Cold Climate Allowance

1st reading
Tuesday 14th December 2021 Commons Chamber

Motion for leave to bring in a Bill (Standing Order No. 23)

13:33

[Neale Hanvey (Kirkcaldy and Cowdenbeath) (Alba)]

I beg to move,

That leave be given to bring in a Bill to require the Secretary of State to report to Parliament on providing additional allowances to people in receipt of the state pension and other social security benefits in places with colder climates to reflect the increased cost of domestic heating; and for connected purposes.

The Bill seeks, on a cross-party basis, to introduce a cold climate allowance throughout the United Kingdom. I am grateful to the colleagues from eight parties, along with an independent Member, who have lent it their support. I am pleased that, as well as having cross-party support, the Bill has attracted support from MPs in each of the constituent nations of the UK. Indeed, as someone who was born in the north of Ireland, I am pleased that every party from Northern Ireland represented in this Chamber supports the Bill. That is no small achievement.

In essence, the Bill is the same as Bills introduced in the 1980s by the former SNP leader Gordon Wilson MP and in the 1990s by the former SNP parliamentary group leader Margaret Ewing MP. I consider it a great honour to follow in their footsteps.

The Bill is UK-wide in its scope and seeks to tackle income, as one of the recognised causes of fuel poverty, by paying a cold climate allowance: an additional monetary payment during the winter months that would be paid directly to eligible people in receipt of the state pension and other social security benefits. The amount of the proposed cold climate allowance is based on paying 10%, 20% or 30%—depending on location—of the annual equivalent service charge for fuel and associated costs that is calculated in respect of housing benefit. It would be an automatic and continuing payment, over 17 weeks from December to March.

The Bill would divide the United Kingdom into four climatic zones: zone 4 would cover the highlands and northern Scotland and would result in an automatic weekly payment of £45.05; zone 3 would cover central and southern Scotland, Northern Ireland and northern England and would provide a weekly payment of £27.56; zone 3 would cover central England and Wales and would entail a weekly payment of £13.78; and zone 1 would cover the remainder of the United Kingdom but would not produce an automatic payment. Existing cold weather payments would continue to apply in zone 1, as they would throughout the UK during cold weather snaps.

The Bill has been welcomed by those organisations in the UK that are committed to ending fuel poverty—namely, Energy Action Scotland and its sister body National Energy Action, which operates in England, Wales and Northern Ireland.

Why should we introduce a cold climate allowance now? People right across the UK face a perfect storm this winter, with rising energy bills combined with an increase in the energy price cap and falling incomes for families, particularly in the wake of the removal of the universal credit uplift. The Bill would go some way towards shielding our most vulnerable from that perfect storm. In addition, there is a crisis in the energy market as large energy suppliers go out of business. With the rise in wholesale gas prices, 28 suppliers have gone out of business in the UK, including Bulb Energy, Britain’s seventh-largest supplier with 1.7 million customers.

Energy Action Scotland predicts that, as a result of high energy prices, poor levels of energy efficiency in homes and falling incomes, this winter

“many lives will be lost and unnecessary pressure placed on the NHS”.

Already, 2,000 more lives in Scotland are lost across the winter months than in the summer because people are living in cold, damp and difficult-to-heat homes.

All Members will be aware of rising household energy prices. The surge in the market price of gas is unprecedented and has more than quadrupled in the last year. National Energy Action estimates that the expected increase in gas bills in April could mean that the cost of heating the average home will have doubled over the past 18 months. Energy prices are already high and are set to rise substantially in April 2022, with high prices expected for some time to come.

New research published only last week by the Global Change foundation predicts that household energy bills are set to rise by up to £900 per annum in the coming year. Customers on standard tariffs will see a rise of between £450 and £650, and those who switch from cheaper fixed-price deals as they expire will go on to the price cap, which could see a rise of between £700 and £900.

According to National Energy Action, the cost of living is at its highest level in a decade, with household energy bills being the principal driver. NEA estimates that average domestic energy bills have soared by more than £230 per customer compared with last winter. This leaves 4.5 million households across the UK now struggling to heat and power their homes. Many are sinking further into debt; others are forced to ration their energy use or turn off the heating altogether, leaving them at acute risk of serious ill health or even premature death.

Unfortunately, many energy experts predict that bills will soar again this coming April, possibly by as much as £550 for the average dual fuel bill. Those calculations are based on average energy use; larger families and people who live in poorly insulated homes are likely to pay even more.

Last week, E.ON Energy chief executive Michael Lewis told ITV:

“Many people are in for a shock”.

He said that rising energy bills

“will certainly cause hardship to customers.”

The Bill would go some way towards addressing that hardship for some of our most vulnerable constituents this winter. According to a new study published earlier this month by Citizens Advice Scotland, 36% of people in Scotland—one in three—are now struggling to pay their energy bills. Of those, 80% cited rising energy bills as a reason.

Why pay a different cold climate allowance in different parts of the UK? The stark reality is that it is colder in different parts of the UK and that weather conditions are predictably more severe in some areas than others. The different rates of cold climate allowance that the Bill proposes would reflect those climatic variations. It is thanks to the campaigning efforts of Margaret Ewing and others in decades past that the UK Government finally conceded the difference in heating costs across the UK. According to the Building Research Establishment domestic energy model, taking Bristol as a baseline, heating a typical semi-detached house with gas central heating requires 23% more fuel in Glasgow, 28% more in Edinburgh, 32% more in Dundee, 41% more in Aberdeen, 53% more in Braemar and a staggering 66% more in Lerwick.

We know that there are extreme pressures in remote, rural and island communities. Households, particularly in off-gas areas, face some of the highest energy costs anywhere in the UK. Households in Orkney, Shetland and the Western Isles of Scotland endure the highest rates of fuel poverty. The Bill would provide those households with welcome additional support. It is beyond doubt that significant climatic variation exists across the UK; the Bill would allow us to balance it and do something meaningful about it.

Why use incomes to tackle fuel poverty, not home insulation or other energy efficiency measures? It is not a case of either/or. Someone may have the most energy-efficient home in the world, but if they have insufficient income, they may be too afraid to turn on their heating system or use it to the level required to provide adequate warmth. Indeed, the home energy efficiency standard in the social rented sector in Scotland is an exemplar in these islands, but many of the people occupying those homes are on low incomes or in receipt of the retirement pension or other social security benefits. Further help for households struggling to afford the rising cost of energy is therefore necessary in Scotland and across the UK. The Bill seeks to provide that support.

Frazer Scott, chief executive of Energy Action Scotland, put it well:

“Far too many people are facing a cold, cold winter, unable to afford to heat their homes to the levels that support their health and wellbeing.”

Age Scotland and Age UK have both highlighted the financial challenges that older people face this winter. These people are our constituents and we have a duty to act. Energy Action Scotland and National Energy Action believe that more must be done to amplify support when extreme weather has an impact on already financially stressed households. People should never feel compelled to self-disconnect or otherwise ration their energy supply. National Energy Action says:

“We hope the Bill is successful or, at the very least, it prompts the UK Government to come forward with their own proposals to help more vulnerable households afford a warm home”.

As we move into winter recess, hon. Members may view winter scenes on Christmas cards with warm fondness. However, it is likely that too many of our constituents will be filled with fear and dread if such wintry conditions descend upon their reality. My Bill would provide practical help in the winter months when it is needed most, help to keep people warm, reduce pressure on the NHS and, ultimately, save lives. I commend it to the House.

Question put and agreed to.

Ordered,

That Neale Hanvey, Kenny MacAskill, Angus Brendan MacNeil, Grahame Morris, Mr Alistair Carmichael, Liz Saville Roberts, Jim Shannon, Claire Hanna, Stephen Farry, Margaret Ferrier and Alison Thewliss present the Bill.

Neale Hanvey accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 14 January 2022, and to be printed (Bill 218).

Business of the House (Today)

Ordered,

That, at this day’s sitting, notwithstanding the provisions of Standing Order No. 16 (1) (Proceedings under an Act or on European Union documents), proceedings on the Motions in the name of Maggie Throup relating to Public Health (SI, 2021, Nos. 1400, 1415 and 1416) and the Motion in the name of Secretary Sajid Javid relating to the draft Health and Social Care Act 2008 (Regulated Activities) (Amendment) (Coronavirus) (No. 2) Regulations 2021, shall be brought to a conclusion not later than 6.30 pm; the Speaker shall then put the Questions necessary to dispose of proceedings on those Motions forthwith; such Questions, though opposed, may be put after the moment of interruption; and Standing Order No. 41A (Deferred divisions) shall not apply.—(Craig Whittaker.)