Off-grid Homes: Energy Support
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Mrs Sheryll Murray (in the Chair)
I will call Fay Jones to move the motion and then I will call the Minister to respond. There will not be an opportunity for the Member in charge to wind up the debate, as is the convention in 30-minute debates. I can see that a lot of Members want to make interventions, but I ask them to keep them snappy to be fair to the Member leading the debate.
Fay Jones (Brecon and Radnorshire) (Con)
I beg to move,
That this House has considered energy support for off-grid homes.
It is lovely to see you in the Chair, Mrs Murray. I am delighted to see the Minister here; I welcome him to his place. He and I have a history of working together; the last time we did a double act was in moving the Loyal Address back in May. There are many Members present, and I intend to be as generous as possible in taking interventions, as I want the Minister to be fully aware of the strength of feeling on this issue. It is evident that this subject has cross-party support.
As a country, we have faced a multitude of challenges over the past few years. Although we often faced bleak forecasts, the Government have done well to steer us through the obstacles, and the global energy crisis is no different a challenge. Russia’s aggressive and brutal invasion of Ukraine shocks us with its barbarity, and it has had very real impacts on our energy markets. As we and others adjust and rightly manoeuvre away from dependence on Russian energy, we must overcome the logistical challenges in our way.
We are fortunate in this country that our dependence on Russian gas was minimal. However, global supply disruptions, high energy prices, geopolitical turmoil and an as yet unrealised transition away from carbon-intensive energy sources are causing real concerns for my constituents and many others across the United Kingdom.
Jim Shannon (Strangford) (DUP)
The fact that so many Members are here is an indication of how important the issue is. The hon. Lady asked me before whether this issue will affect Northern Ireland—of course it will. Some 68% of people in Northern Ireland are oil-dependent. I live in a rural constituency, and on its outskirts, “off grid” refers to those who depend on coal. I appreciate that the Government have taken massive steps to help, but does the hon. Lady think that they need to monitor the situation over the next few months to ensure that the people who need help most get it?
Claire Hanna (Belfast South) (SDLP)
I thank the hon. Lady for bringing this important issue to the House. As the hon. Member for Strangford (Jim Shannon) said, two thirds of Northern Irish homes are on oil, and half of the remaining third use keypad meters. My Assembly colleagues have brought forward a proposal to issue a voucher, consistent with the support we are giving to gas customers and based on the Northern Ireland high street voucher scheme, which we used last year. Is the hon. Lady aware of any modelling being done to allow the Government to issue support directly to households that they can use with oil suppliers in their area?
Fay Jones
As I say, we discussed this in great depth on the Northern Ireland Affairs Committee, and I hope we continue to do so. I am not aware of any modelling, but I am keen for the Government to explore all options to see how this can be rectified. All hon. Members are keen to ensure parity.
There is a feeling of unfairness among the many rural households across the country that we collectively represent.
Richard Foord (Tiverton and Honiton) (LD)
It is vital that those who live off grid, of whom there are 12,000 in my part of the west country, get additional support to reflect their increased vulnerability to price rises. That includes those who use heating oil, those who live in park homes and those who use solid fuels. The £100 offered by the Government simply does not come close to the scale of price increases we have seen, but I am concerned about the speed—
Mrs Sheryll Murray (in the Chair)
Order. The hon. Gentleman should be making a short intervention, not a speech.
Richard Foord
Any additional support should reach households quickly. Does the hon. Lady agree?
Fay Jones
I think the Government have done extremely well—the issue of park homes has been rectified, and I firmly commend them for that—but I want to see further support for off-gas-grid homes.
The Government mobilised a rapid response to the energy crisis earlier this autumn and are supporting all households through a variety of means. This is the right thing to do and I commend the Government for their approach. However, I am concerned that not enough is being done to support rural households.
Dr Neil Hudson (Penrith and The Border) (Con)
Will my hon. Friend give way?
Fay Jones
I will make a touch more progress, and then I promise I will bring my hon. Friend in.
The cost of heating oil has skyrocketed this year. Consumers are experiencing a 21% increase from two months ago, and a nearly 60% increase compared with prices before the war in Ukraine. That is unsustainable for many households. People in rural areas are, on average, five years older than the national average in urban areas. They are often vulnerable and especially susceptible to changes in energy prices.
Dr Hudson
I congratulate my hon. Friend on securing this debate about a very important issue for all our areas. In her part of the world, and in rural Cumbria, off-grid households and businesses rely on heating oil, liquefied petroleum gas, biomass, wood and so on. We welcome that the Government have recognised that, but does she agree that the £100 support must be looked at? People often have to make minimum orders of 500 litres. We urge the Government to do more to address the issue.
Fay Jones
My hon. Friend’s constituency is much like mine, with often challenging topography and older housing stock that leaks energy. He and I share the same concern, and I want the Government to look at the amount of support offered to rural areas.
The Government have so far introduced a series of short-term measures designed to assist the lowest-income households through extraordinary times. It is an ambitious and comprehensive package of support, necessitated by the severity of the situation, and it rightly supports the most vulnerable in the short term; however, for rural homes, it is lacking. Only £100 has been announced so far. I am confident that the Government can go further.
On Monday, the Chancellor announced a review of the energy price guarantee, so that it will apply not for two years but for six months; in April, we will look to introduce a targeted system of support. My concern is that, if we do not do more now, we will increase the number of people who are considered more vulnerable later this year.
Several hon. Members rose—
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
The hon. Member is making an excellent speech. It would be very well received in my vast and very remote constituency if a Government Minister agreed to come north and meet with citizens advice organisations. That would mean a huge amount to people. I am willing to offer bed and breakfast—and maybe a dram—to any visiting Minister.
Fay Jones
I thank the hon. Gentleman for that intervention; I am sure that the Minister will cover it in his speech. I will talk about some of the groups that can input into this debate once I have taken the intervention from my hon. Friend the Member for Faversham and Mid Kent (Helen Whately).
Helen Whately (Faversham and Mid Kent) (Con)
I commend my hon. Friend for securing the debate. Many of my constituents, particularly those who use heating oil and those who live in park homes, are extremely worried about how they will cope with costs. I am grateful to the Government for the support that has been announced, but it is not enough. We need more clarity and further certainty about the protections that will be available for these residents.
Fay Jones
My hon. Friend hits the nail on the head. The Government have taken some extraordinary, comprehensive steps, but there are some gaps, which she is right to highlight.
On the point made by the hon. Member for Caithness, Sutherland and Easter Ross, in the past few days I have met Liquid Gas UK and National Energy Action. It is apparent that the Government’s short-term approach is universally welcomed, but there is more to do. NEA was quick to outline that my constituency of Brecon and Radnorshire has one of the highest levels of off-gas-grid properties in the UK: up to two thirds of my constituents are dependent on heating oil to heat their homes.
Julian Sturdy (York Outer) (Con)
I congratulate my hon. Friend on securing this important debate. A lot of Members are talking about very rural constituencies. Mine, which lies on the edge of York, is not amazingly rural, but we still have a lot of off-grid communities that are reliant on off-grid energy support. Does that add weight to her argument? We are not talking just about remote rural communities; the issue affects vast areas of the country.
Fay Jones
My hon. Friend is absolutely right, and I am glad that he made that very important point. My constituency is heavily rural, but people need only live half a mile or a mile outside one of its larger towns to be off the gas grid. This is not a remote rural problem; it affects a huge amount of the population. I would be remiss not to say, Mrs Murray, that it probably affects a large number of your constituents too, which gives us even more reason to be delighted to see you in the Chair.
The Country Land and Business Association reports that 70% of rural housing across the United Kingdom is off the gas grid and has to use alternative heating methods, such as oil. We must not forget those heating their homes using LPG or wood pellets. They are currently not receiving equity of support with more urban households or those on the gas grid.
Edward Timpson (Eddisbury) (Con)
Like many others here, I am delighted that my hon. Friend has secured the debate. My constituency of Eddisbury is like hers, with a high proportion of people off the grid. There is a particular issue with how dual-purpose properties, where a farmhouse might provide accommodation or there is accommodation above a pub, could be supported by the Government’s welcome scheme. It would be helpful if the Minister addressed that point.
Fay Jones
I have never had such a workout in Westminster Hall! I thank my hon. and learned Friend for his intervention; the Minister will have heard his point. It is also important to consider the commercial aspect of this issue, because a lot of businesses heat premises via heating oil, LPG or pellets. We forget the rural economy at our peril.
I want to mention the case of a constituent who contacted me about the cost and availability of heating oil. She lives high up in the Black Mountains, where the weather is colder and more severe. Her home is in a beautiful place, but it is in an austere position, without a connection to mains gas. She told me earlier this month that she had bought 500 litres of oil, costing £500. That will barely last her through the winter. She is deeply concerned about how she will afford to heat her home this winter and the remainder of the year.
Between May 2020 and May 2022, the average price of heating oil in the UK increased almost 250%. Some communities are reporting increases in LPG costs of around 200%. The price of logs has more than doubled for many. It is therefore vital that off-grid homes in rural areas do not lose out on this support.
Virginia Crosbie (Ynys Môn) (Con)
I thank my hon. Friend for leading this debate. I have had many constituents on Ynys Môn write to me, as 60% of them rely on off-grid energy for heating. The average cost of filling an oil tank has almost doubled this year. Although they are grateful for the £100 heating oil payment, that is simply not enough. On behalf of my constituents and those of other rural constituencies across the UK, I ask whether the Minister agrees that a price cap should be applied to off-grid heating oil and LPG, mirroring that applied to gas and electricity.
Fay Jones
I thank my hon. Friend for her intervention. I, too, hope that the Minister addresses that point. It is important to remember that those living off the gas grid are not subject to the protection of the energy price cap. I hope the Minister acknowledges that point.
I want to allow some time for the Minister to respond, but a point I would like to press this morning is that rural areas are not wealthy. It is misleading to think that, because we live in beautiful homes, we do not suffer some of the social pressures that the rest of the country does. Rural poverty is often masked by the relative affluence of rural areas, and by a culture of self-reliance in rural communities, but self-reliance cannot be how my constituents stay warm this winter. Rural homes are often older, damper, draughtier and more poorly insulated than those in urban areas. In the long term, it is right that those issues are addressed, to improve overall energy efficiency, decarbonise our homes and save money for our constituents. However, the short-term needs of people who live in rural areas need to be addressed now.
Dave Doogan (Angus) (SNP)
I thank the hon. Member for giving way just before she reaches her conclusion. Her constituency, albeit in Wales, will be similar to mine in Angus, where the 3,500 houses that rely on oil are in the more remote places, further up the glen where the weather is much colder. It is a double whammy for people. Does she agree that, when the Government review the situation, they should accept that £100 does not cut it and that we need a far more significant intervention in the oil market?
Fay Jones
I do. We have heard a chorus of unanimity this morning, and I hope that the Minister has heard that message. The hon. Gentleman underlines my great concern that if we do not do more now, we will create a bigger cost for the Treasury later in the year, when the Chancellor moves to a targeted package of support for the most vulnerable. We will increase the number of those people if we do not do more now. I am very concerned, and I look to the Government to take more urgent action.
It is clear from the debate that there is unanimity right across the House. It is imperative that we speak for rural communities and ensure that we deliver equity between those who live in rural homes and those who live in urban homes. I urge the Government to reconsider whether more could be done to support rural households. Perhaps the Minister will also outline how the £100 payment will be delivered. We do not yet have that detail from the Department, and I would like to see that uncertainty ended.
Victoria Atkins (Louth and Horncastle) (Con)
I am so grateful to my hon. Friend, who is doing a wonderful job of representing the interests of millions of rural and urban residents around the country who are not on the grid. Last Friday, I held a winter support summit in my constituency, where I brought together all the organisations that can help people, from charities and businesses to schools and councils. To help the Minister, there are some schemes that large energy companies are running to help the most vulnerable. I encourage hon. Members to look into that, because there is some help that can support the work that I am sure the Minister will tell us about.
Fay Jones
I thank my hon. Friend for her intervention, which gives me the opportunity to pay tribute to all those supporting vulnerable individuals through this winter, whether in rural or urban areas. We could not get by without the support of many of the charities and social organisations that are supporting those who deal with fuel poverty issues.
I will sit down shortly—I hope that I have allowed all Members to speak—but I hope that the Minister is clear about the strength of feeling on this issue. It is imperative that the Government come forward with a package of measures that matches their ambitious and comprehensive support for those who live on the gas grid; I would like to see that replicated for my constituents who live off the grid.
The Minister for Climate (Graham Stuart)
It is a great pleasure and privilege to serve under your chairmanship, Mrs Murray—for the first time, I think. I congratulate my hon. Friend the Member for Brecon and Radnorshire (Fay Jones) on securing the debate. We can see how motivated rural colleagues are across the House; we have the Liberal Democrats here, we have Plaid Cymru, the SNP, the SDLP and of course a large mass of Conservative Members. It is pretty shocking, given the importance and topicality of the issue, that His Majesty’s Opposition did not even bother to turn up. I thank everyone else for doing so, and for taking this issue seriously.
Colleagues will know that I have long been involved in this issue. My constituency has a lot of people who are off grid; I have spent a lot of time fighting the inequities of Government systems of support, which too often are shaped around urban needs and ignore or try to fit the rural into some urban pattern. That does not work, and too often the system, under successive Governments, has failed properly to recognise the needs of rural areas that, because of their natural grittiness, put up with it more than they should.
James Cartlidge (South Suffolk) (Con)
I welcome the Minister to his position, and congratulate my hon. Friend the Member for Brecon and Radnorshire (Fay Jones) on a brilliant debate. The Minister talked about the equity between off grid and those who have access to the grid. For people in South Suffolk on heating oil who have contacted me, one of the key issues is that it is not regulated; there is no cap and so on. Is it not the case that in practice that may be difficult because of the size of the producers, and therefore the issue is competition? Can he assure us that he keeps the competitiveness of the market under review? The worry I have is that as it gets tougher, we get more agglomeration, and that is how we get higher prices in the long run.
Graham Stuart
As ever, my hon. Friend is absolutely right, and has gone to the heart of the issue. The Government recognise and understand the pressures that people are facing with the cost of living. This is a deeply worrying time for many of our constituents, and we will continue to listen to their concerns, which have been well expressed by many colleagues today.
Wholesale energy prices have been rising due to global pressures, and the UK is hardly alone in feeling the pinch. It is important to recognise how significantly this Government have stepped in. Back in May, £37 billion of support was announced, which altogether means that the most vulnerable households are receiving £1,200 a year—£100 a month—before we get to the energy price guarantee and the alternative fuel payments. It is important to put that on the record. There is a lot of support for all of our more vulnerable and rural constituents. The hare that is running—and this has been repeated by my hon. Friend the Member for Brecon and Radnorshire today—is that it is inequitable. On the face of it, that £100 intuitively does not feel right. However, I will take colleagues through the numbers and explain why there is equity, while also recognising the issue of monitoring. That is important, and the Government are going to monitor the situation going forward.
Heating oil prices have risen more than prices for other alternative fuels such as coal, biomass and others. The Government have picked a point in time; we looked at what the situation was going into winter last year and compared it with this year—then we have sought to provide protection. We have looked at the numbers for September last year to September this year. LPG, coal and biomass have risen less than heating oil. The average price of heating oil in September 2021 was 40.6p per litre in Great Britain. A year later, that average price is 100.3p. For those colleagues who have talked about a 60% rise, it actually comes to a 147% rise. The average use of heating oil over a year is 1,514 litres; that used to cost £615, but has gone up to £1,415. That has a serious impact on those with the least. I have already talked through the £37 billion package. The difference in the current bill is around £100—that has been the rise.
The cost of heating for the average on-grid home would have increased by approximately 220% in that same year to October. The energy price guarantee lowers that increase, through unparalleled Government intervention to support people, which I think we can be proud of and should do a better job of trumpeting. Over the same period the price of heating oil rose by 150%. It has been dampened by the EPG for on-grid homes to 130%. Probably due to market competition and lack of Government intervention—I am not saying that that is the only explanation—heating oil rose by 150%. That is where the £100 comes in. I beg colleagues on all side of the House to stop the hare running; there is comparable support. I can say that as someone with many oil-heated and LPG homes in my constituency; it is comparable.
The question is about going forward—what if prices spike? That is why, quite rightly, colleagues have pressed me and the Government to monitor the situation and to be prepared to intervene if necessary. I cannot pledge precisely that that intervention would happen, but we are going to monitor the situation with a view to being able to intervene if necessary and maintain the equity that I assure colleagues is in place.
Victoria Atkins
I thank my right hon. Friend for putting that explanation on the record. The £100 figure has been totemic. As that is a very technical response, it would be ideal if he were able—with his copious free time—to provide us with a “Dear colleague” letter that we could all share with our constituents. I also acknowledge the enormous help that the Government have provided to people on the grid. The energy price guarantee and the vulnerable household payments that the Minister set out are incredibly helpful. The next question I am bound to ask—I sense some parliamentary questions—
Graham Stuart
Let me return to my scripted speech, which I seem to have entirely ignored so far, and hope to get to that answer. The energy bill support scheme—there are so many; I struggle with the acronyms myself, and I am responsible for them—provides £400 per household to assist with the cost of rising energy prices and in most cases is being delivered automatically through domestic energy suppliers.
There is a small proportion of households, including off-grid homes, that will experience increased energy costs but do not have those domestic energy supply contracts. I assure hon. Members that the Government are committed to ensuring that they receive support for energy costs. We are working rapidly to ensure that off-grid households will be able to apply for the scheme. We do not have a centrally controlled society. We do not have a database of everybody—they are not forced to register—so we are finding practical ways and looking to find designated parties to help to administer the scheme, and to do so in real time, this winter; having a perfect system next winter is of no help to people who need help now.
Graham Stuart
I am going to press on as I have so little time left. The alternative fuel payment is an additional one-off payment of £100, which is provided equally. Both schemes will be delivered across the UK and we have been working with devolved Administrations to understand how best to deliver it. It is important that all households receive support from the Government this winter, including harder-to-reach households that are not benefiting from the energy price guarantee or automatic energy bill support.
There were questions earlier about park homes and farmers. Our aim would be a system that ensures that each household receives the support. We are looking to find the right counterparties in Northern Ireland and GB to make sure that that is in place. Some forms of delivery will be more burdensome administratively than others, but for the most part, where we are able to do things automatically, consumers have to do nothing.
Graham Stuart
Will the hon. Gentleman bear with me? I have so little time left and I would like to get these points on the record.
The Government are seeking to ensure that nobody is inadvertently excluded from the generous package of support that is being provided. As the Chancellor emphasised in his statement on Wednesday, the Government’s priority will always be to support the most vulnerable. That is why we are ensuring that individuals not covered by other schemes will be able to apply for the £400 of energy bill support and, if relevant, the additional £100 alternative fuel payment.
Helen Whately
I looked at these schemes as Exchequer Secretary in the Treasury, and my right hon. Friend is absolutely right about the complexity of helping people who are off grid, as well as about the competition in the heating oil market. It is very helpful that he has set out the figures and the rationale for that help. Can I push him to address the need for reassurance on what happens if prices go up further, and on the need for clarity, for people in park homes for instance?
Graham Stuart
I completely agree with my hon. Friend. As well as getting the policy right, a lot of government is about communication and I hope there will be a “Dear colleague” letter, working with colleagues, to get those messages out. I am sure no one would want to say that maintaining something was not fair, when it in fact was—we have to get the information out there and it is our responsibility to do that.
Graham Stuart
The hon. Gentleman is absolutely right and there are two parts to our interventions, one for business and one for homes. If the homes scheme is complex, the business one is even more so. There is a vast variety of contracts. Coming into this Department from elsewhere in Government, I have been amazed at the quality of work done by officials. They have been working nights and weekends, day after day. I am just on the receiving end of the submissions and feel a bit knocked down; they are producing the schemes succinctly, and dealing with very complex issues and delicate balancing acts, to make sure that we balance timely intervention against perfection. Perfection is not possible. What we can do and what we will work on, with the help of colleagues, is to be transparent.
Dave Doogan
Is the fact that oil customers pay for their oil up front factored into the support?
Graham Stuart
We are trying to get payment to those who have bought ahead. In terms of timing, we cannot time payment exactly with when they are purchasing. What we can seek to do is to make sure that they are getting comparable levels of support and that we are monitoring the situation going forward.
Motion lapsed (Standing Order No. 10(6)).