse they are always given is that the damp is the result of condensation. I am sad when that happens, and it happens with alarming regularity.
Year on year, housing is getting damper and more run-down, and energy is disappearing out of poorly insulated homes and inefficient heating systems, which means that costs are rising. We should seriously consider giving further support to the Energy Bill Revolution campaign, which comprises more than 100 charities, organisations, private businesses and unions that are calling on the Government to use money raised from the carbon tax to fit all houses with effective insulation to stop heat being lost through roofs and walls. The group says a nationwide programme, insulating all homes across the country, could save the average family £310 a year on its fuel bill.
However, improving housing stock alone will not be enough. The Government need to work harder at bringing down the everyday costs of running our homes, cooking our meals and keeping warm. National Energy Action says that, as of March 2012, the average gas and electricity bill for households in Wales was more than a massive £1,250 per year. Many consumers could get better deals if they changed tariffs. Many of my constituents are adept at switching, which they do with a regularity that amazes me, but I am one of those people who rarely changes supplier. I have been with the same energy provider since the day I got married, and, for better or worse, I have stuck it out with that company because I know it. However, even I am seriously thinking about swapping. None the less, that is a big step, and many people cannot comprehend the bewildering number of tariffs and offers available. As I say, switching is often the most difficult step to take.
Mr Mark Williams
I know how much work the hon. Lady does on this important issue in her constituency. Does she accept that we have a particular problem in rural areas? We have no choice of energy sources, and most of my constituency is not gas-enabled, so we still rely on oil companies and suffer from what are sometimes their monopolistic practices.
Mrs James
I will carry on.
Although I welcome the Government’s plan to introduce a scheme in 2014 under which utility companies must automatically swap people on to their cheapest tariff, I am concerned that that will be a price too far for some. Once the scheme is introduced, energy companies will remove the discounted tariffs available to those who can swap at will, and I fear that those people will then pay even more for their energy.
The problem of fuel poverty is exacerbated in Wales because we are also dealing with lower incomes and a higher prevalence of part-time work. Both factors make it difficult for families to pay their bills and have money left over to put food on the table. According to the Office for National Statistics, wages in Wales in 2013 have sunk back to 2003 levels. If the Government put more focus on the economy and created more full-time jobs, they would help my constituents and those of every Member in the room enormously. Only by providing full-time jobs with decent wages can we help ensure that people in Wales can afford to meet their heating costs.
The green deal does not go far enough. It is far from perfect, and it is not doing enough to address the problem of fuel poverty. It might be useful for households to take out a loan to carry out home improvements, but the interest rate is set far too high, at 7%. It is odd to expect a home owner to pay up front for an assessment of their home, typically at a cost of £80 to £150. How does that help someone who is already struggling with their bills? The short answer, of course, is that it does not.
The Welsh Government have set a target of ending fuel poverty by 2018, and they have implemented the Nest scheme. Although I am pleased with the scheme overall, and I am pleased they are investing £100 million in it over five years, there needs to be better reviewing and measurement of fuel poverty in Wales. We need to see the statistics to judge for ourselves whether energy efficiency improvements are successful and result in cheaper bills. As far as I am aware, the last measurement of fuel poverty was carried out as part of the Living in Wales survey in 2008. If any Member knows differently, or knows of more up-to-date information, I would be grateful to receive information from them.
We should not forget that the impact of fuel poverty on a household is enormous and potentially fatal. In winter 2010-11, there were an estimated 1,900 excess winter deaths in Wales and England—an increase on the five-year average of 1,786 excess winter deaths a year. I am sure a number of facts contributed to that increase, but the Hills review estimated that 10% of winter deaths can be attributed to fuel poverty. If the Government had acted sooner, they could have prevented 190 deaths.
Fuel poverty inflicts much misery on too many people in Wales. To use an old pun, it is time to give it the cold shoulder.
Chris Evans (Islwyn) (Lab/Co-op)
As always, it is a pleasure to serve under your chairmanship, Mrs Riordan. I congratulate my hon. Friend the Member for Vale of Clwyd (Chris Ruane) on securing the debate.
This is the third fuel poverty debate I have spoken in since I came to the House. The first was quite early on, and I had not been a Member very long—I was green behind the ears. Constituents who had come to my surgery had told me anecdotes about sitting in front of the television wearing coats because they were cold and about being unable to afford to heat their houses or turn on an extra bar on their fires. I was deeply concerned because constituencies such as mine have large numbers of former miners with chronic obstructive pulmonary disease and other illnesses who need to heat their homes.
Two years before that, I was working for my predecessor, now Lord Touhig. I was doing some research for his speech at the time, and I spoke to the president of the National Old Aged Pensioners Association of Wales and asked him for some examples. He said that many members do not know they are in fuel poverty and simply put on an extra pullover or go to bed early. I was quite struck that the problem was still going on.
The second fuel poverty debate that I spoke in was on the effect on vulnerable people and, in particular, those suffering from cancer. I discovered from Macmillan that 70% of cancer patients lose, on average, 50% of their household income during treatment. One in four cancer sufferers also suffers from fuel poverty. I was disappointed with the response of the Minister at the time. Rather than talking about positive action, he mentioned the example of Her Majesty the Queen being in fuel poverty, because it was being measured wrongly. That is all very well and warm words, but to someone who is suffering and choosing between heating and eating, it does not matter whether the Queen or anyone else who can easily pay their fuel bill is in fuel poverty. When I listen to debates such as this, I am seriously concerned, because every time we come back to the issue and receive promises from the Government, nothing happens.
Fuel poverty hits Wales harder than anywhere else, as it has more people off-grid. As my hon. Friend the Member for Vale of Clwyd mentioned, we have the highest bills in the country, yet we export more electricity than any other region. We have more people on coin-operated meters than anywhere else in the country. More people have to press the button that disconnects them from electricity bills. More than a third of Welsh households are in fuel poverty, which is higher than the UK average and higher than any other UK region. By 2015—the time of the next general election, which is when we will go before our constituents—the average household in Wales will have £1,470 less than in 2010. At the same time, energy bills are going up and up. What are the Government doing?
I am proud that in Wales we have a Labour-led Assembly that has a target of ending fuel poverty by 2018. It is taking action through energy efficiency schemes. The Westminster Government could take that on. The work being done by the Welsh Assembly follows on from that done by the previous Labour Government. It is in vogue and fashionable among Government Members to attack the Labour Government. They say that we should apologise for everything we did, but I am not apologising for winter fuel payments. I am not apologising for central heating programmes, and I am not apologising for energy efficiency commitments that improved the lives of so many people in this country.
What have we seen in comparison? Since Labour left office, it is the shame of this coalition Government that they cut the winter fuel payment. They have overseen rising energy bills and there has been no reduction in the number of households struggling to heat their homes. I have spoken before about the better targeting of support for vulnerable groups. It is all very well targeting it and it is all very well having the winter fuel payment, but it is eaten up by constantly rising energy bills. It is perverse that every time we hear of rising energy bills we also hear of record profits by the same energy companies that are pleading poverty. It is up to us in this House and this Government to stand up to those energy companies. It is no good inviting them round to Downing street for tea and biscuits and begging them, “Please, please will you reduce your energy bills. It is making us look bad.” We need real action and we need a regulator that will fine the companies when it finds that they are colluding to put prices up.
Jonathan Edwards
The hon. Gentleman is making a typically powerful speech. Both he and the hon. Member for Vale of Clwyd (Chris Ruane) alluded to the fact that Wales is a net exporter of electricity, yet we have the highest levels of fuel poverty. Can I take it therefore that the next Labour manifesto will include a promise that Wales gets control of its natural resources?
Chris Evans
If I am ever lucky enough to be involved in writing the Labour party manifesto, I will take that on board.
The point I want to make on energy companies is that energy bills are complicated. There are 100 different tariffs for energy bills and the most basic argument—I have said it before, both here and in the House—is that we do not have luxury energy. People cannot have electricity or gas coming faster to them, like they can with the internet. Someone can go into Currys and say, “I want a luxury LCD or LED television”, and pay the price for whatever they want, but energy is energy; there is no luxury system. My hon. Friend the Member for Llanelli (Nia Griffith) talked about energy companies saying, “You can go on the internet and start switching.” My problem with that is that the vast majority of my constituents are elderly and do not have internet access. They do not know how to use it, so they are not going to go around looking for different prices.
I do not expect the Minister to come up with radical plans for reforming the energy market, even though we need to have that debate. We are approaching a tipping point where rising energy prices, and the need for energy security, will be a way of life. There is no magic bullet to end fuel poverty.
Mark Tami (Alyn and Deeside) (Lab)
Does my hon. Friend share my concern about companies allowing people on very limited incomes to run up bills of £3,000 or even more? I am sure he has had constituents come to see him about that, as I have. Those companies are now demanding that money, without any reference to income level.
Chris Evans
I entirely agree. The hon. Member for Montgomeryshire (Glyn Davies) shouted earlier “Mention Margaret Thatcher”, and I will mention her. When she privatised the energy companies, I bet she did not expect that she would remove one energy company to get just six. She would not have thought that we would be talking about a market that has moved from a monopoly to an oligopoly. I am sure she would be ashamed of that. That would not have been her intention. The problem is that there is no competition in the market.
Chris Ruane
While we are on the Thatcher era, does my hon. Friend remember the Tory Minister who said that pensioners who were freezing to death in their homes should go to a charity shop and buy an extra second-hand cardigan? That was her solution. Let us hope that we are not going back to those dark Tory days.
Chris Evans
I very much remember that, which says a lot about my childhood and my interest in politics. It was a shameful thing to say. We are in a situation where there is a lack of competition and people have nowhere else to go. They have to go to those six energy companies, and that is why we need the debate.
There are a few things that the Government can do. My hon. Friend the Member for Vale of Clwyd has already said that we could ensure that everyone over the age of 75 is on the cheapest tariff and that 250,000 pensioners would be up to £200 better off through that. We could have targeted support through the winter fuel payment for those suffering from cancer and for the disabled and those with conditions such as multiple sclerosis or muscular dystrophy. We need some political will. We cannot afford to sit idly by and watch energy companies pile up profit upon profit. We need to show people that we are on their side. It is no good standing back and allowing people to die. We have a moral obligation to end fuel poverty. James Maxton said that poverty is man-made and therefore open to change. We have a chance to change fuel poverty.
Paul Flynn (Newport West) (Lab)
I am reminded of a debate that took place when I was the Opposition spokesman on pensions—if hon. Members can remember that; it was in the dark age of Thatcherism—in which the then Minister suggested that elderly people should go to jumble sales and buy coats to put on, saying that they would get good value. That was only a few months after Edwina Currie suggested that the elderly should go to bed with bobble hats on—that was the then Government’s Dickensian approach. It was a happy occasion, because a group of Welsh MPs had the only fax machine in the House at that time, because faxes were suspect and not allowed—all that could be attached to a telephone line was a telephone. A group of officials came to inspect the installation of our wood-burning fax machine, which cost an enormous amount and was built like a steam engine. However, that meant that we could ensure that news of the Tories’ answer to fuel poverty—jumble sales—went out to the nation so that people would realise what it was.
I was struck by what the hon. Member for Montgomeryshire (Glyn Davies) said in his speech. I welcome the fact that he is acquiring the same reputation for wisdom and restraint as his predecessor in the House, and we look forward to further improvement. He drew attention to, but did not dwell on, the fact that fuel prices are crucial. Something extraordinary has happened, which nobody forecast: America has had a huge boost to its economy because it has low fuel prices, mainly as the result of fracking.
A new gas-fuelled power station recently opened in my constituency, the gas for which comes from Scandinavia. It is situated precisely on the confluence of the River Usk, through one window, and the River Severn, through the other window. Fuel comes all the way across to Wales, but twice a day a huge cliff of water comes up the Severn and down the Severn, and up the Usk and down the Usk, wasted and unused. The cheapest electricity in the world comes from the tidal power station at La Rance in Brittany, which has been going for 47 years. The capital costs were paid 27 years ago, so the fuel is of course free. The turbines are in pristine condition and it produces electricity regularly and cleanly from a non-carbon, eternal fuel source, and no one takes a cut. There is a similar, slightly bigger, power station in South Korea.
In Wales, the tides washing around our coast 24 hours a day are our North sea oil, but we neglect them. There are serious problems with the barrage—building a wall across the channel—because it is open to so many environmental objections and has a huge cost, but a very acceptable alternative, which would be equally rich in providing power, would be a series of turbines in the water, perhaps in lagoons, linked to a pump storage system such as the one in Dinorwig, meaning that when pulses of energy arrive at 3 am, we can store that, as with a large battery, for use later in the day. That is the cleanest, cheapest, most sophisticated and best way to produce energy.
We have heard about the dearest way to produce energy this afternoon, as we are going ahead with a nuclear power station. While it is not in Wales, a large part of Wales is within a radius from it that is the size of the uninhabitable area around Fukushima. What if there was a disaster? There have been tsunamis in the Severn channel—they were many years ago, but they have taken place. We did not get much information about that from the Secretary of State, who had said, when he was a Liberal Democrat, that nuclear power could come only through either a rigged market or a “vast”—his word—subsidy from the taxpayer, yet he has managed to get both in the proposal. The current negotiations started with a strike price of £50 per megawatt-hour, but The Times and The Daily Telegraph now tell us that the price being negotiated on is £97 per megawatt-hour—nearly double.
Simon Hart
One or two of my constituents who are watching the debate would be interested to know when the hon. Gentleman might make some points about fuel poverty as it affects constituents in Wales.
Paul Flynn
Fuel poverty is about the cost of the fuel. I am sure that there will be great cheers in the main Chamber tomorrow if we hear the expected announcement that the price of petrol and diesel will be frozen—[Interruption.] Hon. Members will be cheering and it will be welcomed. The consequence, however, is that fuel will be cheaper, so there will greater congestion, more pollution and more accidents. The more the price of fuel goes down, the more unnecessary journeys are made. We have less congestion now, fewer accidents and less pollution. Many people—almost half the population—are directly involved in that, but everyone is involved in paying for gas and electricity. They should be the first consideration, but there is no attempt to freeze those prices.
An extraordinary deal is on offer. We have seen fuel prices drop in the US. We are, however, in a position whereby Centrica, E.ON and RWE—all of them—have left the proposed deal, so the only people in the negotiations at the moment are Électricité de France, which has a €33 billion debt. If it was not nationalised, it would be bankrupt. It wishes to do a deal in the short term in which British taxpayers pay it £30 billion in subsidy. According to Tom Burke, an expert in nuclear power, the subsidy will be £150 billion over 35 years, and a Liberal Democrat spokesperson today suggested that it would be £99 billion. That is from a coalition that said that there would be no subsidy on nuclear power. We will be told the result only when it has been negotiated, but the deal will burden those in fuel poverty for 35 years. We are betting for that period. Who will benefit? Not British industry, but French industry, so the advantages will go there.
The Government seem to be hellbent on producing fuel that will be increasingly dear. Fuel poverty will not go away if we irresponsibly decide on the dearest means of producing energy in the world. If hon. Members want another example of that, they can look at the two other Électricité de France new nuclear power stations at Flamanville and in Finland. One is four years late and the other is six years late; one is €5 billion over budget and the other is €7 billion over budget. Who can suggest that the one at Hinkley Point is going to be any different? It will cause anxiety throughout the area, because every 10 years we have a nuclear disaster, and there is likely to be another one, either due to terrorism, an accident or—
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
I congratulate my hon. Friend the Member for Vale of Clwyd (Chris Ruane) on not only securing the debate, but his excellent speech on behalf of his constituents and the people of Wales. I extend those congratulations to all hon. Members who have taken part in the debate. It is clear from the contributions of Members of all parties that fuel poverty is a serious problem in Wales and a subject on which many have campaigned on behalf of their constituents. We heard excellent contributions, and I want to use my time to pick up on a few of the themes that have emerged over the course of the past hour.
Despite falling by 1.75 million people under the previous Labour Government, it is clear that fuel poverty in Wales and across the UK is now increasing rapidly. The Hills fuel poverty review, which was commissioned by the Government, estimates that 8.5 million homes will be in fuel poverty by 2016, which is up from the 4.75 million homes that were in fuel poverty in 2010, according to the Department of Energy and Climate Change website. With the average energy bill going up by more than £300 since the coalition came to power and Government help to support the fuel-poor being cut, it is hardly surprising that fewer and fewer households can afford to keep warm.
My hon. Friend the Member for Swansea East (Mrs James) told us the cost of a dual fuel bill, but I am sorry to say that the figure is even worse. I read on Sunday that the average dual electricity and gas bill is now £1,410 a year, although I appreciate that many customers in Wales are off-grid. My hon. Friends the Members for Vale of Clwyd and for Llanelli (Nia Griffith) spoke about the challenges of switching, particularly for vulnerable customers and those who do not have a bank account, or who do not have access to the internet or know how to use it, particularly where there is a digital divide. My hon. Friend the Member for Islwyn (Chris Evans) spoken eloquently and in detail about the particular challenges that people with cancer face in paying their fuel bills.
Although there are many people who are struggling with the impact of rising prices, today’s debate has highlighted that the impact is felt nowhere more severely than in Wales. Many Members referred to the double whammy of rising bills and falling living standards that is hitting households in Wales right now. The hon. Member for Brecon and Radnorshire (Roger Williams) eloquently presented the issue: in 2013, it is a shocking indictment that people have to choose between eating and heating. We are the seventh most industrialised nation in the world, and the Government should urgently consider the fact that 250,000 people in our country have accessed emergency food aid.
As my hon. Friend the Member for Newport East (Jessica Morden) rightly pointed out, not only are Welsh consumers paying the highest energy prices of anyone in the UK, but they are hit disproportionately hard by the Government’s tax and benefit changes. We heard reference to the TUC report published last week, which showed a 7% reduction in household income in Wales since 2010. The effect is clear: higher fuel poverty in Wales. The 2012 DECC annual report on fuel poverty statistics shows that the proportion of households in fuel poverty across the UK is 18.6%, but the figure in Wales is 26.2%—more than a quarter of households. Consumer Focus estimates that about 420,000 households in Wales are in fuel poverty, which is more than a third of the population and a higher proportion than in any region of England.
We heard from my hon. Friend the Member for Islwyn about how the Welsh Labour Government are acting in response to the standard of living crisis. They are providing help for low-income and vulnerable households to reduce their energy bills and heat their homes through something that I learned about recently—the Nest scheme.
My hon. Friend the Member for Llanelli told us that many homes in Wales are not on mains gas, or require urgent improvements to their energy efficiency, and it is Labour in Wales that is investing £100 million over five years through the Nest scheme to improve the energy efficiency of about 4,000 eligible homes each year. It is estimated that the energy improvement packages will deliver annual benefits averaging £550 per household, and 6,700 of them have been installed since April 2011.
The Labour Government in Wales are helping the fuel poor and endeavouring to eradicate fuel poverty, and they have a target that they take very seriously. I am sorry to say that the same cannot be said for the coalition Government here in Westminster. Sadly, the Minister admitted when the Energy Bill was in Committee that we are not going to meet our targets to eradicate fuel poverty.
Unfortunately, as we have already heard, the Government have gutted support for the fuel-poor since coming to power. The Warm Front scheme, which helped more than 2 million households over 10 years to improve their heating and insulation, was scrapped, and lower-cost social tariffs have replaced the warm home discount, offering far less help to far fewer people. We have also seen the end of the carbon emissions reduction target scheme and the community energy saving programme, which together insulated more than 4.2 million lofts and 2.1 million cavity walls across the UK, lowering carbon emissions and reducing energy bills for millions. This is the first time since the 1970s that we do not have a Treasury-funded scheme to tackle fuel poverty across the UK, and according to analysis by National Energy Action, the net result of the Government’s cuts is that funding this year for the fuel-poor and for low-income and vulnerable households will be half what it was last year.
Nia Griffith
Does my hon. Friend share the very real concerns about the green deal? Even for better-off consumers, it does not provide a very attractive deal, and it does absolutely nothing for those who struggle to make ends meet.
Luciana Berger
I am about to get on to the green deal, and if my hon. Friend will wait just one moment, I will make several points about it.
When the Minister gets to his feet, I am sure that he will tell us in great detail what he believes his Government are doing through the introduction of the green deal and the ECO, after scrapping the three schemes I mentioned. Will those new schemes do anything to help the fuel-poor in Wales or anywhere else in the UK?
I ask the Minister to respond directly to the important points about cold weather payments that were made by the hon. Member for Brecon and Radnorshire. I also ask him to listen carefully to his hon. Friend the Member for Montgomeryshire (Glyn Davies), who raised a concern about new homes. We know that the green deal addresses the energy efficiency of existing homes, but the hon. Gentleman was keen to ensure that we have energy-efficient new homes. I hope that the Minister will tell us what he thinks the coalition Government should be doing, specifically regarding their commitment to zero-carbon homes. He will know that Opposition Members have many concerns about the Government’s intention to scrap the zero-carbon homes policy for new homes.
On existing homes and the green deal, I share many of the concerns raised by my hon. Friend the Member for Swansea East, and I want to respond to the intervention made by my hon. Friend the Member for Llanelli. According to the Government’s own predictions, the number of homes getting insulation under the green deal will fall this year. The Department’s impact assessment shows that the number of loft insulations will fall from 900,000 last year to just 150,000 this year—a decrease of 83%—while the number of cavity walls being insulated will also go down from about 700,000 last year to just 400,000 this year—a fall of 43%. We understand that the number of solid wall insulations will stay largely the same.
By the Government’s own admission, the way in which the green deal is designed means that most fuel-poor households will not benefit from it, because they are unlikely to meet the golden rule. They currently under-heat their homes, so a more energy-efficient property would ensure only that they lived in a warm home rather than a cold one. I heard the concerns of my hon. Friend the Member for Llanelli about the cost to households, and we have had many a discussion on the Floor of the House about the interest rate and whether the green deal will present a good deal for households.
Perhaps we can be more hopeful, however, about the ECO. After all, the Minister told me during DECC questions in May 2011 that the ECO
“is going to be much more effective than any measure that the Labour party introduced.”—[Official Report, 19 May 2011; Vol. 528, c. 478.]
However, according to the Government’s own impact assessment, by 2023—in 10 years’ time—the ECO will have reduced the number of homes in fuel poverty by only 250,000. That is fewer than the 300,000 households that were put into fuel poverty this winter alone, and a fraction of the millions of homes that were helped under the CERT programme that the ECO replaces. Again, the Minister’s claims to be supporting fuel-poor households simply do not stack up.
Perhaps the Minister will want to mention the £46 million boost for 132 local energy schemes that was announced by his Department on 15 January. If so, perhaps he will tell us why none of that money, which was designed to help to reduce fuel poverty and boost energy efficiency, was awarded to a project in Wales. That is further evidence of the double whammy I mentioned earlier and the Government’s lack of support for Wales.
I hope that the Minster will tell us why he is cutting support for the fuel-poor in Wales and around the country. Why have his Government halved support for the fuel-poor this year? Why did he reject Labour’s amendments to the Energy Act 2011 that would have targeted the ECO primarily at the fuel-poor? He will have heard many representations about how our energy market is broken, so why will he not accept our proposals for reform and introduce a pool, breaking open the market and ending the regional monopolies that lead to people in Wales paying more for their energy than people in any other part of the UK, despite Wales being a net exporter of energy? Why will he not introduce a real energy regulator with the power to stand up to the big energy giants and insist that energy companies automatically put the over-75s on to the cheapest tariff and help the most vulnerable and disadvantaged in our communities?
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
I will try to cover as many points as I can; but with barely 10 minutes left, I apologise to any Member, not least the hon. Member for Vale of Clwyd (Chris Ruane), whose points I do not cover in full. I congratulate him on calling this debate on fuel poverty in Wales. It will not come as a great surprise that I did not agree all with all his points, which were somewhat theatrical, but what was not theatrical was his real passion for the subject, which is shared by other Members from both sides of the House.
I assure the hon. Gentleman that the coalition shares his real determination to end the affront of fuel poverty in 21st-century Britain. The Government are only too aware of the real daily choices that confront too many people—not just in Wales, but across the country—in making decisions about keeping warm, particularly during the winter, and we take that issue extremely seriously. If we are to take it seriously, however, we need a little less party political point scoring.
If we are to address fuel poverty, we need a little less disingenuous analysis and to recognise that every year from 2004 to 2009, with only a slight pause in 2010—every year of the last Parliament—fuel poverty went up in Wales. I do not say that the last Government were entirely to blame, because there is in fact a direct link between the international wholesale gas price and fuel poverty. We can score petty points and selectively choose dates that suit our argument, but the fact is that a bigger issue is at play that has eluded successive Governments, so we need to come together with a much more ambitious, comprehensive and honest way to address the issue.
In Wales, there is a degree of complication in the sense that fuel poverty is largely a devolved issue. Although the Welsh definition of fuel poverty is the same as the English one—namely, 10% of household income, as the hon. Gentleman said—the issue is devolved and is not therefore subject to the Hills review that we commissioned to come up with an accurate definition that will aid our policy making. One reason why we have suffered with ineffectual policies in tackling fuel poverty over successive Governments is the lack of specificity—the fact that our efforts have not been targeted enough on those who really need our help.
I am very glad that my hon. Friend the Member for Brecon and Radnorshire (Roger Williams) recognised that cold weather payments have been made permanent, but he made some sensible and informed criticisms of how they are triggered, particularly to the detriment of some of his constituents. I am very happy to meet him and certainly to hear about his discussions with the Department for Work and Pensions.
The hon. Member for Llanelli (Nia Griffith) highlighted the plight of off-gas grid customers. She particularly raised concern about a liquefied petroleum gas monopoly, which is again a real issue for not only her constituents or Wales, but right across the country. Those who are off the gas grid in rural areas get a raw deal from the market, and we continue to consider that issue. In fact, the coalition Government asked the Office of Fair Trading to look into that very matter, which we are keeping under close scrutiny. She made important points about standing charges, about which we are also concerned. We are looking at their impact, particularly because we are now entering the most radical period of reform of the electricity markets since privatisation in the 1990s.
The hon. Member for Islwyn (Chris Evans) mentioned Mrs Thatcher and asked whether, at the point of privatisation, she anticipated that, far from creating greater competition, she would end up triggering a consolidation. In fact, Margaret Thatcher did not create that consolidation; the big six are the child of new Labour. When Tony Blair came to Downing street in 1997, there were 12 energy companies, and when the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) left Downing street, there were six. That massive consolidation occurred on Labour’s watch, and it now falls to this radical, reforming coalition to take the measures that successive Labour Energy Ministers shirked and to reform the energy system.
We are not only reforming the wholesale market, which will drive competition and open up the market to the new entrants who were squeezed out by Labour’s love-in with big business, but reforming tariffs for the consumer and simplifying bills, which are important consumer issues that will make a real difference.
Several colleagues quite rightly referred to tariffs, so I am pleased to say that, far from doing nothing, as the hon. Member for Vale of Clwyd suggested, the Government are acting on the Prime Minister’s pledge and not only acting on a substantial review, but introducing legislation this year to sweep away the bewildering thicket of tariffs. That will ensure that everyone in the country—the fuel poor, the pensioner, the low-income household—is put on the best, lowest appropriate tariff for them. People do not need a PhD in internetology to get a good deal out of their energy company. That will be welcomed, as will our simplification of bills.
My hon. Friend the Member for Montgomeryshire (Glyn Davies) spoke with genuine compassion and concern about the terrible iniquity of fuel poverty, particularly in Wales. We do not always see eye to eye on issues such as wind, but he is right to say that we must not turn our back on a responsible exploitation of gas, particularly if that delivers greater energy security and brings down or limits energy prices for consumers.
The hon. Member for Swansea East (Mrs James) was quite right to point out that there is a bewildering array of tariffs. She said that she had been on the same supplier every since she married, which I am sure was only yesterday, and I hope that, as a result of the Prime Minister’s reforms, she will be having a change—of energy supplier.
Our reforms will bring in real competition. There may be some adjustment to the lowest tariffs, but we know that the big six energy companies use them to tempt 10% or 15% of us to switch, funding those tariffs at the expense of the 85% of the population that do not. Having much greater simplicity and transparency will make it easier for new entrants, who do not have an existing big customer base to milk, to come into the market and give the big six a run for their money.
The feed-in tariff was mentioned, but I have to say that, far from being dead, the feed-in tariff—particularly for solar technology—is alive and kicking. We now have the extraordinary figure of nearly 1.5 GW of small-scale solar having been installed under the coalition, and we are approaching 2 GW of total solar capacity. In fact, solar represents a very good return and a very good deal. I appeal to Opposition Members to stop talking down the solar industry, to talk to their local suppliers and to get behind solar, because it offers a very good deal and great opportunities for the whole supply chain.
Across the board, the Government are taking action to help the fuel poor. The Hills review will help us to do so more accurately, but we are very proud that, taken in total, our policies mean that more money is being directed in a more targeted way at the fuel poor than at any time in our history. We have a lot more to do and there is absolutely no room for complacency, but we are determined to do more.