Fuel Poverty

Lord Harrington of Watford Excerpts

Tuesday 11th December 2018 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)]

I beg to move,

That this House has considered fuel poverty.

I hope that no Members will leave the Chamber during such an important debate. I have just spilt a glass of water over the Secretary of State for Environment, Food and Rural Affairs and I apologise. [Interruption.] Yes, it is not the worst thing that has happened to Members today from what I have heard.

Fuel poverty is debated annually in the House. Let me give some background to that. Our 2015 fuel poverty strategy for England committed us to ensuring appropriate parliamentary scrutiny as we take action to tackle fuel poverty. That commitment to transparency is why we created the Committee on Fuel Poverty and why we hold the annual debates.

The problem of fuel poverty crosses party lines and needs action from many different stakeholders. I welcome all contributions today and the positive way in which I know they will be made. I am looking at the shadow spokesman when saying that and pleading with her to show her usual grace and dignity in opposing me.

[Caroline Lucas (Brighton, Pavilion) (Green)]

I am afraid that the Minister cannot expect quite so much grace and dignity from me—I apologise. To be serious, there is good reason to be deeply concerned about the fuel poverty statistics because we have just heard from the Office for National Statistics that last winter, the figure for premature winter deaths exceeded 50,000— the highest for more than 40 years. With respect, the Government are not doing anything near enough on fuel poverty, and I want to put that on the record at the beginning of the debate.

[Richard Harrington]

I would ascribe grace and dignity to the hon. Lady’s usual contributions. This is a serious matter. The hon. Lady is right that last winter’s severely cold weather included wind-chill factors of minus 10° C and I accept what she says about the statistics. However, I do not accept her assertion that the Government have done nothing about that. If she will bear with me for the rest of my contribution, I will answer her point, and if I do not, I am sure that she will intervene.

[Dr David Drew (Stroud) (Lab/Co-op)]

I hope that the Minister will say something about rural areas. Fuel poverty is one of the biggest problems for rural areas because of the nature of the properties, which are often older, with older people living in them, but also because the schemes do not reach them. In particular, the energy company obligation—ECO—has completely failed and I hope that the Minister will say something about that. It is a tragedy that people in rural areas are more likely to die early because of fuel poverty.

[Richard Harrington]

I will indeed mention that. Various groups have lobbied all Members of Parliament to contribute to the debate and I agree with the basis of what they say.

It is also fair to say that fuel poverty is a devolved matter and that the debate originates from the fuel poverty strategy for England.

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

Will the Minister give way?

[Richard Harrington]

If the hon. Lady gives me a second, I hope that I will mention the point that she was about to make. Fuel poverty is a problem across the United Kingdom. I am sure that we all have constituents who struggle to keep their homes warm during the winter. The weather has no borders and does not understand devolved legislation. I am sure that the hon. Lady will confirm that.

[Patricia Gibson]

The Minister has said that measures to tackle fuel poverty have been devolved. The real drivers of fuel poverty are the high cost of fuel—the tax on which is reserved, as he knows—and, of course, people simply not having enough money. We know about the hardship that universal credit is causing, so I would say that the real and fundamental causes of fuel poverty are very much in the power of this Government to tackle, beyond energy efficiency measures.

[Richard Harrington]

I agree with the hon. Lady. The Government have many different strategies, and energy efficiency measures are one of them. The importance of working together with the devolved authorities on this issue was never in more evidence than during last winter’s beast from the east—I see the hon. Member for Bolsover (Mr Skinner) is not in his seat. As temperatures plunged, many households throughout the UK faced broken boilers and frozen pipes. The sustained cold weather made it even more difficult for those on the lowest incomes and in the worst properties to be able to heat their home.

As has been mentioned, last month the Office for National Statistics reported there were 50,000 excess winter deaths last winter. The figure was said by the ONS to be unusually high because of multiple causes, including the virulent strain of flu, the relative ineffectiveness of the influenza vaccine and the colder than average winter temperatures. However, old, inefficient and cold homes, combined with occupants who are vulnerable to the impact of living in a cold home, certainly have been a factor.

The fabric of our building stock cannot continue to be a source of ill health. We have put in place an ambitious framework to tackle this issue, based on energy efficiency being the best long-term solution to tackle fuel poverty.

[Caroline Lucas]

I do not know how the Minister can say he has put in place something that is so ambitious when no public funds are going into domestic fuel poverty and energy efficiency, for the first time in years. In the past we had Warm Front and other schemes, but right now the Government are putting no taxpayers’ money into these schemes.

[Richard Harrington]

I respectfully disagree with the hon. Lady, and I will outline the £3 billion-worth of Government help.

Our 2017 clean growth strategy sets an ambition of improving as many homes as possible to energy performance certificate band C by 2035, wherever practical, cost-effective and affordable, but the truth is that the most vulnerable must be helped first. We are committed to improving the homes of the fuel poor to band C five years earlier, by 2030, and we have set interim milestones to keep us on track. As many fuel-poor homes as reasonably practical will be improved to band E by 2020, and to band D by 2025.

A key way in which we are delivering energy efficiency measures to meet that ambition is through the energy company obligation, which has led to energy efficiency upgrades to nearly 2 million homes across England, Scotland and Wales since 2013. Recognising the need to support low-income and vulnerable households first, we have taken action to ensure that ECO is targeted at those who need it most.

When the scheme was first introduced in 2013, 30% of ECO spending was focused on addressing fuel poverty, and by 2015 it had been increased to 70%. Today 100% of the energy company obligation is focused directly on low-income and vulnerable households, and we have introduced a new innovative element that will bring down the long-term cost of low-carbon measures.

[James Heappey (Wells) (Con)]

The ECO programme has been very successful indeed, but does my hon. Friend agree that it is not just the barrier technologies of insulation in roofs and better windows, doors and floors that make a difference but the introduction of clean tech in homes? Clean tech can often deliver significant savings, too, so I hope that, as a result of the recent consultation, things like smart thermostats will now be included in the ECO catalogue.

[Richard Harrington]

As usual, my hon. Friend is well informed and well spoken on this subject. I share his hope, and he makes a significant point. I hope he will see this come to pass.

We are also clear that landlords should play a role in upgrading the energy efficiency of the properties they rent out. The private sector regulations will require landlords to improve the energy efficiency of band F and band G properties so that their tenants will be living in properties rated band E or above by 2020. We expect that these regulations, which require landlords to invest up to £3,500 on their property, will enable all privately rented F and G properties to receive support, and about half of these homes will be improved to an energy performance level of band E. This action to tackle the worst homes first—those rated F or G—is consistent with the approach set out in our fuel poverty strategy, but we will be consulting on options to ensure rental properties are improved to the band C target level by 2030. The private rental sector has to make its contribution as well.

We recognise that long-term sustainable solutions such as the ones I have mentioned are little comfort to those who are cold now. It is important to complement this approach with more immediate support, which is why we extended the warm home discount to 2021, so that it can continue to provide more than 2 million low-income and vulnerable households with a £140 rebate off their energy bill each winter.

[Graham Stringer (Blackley and Broughton) (Lab)]

The Minister is talking about taking immediate action. It is some time now since the Dieter Helm review came out with a number of recommendations to sort out the chaos of the subsidies going into the alternative energy business, which would take the cost pressure off the most vulnerable households. The Minister does not look as though he has read it. Its approach would take the pressure off the most vulnerable households, so why do the Government not respond and implement those recommendations?

[Richard Harrington]

I will make one small change to what the hon. Gentleman said, in that I have read that report and I have met Dieter Helm. I will happily send the hon. Gentleman a copy of the recent energy speech that my right hon. Friend the Secretary of State made. If the hon. Gentleman does not have a copy, I will send it to him with my compliments—I might even get the Secretary of State to sign it for him for Christmas.

We extended the warm home discount to 2021, so that it can continue to provide more than 2 million low-income and vulnerable households with a £140 rebate off their energy bill each winter. In addition, the winter fuel payments provide all pension households—people of pension age in the households—with additional financial support worth up to £300. Cold weather payments also provide relief to the elderly, the vulnerable and those who need extra support with their fuel bills during spells of cold weather. Last year, that alone provided an estimated £98 million in cold weather payments to keep people warm in vulnerable households.

[James Heappey]

The Minister, or at least the Treasury, will know who receives cold weather payments. Is any measure taken of the energy-efficiency of the homes in which those recipients live and therefore of whether, rather than just spending money every time the weather is cold, we might improve the energy-efficiency of those properties and so reduce the requirement for those payments to be received in the future?

[Richard Harrington]

If it is acceptable to my hon. Friend, I will write to him on that subject, because I need to speak to the Treasury about its analysis, which is what his question is about.

We are providing all consumers, including the fuel poor, with more control over their bills. The smart meter programme will mean millions of customers will be in control of their energy use, helping them to save money. A new safeguard tariff coming into effect on 1 January will protect 11 million consumers from high bills. On average, households will save £76 a year, with some saving a lot more. Significantly, as a result of these measures, the average fuel poverty gap has decreased from £379 in 2011 to £326 in 2016. Over that five-year period, the total fuel poverty gap has decreased by £88 million in real terms. Although it is important to recognise that progress is being made, we acknowledge that we still have a long way to go. The clean growth strategy included an ambitious set of policies for homes, the extension of energy-efficiency support through to 2028 and at least £640 million per year. We will be reviewing what the best form of support this will be in 2022, and I would welcome the views on this topic of hon. Members here today.

We will update the fuel poverty strategy for England in 2019, and we look forward to receiving good ideas on how we can make further progress. The new strategy will align our work on fuel poverty with our clean growth strategy and industrial strategy. We had always planned for the fuel poverty strategy to be a living, evolving document, because changing technology and innovation will mean that what worked in the past will not necessarily be the best plan for the future.

[Graham Stringer]

Will the Minister explain to the House why, as smart meters are rolled out in the north of England, we are not getting the most up-to-date and best smart meters, which people in Watford are getting? Why is the north being discriminated against?

[Richard Harrington]

I thank the hon. Gentleman for saying that my constituents in Watford are doing well out of smart meters, and they are, but the pace of the expansion is under continual review with the suppliers. The Secretary of State’s powers were extended in the recent Smart Meters Act 2018 and will be used to encourage take-up of smart meters, which is gathering momentum. I accept the hon. Gentleman’s point, though, because it is patchy in different parts of the country.

The main point is that for the first time we have an opportunity to ensure that our fuel poverty strategy is joined up with our holistic plan to improve energy efficiency throughout Britain. The new strategy will focus on better ways of identifying those in fuel poverty and targeting our assistance to them directly. It will help us to identify the most cost-effective means of achieving our target in 2020, 2025 and 2030.

Let me bring the focus back to our main goal, which is to improve the lives of those in fuel poverty. No one deserves to live in a cold home. We have the opportunity next year to set out a refreshed fuel poverty strategy that will lay out an updated plan for meeting the 2030 target. I would welcome hon. Members’ views based on their experience of fuel poverty, so that we can work together to set out a new, ambitious plan. This issue transcends party lines and affects us all. I look forward to hearing hon. Members’ questions and contributions on this topic.

[Several hon. Members rose—]