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Steff Aquarone (North Norfolk) (LD)
I beg to move,
That this House has considered Government support for the cost of heating oil.
It is a pleasure to serve under your chairship, Dr Allin-Khan.
It would be fair to say that North Norfolk is quite rural. We are proud of that, and we enjoy the beauty and tranquillity that it affords those of us lucky enough to live there, but in the decades I have lived there and all the time I have been campaigning and working for the people of North Norfolk, I have seen too many ways in which we seem to be punished or penalised for rurality.
Much of the North sea gas that is used across the country passes through the North Norfolk countryside, deep underground and at high pressure. A vast amount of gas is onshored at the Bacton gas terminal, one of my constituency’s largest employers, and then sent out across the country. Despite our being the custodians of that vital resource, around half of my constituency is not connected to the gas grid. Of those who are not connected, more than half rely on heating oil or liquefied petroleum gas to heat their home and provide hot water. These homes, and the families in them, vary widely. The homes range from listed buildings that cannot be retrofitted to run-of-the-mill family homes that happen to be somewhere with no gas connection and were built long before the advent of heat pumps and other green energy solutions.
Vikki Slade (Mid Dorset and North Poole) (LD)
Will my hon. Friend give way?
Vikki Slade
I am so glad that he made it to the Chamber in time. Will he comment on the fact that families who live in very old properties—I have properties on Charborough Park and in Shapwick that are National Trust properties or belong to old estates—are already facing much higher costs to run their homes because they are solid-wall and thatched?
Steff Aquarone
I completely agree. As I said, these homes vary widely, as do the families that live in them, but what connects all these places and people is a unique and worrying exposure to oil price shocks impacting their daily lives.
Running a home on heating oil means buying energy in advance, in bulk and irregularly throughout the year. Households know that even half-filling an oil tank will cost them hundreds of pounds. They expect and budget for that. But since the outbreak of Donald Trump’s war in Iran, they have seen the price of heating oil skyrocket far beyond the changes in the price of crude oil.
Cameron Thomas (Tewkesbury) (LD)
I thank my hon. Friend for securing this important debate. Many of my rural constituents are also paying the price of President Trump’s latest exploration into market manipulation. Given that heating oil customers are not protected by the Ofgem price cap, will he join me in calling on the Government to take the Liberal Democrats’ line and implement such a price cap for heating oil customers?
Alex Easton (North Down) (Ind)
Given that between 60% and 65% of households in Northern Ireland rely on home heating oil, whereas 80% of the rest of the UK relies on gas, does the hon. Member agree that there is a strong case for the Government to enhance existing support schemes to reflect Northern Ireland’s higher dependence on home heating oil?
Steff Aquarone
Again, I agree, for reasons I will come on to. I will just note that the ministerial meeting for Members early on in this crisis, which was very welcome, featured a really interesting profile of Members from across the House. Rural and coastal Members often find themselves together, and Northern Ireland Members such as the hon. Gentleman were well represented at the meeting.
As I said, since the outbreak of war, the price of heating oil for my constituents has skyrocketed far beyond the gradual increases they suffer due to the usual inflationary pressures. This was a near-overnight shock that saw people having to scramble to find hundreds of pounds in already stretched household budgets. I want to share just a few of the experiences I have heard from my constituents.
Roy in Roughton has paid £1,400 to fill his tank, which usually costs him £800. Eric in Salthouse paid 55p a litre in January, but was quoted £1.34 a litre in March. Wendy in Hindringham told me that she had been quoted £720 for 500 litres of oil—double what she paid in October. She says:
“We just don’t have that sort of money.”
Alex Brewer (North East Hampshire) (LD)
I thank my hon. Friend for securing this important debate. As the representative for North East Hampshire, I know all too well the premium that many rural households face when it comes to bills and expenses. Rural households already have a really heavy burden, as he has outlined, including higher rates of fuel poverty, lower energy efficiency and a fuel poverty gap of £987 against their urban counterparts. More than 5,000 households in my constituency rely on heating oil. Does he agree that the Government have a responsibility to act, probably through a price cap, which would ensure that rural households are not penalised simply for where they live?
Steff Aquarone
I wholeheartedly agree, which is why I was so glad to be granted this debate, and I am sure other Members share that view. There is a long-term discussion to be had about Government action on retrofitting and reducing the fuel poverty gap, but right now the urgent issue is the price today.
I was pleased to see progress on some of these concerns in North Norfolk. Local heating oil delivery company Goff agreed to honour the prices it had agreed before the global price increases, which meant that many of my constituents were protected. But as welcome as that is, we cannot just rely on the good will of companies to regulate their own market. It has been left as a wild west for too long, without any strong regulations or protections to keep my constituents safe from unaffordable price spikes. While we rightly discuss a great deal the rises in the cost of energy, many who rely on heating oil will look enviously at the energy price cap, which at least puts a strong ceiling on what will be paid. For them, there are no guarantees of where the price rises will stop.
Another key issue is the minimum order requirements for heating oil. It is not like filling up a car, where if the prices look bad, we might just stick in £20-worth and hope it gets us to the end of the week. For most, the minimum order of heating oil is 500 litres. If someone runs out during the peak of a price spike, that means a minimum outlay of more than £500, or no heating or hot water.
Jess Brown-Fuller (Chichester) (LD)
A constituent got in touch who had been in hospital over the winter and then in a care home while he convalesced. He finally got home and is now having to pay for carers twice a day. He is 70, and he has no spare money. His heating oil has run out, and he is being quoted twice the price he paid in September, before he went into hospital. He is totally trapped. Does my hon. Friend agree that we need to protect the most vulnerable in our society from these shocks?
Steff Aquarone
I wish my hon. Friend’s constituent well in his recovery. This is just not something we had to think about 10 or 20 years ago. I am sure price-sensitive households were always thinking about every line on their household budget, but for somebody going from hospital to convalescence to home, continuing healthcare probably thinks about everything under the sun—except the cost of energy, because it has not been a thing for that long. We have to do more, because this issue is so urgent right now.
We finally have to say, “Enough is enough.” Heating oil customers need to stop being seen as an afterthought in energy policy. We need to reform properly how we support these people, so that they are never again forced to find vast sums of money just to keep their heating on because of global events that are totally out of their control.
Adrian Ramsay (Waveney Valley) (Green)
I thank my fellow Member from East Anglia for securing this crucial debate. He is right to highlight the vulnerability in our energy system that this war has exposed and the particular impact on rural communities. Does he agree that older people in rural communities are particularly impacted? As he says, we have seen a doubling or even tripling of costs and a huge financial outlay, which is resulting in some of my constituents having to pay by credit card because they do not have the cash. According to Age UK, 28% of pensioners were already struggling before this crisis. Does he agree that this is further evidence that although the Government’s package is welcome, they need to go further and put in place a price cap to ensure that constituents, including older constituents, are supported?
Steff Aquarone
The hon. Member is perfectly entitled to upgrade his geographical reference to “fellow Member from Norfolk”, as a decent quarter of his constituency is in the same county as mine. He will know that a disproportionate percentage of the population in Norfolk is older. There is a tragic, understated reality. When I visit households in my constituency—I am sure he can relate to this—I can just tell whether they are suffering from fuel poverty, because they will be living in one room. That is all too common for older people, and we have to take it seriously. I do not want to indulge in cheap soundbites, but the reality of how the older, retired generation live is quite different from the perceptions that are often peddled. I am grateful for his reminder of that point.
On policy, let me turn first to the support the Government have announced during this crisis. The money is welcome, but I cannot help but wonder how they thought that £53 million was adequate for the millions of people who are affected. I accept that they sought to prioritise those in greatest need, who must receive support, but do the Minister and the Government recognise that even if someone is not on the lowest income or relying on benefits, a sudden extra bill in the hundreds of pounds just to keep the heating on can cause real problems?
Victoria Collins (Harpenden and Berkhamsted) (LD)
I have a case from Berkhamsted. Louise’s entire estate relies on heating oil, and the price for filling her tank went from £1,080 to £2,500—a more than £1,000 increase—over a weekend. Does my hon. Friend agree that the £35 per household will not touch the sides?
Steff Aquarone
I do agree. That great example shows that even if the increase does not push a household over the edge into total poverty, it will cause people to have to make tough decisions about their money. Like my hon. Friend, I have inevitably received a range of messages on this issue. Unfortunately, I have had quite a few on social media over my calls for support with fuel costs. That is a shame, as I am an environmentalist, but we will not win the argument on renewable energy by making struggling rural households pay the price of Trump’s illegal war in Iran. This is part of a wider debate about retrofitting and rural renewables. We do not have time to explore it here, but the need is urgent.
I have found it incredibly frustrating to hear the repeated line from the Chancellor that these households will receive support anyway through the cut to electricity bills announced in the Budget. That is of course true, but their biggest outlay on energy by far is on heating oil. If a person does not use electricity to heat their home or their water, the impact of electricity prices is far, far smaller. The Government continue to demand that they be grateful for that small mercy, which sort of implies that they should stop asking for more, and that is starting to grate slightly on my constituents—and on me. I ask the Minister to acknowledge the profile of energy use in rural areas and perhaps reconsider that approach.
Local government, however, is stepping up on this crisis. It is dishing out the Government support, which is no mean feat, and finding its own ways to support communities. Liberal Democrat-run North Norfolk district council has allocated £50,000 to support households that have been plunged into fuel poverty due to these rising costs. That was set up within days of the crisis by Councillor Lucy Shires, our finance portfolio holder, and will be distributed to vulnerable households by North Norfolk Foodbank. They stepped up while the Government were still trying to work out their sums, and that has been hugely welcomed by my constituents.
Looking to the future, we must establish a cap on the cost of heating oil. As many hon. Members have said, the two-tier system of price protection for those using gas and electricity and for my constituents using heating oil is wrong and has gone unchecked for too long. We saw many prices surge well beyond the actual cost of oil on the global market, and there is a real risk that unfair margins are being made. People will say that it cannot be done. In fact, the Minister might do so, but I gently remind him that the same was said of the energy price cap, which is now accepted across the political spectrum. We can take tough decisions and develop tricky policies. That is what we were sent here to do. I offer the Minister my support—I am sure Members of other parties do too—in developing proposals that will support and work for rural residents everywhere. As Grahame from Thursford told me:
“The Government’s response in relation to this is simply not good enough. A price cap is the way forward.”
Further to that, I hope that the investigation that the Competition and Markets Authority is undertaking will allow the Government to introduce a better set of regulations for the industry. In fact, much of the industry would welcome that. There are many good businesses out there that behave in the best interests of their customers, and they do not want to be dragged down by bad actors. Ensuring that everyone is held to the same standards is good for the industry and consumers.
Although we are discussing heating oil today, I urge the Minister not to forget those who rely on LPG. They may be fewer in number, but their need is just as great. They often feel ignored in such conversations, and it is vital that we address their struggles too. They are often hit just as hard by price spikes, and they need protection.
Beyond that, we need to ensure that our homes are cheaper to heat. We should have been fixing the roof when the sun was shining—perhaps literally. It is time for an emergency programme of upgrades to make our homes fit for the future—well insulated, energy efficient and with renewable alternatives.
David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)
I thank my hon. Friend for securing this debate. More than 55% of households in Brecon, Radnor and Cwm Tawe are off grid. I am grateful to him for mentioning LPG. As he knows, residents who rely on LPG did not get support from the Conservatives when this last happened back in 2022. Does he agree that we need to go further and provide support to people who rely on all fuel types?
Steff Aquarone
I totally agree. It is the same cash-flow problem, the same price peaking problem and the same issue of intermittent delivery—because people do not refill every week or every month—but it is a different slice of the petroleum refinement process, so it is volatile in a slightly different way. In some cases, it is even more problematically volatile, so I thank my hon. Friend for reinforcing that point.
Well-insulated homes powered by renewable energy will prepare us for whatever volatile fossil fuel markets may do down the line and reduce my constituents’ exposure to the effects of the late-night proclamations of President Trump. I want to be clear with the Minister: residents in North Norfolk should not be poorer because they live in a rural area. We face unique challenges, and we accept that, but we should not be punished for them. The Government have a responsibility to step up and help where necessary, and that is what I am calling on them to do today. If we were in power, Liberal Democrats would be stepping up for Britain; the Government must do so, too.
Several hon. Members rose—
Dr Rosena Allin-Khan (in the Chair)
Order. Because so many Members wish to speak, you are likely to have two minutes each. If anyone intervenes, that limit will reduce or some of you will not be called, I am afraid.
Peter Prinsley (Bury St Edmunds and Stowmarket) (Lab)
I thank the hon. Member for North Norfolk (Steff Aquarone) for securing this debate.
I want to speak about the impact that the rising cost of heating oil is having on rural communities such as mine in Suffolk. Following events in the middle east, many residents who rely on heating oil contacted me—as I am sure happened to others—with understandable concerns about the sharp increase in prices. That matters because it is an immediate pressure on family budgets, one that many people feel powerless to avoid.
This issue is important because my constituency has one of the highest number of households relying on heating oil. About 40% of all properties in the villages are completely off the grid. That means that many residents are exposed to this sudden price shock. Those most affected are those least able to absorb the extra cost, especially residents in council homes and in lower-income rural communities that are disproportionately hit. For many of those households there is no short-term alternative and no flexibility.
As the hon. Member for North Norfolk said, the Government have taken some important steps in response. The £53 million emergency support fund is welcome, as is the warm homes plan providing targeted support for low-income households in rural areas. It is right that the money is distributed through local councils, which are often best placed to identify where the support is most urgently needed.
I raised the matter locally with Goff, one of the principal suppliers of heating oil. I was pleased to be assured that it will honour the original prices quoted to customers who ordered on 28 February, 1 March and 2 March, at the start of hostilities. That provides immediate reassurance for those residents who acted promptly and should not be penalised.
That must be our approach: immediate support for those facing rising costs now; proper oversight of the market; and long-term action to reduce dependence on heating oil. For rural communities in my patch, that is a necessity, which we should all push for.
Sarah Dyke (Glastonbury and Somerton) (LD)
It is a pleasure to serve under your chairship, Dr Allin-Khan. I thank my hon. Friend the Member for North Norfolk (Steff Aquarone) for securing this important and timely debate.
The ongoing cost of oil is a symptom of Trump’s idiotic war in Iran. Volatility in global energy markets and the lack of consumer protections for off-grid fuels have left many rural residents exposed to sharp price increases. It is leaving rural communities reeling, with many wondering how to heat their homes. The longer the crisis drags on, the greater the impact will be.
A third of homes in rural communities such as Glastonbury and Somerton are reliant on heating oil. Putin’s illegal invasion of Ukraine in 2022 saw prices of heating oil spike up to almost 160p per litre. Last month, prices peaked at 134p per litre and still sit at around 120p, more than 100% higher than before the war. Despite the impact of this sharp price increase, no action was taken to shield rural communities from future price spikes, no price cap has been created like it has for on-grid homes, and there has been no protection from Ofgem. Instead, all we have is another temporary sticking plaster.
The Liberal Democrats were the first to call for action, demanding an immediate three-month zero-rating for VAT on heating of all residential homes and a price cap to protect them from sudden price increases. Although we welcome the additional £53 million of support announced last month, that equates to a meagre £35 per household. Organisations such as National Energy Action, the End Fuel Poverty Coalition and Age UK agree that this limited funding support must go further.
Rural homes already cope with higher rates of fuel poverty, worse levels of energy efficiency and a fuel poverty gap of £987 compared with urban homes. Given that Glastonbury and Somerton has more households living in fuel poverty than the national average, any jump in oil and gas prices will result in further financial pressure. My constituents simply cannot afford that additional burden.
In the long term, we must consider how to support rural properties to transition away from oil and LPG as heating sources, so I hope that the Minister will be able to address that today.
Dr Kieran Mullan (Bexhill and Battle) (Con)
I am grateful for this opportunity to talk about heating oil in my constituency. About 10% of its households are on heating oil and they have spoken directly to me, both by email and by filling in a survey—I am grateful to everyone who filled in that survey—telling me how much of an impact the issue is having. We are talking about hundreds and hundreds of pounds being added to household bills.
One lady told me:
“We usually pay around £200-£250 per fill up of our small tank, which we need to fill up 2-3”
times
“a year. We’re now at nearly empty and our recent quote has been £750”
for a fill-up. She continues:
“I’m 9 months pregnant, about to go onto a reduced wage and will not be able to afford an additional £1500 this year for oil. Our oil covers both heating and water which are both necessary for looking after a newborn and the rest of our family.”
The challenge that constituents put to me and the challenge to the Government is about fairness, because at the same time as they are talking about further help for households, on all sorts of supplies, in a targeted manner, everyone is benefiting from the cap that is available to ordinary bill payers, and my constituents say to me, “We are not getting anything like that kind of help.”
Although the amount of money that the Government have announced is welcome, it is a drop in the ocean. Per heating oil household, it is something like £30 or £35. If it is targeted, as it will be in my constituency, it is a few hundred pounds for certain households. As I have just illustrated with one example, that will not touch the sides of the additional bills that people are having to pay. We are talking about a huge increase in bills and a lack of Government responsiveness, and this has already happened to people.
Future help is welcome, but already many people are forced to pay hundreds and hundreds of pounds that they had not anticipated and budgeted for. That means vulnerable people, people on median incomes, are sitting with their heating turned off and worried about whether they can afford their bills for the rest of the year, so it is vital that the Government listen much more strongly to the thousands and thousands of people across the south-east and the many more across the country who simply cannot afford to pay hundreds and hundreds of pounds in additional bills out of nowhere in the way they are having to.
Michelle Welsh (Sherwood Forest) (Lab)
I thank the hon. Member for North Norfolk (Steff Aquarone) for securing today’s debate. Nearly 1,000 people across my constituency of Sherwood Forest rely solely on heating oil to heat their homes and provide hot water. The sharp increase in prices is having a particularly severe impact on rural communities—as we have discussed—such as Wellow in my constituency, where access to alternative forms of heating is often unavailable. I welcome the Government’s introduction of support schemes to assist the most vulnerable and the Government’s swift action on that. It is right that those most in need are supported first, but also we must recognise that many households risk slipping through the net and require more support. These people do not qualify for other financial support, such as universal credit, but are not in a financial position to absorb such a hit as this financial crisis is causing.
Let us face it: heating and water are not a luxury, but a necessity. I have been contacted by constituents in Blidworth who have been forced to turn off their heating and hot water to preserve their oil stock. They have told me of their worry about the risk that that will pose to their health, especially if they are unable to secure more oil. At a time when the duration of the conflict in the middle east remains uncertain with Trump’s reckless war, many people across Sherwood Forest who rely on heating oil are understandably anxious about the future, especially as heating oil prices continue to rise rapidly and individual stock levels are shrinking.
I urge my hon. Friend the Minister to extend the current support to all those who rely on heating oil, and ask the Government to do more specifically to help those in areas where they have no other source to rely on and to help the most vulnerable. In my constituency, it is mothers with babies who are really struggling at the moment.
Dr Roz Savage (South Cotswolds) (LD)
It is a pleasure to serve under your chairship, Dr Allin-Khan. I thank my hon. Friend the Member for North Norfolk (Steff Aquarone) for initiating this very important debate.
South Cotswolds is one of the most rural, off-grid constituencies in England. About 20% of households rely on heating oil; that is about four times the national average. A young mother with two small children faced a sudden increase in the price to get her tank filled up from £305 to £800. Rural households already pay a premium on everyday goods that the Joseph Rowntree Foundation has put at up to 20%, and face a fuel poverty gap of nearly £1,000 compared with urban households.
Jim Shannon (Strangford) (DUP)
It is a pleasure to serve under your chairship, Dr Allin-Khan. Let me say a big thank you to the hon. Member for North Norfolk (Steff Aquarone) for his passion in seeking help for our constituents throughout the entire United Kingdom of Great Britain and Northern Ireland.
I want to speak about Northern Ireland in particular, and specifically the 68% of my constituents who do not have the luxury of turning on a gas boiler. They must instead watch the price of a drop of kerosene like a hawk—or like an Ulster Scot, as we are. On the Ards peninsula, where I live in Strangford, almost every household uses oil for heating.
While this House debates the energy price cap, we must remember that, in the vast majority of Northern Ireland, a cap is a myth. When the price of oil spikes, our people do not just see a higher bill at the end of the month; they see an empty tank and a cold home. They are at the mercy of a volatile global market, with no safety net. I do not want to be churlish, Minister—I never am—and I thank the Government for what they have done, but let us be honest: the £17 million package is a start, but it is a drop in the ocean.
A payment of £35 per household does not even fill a jerry can, let alone a tank to last a cold Ulster winter. We are part of the United Kingdom and need to be considered accordingly. The fact is that people should not be penalised simply because of our geography or our lack of a gas grid. No one is asking for a handout, but we are asking for a fair deal. There must be an increase in targeted support to reflect the actual cost of a 500-litre delivery.
I also believe that the Government need to review the winter fuel payment and restore the universal nature of that payment for our pensioners—that is my first ask. My second ask is that there needs to be infrastructure investment to fund long-term energy security, so that we are never this vulnerable again. Minister, on behalf of my constituents and others throughout the United Kingdom, the time for “monitoring the situation” is long over. The time for delivery is now.
Sadik Al-Hassan (North Somerset) (Lab)
It is a pleasure to serve under your chairmanship, Dr Allin-Khan. In my constituency, 2,281 homes rely on heating oil as their only source of warmth. Those are not households with alternatives; they are off the gas grid entirely and, unlike the rest of us, they face a market that is completely uncapped and unregulated.
As we all know, the ongoing conflict in the middle east and the strait of Hormuz is driving oil prices unpredictably higher. Families relying on heating oil are being squeezed the hardest. Those in the worst affected areas, such as Wrington, Felton and Dundry, cannot switch supplier instantaneously. They buy in bulk, have no negotiating power and, when prices surge, go cold.
I therefore welcome the steps this Government have taken: the energy bill cap extended until June, saving the average household £170; the £150 warm homes discount for the most vulnerable; and, crucially, the swift announcement of a £53 million support package targeted at low-income and vulnerable households who depend on heating oil. The funding allocation reflects census data on need, demonstrating that this is not a scattergun approach. It is targeted, proportionate and urgent.
Support alone, however, is not enough. I welcome the Government’s commitment to introduce a strengthened code of practice to improve price transparency, and to explore a new regulator or ombudsman for the market. Those households deserve the same consumer protections as everyone else.
I urge the Minister to move quickly to ensure that local authorities have the guidance and resources to get this funding to those who need it before the cold takes hold. No one in this country should have to choose between heating their home and feeding their family. This package is a welcome start, but it must be the beginning not the limit of this Government’s ambition.
Edward Morello (West Dorset) (LD)
I congratulate my hon. Friend the Member for North Norfolk (Steff Aquarone) on securing the debate. Around 15% of households in West Dorset rely on heating oil as their sole source of heating, and in some villages, including Yetminster, Bradford Abbas and Longburton, the proportion is almost half of all households.
In the last couple of weeks, one constituent was quoted £1.40 per litre—more than double the previous week’s price of 60p—resulting in a £735 bill for 500 litres. Another constituent, a pensioner, had a confirmed order cancelled and was then asked to pay more than £1,000 for the same delivery. Others have reported being unable to secure deliveries at all or being quoted up to two and a half times the previous price, leaving them without heating or water. One company tried to offer my constituent a refund instead of delivering the oil, so that they would have to reorder at a higher price. These are not isolated incidents: they point to a wider issue of instability and a lack of transparency in the market.
This is a challenge not just for those on the lowest incomes. Middle-income families who receive no targeted support are also being hit hard, as are farmers, who already face increasing input costs. Although I welcome the Government’s recognition that some oil-heated households are particularly vulnerable, the current level of support does not match the scale of the problem. As has been highlighted elsewhere, £35 per household is simply not sufficient in the face of the prices we are seeing.
A temporary zero-rating of VAT on heating oil would provide immediate relief, and we should implement a price cap similar to the other price caps in the marketplace for consumers such as electricity users. At the very least, the Government must assess whether the current level of support is adequate in rural areas with high levels of oil dependence and ensure that funding is targeted accordingly.
Torcuil Crichton (Na h-Eileanan an Iar) (Lab)
It is a pleasure to serve with you as Chair, Dr Allin-Khan. I thank the hon. Member for North Norfolk (Steff Aquarone) for securing this timely debate, and I thank the Minister for visiting the Western Isles last month to hear directly from my constituents in Na h-Eileanan an Iar how the spike in prices has affected them. As he heard from consumers, prices have doubled since the conflict broke out. There is huge demand, limited competition and, of course, an island premium on deliveries.
People appreciate the emergency heating oil fund announced by the Government, which will send £4.6 million of support to Scotland for consumers in need. This being Scotland, of course the SNP wants to do things differently. The Scottish Government have doubled the sum to £10 million, which is welcome, but announced that instead of funds being distributed through local authorities, which know their area and their constituents, the fund is operated through Advice Direct Scotland, a Scottish charity that gives free, impartial advice to people across Scotland.
As soon as the scheme was announced, my constituents reported a glitch in the system. People applying from the Western Isles found their online applications bouncing back. When they called the helpline, they heard a recorded message instructing them to apply without supporting evidence, informing them that they would then receive an email to which they could attach receipts of eligibility and evidence of supply. This kind of ping-pong shambles benefits no one, and I fear it will lead to a lack of uptake of support.
In talks with Advice Direct Scotland, officials assured me that the scheme is operating, that nearly 5,000 people have applied and that 16,000 applicants are expected across the six months the scheme is open. By rough calculation, 16,000 times £300 is £4.8 million, which is only half the amount the SNP Government claim to have allocated to the scheme. I do not want heating oil support by stunt, whereby only half the fund is distributed.
I urge my constituents to apply early for support as soon as they have receipt of their oil delivery, and I call on the Scottish Government, the UK Government and Advice Direct Scotland to be fully transparent about the distribution of funding both during and after the scheme, and in terms of amounts and geographical distribution.
Stuart Anderson (South Shropshire) (Con)
It is a pleasure to serve under your chairmanship, Dr Allin-Khan. I thank the hon. Member for North Norfolk (Steff Aquarone) for securing this important debate.
South Shropshire is a very rural, remote area, and its beauty is unrivalled, as many Members will agree. With 53% of my constituents off grid, this is a major issue. When the war in Iran increased the heating oil prices literally overnight, many constituents got in touch with me to raise their concerns. Paul from Eardington saw his heating oil quote go up from 53p to £1.39 per litre—an increase of about 150%—in almost 24 hours. That is a huge impact, and his story resonates across my constituency. Many of my constituents have not been able to fill up because of the 500-litre minimum. A big shout out to Cambers of Harley: when I was buying my wheelbarrow at the weekend, I saw 25-litre containers, which provide fuel for people who cannot afford 500 litres.
Despite many having praised it, the Government’s £53 million of energy support has penalised my constituency. Shropshire council has more than 53,000 off-grid households, of which more than half are in my constituency, yet it has been allocated only £750,000. That equates to £14.29 per house, whereas the average across the country is £35. Why is South Shropshire missing out? My constituents need support. I want the minimum order level to be addressed, and I want future provision to ensure that my constituents, particularly the hardest hit, can have heating oil without having to choose between that and food.
Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)
It is a pleasure to serve under your chairship, Dr Allin-Khan. I congratulate the hon. Member for North Norfolk (Steff Aquarone) on securing this important debate.
In his statement to Parliament yesterday, the Prime Minister said that energy bills had gone down on 1 April, yet for literally tens of thousands of my constituents, that is simply not true. It is estimated that in my constituency alone, 22,500 households—approaching 50,000 constituents—are not connected to the gas grid. Thousands of those homes are reliant on oil and LPG tank gas to heat their homes.
Let us delve a bit deeper. One low-income house in Newtonmore, which is in the Cairngorms national park, an arctic-alpine mountain environment, went from paying £640 to £1,220. The supplier told them there was a minimum order of 1,000 litres. A constituent in Forres went from paying £307 plus VAT in December, to £827 in March for 500 litres. That constituent is disabled, with multiple health conditions.
This inequity is not new. When it comes to their electricity bills, people in Moray, the highlands and across Scotland are paying among the highest energy prices in Europe, and substantially more than most of the rest of the UK, despite vast amounts of that energy being produced right beside them.
Torcuil Crichton
Like the hon. Member’s constituency, many businesses in my constituency, including distilleries, rely on kerosene heating oil for manufacturing processes. Would he urge the UK Government and the Scottish Government to devise a loan scheme to help these businesses to get over this Trump spike?
Graham Leadbitter
I will come on to the energy powers that should be devolved, but it is currently the UK Government’s responsibility.
Over the years, Scotland has sent over £350 billion to the Treasury from oil and gas activity, yet when it comes to the crunch, all the Treasury can come up with is the equivalent of £35 per household for oil. Yet again, the Scottish Government have had to step in and boost support by more than doubling the fund, for an issue that the UK Government have failed to address properly in the first place.
Rural homes and communities in Scotland are being overlooked and ignored. Is the Minister really happy that he is presiding over discrimination that is putting so much financial stress on vulnerable households? Will the Government take urgent measures to increase significantly the support funding? Will they provide support to those reliant on LPG gas for their heating? Will they properly regulate heating oil with a price cap, which I fully support?
If the Government are unwilling to take those actions, will they devolve energy powers and budgets to the people of Scotland, so that they can make their own decisions in their own Parliament on these vital and urgent issues?
Steve Witherden (Montgomeryshire and Glyndŵr) (Lab)
It is a pleasure to serve under your chairship, Dr Allin-Khan. I thank the hon. Member for North Norfolk (Steff Aquarone) for securing this essential debate.
The escalation of conflict arising from Donald Trump’s war on Iran and the consequential disruption to the strait of Hormuz has sent shockwaves through international fossil fuel markets. This has left many households across the country, including a significant number of my constituents, facing sudden and severe increases to their energy bills.
I have been contacted by people who are switching off their heating entirely or worried about preserving what supply they have. This is particularly concerning for elderly people or those with health conditions who need to stay warm. The average price of UK heating oil increased by 100% in just three days, and prices have remained over 120p per litre ever since.
Across the UK, around 1.5 million homes rely on heating oil systems, with a particularly high concentration in rural areas. Around a quarter of households in my constituency use oil central heating, compared with 5% nationally. Households that are dependent on oil-heated systems are not protected by Ofgem regulation or the energy price cap, and are therefore more exposed to immediate energy price increases.
Sean Woodcock (Banbury) (Lab)
This crisis shows that we cannot rely on emergency payments to resolve geopolitical shocks; we need the electrification of heat in rural areas, and heat pumps play a significant part in that. Does my hon. Friend agree that the Government taking steps to roll out renewables and heat pump technology across rural areas would go a long way to help to protect and preserve rural areas from these sorts of shocks in the future?
Steve Witherden
It will not surprise my hon. Friend that I agree wholeheartedly.
With heating oil prices reaching levels similar to those in 2022 following the Ukraine war, our Government have been far quicker to react than the previous Conservative Government were. Less than two weeks after the price surge, the Department for Energy Security and Net Zero announced a £53 million support package aimed at protecting the most vulnerable households that rely on heating oil—particularly low-income households in rural communities.
Wales was allocated £3.8 million, which the Welsh Government delivered through one-off £200 payments to eligible households on the council tax reduction scheme that use heating oil or liquefied petroleum gas. They also made enhancements to the value and frequency of the discretionary assistance fund for those in severe financial hardship. This response to protect households’ immediate needs in the face of crisis was very welcome.
However, if high prices persist, support will need to evolve. What plans do the Government have to ensure continued and expanded support for vulnerable households should this crisis continue? Diolch yn fawr.
Charlie Maynard (Witney) (LD)
It is a pleasure to serve under your chairship, Dr Allin-Khan. I thank my hon. Friend the Member for North Norfolk (Steff Aquarone) for securing this important debate. We have all received casework on this issue from so many residents who are so worried and have been impacted by what has happened as a result of Trump’s war in Iran.
The cost of heating oil doubled in just one week at the beginning of March, and that has had a huge impact on so many people. A constituent in her 70s wrote to me whose husband is in palliative care. The cost of filling her tank has gone from £320 to £750 and she just does not know what to do. She has asked what help the Government have given, and has received no help so far. Another constituent wrote to say that he had agreed a price back in February, but the company repeatedly delayed and ultimately cancelled his order, telling him he would have to reorder at the new price, which had more than doubled in the meantime.
The Government have announced the £53 million package but, as so many Members have said, that is clearly insufficient to support the scale of affected households: more than 3.5 million people across the country depend on heating oil. So far, the Government have refused to cap the cost of heating oil, when we have caps on other energy sectors such as gas and electricity. That feels completely inconsistent and unjust. We would really like to see that changed.
I echo the calls of my Liberal Democrat colleagues for the Government to act now to protect constituents who rely on heating oil by enacting a three-month zero-rating of VAT on heating oil for all residential homes, and by developing a price cap to shield them from sudden increases in the price of heating oil. I would also welcome an update and more details from the Minister about the progress on the promised new consumer protections in the heating oil market.
Chris Bloore (Redditch) (Lab)
I congratulate the hon. Member for North Norfolk (Steff Aquarone) on securing this important debate.
Across our rural communities and in villages such mine, including Inkberrow and Cookhill, many households are not connected to the mains gas grid and have no choice but to rely on heating oil. In recent weeks, my office has been inundated with emails from constituents facing what can only be described as outright price gauging: sharp, sudden increases in heating oil costs, often with little warning and no meaningful protection. The figures are not abstract; families are being asked to find hundreds of pounds up front just to heat their homes. That is the fundamental unfairness at the heart of the issue. Where someone lives should not determine whether they are protected.
I welcome the Government’s swift action in providing additional support through the crisis and resilience fund, enabling local councils to step in and support households facing immediate hardship. That will make a real difference in the short term, and I thank Ministers for listening. For some families that support will mean the difference between staying warm and going without heat. But we must be clear: emergency support, however welcome, is not a substitute for structural reform. That means a properly regulated off-grid energy market, greater transparency from suppliers—including real-time price publication—and serious consideration of a price cap on domestic heating oil and LPG.
Ms Julie Minns (Carlisle) (Lab)
Does my hon. Friend agree that one of the advantages of extending regulation to this market would be to introduce a requirement on the companies to maintain a priority service register, as is the case with the gas market, which would ensure that those companies could more easily identify which customers are vulnerable?
Chris Bloore
I wholeheartedly agree and so would my constituents.
A price cap would ensure that households are not left exposed to sudden and excessive increases that they simply cannot plan for. The Competition and Markets Authority has previously raised concerns about weak competition and poor transparency in this market. Those concerns have not gone away; they have intensified for our constituents and rural businesses. I hope the Minister will consider taking comprehensive action.
Manuela Perteghella (Stratford-on-Avon) (LD)
It is a pleasure to serve under your chairship, Dr Allin-Khan. I thank my hon. Friend the Member for North Norfolk (Steff Aquarone) for securing this timely debate. Nearly 13,000 households in Stratford-on-Avon, including mine, are off the gas grid and rely on heating oil and LPG. That is a huge number of people left exposed in a way most households in Britain are not. There is no price cap; when prices rise, they rise fast, and people are expected to find hundreds of pounds up front just to heat their homes. There is no buffer, no protection—just the full impact landing at once.
Once again, it is constituents such as mine who are left picking up the bill for a reckless and illegal war driven by President Trump. I am hearing from constituents worried about how they will afford their next heating oil or LPG delivery. For some, even the minimum order is out of reach.
Sir John Hayes (South Holland and The Deepings) (Con)
Those who are obliged to use heating oil are isolated by definition, and they are further disadvantaged if they happen to be old, or infirm, or disabled or poor. Surely the Government recognise that the mechanisms already exist to cut prices, as has been said. There is no need for delay. We need to help people in my constituency, the hon. Lady’s constituency and many others who are suffering from the kind of exploitation set out in this debate.
Manuela Perteghella
I fully agree with the right hon. Gentleman. Local heating companies have also stopped delivering for consortia, which provided a way for villagers to work together and pay less for their oil by buying in bulk. That has now stopped.
The Government support does not match the reality that people are facing. It works out at around £35 per household, and that is simply not enough. The Liberal Democrats have put forward a clear proposal that would provide meaningful support to households. A three-month zero VAT on heating oil would give immediate relief; it is simple, it is affordable and it would make a real difference to people right now. Big businesses are making immense profits from the middle east conflict and the surge in energy prices. The Government should implement a windfall tax on those mega-profits being made at the expense of families struggling to heat their homes. Can the Minister say whether the Government are considering that?
We have also called for a price cap on heating oil, because it cannot be right that households off the gas grid are left completely exposed, while others have some protection. However, if we carry on relying on expensive fossil fuels, that will keep happening and people will keep getting hit every time there is an oil price shock. That is why we need far more ambitious action to insulate homes and to roll out cheap, clean energy produced here in Britain that stays in Britain, rather than being shipped off to the highest bidder. Yes, we need to protect people now with measures such as a VAT cut, but that must be backed up by real investment in making homes warmer and cheaper to heat, especially in rural communities such as Stratford-on-Avon.
Adam Dance (Yeovil) (LD)
It is a pleasure to serve with you in the Chair, Dr Allin-Khan. I thank my hon. Friend the Member for North Norfolk (Steff Aquarone) for securing this really important debate.
According to House of Commons Library data, Yeovil has a higher percentage of households using only oil for heating than the UK average. Because they are not protected by the Ofgem energy price cap, families across my area are suffering from rising costs due to a war they never wanted. One constituent told me that they suffered a 60% week-on-week increase in prices; on top of that, they struggled to find suppliers delivering to their area. Another constituent pointed out to me that they were able only to purchase a minimum amount of oil, which suggests that suppliers may be profiting from the situation.
The £53 million announced by the Government is welcome, but amounts to only about £35 per household. That is not good enough. Rural communities deserve a bit better than that, for sure, so the Government must enact a three-month zero rating for VAT on heating oil for all residential homes and develop a price cap to protect rural households from sudden increases in the price of heating oil.
I also urge the Minister to investigate the impact of rising oil prices on the spending and value of rural households, something I have heard real concern about. We also need proper long-term investment in rural home upgrades. We are proposing a 10-year energy home upgrade programme to make houses cheaper to heat. That has to start with free insulation for those on low incomes and ensuring that all new homes are zero carbon, to improve savings through energy efficiency. I would welcome the Minister to Somerset to discuss that further and to see how the crisis is affecting my constituents in Yeovil.
Ann Davies (Caerfyrddin) (PC)
It is a pleasure to serve under your chairmanship, Dr Allin-Khan. I congratulate the hon. Member for North Norfolk (Steff Aquarone) on securing this important debate.
I do not know whether to take comfort from the number of MPs present for this debate, or to be troubled that we are here again to press the Government to take stronger action to get to grips with the costs facing rural households because of Trump’s war. As Members have said, many households in rural areas simply have no alternatives to heating oil, and that is particularly true in Caerfyrddin and across Wales, where reliance on heating oil is significantly higher than the UK average. Some 57% of my constituents, representing more than 25,000 households, are off grid.
Just over a month ago, heating oil was retailing at around 65p a litre; today, if I wanted to buy oil for my home, it would be 130.98p—an increase of more than 100% in a matter of weeks. I recognise that the Government have announced a package of support for low-income households who heat their homes with oil, and of course I welcome any help that is available. However, because heating oil is bought in large lump-sum deliveries to cover several months—usually about four months—a 100% increase is a huge hit for households, whatever their income bracket. People who are already squeezed from every side are expected to find extra money that they do not have.
I simply ask the Government to cast the net wider, so that households who are not defined as low income can still receive the help that they need. That includes constituents who do not claim benefits, those whose income is just above the pension credit threshold and pensioners who now pay tax because of the freeze on taxable earnings—they are not well off. Every day that passes is a missed opportunity for the Government to address the needs of households in the UK and across Caerfyrddin.
James Wild (North West Norfolk) (Con)
I congratulate my constituency neighbour, the hon. Member for North Norfolk (Steff Aquarone), on securing the debate.
In North West Norfolk, more than 20,000 households are off the gas grid. When people are struggling, urgent support is needed, so I welcome the crisis fund that Norfolk county council has established and the fact that the Conservative-led administration chose to double the funding to £6 million. Although that support is focused on people in need, I reiterate that that is not limited solely to people on benefits. Local authorities have discretion, and I have been told by the council that households earning around £35,000 would qualify, so I encourage anyone who is in need to apply to the council. Clearly, there is concern about the adequacy of those funds, which I raised with the Energy Secretary. I would be grateful if the Minister could confirm that his Department is monitoring in real time the payments that are going out.
Like other Members, I have been helping constituents who have had orders cancelled or who have had to accept higher prices for existing orders. I am glad that Goff Petroleum, one of the main providers in Norfolk, agreed to honour their prices, even taking a loss to do so. We should recognise that the just-in-time model that many firms in the industry use exposes them, and thus customers too, to shocks.
We need to see reform in the market: greater pricing transparency and formalised priority support for vulnerable people. We should also recognise that this is an issue for businesses, not just for households. Rural areas do not only face higher costs for heating oil. Prices at the pump have leapt—and in the Budget the Chancellor committed to increase fuel duty by 5p from September, after 14 years of freezes under the previous Conservative Government. That is the wrong choice and puts higher costs on to drivers and businesses. While international factors are largely at play, the Government can choose to act to ease the burden of tax and levy. That is what they should be doing. The plans that we have set out would do that and would save people £200.
Dr Rosena Allin-Khan (in the Chair)
I thank everyone for keeping to time. We now come to the Front-Bench speeches.
Pippa Heylings (South Cambridgeshire) (LD)
It is a pleasure to serve under your chairship, Dr Allin-Khan. As many have done, I thank my hon. Friend the Member for North Norfolk (Steff Aquarone) for securing this hugely subscribed and important debate and for representing rural constituencies across the country.
As we have heard, people in rural areas already face higher living costs, higher levels of fuel poverty and poorer energy efficiency compared to urban homes, and those areas also have many vulnerable elderly people. The Liberal Democrats are deeply concerned that, once again, we are debating urgent support to rural, off-grid households facing immediate and unaffordable cost increases who are uniquely exposed to volatile global fossil fuel markets.
Clearly, we have not learnt the lessons from the very recent past. In the current energy crisis resulting from Trump’s dangerous, reckless and illegal war in Iran, heating oil is not covered by Ofgem’s price cap, just as during Putin’s illegal invasion of Ukraine in 2022 it was not covered by the energy price guarantee. We must not allow rural households to be left behind again. As the UK and Ireland Fuel Distributors Association points out, the situation is exacerbated by the fact that the price of imported jet fuel is the largest component in the retail price of a litre of heating oil, and it is far more volatile than Brent crude oil. The association has reported prices jumping from 44p per litre in January to 100p litre this week and, as we have heard, the final price landing on consumers is way above that.
In my constituency, 2,954 households—35%—are reliant on heating oil. That is much higher than any other Cambridgeshire constituency. As soon as the conflict began, I heard directly from constituents in the villages of Fowlmere, Barrington, Litlington, Weston Colville, the Abingtons and Heydon, who, despite having agreed a price, were being told that neither that price, nor even the date of delivery, could any longer be guaranteed. One vulnerable elderly resident had only two days of heating oil left in their home. Some bought heating oil from a different provider at double the price because they could not wait.
It is questionable that the UK and Ireland Fuel Distributors Association justifies that kind of action as acceptable and appropriate because it is approved by the Competition and Markets Authority. I was the first to demand directly of the Chancellor, when I talked to her in the Chamber, that she not leave households exposed once again, as they were in 2022. Her response was that public money would not be spent and that she would focus exclusively on price gouging and complaints to the Competition and Markets Authority.
As Liberal Democrats, while we welcomed the Government’s U-turn to channel £53 million of funding through the newly launched crisis and resilience fund through county councils—Cambridgeshire county council was one of the first councils to get that up and running—we have heard that it is not enough. As other Members have said, it is averaging around £30 to £35 per household, and I have already been told that many struggling households are now complaining that they do not meet the criteria from the fund. As I have mentioned repeatedly to Ministers—and as highlighted by research from Energy UK—improved data sharing from Government Departments—that goes beyond the Department for Work and Pensions—is critical for the funds to be fair and effectively target and reach those who really need them. We need to look closely at price gouging and at whether this unregulated market for heating oil is fit for purpose in serving and protecting rural households.
Will the Minister respond to our Liberal Democrat proposal for a three-month zero rating of VAT on heating oil; for a better regulated sector, with a proper price cap that shields households not only on heating oil but on LPG; and for improved consumer protection? Will he also look at the regulation we probably need on improved data sharing, so we can ensure that this help reaches those who need it most?
As many have said today, the long-term solution is not to leave rural households on the rollercoaster of volatile fossil fuels. We need to increase the transition to home-grown clean energy, insulate homes and ensure that the warm homes plan works for rural and off-grid homes.
Greg Smith (Mid Buckinghamshire) (Con)
It is a pleasure to serve with you in the Chair, Dr Allin-Khan. I am grateful to the hon. Member for North Norfolk (Steff Aquarone) for securing this important debate. I must start by declaring an interest: my home is off the gas grid, and we use heating oil. When constituents have raised this issue with me—many have—I therefore understand it not just as their Member of Parliament, but as a fellow purchaser of heating oil.
When prices doubled—or, as we heard, sometimes tripled—overnight following the outbreak of war in the middle east, it was a genuine financial shock that was even greater than when Russia invaded Ukraine in 2022. According to evidence from Martin Lewis of Money Saving Expert, customers who had paid around £300 to £350 for 500 litres of heating oil in February were being quoted between £600 and £1,000 just weeks later, and that price continues to go up. That is not a marginal increase. For families on fixed or modest incomes—not just the poorest households—that is the kind of bill that forces a choice between heating, eating and other necessities.
So far, the Government have allocated £53 million in very targeted financial support across the United Kingdom, as we have heard. They have announced intentions to introduce consumer protections, including dispute resolution, greater price transparency and enhanced protections for vulnerable groups. To be fair, they have asked the Competition and Markets Authority to examine the market, and have signalled that an energy independence Bill will include powers to establish an ombudsman or appoint a regulator.
I acknowledge all those steps—they are not nothing—but let us be honest about what they amount to in practice. As we have heard, in Northern Ireland, where almost two thirds of households rely on heating oil, the allocation amounts to roughly £35 per household. The First Minister of Northern Ireland described it as a “slap in the face”; the Finance Minister said it was “significantly below par”. In Scotland, eligible households can apply for £300 in support. In England, the money flows through local authority crisis and resilience funds—I particularly note the example given from Norfolk.
Are Ministers confident that funding is actually reaching people in every part of our country at the pace and scale required? The evidence from many places suggests that the answer is not a straightforward yes. Also, why has LPG—this has come up in the debate—not been more consistently included in the scope of support? LPG users are in much the same position as heating oil customers—off grid, without alternatives and facing the same challenges—yet they have too often been an afterthought in support announcements. That needs to be addressed.
The problem is not confined to households. I have heard from businesses, some in my constituency, that are dependent on oil and LPG, including a pub that has had to completely close its kitchen and food offering because the cost of running it has become prohibitive. Thousands of small and medium-sized enterprises across rural Britain are in the same position, and the Government have not even attempted to support those businesses. That needs to change.
That is the structural failure at the heart of this debate. Unlike gas or electricity, the heating oil market is not regulated by Ofgem. There is no ombudsman or binding transparency requirement. The Competition and Markets Authority is now examining the market, which I welcome, but the CMA’s own chief executive has acknowledged troubling reports of cancelled orders and sudden price increases. That is precisely the kind of sharp practice that exploits the absence of regulation, examples of which Members have raised in this debate.
We should end the practice of accepting orders without stating a clear, binding price up front, only for consumers to receive a bill on delivery significantly higher than anticipated. That is not a complex regulatory ask; it is basic consumer protection. When someone agrees to take delivery of heating oil, they should know what price they are paying before the tanker arrives, not after. The Government’s promise of an ombudsman and stronger consumer protection signals the right direction of travel, but it is a promise of future action, not present support. Rural households and businesses cannot wait for primary legislation to wend its way through Parliament before they receive the most basic of protections.
I say to the Minister: adequate support means three things. It means emergency financial assistance that is genuinely proportionate to the scale of the crisis, not the equivalent of £35 per household, when those households are facing hundreds if not thousands of pounds in additional bills. My right hon. Friend the Leader of the Opposition and other Conservative colleagues, including myself, were the first to write to the CMA to investigate failings in the sector. I urge the Minister to continue to examine that “at pace”, which I think is the fashionable term, to get this right in future.
We are also urging for LPG users to be treated with equal importance to heating oil consumers. That means immediate binding price transparency requirements, so that consumers know what they are paying before they commit. Around 1.5 million households across the UK rely on heating oil. They are disproportionately older, rural and without alternatives. They deserve better than warm words and a timetable that seems to stretch endlessly into the future.
Stuart Anderson
Further to that point of order, Dr Allin-Khan. I would also like to declare that I use heating oil.
Dr Rosena Allin-Khan (in the Chair)
I do not mind if any of you use heating oil. That is fine; do not feel the need to let me know, although I appreciate it.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
I thought we were about to end up in an “I am Spartacus” moment. [Laughter.] It is a pleasure to serve under your chairmanship, Dr Allin-Khan. I thank the hon. Member for North Norfolk (Steff Aquarone) for raising this vital issue and giving us the opportunity to discuss it at length, since it is an important area that is dominating much thinking among Members and in my Department.
It is important at the outset to put this in the wider context of what is happening in the middle east. It is clear from what we have heard over the past few weeks that the conflict in the middle east is not Britain’s war. The Prime Minister made the right judgment in not taking the country into offensive action, but how we emerge from this crisis will define us for a generation in how we respond. It is clear that we need to de-escalate the situation in the middle east. We need a negotiated settlement that allows the free passage of traffic through the strait of Hormuz. That will ultimately determine the fate of energy prices and our constituents’ cost of living.
Let me do three things. First, I want to respond to issues raised around the immediate support the Government have offered. Secondly, I will talk a little more about market reform and regulation, and the process going on with the CMA. Finally, I will talk about some of the wider structural issues discussed this morning.
As hon. Members have mentioned, 1.5 million households in the UK use heating oil to keep their homes warm. We know from what has been said this morning, and also from looking at what has been happening in the market, that the price of a litre of heating oil has increased significantly—doubled, in fact—since the war in the middle east began. Even before the situation in the middle east developed, the cost of living crisis was a priority for the Government. Hon. Members know that we have till the end of June. This does not apply to those on heating oil, as we will discuss, but energy prices have been reduced under the price cap by 7% until the end of June, and the Government were taking other measures to alleviate the cost of living even before the middle east situation started.
I want to be candid with people about the choices that we had to make. Under the last Government, it took around 200 days for support to come to heating oil customers. We have rolled out support within two and a half weeks, but there is a trade-off when we make such decisions, and the decision that we made was to prioritise speed at this point, which meant deploying funding through local authorities in England and through devolved Governments elsewhere in the UK. That does, however, limit our ability to stipulate what the criteria are, but that is the trade-off we had to make. Listening to hon. Members this morning, I think we have made the right choice in prioritising speed because the need is clearly great right now. Had we been sitting here saying that the Government were coming up with a far more extensive scheme that might take months to deliver, I think we would have had a very different sort of debate this morning.
Martin McCluskey
No one has said that this is the extent of all the support that will be on offer: I have been very clear about that, both in the Chamber and whenever I have been asked the question. The point of immediate support now was to provide people with relief from an immediate crisis. We have been very clear—the Chancellor was and the Secretary of State was—that it was never intended to provide discretionary support for every single heating oil user to fill up their tank. It was to provide immediate relief quickly from a pressing crisis that we were facing across the country. We are keeping everything under review. Were we in a situation later in the year where we need to look at providing further support, we will make decisions then, but right now that support is on offer to people.
Different local authorities are taking different approaches. That is in the nature of the trade-off that we had to make. North Norfolk is taking an approach that looks at means-tested benefits, but North Northamptonshire is not taking an approach that relies on means-tested benefits. It is asking for evidence that people are not able to afford a payment, which involves, for example, giving over bank statements to enable people to make an assessment based on income rather than on means-testing. So different authorities are taking different approaches. That is what we have to accept if we are deploying this through the crisis and resilience fund and not having a centralised scheme as we did before. But as I said, this is about doing things at speed to make sure that people have the support they need.
On the situation in Northern Ireland, the hon. Member for Strangford (Jim Shannon) highlighted that almost two thirds of homes rely on heating oil. We have allocated £17 million to support them. Again, we will keep that under review. We have heard complaints from the Northern Ireland Executive, as we have heard from others this morning, that it is not enough. But as I understand it—the hon. Member might want to correct me—there is not currently a scheme through the Northern Ireland Executive to deploy that money, so we do not yet know what the demand actually is in Northern Ireland for the take-up of that funding.
Jim Shannon
I do not want to be churlish—when we get something that is helpful, we accept it—but our indications are that those moneys will be disbursed across Northern Ireland shortly and that it will be £35 per household. As I asked in my contribution about pensioners, who are really feeling the pinch, what can be done for them specifically?
Martin McCluskey
As I said, once the funds are disbursed in Northern Ireland, just as across the whole of the United Kingdom, we will make an assessment as to what further work might need to take place. I will have further discussions with the Northern Ireland Executive. We are obviously keeping every option under review, especially as we start to think about later in the year and into the winter. In Northern Ireland, we are still to see what happens when the funds are disbursed.
In Scotland, we have heard from my hon. Friend the Member for Na h-Eileanan an Iar (Torcuil Crichton) about how Advice Direct Scotland is disbursing those funds. However, we cannot know at the moment how much is being given out, because the Scottish Government will not let Advice Direct Scotland provide us with that data, so there is no way for us to know what the situation in Scotland looks like.
In England, we are having weekly stocktakes with the DWP, which is the Department responsible for the crisis and resilience fund. It is providing us with assurance on the disbursal of those funds, and we hope to have a dataset available in May that looks at how many applications and payments have been made, and what those payments look like across the country.
Torcuil Crichton
If officials from Advice Direct Scotland can tell me, as a constituency MP, the number of applicants they have, and the estimated number they will have—16,000, with 5,000 applications already last week—surely they can provide that information to the UK Government as well.
Martin McCluskey
Unfortunately, the Scottish Government are not allowing the data to be shared because of the pre-election period. I would argue that that is not what the pre-election period is meant for, and I will continue to have those discussions with the Scottish Government. I know that other hon. Members in Scottish constituencies have faced a similar problem in getting any data about their constituencies from Advice Direct Scotland because of this prohibition from the Scottish Government.
I am conscious of time, so I turn to the issue of wider market reform. There is obviously evidence that the market as it exists at the moment is not working. I find it difficult to listen to the hon. Member for Mid Buckinghamshire (Greg Smith), who was a Minister in the Department for Business and Trade under the last Government—
Martin McCluskey
Well, the hon. Member was a Member of the party that was last in government, let me say that, and I find it difficult to listen to him tell us about the lessons that we should have learned. We should never have been in this position, and we should not be in a position again where we are facing higher energy prices because of an international situation, and where we are having to deal with an unregulated market in heating oil. I argue that the then Government should have looked at this in 2022 and determined what action needed to be taken.
I will explain what we have done so far. The CMA is conducting an investigation at speed. These investigations normally take around a year, but it is going to conduct this one within 12 weeks. It has already completed the evidence-gathering stage, and it is now in the process of examining that evidence. I hope that it will come forward with the report in June. The Prime Minister has been clear that we will look at what comes forward from the CMA and examine the case for regulation.
Hon. Members across the Chamber have spoken about a price cap, but I do not want to prejudge the work of the CMA. There have also been suggestions about minimum orders and price guarantees—there a number of different proposals on the table—but we have to ensure that we make the right decision, and do not end up with unintended consequences that could make the situation worse. In a market with a large number of players, many of which are quite small rural businesses, it is especially important that we do not make the situation any worse. We are looking at a range of options.
The Chancellor has written to the CMA to ask that it remains vigilant across heating oil prices and tackles any unjustified increases that it might find. The Government are also in daily contact with industry to understand the drivers of recent price movements. We have reminded heating oil distributors of their commitments under the trade association code of practice.
Pippa Heylings
Does the Minister have a timescale for when he expects the review of the market and any recommendations to come back from the CMA? When will the Government enact them? Will they be part of the energy independence Bill, or is there another way in which they could come into effect quite quickly?
Martin McCluskey
I hope the report will come back to us some time in June, and then we will examine it to determine what may be required in terms of further action. I want us to move as quickly as possible. I have another meeting with the chief executive of the CMA tomorrow to discuss progress on the market investigation and ensure that work is carrying on at the pace that we want. We are not moving slowly. We have already accelerated this process—it was a year, and it is now 12 weeks. That is significant, but we obviously want it to move as quickly as possible.
Let me turn to the wider structural issues that we face in the energy sector. We recognise that the heating oil sector is under-regulated. Unlike gas and electricity, heating oil is not regulated by Ofgem, and we will put that right by exploring what regulations are needed to protect consumers and get them a better deal.
Taking a step back, ongoing events provide us with yet another clear reminder that we must get off the rollercoaster of global fossil fuel markets and on to the path of clean, home-grown energy that we control. We will learn the correct lessons from the crisis, unlike the previous Government, who went through the situation in 2022 and did not. In our mission to make the UK a clean energy superpower, we have already brought in £90 billion of investment in clean British energy. In the light of spiking oil and gas prices, we intend to go further and faster in the pursuit of national energy security.
We are bringing forward the next renewables auction, just months after the most successful auction that we have ever had, which secured enough power for the equivalent of 16 million homes. We are making plug-in solar available for the first time in Britain so that families can buy a low-cost panel straight from a supermarket and set it up on their balcony or in their garden.
We are speeding up delivery of the £15 billion warm homes plan. I heard what many Members said about the fabric of housing. There is obviously support within the £5 billion that we have set aside for low-income schemes, but there is also work going on about low interest and no interest consumer loans. I am trying to accelerate that work so that we can get that to people as soon as possible.
Pippa Heylings
We welcome the publication of the warm homes plan, but we have not received details of what will replace the energy company obligation 4 programme, which was run through local authorities. Can the Minister tell us when he expects that detail to be available? Will it be published ahead of the winter so that it can be applied and homes can be upgraded?
Martin McCluskey
As the hon. Lady knows, the Department runs a range of programmes. We took the decision to abolish ECO4 because it was not working effectively. In some cases, it was costing more to find people who needed the measures than it was to deploy the measures. The Department has been provided with an additional £1.5 billion, which took the total up to £15 billion for this financial year. That money is being deployed through the local government schemes—the warm homes social housing fund and the warm homes local grant. That is enhancing what has already been provided to low-income households through the Department.
As I say, £2.7 billion of capital is being deployed to provide low interest or no interest consumer loans. We need to accelerate that. At the moment, we are probably looking at early next year, but I would like to see that come forward so that we can use those consumer loans as a response to the current situation. We know that there is significant demand for home upgrades, including solar, battery and heat pumps, but we have to give people the support they need to take up those options.
We will speed up the delivery of the £15 billion warm homes plan—the largest home upgrade programme in British history—and we are reforming nuclear regulations following the Fingleton review so that we can fast-track new nuclear power stations.
Greg Smith
The Minister seems to have pivoted towards electricity and away from heating oil, which this debate is about. On the wind auctions, I am not sure consumers will thank him for the price that has just been paid. However, we are talking predominantly about the many rural homes that are off the gas grid. Many are built out of stone—I declare an interest, as mine is built out of witchert, which is a form of cob—and heat pumps do not touch the sides. Will he at least acknowledge that for those rural homes, we need to look at things such as alternative fuels? Boilers can be converted to run on hydrotreated vegetable oil and, in the future, synthetic fuels. We must not just keep talking about electricity.
Martin McCluskey
Fifty per cent of grants provided through the boiler upgrade scheme, which is our primary vehicle for providing people with grants for heat pumps to replace—
Martin McCluskey
If the hon. Gentleman will let me finish the point, I was going to say that 50% of those are to rural homes. I am not trying to dismiss the fact that there are some properties where it would not be appropriate to fit a heat pump because of the fabric, although adaptations can be made. However, we are seeing from consumer behaviour that most boiler upgrade scheme grants are going to rural homes, so there is clearly demand within rural areas for heat pumps, whether the traditional air-to-air or air-to-water heat pumps or ground source heat pumps, which are increasingly popular in rural homes.
I go back to the point about learning the lessons. We are in a situation where this country is significantly exposed to fossil fuels, whether through gas or oil. The long-term solution—to remove that risk and exposure—is to move to electrification, because we would not be having this debate if homes were electrified. We need to find solutions for rural homes, and we need to move to technology that means people have more control over their energy and the system.
Behind every decision this Government take is a simple principle: whatever the challenges, we will support working people. We will always fight their corner through this crisis. That is why we are directly helping those affected by the spike in heating oil costs, cracking down on energy suppliers who are cancelling orders or jacking up prices, and working at pace to ensure the sector is properly regulated. That is why we are doing everything we can to end our reliance on unstable fossil fuel markets and take back control of our energy.
That will mean an era of economic growth, good new jobs and unprecedented investment—an era of real energy security. That is how we will ensure that ordinary working British people, including those in rural areas, never again pay the price for foreign conflicts and our overdependence on fossil fuels.
Steff Aquarone
A couple of years ago, I recall a senior former Secretary of State from the Conservative party, who shall remain nameless for the purpose of this anecdote, saying how annoying it was that the Liberal Democrats had gained 72 seats. Previously, they knew we would work out the right answer to these complicated challenges and they could steal the ideas with pleasure without anybody knowing, because we did not have a platform—so how inconvenient it was now that we had one! If individual Members want to know, I will tell them who said that to me.
The speech from my hon. Friend the Member for South Cambridgeshire (Pippa Heylings) reminded me that these problems are solvable and that the Liberal Democrats have plans to solve them. In particular, we have the longer-term vision for bringing about a future where energy is produced and used in Great Britain, as my hon. Friend the Member for Stratford-on-Avon (Manuela Perteghella) said.
I do not have time to reflect on all the valuable contributions from Members across the House, of which there were a great many, and it would be discourteous to suggest that only my party has added to this debate. We have been enriched by contributions from all corners of the country and almost all corners of the House. I note the absence of any contributions from Reform Members, which is regrettable; I believe that 2,000 houses in Clacton and 6,000 in Newark rely on heating oil. As they cheered the war in Iran, it is frankly embarrassing that they are not here to defend some of the consequences.
On a note of consensus and optimism, I do think that the Liberal Democrats have offers and ideas to bring to the table, whether it is about a closer relationship with the European Union or tackling the water companies. We are not ashamed to have our ideas taken forward in somebody else’s name. There are many things we want to contribute to this, and I am sure my colleagues will be just as willing as I am to do so.
I thank the Minister for his response. I am optimistic about the progress that he has indicated—it just cannot come soon enough.
Question put and agreed to.
Resolved,
That this House has considered Government support for the cost of heating oil.