Energy Prices

Debate between Lord Watts and Caroline Flint

Wednesday 11th January 2012 Commons Chamber

[Mr Dave Watts (St Helens North) (Lab)]

Does my right hon. Friend agree that it is not what people say, but what they do? The last Labour Government took pensioners and families out of poverty, while introducing help and assistance for fuel costs. This Government have cut fuel cost assistance and are putting more people into poverty. Is that not the difference—not what we say, but what we do?

[Caroline Flint]

My hon. Friend is absolutely right: actions speak louder than words. The actions going on at the moment mean that the number of people in fuel poverty is going up and there is less support coming forward to help the most vulnerable. We are heading for a car crash when the Warm Front scheme ends and we wait to see whether the green deal will happen in a way that will help people. I shall say a little more about that later, and I am sure my hon. Friends will want to make some points about it in their contributions.

Let us talk about helping low-income families with their energy bills. The Secretary of State likes to boast about the warm home discount scheme. He says it is a statutory scheme and that Labour had only voluntary agreements—never mind that those voluntary agreements secured £375 million to help almost 1.6 million households with their energy bills over three years. What the Secretary of State forgets to say is that the present scheme exists only because Labour legislated for it when we were in office. When the present Government decided to take it on, we warned that, on the basis of their plans, they could exclude hundreds of thousands of people from the help that they needed.

In Committee, my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) said

“there are concerns about the make-up of the broader group and the discretion given to energy companies to fund it.”

She asked for assurances

“that the Government will evaluate how effective the discretionary nature of the broader group will be and, if necessary, take steps to expand the core group if households are falling through the gap”.—[Official Report, Third Delegated Legislation Committee, 28 March 2011; c. 6.]

The Government did not heed those warnings, and, as research by Save the Children revealed last week, only 3% of families who are eligible for help from the warm home discount scheme will receive the support to which they are entitled this year.

The Secretary of State may try to tell us that more people will be helped as the scheme develops, but those families need help now, not in three or four years’ time. This is not about spending more money or adding to customers’ bills; it is about standing up to vested interests in the sector, and telling them that they have a responsibility to their customers and to the public.

The Government are not only cutting help for people in need, however. They are also hitting families who want to do their bit—who want to do the right thing, to have more control over their energy bills, and to make their homes more energy-efficient. The Government’s disastrous and chaotic cuts in the feed-in tariff for solar power will be back in court on Friday. In defence of their plans, Ministers have been forced to resort to ever more outlandish claims about how much it is costing the public. First it was £26 a year, then it was £40, then it was £80. The actual figure—what it is really costing consumers—is just 21p per household per year, compared with average bills in excess of £1,300. What the Government do not seem to understand is that one of the reasons why so many people, especially pensioners, chose to install solar was the fact that it enabled them to control their energy use and cut their bills.

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[Caroline Flint]

I am going to make a bit of progress. The Department of Energy and Climate Change website actually states:

“The Warm Front scheme provides heating and insulation improvements to households on certain income-related benefits”,

and it goes on to refer to grants for loft insulation and draught-proofing—I rest my case.

Perhaps the Government will also respond to firms, such as those I have met, undertaking cavity wall insulation, which provide a sensible, professional product under the carbon emissions reduction target—CERT—scheme. Some 6 million homes have cavity walls without insulation, and 10 million lofts do not have insulation. That provides enough work for a whole industry to do—work that is good both for the public and for the environment. However, I understand that, under Government proposals, if this work is to be undertaken under the green deal, a full assessment of the property will have to be made—the householder’s lifestyle and behaviour will be included in this. The assessment sounds as if it will have to be paid for by the consumer, yet the work that they wish to have done may be blindingly obvious. I hope that the Government will ensure that the public and businesses are still able to improve the energy-efficiency of homes without being forced through a bureaucratic and unnecessarily costly process.

With the end of the Warm Front scheme, and of the community energy saving programme and CERT, what will happen to families in fuel poverty, or in hard-to-treat homes, for whom the green deal might not be suitable? The Government’s solution is the energy company obligation—ECO—but only a quarter of the money from ECO will help households in fuel poverty; the rest will go to able-to-pay households. So the Government’s promise that ECO will do more to tackle fuel poverty than either CERT or the Warm Front scheme just does not stack up. In what way is ECO’s £325 million a year for fuel-poor homes greater than last year’s Warm Front budget of £370 million or the CERT spending of nearly £600 million on priority groups?

We know that as well as coming up with policies, even in these tough times, to help families with spiralling energy bills now, we must also reform the energy industry to secure a new bargain in the future. I have said it before and I am going to say it again: to start with we have to deal with the sheer number and complexity of tariffs on offer. We have 400 tariffs, with about 70 new ones in the past year. They are confusing and unfair, and they must be reformed. At his infamous energy summit in the autumn, the Secretary of State implored people to switch. Perhaps he could tell us today exactly how many people took his advice and switched, and how much they have saved. The problem is not that people are not shopping around enough; the real problem is that there are too many tariffs on offer, that they are too complicated to understand and that even when people do switch, they do not always get a better deal.

[Mr Watts]

Does my right hon. Friend agree that it is clear that the energy companies have made the tariff system as complicated as they can? Is it not a fact that even when people do switch and take the Prime Minister’s advice, they often find that they get a worse deal than the one they started with?

[Caroline Flint]

I am afraid that that is the case. I have met a number of the energy companies over the past few months and they are obviously hurting as a result of the public criticism being directed their way. However, when we examine today’s Which? report, we find that 4 million people complained in the past year and that the number of complaints rose by 26% in the past three months, so something is seriously not right. The real problem is that there are too many tariffs on offer. Having more than 400 tariffs is not about competition or choice, and it does not serve the public interest; it serves only the interests of the energy companies. So we need, as we have said before, a simple new tariff structure that is clearer and fairer, and that will help all customers to get a better deal. I know that consultations are going on at the moment, but the Government really need to step up the pressure. We should not be unable to knock a few heads together, and we need to do that sooner rather than later. We must keep the pressure on as that is the only way to make the companies change. The Which? report has highlighted the terrible situation with bills that were overestimated or incorrect as well as the mis-selling that went on in the past. We need a proper investigation and proper compensation for people who have been ripped off. Only then will we start to rebuild trust in our energy companies.

As well as a more responsive energy industry, we need a more competitive energy market. The energy market is dominated by just six firms that supply more than 99% of electricity and gas. Today we heard that EDF will cut its gas prices by 5%, but the public will ask why energy companies are still so quick to put up people’s bills when wholesale prices go up but slow to bring them down when they fall as well as when the other big energy companies will follow suit.

Local Government Funding

Debate between Lord Watts and Caroline Flint

Monday 6th December 2010 Commons Chamber

[Caroline Flint]

We are dealing with a package, which is what local councils will face. Even on the coalition Government’s most extravagant predictions of what we might have cut, with which I do not concur, the cuts proposed by the coalition Government, of whom the right hon. Gentleman is an ally, would have meant another £2.2 billion worth of cuts over a four-year period, and they are front-loaded in a way that is dangerous for local communities and the services that they need.

[Mr Dave Watts (St Helens North) (Lab)]

Is my right hon. Friend amazed to hear that question, bearing in mind that the Government have not announced what cuts are to take place? It is likely that local authorities will not know that until December, giving them just a few months to adjust the budget.

[Caroline Flint]

My hon. Friend is right: we do not know what the settlement announcement will be at this stage, but what we do know is that local authorities have been told that they will face cuts of 27% in their funding over a four-year period. As I will set out in more detail, much of that is being front-loaded in an incredibly short period of time, which makes no sense at all.

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[Caroline Flint]

I am very much looking forward to the missives I can hear being typed out in town halls in London and across the country to put the Secretary of State right on that one.

[Mr Watts]

Is my right hon. Friend aware that the changes to the grant system are only putting right what the previous Tory Government had done? When I was the leader of St Helens council, the then Tory Government, in one year, took more than £13 million of grants from St Helens—a deprived community—to give to their friends.

[Caroline Flint]

As he did during a Westminster Hall debate last week, my hon. Friend lays out the real choices that are being made here about fairness and unfairness. What is happening is unfair and is not right.

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[Caroline Flint]

Thank you, Mr Speaker. I will not hold the hon. Gentleman too harshly to account for what he said in the heat of the debate.

We must recognise that the deficit has to be reduced—and we do. [Interruption.] We have been very clear about that. There are choices to be made, however, about how far and how deep the cuts should be. What does the hon. Member for Tamworth (Christopher Pincher) have to say to Baroness Margaret Eaton, Tory leader of the Local Government Association, who only last week issued a press release on the “unprecedented” levels of the cuts and the impact of front-loading? It is not just Labour people talking about this—[Interruption.] I hear an hon. Gentleman shout “What would you do?” from a sedentary position. We would not front-load the cuts in this way for a start, and we would not have gone as deep.

[Mr Watts]

Is it not clear that people will judge the Government not on the cuts, but on how they are distributed. So far, what we know is that they will hit the most deprived. Is that not what it is all about?

[Caroline Flint]

I am afraid that there is another motivation, and it has absolutely nothing to do with the deficit. I think I am right in saying that the Office for Budget Responsibility report suggested that a surplus would start to appear in a few years’ time. Given how the coalition Government like to sing from the rafters about OBR reports, it is a shame that they do not think about areas where they could use that information to minimise the damage of the cuts that local authorities face and adopt a much more thoughtful approach to their impact on the ground.

There is no doubt about it—the impact on local communities up and down the country will be harsh and, I think, undeserved. Whatever plans local authorities might like to make—working with the voluntary sector and the private sector and looking at ways to share functions and of delivering services differently are all, I think, subjects worthy of debate—they can do only so much in the time available. That time is simply not enough.