Fuel Poverty (Rural Britain)

Debate between Emily Thornberry and Albert Owen

Wednesday 7th July 2010 Westminster Hall

[Emily Thornberry (Islington South and Finsbury) (Lab)]

May I begin, Mr Betts, by saying that it is a pleasure to serve under your chairmanship for the first time?

I congratulate the hon. Member for Suffolk Coastal (Dr Coffey) on securing this debate. I listened to her maiden speech in the Chamber with great interest and I concluded that, although it was highly unlikely that we would agree politically, she would undoubtedly serve her constituents well. Indeed, we now know those constituents as the people of the new Jerusalem. I also concluded that she was likely to be a formidable advocate for them, and frankly this place can never have enough formidable women.

This debate is one of great importance. More than one in four households in rural areas are in fuel poverty. In sparsely inhabited English communities, every second home has an energy efficiency rating of less than 30, which amounts to a significant health risk. Fuel poverty is a knotty and difficult problem with which the Labour Government struggled. Although we made progress, much more needs to be done. Our concern is that the emerging political philosophy of the coalition Government may prove to be a significant handicap—that might be putting it mildly.

The coalition agreement brags about the way the two governing parties were brought together by a shared ideology that is antithetical to Government intervention. It says that they

“share a conviction that the days of big government are over”.

However, there are times when Government leadership is necessary and when the market will not solve a problem. Climate change, for example, is, in itself, the ultimate failure of the market economy. There are times when we need to intervene. Furthermore, the effectiveness of Government intervention must be measured and quantified, so that we can account to the public for the spending of their money.

We have heard from the Secretary of State for Energy and Climate Change that he did not have any Government targets for the creation of green jobs and that he did not want to borrow our targets, for fear of seeming to copy the Soviet Union’s Gosplan. However, that judgment is wrong. I urge the ministerial team to reconsider their attitude to targets. In relation to fuel poverty, my first question to the Minister is this: will the coalition keep our 2016 fuel poverty target? If it will not do so, how many people do the Government intend to lift out of fuel poverty by any of their schemes, in either rural or urban areas?

Throughout my contribution, I will put a number of questions to the Minister. I asked some of them in a debate last week and during the somewhat rushed winding-up speeches, the Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry), overlooked many of them; I am sure that he did so unintentionally. Therefore, I thought that it might be helpful if I numbered my questions today, for ease of reference.

My second question relates to access to the grid and fuel poverty. The number of off-gas properties is much higher in rural area than in urban areas. Those properties are dependent on solid fuels, heating oil and liquefied natural gas, but the prices of those fuels are higher and they fluctuate more than gas prices. Households that are off the gas network face typical energy bills of £1,700 per annum as opposed to £1,000 per annum for households on mains gas. What steps will the Government take to increase the number of homes on the gas grid?

Another problem is that rural areas have lower average wage levels than urban areas, and the take-up of Government assistance has been more difficult in rural areas. It costs more for contractors to install energy efficiency measures in rural homes, and there is evidence that consumers in rural areas are less aware than consumers in urban areas of the availability of financial support, so my third question is, how does the Minister intend to tackle that problem, especially in the light of recent budget cuts to the Energy Saving Trust?

Another problem, as we heard from many contributors, is that there are fewer cavity walls in rural areas, and solid walls are harder to heat and more expensive to insulate. My fourth question is, what consideration have the Government given to the arguments in favour of making grants available to the rural poor who cannot be connected to the grid, so they can install microgeneration projects, such as ground source heat pumps? Will the Government consider the findings of the Warm Front pilots on air source heat pumps in areas off the gas network for occupants in fuel poverty?

I encourage the Government to be proactive and confident; if we take action, we can get results. Labour achievements on fuel poverty include Warm Front assisting more than 2 million households since 2000, which National Energy Action described as “an extremely successful programme”. Despite early problems with take-up of the scheme, improvements were made and the number of grants increased in 2005-08. I listened with interest to the criticisms of the hon. Member for Suffolk Coastal of Warm Front, but saying that rural communities such as hers lose out on schemes over and over again is overstating the case. In the past five years, Warm Front has helped 2,000 households in her constituency. My fifth question is, can the Minister give his assurance that Warm Front will be retained?

Under the carbon emissions reduction target, major energy suppliers had an obligation to direct at least 40% of carbon savings to priority group households, so, my sixth question is whether the super-priority group of 15%, which was announced on 30 June, in addition to the 40% priority group, can be contained within it. Seventhly, what will the Minister do to ensure that the carbon emissions reduction target takes account of the greater difficulty and cost of insulation in rural areas? In the Energy Act 2010, Labour put a statutory obligation on energy suppliers to offer social tariffs to those in fuel poverty. Under Labour, Ofgem provided incentives for gas networks to connect deprived communities. Households assisted under the scheme qualified as being within the 20% identified in the index of multiple deprivation.

[Albert Owen]

My hon. Friend talks about incentives for gas networks to be extended and for the grid distributors to take the lead, but is it not the case that we need an agency, a local authority or even a community group to do so? Does she agree that we should look at it in that way? We need to ensure that we have local champions in rural areas because, with the greatest of respect, Ofgem in central London does not understand small rural communities. Agencies must work with local government at a local level.

[Emily Thornberry]

That is right, and, in fact, many of the characteristics to which my hon. Friend refers are part of the community energy saving programme, to which I will return in a moment.

In the Suffolk Coastal constituency, 29,960 people receive winter fuel payments. Eighthly, given the fact that payments have benefited millions of people, will the Minister guarantee that they will continue in the age of austerity? The Government recently announced the dissolution of the Commission for Rural Communities, which I agree is unfortunate, as many hon. Members have said, particularly given that it did a great deal of the analysis on rural fuel poverty that led to significant changes in energy efficiency policy to allow for better targeting of fuel-poor rural households. Everyone knows that Labour did not eliminate fuel poverty and that great challenges remain. Nevertheless, without Government measures, there would have been 400,000 to 800,000 more fuel poor households in England in 2008.

Ninthly, how are the pay-as-you-save pilots established under the previous Government going? Will they run their course and inform the Government’s plans or not? Is the green deal just our pay-as-you-save scheme with a different name, as commentators have said? Tenthly, will the Minister clear up the confusion over whether there will be any form of Government subsidy for the green deal? Will it impose any cost on the public purse? We have had contradictory statements from the Minister of State, Department for Communities and Local Government, the right hon. Member for Tunbridge Wells (Greg Clark), and the Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden, this year. Eleventhly, will the amount available per household be £6,500 or up to £6,500? Twelfthly, will it be more for harder-to-heat homes? In the debate last week, the Minister in the Chamber today told us, with characteristic enthusiasm, about the potential deal with companies such as Tesco, B&Q and Marks & Spencer on the green deal. What will companies get out of this? That was question 13. How confident is he that the private sector will see it as a good proposition?

Most important is my 14th question: how will the Minister ensure that all households that need to improve their energy efficiency take advantage of the scheme? How will the poorest take advantage of it, and how will it work for those on low incomes and those with poor credit ratings? If poorer households do not take up the scheme, does he agree that it will have failed? On 24 June, the Minister’s new boss, the Secretary of State, said at the UK energy summit organised by The Economist:

“Some people—such as the fuel-poor, and those in hard-to-heat homes…—will need extra help because energy savings alone will not be enough. We intend to provide that help by refocusing the obligations on energy companies. Local authorities could also join with energy companies to reach those who live in houses that need it most. Insulation measures are often cheaper if implemented a street at a time. And we are planning to strengthen the Government’s powers to target energy insulation measures on the highest priority cases.”

Does that mean that CESP is saved? Perhaps the Minister will give it another name; I always thought that it sounded more like something that needed a strong dose of antibiotics, but it is a good scheme and the Government should look at it carefully. Will it continue?

At the beginning of my speech, I referred to the profound health problems associated with fuel poverty, and those problems are urgent. If we hit another severe winter this year, there are likely to be tens of thousands of excess deaths. The Government are under an obligation to be proactive, and I hope that they will be.