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Roger Williams (Brecon and Radnorshire) (LD)
As always, it is a great pleasure to serve under your chairmanship, Mr Sheridan. I had anticipated that this debate would be more heavily subscribed, but I am sure that what we lack in quantity, we will make up for in quality. I know that some members of the Environmental Audit Committee who would have been anxious to take part are away on a Select Committee visit.
The main focus of my remarks is the report by the Energy Bill Revolution, which finds that the core of the problem of fuel poverty lies with the poor heat efficiency of our housing stock. For many years, it has been more important to put a roof over people’s heads than to provide a warm home that is well insulated. That comes from a time when energy prices were cheap and carbon emissions were not considered to be a problem. Even if we build 200,000 new homes a year of good thermal efficiency for the next 15 years, 90% of the houses we live in by 2030 will have been built before 2014, and most of them will have poor thermal characteristics.
I congratulate the Energy Bill Revolution for assembling such a powerful group of charities, companies, disability groups, environmental groups, trade unions and trade associations to tackle this important issue. I also wish to congratulate it on highlighting the matter during cold homes week.
The causes of fuel poverty are a complicated nexus of poorly insulated homes, rising fuel prices, low incomes and limited accessibility to the cheapest fuel and best tariffs. The Energy Bill Revolution rightly focuses on retrofitting substandard properties. We have a large legacy of poorly insulated properties in this country. Such is the backlog of that essential work that, if 600,000 houses were treated every year, it would take until 2027 to deal with 90% of the homes.
Guy Opperman (Hexham) (Con)
I congratulate my hon. Friend on securing the debate. Does he agree that there is a need for local authorities to insist on proper energy efficiency measures in any new build?
Roger Williams
My hon. Friend is completely right. The regulation and specification for energy efficiency in new houses today is to be welcomed. Some of us believe that a higher degree of that could have been aspired to.
The Energy Bill Revolution is calling for the revenues from two carbon taxes—the EU emissions trading scheme and the carbon price floor—to be invested in a massive energy efficiency programme that would eliminate the scourge of fuel poverty once and for all. Compared with much of Europe, the UK has a bigger fuel poverty problem because of our poor quality housing.
Mr Mark Williams (Ceredigion) (LD)
Does my hon. Friend agree that that is a particular problem in the area he represents and in my neighbouring constituency? It is about the age of the housing stock coupled with the problem, as a rural area, of the absence of any gas provision. It is a case of lacking alternatives, as well as older housing stock.
Roger Williams
My hon. Friend is correct, and I shall come on to that later. Most houses in rural areas tend to have solid walls, and insulating them is much more difficult and much more expensive than dealing with properties with cavity walls.
Improving the poor quality has to be the focus of solving the problem. Investing in better housing should be the next Government’s top infrastructure priority and funds need to be found. The last Liberal Democrat conference passed policies to recycle carbon taxes for that purpose. Investing in better housing is also good for jobs and the economy, as well as having major health benefits.
Mr Brian H. Donohoe (Central Ayrshire) (Lab)
I congratulate the hon. Gentleman on securing the debate, which is happening at a most appropriate time, given the problems that we face, which are about not only energy costs, but people staying in badly insulated housing. Is it not the case that public housing, as it was, was always better than the private sector for insulation? The U-values in public housing were much greater than they were in the private sector.
Roger Williams
I thank the hon. Gentleman for that point, but I am not in a position to answer his question. I suspect that different local authorities might have had different standards in building houses. Whether they were better or worse than the private sector, I guess, depended on the developer.
Mr Jim Cunningham (Coventry South) (Lab)
I congratulate the hon. Gentleman on securing the debate. We have had lots of debates about fuel poverty, and Government spending on fuel poverty is down 25% on 2010. Having said that, should we not learn a lesson from the past and look at the possibilities of improvement grants, which were often used—certainly in the late ’60s and ’70s—to deal with this sort of problem and for when people lacked amenities, such as toilets?
Roger Williams
I agree with the hon. Gentleman. Finding a way forward to get improvements in heat efficiency will be key to solving the problem. The Energy Bill Revolution believes that the quality of the housing, rather than other aspects, is key to the problem.
Caroline Dinenage (Gosport) (Con)
The hon. Gentleman is being generous in allowing interventions. Pensioners are among those most at risk of falling into fuel poverty. Does he agree that the Government’s warm home discount scheme has been helpful—in fact, invaluable—in providing financial support for more than 1 million pensioners to help them make their homes warmer and safer?
Roger Williams
I agree that the warm home discount scheme is very important, as are winter fuel payments and cold weather payments. A combination of those enables old-age pensioners, particularly in poor housing, to have a fairly decent standard of living and a decent quality of life.
Mr Nigel Dodds (Belfast North) (DUP)
I, too, congratulate the hon. Gentleman on securing this important debate. He is right to point to the necessity of insulating homes better and of concentrating on that. Will he join me in welcoming the Northern Ireland Executive’s approach? We have the highest levels of fuel poverty of anywhere in the UK—42% of all households are in fuel poverty, which is a shocking statistic—but the Housing Executive has now embarked on a campaign to get all social housing double-glazed, so that there is no single-glazing or substandard windows in any of these houses in Northern Ireland.
Roger Williams
I thank the right hon. Gentleman for those comments. They are of interest to me; I think the devolved nations in the UK very often show the way to best practice in such matters and that other nations can learn from them. Getting double-glazing into social housing and local authority housing is a way forward.
The three factors that make it more likely that a household will be fuel poor are low income, high energy prices and energy inefficiency of the home, although people would not know that from much of the noisy debate in recent months, and from party promises of fuel price freezes and rolling back charges on bills. By far the most important of those in the UK context is the state of homes. UK incomes are not especially low. EUROSTAT figures for real adjusted gross disposable income of households per capita in 2011 put the UK right in the middle of the table, coming seventh out of the 13 countries for which data are available. We are within €1,000 of Finland and the Netherlands, which have marginally less income, and Sweden and Belgium, which have marginally more.
Rushanara Ali (Bethnal Green and Bow) (Lab)
I, too, congratulate the hon. Gentleman on securing this very important debate. According to Barnardo’s, the impact of fuel poverty is being felt by families and older people, but, in addition, 90% of the respondents to its survey said that families were cutting back financially on other services and other things to meet their fuel costs. Therefore, although I support the hon. Gentleman’s debate, I appeal to him to recognise and highlight the fact that families are facing a squeeze. In areas with high levels of child poverty, such as in my constituency, the fuel poverty dimension is a huge issue in the cost of living crisis. I therefore hope that he will join us in campaigning on that and ensure that this debate falls into the context of wider poverty issues.
Roger Williams
I thank the hon. Lady for making that point. I do not underestimate the effect that fuel poverty has on families. It is particularly troublesome that children are drawn into this problem. There will be ways in which we can deal with the immediate issues. The purpose of this debate, as I see it, is to find a much more long-term approach to the problem that will get rid of fuel poverty for ever, rather than mitigating it as it appears.
Guy Opperman
On that point, does my hon. Friend agree with me that the progress in, for example, Northumberland, where we have 13 oil-buying clubs, providing more than 1 million litres of oil and a 10% to 20% discount for off-grid customers, and the role of the Church and credit unions in assisting those who need finance for off-grid supplies are the sort of long-term solutions that we need to reduce prices and generally address the problem?
Roger Williams
I thank my hon. Friend for bringing that to my attention. I will move on to rural issues later, but certainly fuel-buying clubs have a big future in rural areas and make a real difference. One of the ways forward that I will be suggesting later is extending the gas main to ensure that other people have the opportunity that most people in towns take for granted.
Mr Donohoe
I am grateful once again to the hon. Gentleman for giving way, but it must be put on the record that we can have long-term solutions to the problem, but we have immediate problems—problems right now. If one in five people are turning off the heating in their house, it is the case that either they heat the house or they feed the house. It is far more important to have that as the basis of a debate today on fuel poverty.
Roger Williams
I agree with the hon. Gentleman that that is a debate to be had, but successive Governments have been putting off taking the tough decisions that need quite a large amount of expenditure and that would make a real difference to the problem. Yes, we have to deal with the situation of pensioners and families as they experience it today, but we also must look to the future.
Annette Brooke (Mid Dorset and North Poole) (LD)
I congratulate my hon. Friend on securing the debate. Does he agree that we should not forget a significant minority, which is those who live in park homes? They struggle because they have to pay for a share of the electricity and it is very difficult to be included in schemes because of the construction of the properties. These really are people on low incomes.
Roger Williams
My hon. Friend has a great record of campaigning on behalf of park home owners. Indeed, in Wales, through the Welsh Government, legislation has been brought through to support park home owners. One issue is how the people who live in park homes are charged for energy and water and what the owner of the park takes as a percentage of the charge made to the residents. My hon. Friend has done an enormous amount of work on that.
In terms of prices in the UK, I accept that lower prices are always welcome, but we must recognise that the Department of Energy and Climate Change quarterly energy prices update shows that in 2011 the cost of a unit of domestic electricity in the UK, including taxes, was the third lowest in the EU15 countries. Similarly, the cost of a unit of gas was the second lowest in the EU15. Buying a unit of energy in the UK is cheap by international standards. What makes the bills expensive—the bills are the key issue—is that we have to buy so many units because our houses just do not keep the heat in.
Only when we look at housing quality do the reasons for our fuel poverty problems become clear. EUROSTAT conducts an annual survey about “Statistics on Income and Living Conditions”. That includes a question on whether households live in a dwelling with a leaking roof, damp walls, floors or foundations, or rot in the window frames or floor. Such substandard homes may be hard to keep warm, as well as presenting a health risk to the occupants. On that, the UK ranks 11th out of 15, with almost 16% of households in leaky homes. Finland is at the top of the table with just 5.7%. However, a second indicator shows that even UK homes without leaks or damp lose more heat than those of most of our neighbours. The amount of heat that a wall allows to escape is measured by using what is known as a U-value. Data from the Buildings Performance Institute Europe data hub show that homes in the UK are further from the optimal U-value than those in almost every other country for which figures are available. We come seventh out of eight countries.
There is a real warning in these figures for politicians of all parties. Talking big on price cuts may be popular, but they will not solve the problem of fuel poverty. A politician without a serious plan to improve housing is very unlikely to be serious about tackling fuel poverty.
Guy Opperman
My hon. Friend has not mentioned thus far the green deal, which, as part of the coalition’s policy, is one of the finest things, and one of the things of which I am most proud, in terms of improving housing stock on a very cost-efficient basis that addresses both energy efficiency and environmental concerns.
Roger Williams
I thank my hon. Friend for picking me up on that. The green deal is indeed a very important part of the coalition’s policy. Figures show that more and more people are making use of green deal assessments. Indeed, some of the companies providing those assessments are not charging for them, but see that as an opportunity to suggest ways forward that will improve the environment of the house. As I understand it, though, some of the green deal finance is not taken up. Some of the green deal recommendations are put into practice without taking up the green deal finance.
Albert Owen (Ynys Môn) (Lab)
I congratulate the hon. Gentleman on securing the debate. On the green deal, he is correct to say that the number of assessments is going up, but the Government’s targets have not quite been met. However, when the assessments have been done, the practical steps that are taken are to replace boilers, for example. Surely it would be more cost-effective to have a scrappage scheme and a boiler efficiency scheme, which would help people on grid and off grid.
Roger Williams
I understand that the hon. Gentleman has a real passion for this issue. We share that, as we represent rural areas. I am not quite sure how a scrappage scheme would fit into the green deal, but I am sure that he will enlighten me on that after the debate. I will come on to some of my concerns about the ECO—energy company obligation—scheme later.
On the rural situation—this is a caveat on the comments that I have just made—certain parts of the UK face significantly higher energy prices. Rural areas in particular are far less likely to be on the mains gas grid. The Department for Environment, Food and Rural Affairs has found that although 10% of the houses in urban areas do not have a gas connection, that figure rises to 36% in rural areas. In villages, the figure rises to more than 50%, and for hamlets and isolated dwellings it is more than 60%. Those figures are for England in 2009, but they illustrate the point well, although I am sure that for some of the devolved nations they could be much higher.
Age UK says that household energy bills in rural areas are, on average, 27% higher than in urban areas. Without mains gas, people in such homes rely on more expensive forms of fuel such as heating oil, liquid petroleum gas, solid fuel or even electric heating. The extension of the gas grid would bring benefits to many such homes. The Government must also ensure that homes that rely on more expensive heating fuels are better insulated if people are to be able to afford energy bills in the future.
Mr Dodds
The hon. Gentleman has raised a significant point about off-grid households, and he is right to say that the problem is far worse in some areas of the country than in others. In Northern Ireland, 70% of households are dependent on home heating oil, which is a massive extra cost burden, and the warm home discount does not apply in the Province. Does he agree that the matter should be looked at as a priority? The problems faced by off-grid households are critical for rural areas and peripheral parts of the UK.
Roger Williams
I absolutely agree with the right hon. Gentleman. One of the first things I did when I was elected to the House was to continue the work of my predecessor, who wanted to bring real competition into the supply of liquid petroleum gas. We managed to get the Competition Commission to conduct an inquiry into the procedures that limited people’s ability to change providers, and the commission introduced proposals to allow people to change their supplier without having to change their bulk tank. That has made people much more likely to choose their own supplier.
Mr Alan Reid (Argyll and Bute) (LD)
I congratulate my hon. Friend on the success of his campaign. I am sure that he was as disappointed as me by the Office of Fair Trading investigation into the heating oil market, which concluded that it was working fine, when it is quite clear that in rural constituencies such as mine people are subject to monopolies because they do not have a choice of suppliers. Does he agree that the OFT should look at the situation again?
Roger Williams
I absolutely agree with my hon. Friend, and I would join him if he made such a proposal. At the height of concern about the lack of competition in heating oil, we looked at a price comparison site that was available to my constituents, which appeared to show four potential suppliers of oil. When we looked into it, however, those suppliers were all the same company pretending to provide competition and offering marginal differences in oil price. That was undoubtedly illegal, and I believe that the company concerned has been prosecuted.
Mr Jim Cunningham
I sometimes think that the suggestion that poor families should shop around for cheaper fuel is a cop-out. We should, as I said in a debate in this place about three years ago, carry out a proper investigation into the companies involved, because they are frankly rigging the market. Some years ago when I was in Cornwall, I saw five fuel tankers lined up for about three weeks to force the price up. Does the hon. Gentleman agree that it is time we had a proper inquiry into the industry to break those companies up?
Roger Williams
I completely agree with the hon. Gentleman, because transparency is essential. I have already told hon. Members about the experience that I had in my constituency, and I have even suggested that in the energy supply industry, we need a different type of company to come in and promote real competition. I have suggested that Welsh Water, a not-for-profit company that pays no dividends to shareholders and is responsible only to its customers, might provide good competition in the system. People should be able to choose to take services such as water, electricity or gas from such a company.
Ending fuel poverty is undoubtedly a massive task. At its launch, the Energy Bill Revolution estimated that we need to improve slightly more than 9 million homes, and it assessed the average cost of improving each home to be £6,500. Many homes can be improved for far less than that, but the most difficult to treat can be very expensive indeed. Improvements have already been made to many cavity-wall homes, but improving the insulation of those with solid walls, which are the ones that really need it, can be expensive.
The Energy Bill Revolution has pointed out that the Treasury is already receiving the proceeds from the auction of carbon permits under the EU emissions trading scheme, which along with money from the carbon price floor, may raise an average of £4 billion over the next five years. That money ultimately comes from those who pay energy bills, and the Energy Bill Revolution suggests that it should be invested in energy efficiency measures to help cut those bills. I am proud that as part of the zero-carbon Britain policy that we passed at our most recent party conference, the Liberal Democrat party decided, in common with other EU Governments, to allocate revenue from the EU ETS and the carbon price floor to an energy efficiency programme designed to assist households suffering from fuel poverty. I hope that the Minister will take that large ask seriously and consider the use of carbon taxes to achieve it. I also ask him to consider how to support hard-to-treat homes, because improvements to easy-to-treat homes, cavity walls and loft insulation will all soon be done.
I turn to a favourite theme of mine, which is extending the gas main. The fuel poverty problems of at least three villages in my constituency would be greatly reduced by the installation of mains gas. Abercraf, a former mining community of some 1,000 people, used to rely on the free coal that was available to many of its inhabitants who were coal miners, their widows or their relations. Sadly, such free fuel is no longer available to many of the residents, and they have no mains gas. In Llangynidr, another village, the mains gas supply runs on the other side of the River Usk, and the installation of a crossing for the mains pipeline is thought to be too expensive. The third village, Howey, needs only a short extension from Llandrindod Wells. At the moment, however, they all remain excluded from mains gas. I know that the expense of installing such facilities is great and that individuals will be asked to contribute to that cost, but some of them will find it difficult to do so because they are pensioners. With funds shortly beginning to flow from income streams such as shale gas, can the Minister give some good news to those communities? Those are big asks for a big solution, but they would bring great benefits to our constituents.
My hon. Friend the Member for Southport (John Pugh), who cannot be present in the debate, has concerns about the operation of the ECO scheme with regard to the replacement of boilers. Manufacturers tell him that because the scheme is about carbon reduction rather than fuel poverty, it is being directed at people with large homes and old boilers rather than at the fuel poor. Many of the big six have already met their targets, and no more funding is available for free boilers for people in need. Many boiler companies have done the work only to be told that there is no funding. Suppliers are switching to inferior boilers manufactured abroad, which puts consumers at risk. Will the Minister address that today or contact my hon. Friend to answer his questions?
We have covered quite a lot of ground, and there have been some helpful interventions from other hon. Members. I look forward to the rest of the debate.
Albert Owen (Ynys Môn) (Lab)
It is a pleasure to serve under your chairmanship again, Mr Sheridan, and to follow the hon. Member for Brecon and Radnorshire (Roger Williams). He has been a sincere campaigner on behalf of the fuel poor for many years, particularly since we both came into the House in 2001. I very much agreed with the tone of his speech and the outcomes that he asked for. I make no apology for concentrating in my speech on some of the issues that he raised because they are very important.
One statistic, which comes from the Department of Energy and Climate Change, is that, on average, fuel poverty in rural areas is twice that of urban areas. The fuel-poor are concentrated in many of the rural areas of the United Kingdom. I am glad that the Minister is present, because he has given evidence to the Energy and Climate Change Committee on a number of occasions, and I know that he is sincere in his wish for an all-UK solution to fuel poverty, whether for those in a large urban town or city or those in a small rural area.
I would like to give some context on why we must do more for rural areas. I have been campaigning for some time about off-grid gas and for the extension of the gas mains. I am pleased that the Energy Bill Revolution campaign has come up with funding mechanisms for that from the EU emissions trading scheme and the carbon floor tax. That is important, but I would like to add a third stream to that funding equation. Shale gas has great potential for this country’s future revenues. If the exploration goes ahead and the volume of recoverable gas is sufficient, the profits should be used to extend the gas mains into rural areas of the UK.
As regulator, Ofgem insists that its policy is to extend the gas mains, but currently the incentives are just not there for the energy distribution companies. I support the Government’s stance on shale gas, and it is quite right that, if we have a bonanza, there must be local community benefits, but there should also be national benefits. If the Exchequer is going to enjoy greater revenues from the exploration of shale gas, similar to those that we have seen from North sea oil and gas, we should have a national strategy. I would like such revenue to be put towards extending the gas grid of Great Britain and Northern Ireland. I stress Northern Ireland because I am fully aware of the problems that people there have with the high price of oil.
I am as disappointed as other Members who have intervened about the fact that the OFT has not strongly concluded that those who live off-grid do not enjoy the benefits of those who are on the grid. It has looked at competition very narrowly. It is difficult to unpick that, and the Competition Commission has been unable to unpick the unfairness that lies behind people’s lack of choice when they are off-grid. For example, they do not enjoy the dual-fuel discounts that the big six and other energy companies boast about because they do not have dual fuels. They cannot get gas and electricity from the same supplier so that they can enjoy a reduction in their bills. That opportunity does not exist for them.
I am pleased that the Labour party has made the commitment that the regulator will look after those who are off-grid in the same way that it looks after those who are on the gas mains grid. I have pressed the Government on that issue on a number of occasions. It is important that the regulator is the champion of people who live in rural areas. The electricity and gas markets were privatised rather hastily and the regulations were put in place to look after privatised areas. The off-grid issue was neglected in many ways, but it is time for that to end.
With the rise of energy prices, we have seen a fuel poverty crisis in many places. DECC’s own figures show that people who live off-grid and those in rural areas have been hurt more than those who are on the grid, so we must take an important step. The Minister and the Government are looking at extending the gas mains, but will he comment today on the possibility of the revenues from shale gas being used as an incentive for the distribution companies that often have no competition?
The electricity and gas market is not fully competitive. Monopolies set the prices in the transmission and distribution of gas—huge prices that contribute between 19% and 24% of gas and electricity bills. We are not talking about a small fraction like the green levy, which was X%. A quarter of the actual price is the result of distribution and transmission. That must be looked into, because bills are increasing. I was very keen on what the hon. Member for Brecon and Radnorshire said about the comparison with European prices. He said that that included tax, but if he looks at the matter closely, the fact that we have a 5% VAT threshold on energy gives us an advantage, because the rate is higher in many other European countries. I know that he was present at this morning’s debate on the effect of VAT on tourism. The off-grid is disadvantaged. We need a regulator and champion to bring benefits to off-grid consumers.
I want also to talk about transportation in rural areas, because it also has an effect. There is a double whammy: people are paying more for oil and off-grid gas and more for transportation and fuel. I very much welcome the Government’s freeze on fuel duty. I have campaigned for it for a long time, under previous Governments, and previous Chancellors have frozen the duty for many years. Members will recall that the fuel duty escalator was introduced in the ’90s. It escalated quite a lot, and there was a crisis point in 2000, when there were fuel protests in this country. There were price freezes thereafter for a number of years. People in my constituency and many rural areas in the UK are affected by the fact that they are paying VAT on their fuel. That 2.5p in every pound that people spend on diesel or petrol has an impact and creates a cost of living crisis in such areas. We are not talking about cars as luxury items; we are talking about essential means of transport.
Mr Mark Williams
Does the hon. Gentleman share my disappointment that the whole of Wales is excluded from the Government’s laudable attempt to achieve a derogation of fuel duty? That is despite Wales being a sparsely populated area by anyone’s standards—his constituency and mine certainly are.
Albert Owen
I agree with the hon. Gentleman. I compliment the Government for introducing the fuel duty rebate and for making representations on the issue. I am sure that the Minister and my hon. Friend the shadow Minister will know that I am not shy of criticising my own party, and I was not shy of criticising it when we were in government, because it should have taken that step. Nevertheless, it is wrong now to exclude a whole area—a whole country—because it is within 100 miles of a refinery. No one in my area, the most north-western point of Wales, can plug into a refinery. The independent suppliers are paying extra for fuel because of the cost of transport from those very refineries. The 100 mile radius principle is really a fly in the ointment. People in Wales, unlike those in remote areas of Scotland and in some parts of England, have been seriously disadvantaged. They are paying extra.
Mr Dodds
I want to pick up on a point made in the previous intervention. The hon. Gentleman will no doubt join me in expressing concern and anger that the rural fuel rebate scheme does not apply to any part of Northern Ireland either, even though we have the highest diesel and petrol prices anywhere in the UK and, indeed, sometimes in Europe. This is a major issue for us as well, and it must be revised and looked at.
Albert Owen
Absolutely. The criteria should take rural areas into account, as well as peripheral areas of the UK, because they are the ones that are disadvantaged. Someone in a rural area of central Yorkshire, for example, could probably travel in all directions to get a better deal on their fuel. However, for someone in a peripheral area, such as the hon. Member for Ceredigion (Mr Williams), there is only one way to get their fuel.
Roger Williams
The hon. Gentleman and I are at one on this issue. I emphasise the importance of independent petrol retailers, without whom many rural areas would not be served. They also serve to keep the bigger suppliers and supermarkets honest: without the independents, we do not know what the supermarkets would charge.
Albert Owen
Absolutely. I ask the Minister to put pressure on the Treasury to reconsider the criteria for the fuel rebate, so that areas such as the periphery areas in west and north Wales and Northern Ireland can be given a fair chance. There is absolutely no doubt that people in those areas pay more for their fuel, as any cost comparison shows. That fly in the ointment—being 100 miles from a refinery—should be excluded from the criteria and the formula. I reiterate that I congratulate the Government on taking the initiative forward, because some areas of the UK will benefit.
I finish on the green deal, which I think everybody in the House welcomes. We welcome the focus of attention on alleviating fuel poverty and introducing energy efficiency measures. However, the green deal that has gone through the House and is now in place is a little cumbersome and expensive. It is well-intentioned, but the rates at which people would borrow money are too high. Again, there is a simpler solution.
I will try to answer the question asked by the hon. Member for Brecon and Radnorshire about boiler replacement. The evidence that I am hearing—I am talking to many of the energy companies as well—is that most energy is lost through inefficient boilers, many of which are in older properties. They are placed in the living room, and most of the heat goes up the chimney. The boilers themselves are inefficient, so the heat goes out through the flues. A package is needed to help with boiler replacements, because modern boilers—condensing boilers, for example—are hugely energy-efficient.
We must remember that most households replace their boilers only after they break down. We are probably all guilty of that: “Oh, this inefficient boiler’s got another year left in it.” That is why the scrappage scheme under the last Government was so successful. People realised, “I might have a year or two to go on this one, but it’s well worth replacing it now.” We are finding—anecdotally, but I have read it on numerous occasions—that there is a pattern. Many people who want to use the green deal get the assessment, go through all the paperwork and find out that just replacing the boiler or the thermostat on the radiator does the job. That is why I think that we should have a reduced version of the green deal, so that people can get quick fixes, perhaps while raising revenues for exterior insulation, for example, for hard-to-heat homes.
There are some good examples in Wales of energy companies—yes, I pay tribute to the big six for this—giving free insulation for lofts, or giving pensioners additional insulation in their lofts and walls. That has been a huge success, but the green deal is missing a trick due to its cumbersome nature. Fuel poverty is hugely important, and I am pleased that it has come to the House. This is an important debate on an important issue. The hon. Member for Brecon and Radnorshire has outlined the issues in a measured way, and I know that the Minister will respond in an equally measured way.
It is in everybody’s interest that we reduce fuel poverty and the amount of carbon emissions. It is in everybody’s interest that we have energy-efficient homes and businesses. When we have this debate, we tend to exclude businesses. We need energy-efficient businesses. Members from all parts of the United Kingdom have businesses in their constituency that are concerned about their energy prices, and they do not get the deals that many individuals get that are easy to switch. It is difficult for small businesses as well. I am pleased to have taken part in this debate, and I hope that the Minister will consider some of the points made by the hon. Member for Brecon and Radnorshire and me. The issue unites the House, and the House of Commons is at its best when united.
Mr Mark Williams (Ceredigion) (LD)
It is a pleasure to serve under your chairmanship, Mr Sheridan, and a privilege to follow the hon. Member for Ynys Môn (Albert Owen) and my hon. Friend the Member for Brecon and Radnorshire (Roger Williams), who has done so much in this area. He has done the House a good service in securing this debate. He set the parameters for the debate clearly and effectively, stating what we can do to improve energy performance and reduce bills in our homes. We heard some interventions from the Opposition about the immediacy of the issue—a point that I do not think is lost on anybody—and my hon. Friend gave a longer-term vision of the action that must start soon. The truth is that both approaches must be undertaken.
This debate is particularly timely, given that last week was cold homes week, a campaign to raise awareness of the Energy Bill Revolution that we have heard about in gatherings here over the last week. I will use this opportunity to discuss some smaller measures that could be taken to make our homes more fuel-efficient and keep them warm, an issue on which my local authority has been active.
Research undertaken by the Energy Bill Revolution campaign has shown that overall, the UK ranks bottom of 16 western European countries with comparable properties on a range of factors, including the affordability of space heating units, the share of household energy spent on heating, the percentage of households in energy poverty, the number of homes in a poor state of repair and the thermal performance of walls. That is particularly pertinent to rural Wales, as I said in an intervention, as much of our housing stock is dated and of a poor standard, with poor heating systems, insulation and so on. It is of great concern to hear that we are performing so badly compared with our European counterparts, but it goes to show that if the issue is dealt with in the right way, it can be addressed effectively, as it has been elsewhere.
Rushanara Ali
Does the hon. Gentleman agree that although the Prime Minister spoke well, before he was elected, about having the greenest Government ever, the Government are missing a trick by not investing in the kinds of initiative that can genuinely create a green economy and jobs, and deal with some of the issues that he and other colleagues have raised, including retrofitting and improving energy efficiency? Will he join us in encouraging his Government to take more active steps to consider how to promote the green economy while addressing fuel poverty?
Mr Williams
I am grateful for that provocative intervention. I will not join the hon. Lady. I actually aspire, like the hon. Member for Ynys Môn, to a cross-party approach to the issue. The Prime Minister and my party leader made various comments before the general election, many of which have been or are being delivered on, through the green deal. However, I do agree with the hon. Lady that we must be even more ambitious and take the agenda forward, so there is partial agreement.
The Energy Bill Revolution campaign, in whose measures I am particularly interested in this debate, calls for revenues from two carbon taxes—the EU emissions trading scheme and the carbon floor price—to be invested in a widespread energy efficiency programme in the hope of eliminating poverty. The campaign believes that investment in improving the energy efficiency of the UK’s leaky homes would save the average family money, provide the jobs mentioned by the hon. Member for Bethnal Green and Bow (Rushanara Ali) by developing the green economy, and boost growth. Incidentally, it has also undertaken polling that suggests that it would be a popular form of investment. Most people feel that it would bring them more benefit than some of the more controversial road or rail projects.
What makes the debate even more timely, especially for Wales, is the fact that figures released last week indicate that in Wales, fuel poverty has increased by 13% over the past year and that, more worryingly, more than one in four families with dependent children are fuel-poor. Families are struggling to keep their homes warm at a reasonable price due to our poor housing stock, as has been outlined. The hon. Member for Bethnal Green and Bow alluded to work done by Barnardo’s; I concur with that work. Barnardo’s and the Children’s Society support the Energy Bill Revolution. The Children’s Society found, in a survey of 2,000 children across the UK, that about 28% of them thought that their homes were too cold, and this winter more than 3 million families are likely to have to cut back on essentials such as food to pay their energy bills.
Some good moves have been made, as was pointed out by the hon. Member for Gosport (Caroline Dinenage). One of those was the warm home discount introduced in 2011—inadequate in its coverage, of course, and not enough, but important to many. It required the big six to provide £135 towards energy bills to low-income, more vulnerable households. Low-income pensioners are in the core eligibility group. However, energy companies can use criteria to decide whether struggling families qualify. It is scandalous that although it may be known that a family are struggling, they may still not get that support. I endorse the Children’s Society’s call on the Government to ensure that no household is without a warm home discount if it is known that there is a child living in poverty there.
Will the Minister consider encouraging companies to extend the eligibility criteria for a warm home discount so that poorer families are automatically included? Perhaps that would be families who receive extra child tax credits, or households earning less than £10,000. The Government have done wonderful things on tax thresholds for those earning less than £10,000, and have taken many people out of tax altogether. The additional action that I suggest is something immediate and pertinent that could be done. Does the Minister have any dialogue with energy companies, or does he plan to have any, about extending the criteria for the warm home discount to working families in which there are children living in poverty? That would help many of my constituents.
I want to mention some local initiatives. The hon. Member for Hexham (Guy Opperman) spoke about the need to develop bulk-buying oil syndicates; 70% of my constituency, including my house, does not have access to mains gas, and I wonder what the Department of Energy and Climate Change is doing to support the development of such syndicates, for domestic oil in particular. There have been schemes in the past. I think that a predecessor of the Minister’s alluded, in a letter, to a competition; I think it is less a question of a competition than of a drive to encourage the development of oil syndicates. I declare an interest, because my family is the beneficiary of one, organised by an inspiring lady, Jane Wakeham, in the village of Llanddewi Brefi. She has built an oil syndicate for her community; we have talked about the big society, but I think that that initiative was always there. What should the Department do to encourage the development of such syndicates? We need them on a much bigger scale, not least in my area, which is off-grid for gas.
I was delighted, for cold homes week, to visit two projects in my constituency that do fantastic work to help my constituents make the most of the energy on which they spend their hard-earned money. One is Ymlaen Ceredigion, a charity that runs the Keep Cosy initiative in conjunction with Ceredigion county council and Aberystwyth university. It gives residents free advice in a home visit, pointing out ways to minimise energy consumption, including through draught-proofing, energy monitors and radiator backing, and signposting them towards energy schemes. Funding to enable 400 households to benefit has been secured, and built into the project is the expectation that the information on energy conservation will cascade down to other families. I also visited Cymdogion Cynnes—the Ceredigion Warm Neighbour scheme—which aims to help residents by collating all information on available energy grants and schemes in one place. That is a valuable resource; we hear time and again that lack of access to information about schemes is a barrier. That county council project is most welcome.
I was sitting at home on Sunday evening and the telephone rang; it was an automated message offering me a free home insulation service. I was supposed to press 2 on the telephone and an agent would enlighten me and my wife about the benefits on offer. I am not sure where that came from, or whether it was from green deal operatives; perhaps the Minister or his shadow would know. I await enlightenment. It is a good, proactive way to deal with things, but it makes the point that people need to know where to get information, or, in my case, where it is coming from.
Annette Brooke
I agree with my hon. Friend that small community initiatives are incredibly important. The point has come my way that some older people, who could have free loft insulation, cannot face dealing with the loft to make it possible; we need voluntary bodies on hand to help and make things easier—and to explain that perhaps it will not be the upheaval they imagine.
Mr Williams
I agree. Elderly people are one of the target groups that we want to approach, and briefings from Age Cymru or Age UK make that point strongly. What my hon. Friend says is important; somewhere along the line, more of a one-to-one dialogue will be needed to get those people engaged in schemes.
I want to reiterate the point that the hon. Member for Ynys Môn made when he talked about his passion for getting people on to mains gas. As I have mentioned, 70% of my constituents do not have mains gas in their homes. People talk about swapping suppliers, but we are limited in our choices and there is a need to renew work on that. I am sure—or I hope—that DECC is undertaking such work. I was in the main Chamber earlier, and in a discussion of energy policy in the nations of the UK, the Minister’s predecessor, the hon. Member for Wealden (Charles Hendry), pointed out that there is a need for that renewed emphasis, particularly for rural areas and people who do not have the range of choices that many others have.
The Government have undertaken some good initiatives, and the hon. Member for Ynys Môn was big enough to acknowledge that. We must build consensus on some of those; that is what the campaign that I am associated with is about, and the number of organisations that have joined the Energy Bill Revolution campaign is relevant to that. I want a renewed vision for rural areas. If the Minister will answer me on one matter, perhaps it could be the development of community oil syndicates. I feel strongly about that, because it is a good and proven way for consumers, in the absence of choice, to get something approaching justice in relation to the bills that they pay.
Julie Elliott (Sunderland Central) (Lab)
It is, as ever, a pleasure to serve under your chairmanship, Mr Sheridan. I thank and pay tribute to the hon. Member for Brecon and Radnorshire (Roger Williams) for securing this vital debate. We could almost say that we have had a Welsh debate, because the three speeches have come from Welsh Members of Parliament, but that is not what it was; it has been much broader, although the speeches highlighted issues that affect rural communities, and much of Wales is rural.
There is wide agreement throughout the House that whatever measurement is used, the number of people in the country classed as fuel-poor is too high. It should be a source of shame that in Europe only Estonia has a higher proportion of its population in fuel poverty. Things appear to be getting worse, and among the reasons for that is the fact that the issues raised in the debate are so complex and wide-ranging that there is not one solution. There are knock-on effects for many Departments. Housing issues have been mentioned a number of times in this debate, but they are not the responsibility of the Department of Energy and Climate Change. There are also issues about the supply of energy to off-grid homes. The solutions to these difficulties will be many and multifaceted, and we must recognise that.
The scale of the problem of fuel poverty is severe. As a result of the age profile of the UK’s housing stock, we have some of the least energy-efficient dwellings in Europe. Earlier, an hon. Member mentioned the U-rating of public housing as opposed to private housing. In my experience, public housing—social housing—is often of a far better standard, particularly in the rented sector, than private rented housing, which has some of the worst energy insulation standards in our housing stock. There are some difficulties. The fact that our country has a long-standing population going back many thousands of years means that we have some beautiful old buildings, but we do not have buildings that are particularly energy-efficient, and some of the issues around modernising them are complex.
Recent figures show that 2.4 million households in the UK are classified as being fuel-poor. Furthermore, the distressing statistic that there were 31,000 excess winter deaths last year shows just how vital it is that we combat fuel poverty. I recognise the important work being carried out by organisations such as the Energy Bill Revolution, which the hon. Member for Brecon and Radnorshire talked about in some detail; the Association for the Conservation of Energy; and Age UK. Last Friday, I went along to support Age UK’s bobble day in my constituency, which highlighted some of the issues that we are debating. Such organisations are bringing the issue of fuel poverty to a wider audience, and I hope that the coalition of groups committed to fighting fuel poverty continues to grow.
I am proud of the good work that the last Labour Government did on fuel poverty, and I am concerned that the current Government are undoing much of it. Projects such as the carbon emissions reduction target, the community energy saving programme and Warm Front were not perfect, but they all helped to lift people out of fuel poverty.
The energy market reforms that my right hon. Friends the Members for Doncaster North (Edward Miliband), and for Don Valley (Caroline Flint), have set out in detail will help to address the issue of rising energy bills. Our reforms will improve competition and transparency in both the wholesale market and the retail market, establish a new energy security board to plan and deliver the capacity that Britain needs, and replace Ofgem with a new regulator with real teeth to prevent overcharging. Moreover, while these reforms are being implemented, we will freeze energy bills for 20 months.
It should go without saying that energy efficiency must also be a key consideration when combating fuel poverty. However, the Government’s record on fuel poverty and energy efficiency has been hugely disappointing. The energy company obligation in its original form, which I should remind Members was the only energy efficiency programme available to the public under this Government, was expensive, bureaucratic and poorly targeted at the fuel-poor. Of course, any scheme that attempts to address fuel poverty must be welcomed, particularly after the Government scrapped Warm Front. However, ECO was a scheme of only modest ambition, aiming to lift only 125,000 to 250,000 households out of fuel poverty, and it has been condemned by the Select Committee on Energy and Climate Change as
“insufficient considering the scale of fuel poverty”.
ECO could certainly be much improved. It could be made more efficient by focusing its delivery on specific geographic areas, and by devoting a far higher proportion of the money that it raises to lifting people out of fuel poverty. Alongside a properly functioning green deal, an improved ECO would also allow us to hit our carbon reduction targets and generate many thousands of jobs.
The Government’s announcement on ECO in the autumn statement was all the more frustrating and disappointing because just as ECO was beginning to achieve limited success, the Government caved in to pressure from the energy companies and let them off the hook, so that they did not have to extend ECO. The effect of that has been disastrous.
Many of the consequences of the changes to ECO are still unknown. In his response, can the Minister tell us when the impact assessment and consultation on the changes to ECO will happen? There are numerous examples of the devastating repercussions that followed the changes to ECO, such as the effect on the scheme in Clifton, which is in the constituency of my hon. Friend the Member for Nottingham South (Lilian Greenwood); there, the Government’s changes allowed British Gas simply to walk away from a project that was due to deal with problems affecting somewhere in the region of 4,000 homes. Does the Minister agree that where deals have been signed but the work has not been done, the energy company should honour its commitment?
The greater worry about some of the changes to ECO is that the more difficult solid-wall insulations will simply not happen and, as is often said, only the low-hanging fruit will be picked. However, until we start to tackle the very complex properties, particularly the solid-wall properties, we will not really tackle the problems.
I will briefly mention the green deal, the Government’s flagship project on energy efficiency. It was meant to dovetail with ECO, but it has been an abject failure. Just over 600 homes have taken advantage of the green deal financial packages. In its current form, the green deal is an unattractive offer, with a sky-high interest rate and an incredible amount of bureaucracy for both home owners and installers. To all intents and purposes, it has become a boiler replacement scheme. There is nothing wrong with boiler replacement schemes, but it was not the ambition and objective of the green deal that it should be a boiler replacement scheme. Boilers need replacing and get replaced, but the issues are so much more complex than that. We need a scheme that really works to address the wide-ranging problems, and that makes finance accessible to everybody to solve those problems.
I must comment on the reference the hon. Member for Brecon and Radnorshire made to Liberal Democrat party policy on energy. Much of it is honourable, and much of it I would not disagree with. However, it is a shame that the Secretary of State for Energy and Climate Change, who is a member of the Liberal Democrat party, does not vote in the House for Liberal Democrat policy. A particular example is the 2030 decarbonisation target. He is on public record as saying that he agrees with it, but he does not vote for it. Everyone I meet in the sector who invests in energy, whether they are in insulation or renewables, says that one of the things they want is that 2030 target, in order to secure investment. I had to draw attention to that.
At every stage of life, living in fuel poverty is a terrible way to live. Young people in cold homes are twice as likely to suffer from respiratory diseases and five times more likely to suffer from mental health problems. For adults, cold homes impact on existing health conditions, and for older people, cold homes can be a killer. We need to improve energy efficiency in all homes in the UK, but particularly in the homes where people need it most. That is why Labour would ensure that the help that is available would first go to people in fuel poverty and others who need it most. Better insulated homes mean warmer homes, lower bills and more comfortable lives, so it is shocking that the Government are scaling back their energy efficiency programmes.
It is our intention in the spring to publish our Green Paper on energy efficiency, which my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) will lead on.
Chris Williamson (Derby North) (Lab)
Is my hon. Friend aware of the poll carried out for the Energy Bill Revolution group, which showed that 85% of people—a massive proportion—want the Government to prioritise energy efficiency and make it one of the key things that they use their investment in infrastructure for? Clearly, that would be a popular policy, as well as one that would help to address the implications of climate change and take people out of fuel poverty.
Julie Elliott
I thank my hon. Friend for that intervention. Fuel poverty and energy efficiency are important issues. Whenever I knock on doors and talk to people, they are among the main issues that they are very concerned about. People are very worried about their heating bills, and tackling heating bills is not only about tackling energy costs at source but about ensuring that homes are insulated as well as they possibly can be, so that the amount of energy used is as low as possible; that is important because of the impact that it would have on not only climate change, but household bills. Of course, it is not just in the domestic market that energy is a key factor; energy bills are one of the biggest factors in industry, and in employing people. The knock-on implications of energy are massive, so getting it right is very important.
Albert Owen
Will my hon. Friend share with the House her views on the regulator being the champion for people who are not on the gas grid? This is the crux of the issue. Many people who are off-grid do not have somebody to speak up for them in an impartial way. She mentioned the Secretary of State, who is looking at the Office of Fair Trading and the Competition Commission in respect of gas prices. Many hon. Members have been calling for that for some time. Again, the OFT and the Competition Commission are being brought in, whereas, if we had a strong regulator, it could deal with this matter.
Julie Elliott
I thank my hon. Friend for making those two important points. Of course, we are proposing, as a party, to abolish the current regulator and bring in a new one with more teeth, which will cover some of the off-grid issues that are not covered at the moment. I represent an urban community, and it has been shocking for me to hear, over the past few years, some of the stories about off-grid people’s problems. The situation is bad for everybody, but they have so many other issues on top of that, and that needs sorting out for the long term.
The Secretary of State made great play yesterday of the moneys involved in the big six, and figures were quoted that we published a month ago, so that is not new news. However, at least he has suddenly found that what is going on is a problem. The problem in all this is that the regulator is simply not working and operating in the interests of the general public. We need to focus not just on paying less for energy, but on using less energy. Hon. Members from all parties care passionately about fuel poverty. I hope that the Minister listened carefully to what was said in the debate. I urge him to place fuel poverty, cold homes and, ultimately, energy efficiency at the top of the Government’s agenda.
The Minister of State, Department of Energy and Climate Change (Michael Fallon)
I, too, congratulate the hon. Member for Brecon and Radnorshire (Roger Williams) on securing this debate on fuel poverty and cold homes. Like the hon. Member for Sunderland Central (Julie Elliott), I note that all the Back-Bench speakers were from Wales. I make no complaint about that at all; these are important issues. I note that fuel poverty, as a subject, is a devolved matter. I am not trying to escape responsibility—I will try to answer a lot of these points—but perhaps some questions should also be addressed to the Welsh Government and their spending decisions.
Let me begin by saying a little bit about fuel poverty, something on the retail market and prices and something about the off-grid issue, which a number of hon. Members mentioned. I will then try to answer some points made by hon. Members in their speeches. I hope that they will allow me to write to them if I do not cover every point that has been mentioned.
I hope that hon. Members welcome the fall in the last reported fuel poverty figures as much as I do. Of course, that followed a period in which fuel poverty rose between 2004 and 2009, reaching a peak of 5.5 million households. I put that on the record as a criticism not of the previous Government, but of how fuel poverty was measured. To help us meet the challenge better, with the new more accurate measure that we are introducing, which deals with low income and higher cost together, we will be better able to design and deliver effective policies that can cut bills and increase comfort for those on low incomes who live in the very coldest homes. I am pleased that the House agreed to the Energy Act 2013, which allows us to bring in the new definition.
Chris Williamson
Does the Minister understand the scepticism out there about the Government’s changing how fuel poverty is calculated? People want to see significant investment in energy efficiency, to ensure that the shocking increase in excess winter deaths last winter is not repeated in future. Fiddling around with the measurement of fuel poverty will do little to address that. People see winter deaths rising and fuel poverty increasing, but they see spending on tackling it falling. The Government need to deal with that, rather than simply changing the definition of what constitutes fuel poverty.
Michael Fallon
I am a little disappointed about that. We all deplore any excess deaths arising in the winter months, but in terms of fiddling with the figures, the new definition of fuel poverty that we are securing was reached by agreement with fuel poverty action groups that have welcomed the new focus, which, as I say, is on low-income households as well as high-cost households. The problem with the previous definition was that it essentially picked out large houses and wealthy people can be living in large houses. That was not the right way to tackle fuel poverty. It was also a measure that kept moving; people kept moving in and out of the definition.
We are now moving to a better definition, with the agreement with those who work in the area. That will form the foundation for a new fuel poverty strategy that we will publish later this year, which will be deliverable and on which the public can hold us to account.
Albert Owen
The Minister makes an important point. There will be issues about whatever calculation we use. However, now that we have moved to a different definition of fuel poverty, will DECC, the Government and other Departments ensure that there is a comparison with the old figures, so that people are not as sceptical about the change for change’s sake? I agree with the Minister that drawing wealthy people into this is not the way forward, but for people to have confidence in the new calculation, there needs to be a comparison over the transition period.
Michael Fallon
That seems to me a reasonable point. I will see whether we can set the tables side by side. Of course, I have to tell the House that the figure was not dreamt up by the Government; it was the work of Professor Hills, who consulted widely on it. It has been supported by those who work in this area.
We had already moved, under the 2013 Act, to ensure that the energy market, with its confusingly large number and range of tariffs, which had not been serving the consumer as well as they might, could make it much simpler for consumers to understand prices and ensure that everybody is put on the cheapest tariff that meets their preference. I am glad, too, that that seemed to secure all-party support, as the energy legislation went through the House.
We were confronted in the autumn with some quite unacceptably large price increases, by some major suppliers, of 8%, 9% and 10%. We moved immediately, as would be expected of a listening Government, to consider what could be done to reduce the bit on the bill—the green levies—that the Government have control over. We have secured an average reduction of some £50 per household. That is important. People do not have to wait for an unworkable price freeze. This Government take action immediately to ensure that people see a reduction in their bills as quickly as possible.
Julie Elliott
Although we would welcome any reduction in bills, does the Minister acknowledge that the average consumer will still pay about £60 more this winter than last winter?
Michael Fallon
No, I do not think that is the right figure. In any case, the hon. Lady would be advised to go a little bit further back and see the scale of the increase under the final years of her Government. This debate, so far, has been reasonably good natured. I am not sure how useful it is to tempt her back on to previous ground, but I will come to some remarks that she made.
I want finally to say something about off-grid and then deal with hon. Members’ individual points. Four million households are off the gas grid and face higher than average energy bills. Of course, winter is a particularly expensive time for them. One of my first duties as Energy Minister was to chair the off-grid gas round table, not least at the instigation of the all-party group on off-gas grid, which has been working on this issue. I launched, at the all-party group’s request, the Buy Oil Early campaign in September and promulgated a better code of practice for oil suppliers, so that people pay the price advertised, and so on.
The group meets every six months, and we will reconvene in May to learn the lessons of this winter. We will have the regulators, the advisory bodies, the charitable bodies, people who have worked in oil-buying clubs and representatives from Northern Ireland, where there have been real difficulties. We will learn the lessons of this winter again to see what more can be done to improve the security and affordability of the off-grid fuel supply and to share best practice. One of the things on which we are working is how we can better pool data between Government agencies to ensure that we better understand which off-grid households need the most help.
Roger Williams
I welcome the Minister’s insistence that people are sold, for instance, heating fuel at the price quoted by the supplier, but will he also try to insist that the supplier includes VAT in his quote? When the supplier trades with other wholesalers, he might do so at a price that is minus VAT, but VAT is included in the price that the consumer has to pay.
Michael Fallon
I will take up that point. It is important for those who are off-grid that there is as much transparency as possible, so that they understand what the costs are likely to be.
I will now address some of the individual points that have been raised. The hon. Gentleman drew our attention to harder-to-treat homes, which probably lie at the core of the long-term challenge. Getting energy efficiency measures into harder-to-treat homes lies at the heart of solving the problem and catching up with the progress that has been made elsewhere in Europe. I accept that those comparisons are not encouraging for us as one of the wealthier member states.
The hon. Gentleman asked about hypothecating some of the carbon taxes towards this objective. If that were to involve additional spending, the revenue from those taxes would have to be produced from elsewhere, or else we would become involved in additional borrowing. None of that is easy at a time when we still face a deficit of more than £100 billion. He asked specifically about extending the gas grid, and the grid is being extended in the current seven-year period that runs from 2013 to 2020. The aim is to connect some 75,000 off-grid homes each year. Those homes will be reasonably close to the existing grid, but that is expensive and a contribution has to be made by the householder, by some other agency or by the local authority. I do not want him to be under the impression that nothing is happening. I will take his points back to the transmission operators and the companies, including his view that more should be done. The aim is to connect more homes to the grid in each successive year.
Chris Williamson
I am grateful to the Minister for giving way again. Extending the grid is welcome, but is not the key actually to reduce energy demand? Surely, a huge uplift in investment is needed to address fuel poverty—in other words, properly insulating people’s homes—using the money that is already in the system. Unless we can do that, extending the grid will not address the problem of fuel poverty for millions of people.
Michael Fallon
I understand that this problem must be addressed across a number of fronts. The hon. Gentleman is right that energy efficiency has a huge part to play, which allows me now to address the energy company obligation. The ECO has been criticised, so I will first address the suggestion that some of those who work in the ECO scheme have run out of budget. I am advised that, by the end of November 2013, published figures from Ofgem showed that approved ECO measures accounted for some 60% of the affordable warmth obligation that was to be delivered by March 2014, so there is still work to do. There are still affordable warmth targets out there for 2015, and we are now extending the scheme to run through to the end of March 2017. We are also ensuring that, having considered the working of the scheme, it is better targeted at lower-income households.
I welcome the support of the hon. Member for Ynys Môn (Albert Owen) for shale gas, and I am sorry that he will not be able to demonstrate that support for any application in his constituency at the moment. No application has yet been made that would allow him to campaign more openly on the scene of an application, but I note what he says. We simply do not know the full potential for shale, so we are not able to estimate the likely revenues, which is what he was homing in on. I am sure that if shale takes off here, as it has taken off in the United States, there will be many claims on the additional revenues that it brings in. The revenues will, of course, not only simply be brought into the Treasury and reallocated outwards to public services; they will also be brought into local communities through the local community benefits package that the industry has already agreed.
The hon. Gentleman asked about the green deal. Some 130,000 assessments have now been made through the green deal, and it is perfectly true, as I think he said, that not all have taken up green deal finance, but the green deal is being taken up. More and more assessments are being made, and the scheme is proving successful.
The hon. Member for Ceredigion (Mr Williams) welcomes the warm home discount, and he asked about eligibility. He will be pleased to know that 2 million households get the warm home discount each year, but we have committed to extending the scheme not simply for 2015-16, but with an additional spend of some £320 million. More than 1 million additional low-income households will therefore receive the payment, without having to take any action at all.
The hon. Gentleman also asked about oil syndication, which we are pursuing through the twice-yearly round table that I chair. We will pick up experience from his constituency and from other constituencies to see what the Government can do to encourage syndicates. There are some good examples of syndication and oil buying in the north-east of England, in Ceredigion and in Northern Ireland, and I want to see what role the Government can play in incentivising that form of syndication.
The hon. Member for Sunderland Central said that she is proud of the previous Labour Government’s record, but she then outlined the reforms that she wants to make. I am not sure why she should be both proud of Ofgem and determined to abolish it. Her Government set up Ofgem, and now they are going to abolish it. I am not sure that she should be proud of that or of having started with 14 energy suppliers and ending up with the big six. She must develop her policy for a future Labour Government, if there is ever to be such a thing, in her own way.
I preferred the hon. Lady’s earlier remarks, in which she said that the Labour Government did not get everything absolutely right. That is probably a good motto for any Government. I am not pretending that the current Government have all the answers on fuel poverty, which is a deep-rooted problem. A lot depends on the state of our housing stock, which needs to be addressed. The hon. Member for Derby North (Chris Williamson) is right that we need to do more on energy efficiency, but we also need to measure the problem better to ensure that the data that we have are properly matched so that, with all the different schemes, we get help to those who need it most.
I am sure, Mr Sheridan, that you would like me, on behalf of all the hon. Members who have spoken, to thank the hon. Member for Brecon and Radnorshire for bringing this important subject to the House today. I assure him that the Government will respond to him and the other Members who have spoken on all the points that have been raised. This is a serious subject, and we are grateful to him for raising it.