Warm Home Discount (Miscellaneous Amendments) Regulations 2016

Baroness Neville-Rolfe Excerpts

Thursday 21st July 2016 Lords Chamber

Moved by

[Baroness Neville-Rolfe]

That the draft Regulations laid before the House on 4 July be approved.

Relevant document: 6th Report from the Secondary Legislation Scrutiny Committee

[The Minister of State, Department for Business, Energy and Industrial Strategy (Baroness Neville-Rolfe) (Con)]

My Lords, I am pleased to open the debate on the regulations, in my first week in this post. In her first speech, the new Prime Minister recognised the hardships faced by poor households in Britain, families who,

“can just about manage but worry about the costs of living”.

As part of that, this Government are committed to tackling the problem of fuel poverty, and that is why I am moving this Motion today.

Before going into the detail of the changes proposed in the regulations, I shall respond to the amendment tabled yesterday by the noble Baroness, Lady Jones of Whitchurch. This has been a highly unusual period for both Government and Parliament and, yes, it means that getting these regulations before the House has taken longer than we would have liked. However, if we approve the regulations today then we expect payments to the core group of recipients to begin in mid-October, with 1.2 million rebates reaching customers this winter before the end of January, during the coldest period. This represents over half the intended recipients. We expect the remaining 800,000 recipients to receive their rebates by the end of February, although some may receive them as early as the autumn. I recognise that this is a little later than in previous years but, if we do not pass the regulations today and instead wait until after the Recess, we estimate that payments will begin in mid-December and not finish until March.

I turn to the regulations. I shall give some background on fuel poverty and the warm home discount scheme to put them in context. The warm home discount is one of a range of policies to address the factors contributing to fuel poverty. It is a bill rebate, or discount, of £140 from energy suppliers directly to customers. Other policies, such as the energy company obligation, are focused instead on providing energy efficiency measures. However, this rebate reaches over 2 million households each year, giving them immediate support to heat their homes when they need it most.

The warm home discount scheme is currently made up of three parts. First, there are eligible pensioners, described in the regulations as the “core group customers”, who automatically receive a bill rebate of £140 from their supplier. Secondly, there are other low-income and vulnerable customers, such as low-income families and those with long-term disabilities, who are described as “broader group customers”. These customers can apply for rebates through their supplier. The amount is the same, £140. Thirdly, there is the industry initiatives element of the scheme, whereby suppliers provide a range of support measures that include debt assistance, benefit entitlement checks and energy advice to domestic customers in or at risk of fuel poverty.

Over the next five years, we want to simplify the way the scheme is delivered, targeting it more accurately at those households which need it most. To enable this we are reliant on new primary legislation. Data-sharing powers in the Digital Economy Bill, if implemented, could see more of the warm home discount provided automatically. This will reduce the administrative costs for suppliers to participate in the scheme and, importantly, will allow us to provide more accurate targeting. Because we are reliant on this new primary legislation, to implement these changes we propose that these regulations cover two winters—until 2017-18. If we secure the powers, we will consult on our proposals, giving noble Lords another opportunity to comment.

For these amending regulations, the Government consulted on their proposed extension of the scheme in April, proposing some relatively small changes to improve effectiveness and make the regulations simpler and more accessible. Respondents to the consultation were supportive of extending the scheme, and the government response was published at the end of June.

There are four main changes to the warm home discount scheme. The first is that local authorities or charities will be able to submit proposals under the industry initiatives element of the scheme; for example, schemes that offer support to people with specific health conditions linked to living in a cold home. The second proposed change is to place a limit on the total amount that suppliers are able to spend on debt write-off. While we understand the help that debt write-off can provide—suppliers would still be able to use half of this allocation for write-off—we would like to encourage greater diversity of approaches. Thirdly, we are providing the option to pay the rebate on the gas bill rather than the electricity bill, if requested by the customer, and finally, we will require energy suppliers to report exactly how many pre-payment meter vouchers have been redeemed, encouraging them to maximise take-up among the poorest customers. I commend the regulations to the House.

Amendment to the Motion

Moved by

--- Later in debate ---

[Baroness Neville-Rolfe]

My Lords, I thank the noble Baroness, Lady Jones of Whitchurch. As she says, there is some agreement across the House on the importance of tackling fuel poverty. Like her, I look forward to further debates on this issue in the months, and even years, ahead.

As I have stated, these regulations were prepared in difficult circumstances. I very much regret that they have come before this House so late. Although some households will receive their rebates later than in previous years, the majority will reach customers during the coldest months of the year. As I stated in my opening remarks, payments will start in mid-October and not in December, as I think the noble Baroness, Lady Jones, feared.

To respond to another of her points, we are in touch with suppliers and have put in place steps to ensure that they can begin to credit customers’ accounts by mid-October, helping those customers to keep warmer. We will also closely monitor delivery during the scheme, especially given the delay. However, I say to the noble Lord, Lord Berkeley, that I cannot perform a miracle. I can reassure him that I have tried to be completely transparent about what the new timetable is as a result of the delay, which I think we all regret.

I hope that the unusual circumstances of this year will not be repeated next time round. As the new Minister, I take note of what has been said about the importance of avoiding delays in the future and the wish of noble Lords to be able to engage.

As it happens, the Digital Economy Bill, which has been introduced in the other place, will provide the powers to be able to combine data on benefits and the housing stock, helping us to identify more households in fuel poverty. The Government accept that the targeting of this scheme could be improved and, therefore, we are seeking to take steps to improve it. The new powers will provide the Government with the opportunity they need, and also opportunity for debate. We will, of course, be consulting, as we try to do on these sorts of schemes, on the way that we will go about using the new information-sharing powers that we hope to obtain.

The noble Baroness, Lady Miller of Chilthorne Domer, rightly pointed out, and I can confirm, that we have committed to extending the warm home discount to 2020-21. That discount continues to help a large number of poorer households with their energy costs, right across the country, at a time when they are most in need. We will work with stakeholders to deliver these changes efficiently and will continue to provide help where and when it is needed in the most effective way. This obviously complements other proposals that either exist or are being consulted on, such as the energy company obligation and improvements to homes in the private rented sector, which have some of the worst energy efficiency ratings.

The noble Baroness also mentioned measures stemming from the CMA report, which is one thing that I plan to read this weekend. If I have anything further to say, I will certainly come back to her. I look forward to learning from her in this new brief.

I hope that noble Lords will agree that these regulations are important and forgive us for the delay. I hope that the noble Baroness will feel able to withdraw her amendment.

[Baroness Jones of Whitchurch]

My Lords, I am grateful to the Minister for the regret that she expressed about the timetable and the late registration of the regulations before the House. Obviously, that goes some way to addressing our concerns.

We could argue about the five months. I do not think that the unusual circumstances—or however we want to describe them—go back to November of last year. Still at the heart of this issue is a fundamental problem about cross-departmental working and cross-departmental policy discussion, which seemingly remains unresolved. We were looking for the opportunity to hear from the noble Baroness that the Government understand that, are taking it seriously and are addressing it.

[Baroness Neville-Rolfe]

I did say that I take the point about interdepartmental co-operation. It was quite an unusual period in the run-up to the referendum lasting several months: it felt like that to me. However, I am a newcomer to this subject and all I can do is to learn going forward. Cross-departmental agreement in these sorts of areas, particularly between DWP, the Treasury and others is obviously extremely important.

[Baroness Jones of Whitchurch]

I thank the Minister for that intervention. I have one other point. The timetable that is set out assumes that the data matching will go to plan—the timetable with the DWP is 10 weeks. A lot of those IT projects tend to have optimistic timetables in my experience, so we are relying on that data-matching being done within 10 weeks. Otherwise, there will be a further delay which everyone would find very regrettable. There is clearly more work to be done on targeting and how we can get the rebates and the payments to those in greatest need. I understand that this cannot necessarily be resolved within this particular set of regulations, but there is more room for dialogue on that issue in the months to come.

Having heard what the Minister has to say, I will not detain the House any longer. I do not intend at this stage to press this amendment to a vote. It is the Lord Speaker’s last day in post barring disasters over the summer, so it is only fair to give her a gentle ending to her distinguished service. On that basis, I beg leave to withdraw the amendment.

Amendment withdrawn.

Motion agreed.