Fuel Poverty

Alan Brown Excerpts

Tuesday 24th November 2015 Westminster Hall

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

I beg to move,

That this House has considered fuel poverty.

It is a pleasure to serve under your chairmanship, Mr Hamilton. The independent charity National Energy Action estimates that two thirds of working parents will not meet their energy costs. Alarmingly, it has discovered that 67% of people with disabilities are already signalling struggles. Tomorrow, the Chancellor will set out Government proposals for spending and there is an opportunity to take action on poverty. There are large opportunities—big things that can be done—and other straightforward measures that the UK Government can take forward to support those under pressure and to reduce costs.

Fuel poverty is a thief. It creeps into homes virtually unnoticed. It steals into people’s lives, begins taking people’s health, starts stripping them of their dignity and forces them to make choices that none of us would want to face. It makes its mark over years and months, often with the victim unaware of its progress in the first instance until the bills start hitting the mat.

People expect to be able to switch on the lights. If we find our house is getting cold, we want that cold vanquished. People should not be living in uncomfortable houses but, at first, they try to get by. They see whether they can cope. They make do. They make changes to the way they run things, and they make choices. They might turn the heating down or use it a little less; they might put on some more clothes. They will do more with their household budget to try to do what they can. They basically try to manage the impossible, but that becomes harder as next month rolls around and they have to go again, so they make choices about what groceries they buy, what they get for their children and what clothes they wear. Another bill hits the mat, and the worry starts to bed in and the sleepless nights take effect, and then the dreaded red bills start arriving and dignity starts to be stripped away.

The cycle of mental and physical deterioration caused by fuel poverty starts to work on people’s health. Children in the cold have issues with concentration; it affects their homework and, of course, their future chances in life. Children are also at risk of respiratory problems. Many hon. Members present will have knocked on doors during the election campaign to speak to people who are fighting fuel poverty in damp houses and who complain about their children being unwell, but it affects adolescents, too. Many mental health problems, once the contributing factors are stripped out, can be accounted for by fuel poverty. I was surprised by a statistic from National Energy Action that fuel poverty is a bigger killer than road accidents, alcohol and drug misuse combined.

The nations of the UK are split into 14 electricity regions, but in the highlands in my constituency of Inverness, Nairn, Badenoch and Strathspey, and across other nearby constituencies, our consumers are having to face electricity tariff charges of 2p to 6p a unit more than people elsewhere. There are parts of the highlands where fuel poverty has hit 70%. Electricity is charged at a premium in the coldest and darkest places. We are told that the cost of transmitting power makes electricity more expensive for people in the highlands, which is a terrible irony in a place with great renewable energy resource and a history of energy expertise. Of course, there is enormous renewable energy potential not only throughout Scotland but throughout the UK and Europe.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

My hon. Friend is making a valid point. Would it not be better to address fuel poverty by having a strategic overview of the electricity system? That would mean a fairer transmission charging system in the national grid that allows further renewable energy in the area about which he is talking. Does he share my concern that electricity poverty can only get worse following the deal to sign the Hinkley Point C agreement with a £92.50 per megawatt-hour strike rate, which is twice the market rate, with Government plans for more nuclear power stations to come?

[Drew Hendry]

I agree with my hon. Friend that that is a clear problem. Later, I will outline more measures that I believe could be taken in addition to the ones he rightly points out.

The highlands and islands pay more to produce electricity because of the way in which the system is currently set up, and residents pay more to use electricity, which is hardly a great story; it is definitely not a plan for people. The UK Government have spoken warm words about fuel poverty, yet families still sit freezing at home. The inaction is cold comfort to those facing such difficulties. As my hon. Friend mentioned, we need a new national pricing structure that is fair to people across those areas where the hardest conditions are faced. That solution must be based not on robbing Peter to pay Paul but on something that is fair across the piece. We need to consider something that does not just shift the problem from one place to another. The issue should be addressed.

Fuel poverty is not unique to the highlands and islands, and the constituents of many hon. Members in Scotland and across the rest of the UK face similar issues. National Energy Action, which I quoted earlier, estimates that 4.5 million people are facing fuel poverty. The austerity agenda being pushed forward by the UK Government will further hit people on low incomes, which will have the combined effect of ensuring that those struggling the most with poverty and fuel poverty face the coldest cuts. The proposed cuts to tax credits and the changes to social security have the potential to drive fuel poverty to catastrophic levels. Of the people who are already struggling, and nearly half have been struggling for more than a year, only 12%—there is a big communication job to be done—have told their energy supplier and only 5% have sought advice from a supporting organisation.

--- Later in debate ---

[Ian Blackford (Ross, Skye and Lochaber) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Hamilton.

I thank my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), which is the neighbouring constituency to mine, for securing this important debate. It is important, as other hon. Members have said, with millions of households around the United Kingdom being affected by fuel poverty. As I look around Westminster Hall on the day when the Scottish National party has its Supply day and a number of SNP Members are heavily engaged in the main Chamber, I am glad to say that there are seven SNP MPs here out of a total of 12 MPs. One has to ask the question, “Where is the Labour party?” It is missing from the debate in Scotland, having let the people of Scotland down, and its MPs cannot even be bothered to discuss this important subject, which affects constituents throughout the rest of the UK. It is no wonder that the people of Scotland have fallen out of love with the Labour party in our country.

I will deal specifically with fuel poverty in the highlands and islands. I am grateful to Changeworks, which has estimated the percentage of households in fuel poverty in that region. It bands each locality in the highlands into groups, and by its calculations there is no district in my constituency that has less than 47.9% of households in fuel poverty. In a number of districts, fuel poverty is evident in at least 73.5% of households. The Highland Council states that the context is that

“the Highlands and Islands of Scotland experience the harshest climatic conditions in the UK and record levels of fuel poverty”—

levels that are unprecedented. It goes on to say that

“there is far greater, area-wide dependence on the use of electricity for heating as well as lighting but the standard unit price charged is 2p a kw/hr more than in most other parts of the UK and 6p and more for the various ‘economy’ tariffs on offer”—

a point that my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey made earlier. The council continues:

“On top of all this there is also a far greater reliance in off-gas areas on using domestic heating oil and solid fuel which pushes up household heating costs further still.”

As someone who lives in a rural area, I can say that it is one thing to rely on electricity coming through the grid, but having to check the oil tank frequently and ensure that there are adequate supplies of solid fuel is a different matter. According to the council:

“As a result, domestic energy bills in off-gas areas are, on average, around £1000 more per annum than the £1369 pa dual fuel national average (2014)”—

that is the cost of living in many of our rural areas, and wage levels in rural areas are often considerably lower than in more affluent parts of the country. It continues:

“To cap it all, customers on prepayment meters (often the least well off) not only have to pay additional standing charges but also discover that their notional right to change to a cheaper electricity supplier has become impracticable.”

Those statistics should shame us all.

Let us put the highlands and islands in context with the rest of Scotland. The fuel poverty level in Scotland in 2013 was 39% of households. A key driver for the rate of fuel poverty has been the rise in fuel prices. The fuel poverty rate for 2013 would have been only about 11% if fuel prices had risen in line with inflation between 2002 and 2013.

One of the most fundamental questions that we must ask the Minister is: why do we have to accept that there are 14 regional energy markets in the UK, with consumers in the highlands and islands, who are some of the greatest users of energy in this country, paying that premium of 2p per kilowatt-hour? We must have a universal market throughout the UK. If it is good enough for postage stamps, we should have one for electricity distribution too, and that is in the gift of the current Government. I asked the Secretary of State a written question to that effect not so long ago, and I was amazed that the response was that consumers in other parts of the country would have to pay more. The point that that answer seems to ignore is that such a market would introduce fairness, and no more would consumers in the highlands and islands be discriminated against by a Government who want to penalise them for living there.

That is not acceptable, and it must end—it should end tomorrow. Why do folk in my constituency have to accept higher rates of fuel poverty? The Government can act, must act and should act, and they should do it now. Why do the Government not invest in greater measures to deliver effective insulation and ensure that we can cut energy bills and fuel poverty? We can find the money for Trident, but not to allow folk to live in properly insulated, warm, fuel-efficient homes.

[Alan Brown]

My hon. Friend makes an excellent point. We all came out of the Trident debate this afternoon disappointed by the vote. Home efficiency is a serious matter. Home efficiency measures bring people out of fuel poverty, but they have the added effect of wider benefits, because less energy usage drives down the market cost. Does my hon. Friend agree that the Government should rethink their strategy regarding the £12 billion subsidy they are creating for the right to buy? That money would be better invested directly in new build housing and home efficiency schemes for existing owners, which would also help our constituents by driving down market costs, and the Barnet consequential would allow the Scottish Government to continue their excellent work.

[Ian Blackford]

My hon. Friend makes a good point. I must contrast the Government’s performance and behaviour with that of the Scottish Government on house building and home insulation over the past few years. It really is about time that the Government in Westminster stepped up to the plate. In light of the upcoming climate change talks, we have a responsibility to cut our energy consumption as far as possible, and we can do that if we invest more in insulation.

Research by Turn2us graphically shows the kind of challenges that those in fuel poverty face. The research found that one in two low-income households struggle to afford their energy costs, despite being in work. Those are people who will be disadvantaged by the cuts to tax credits that my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey mentioned. Turn2us states:

“Amongst the hardest hit are people with disabilities, with over two in three (67%) reporting their struggles, and families, with almost two-thirds of working parents (65%) unable to meet these costs. Worryingly, of those households who are struggling with energy costs, nearly half (48%) have done so for more than a year”—

this is a long-term, not a short-term, problem. Turn2us continues:

“The knock-on effect is severe, with a third (33%) forced to skip meals and over a fifth (21%) experiencing stress and other mental health problems.”

Is it a price that we as a civilised society are prepared to pay, that people in this country have to make the choice between food and fuel? There is something wrong with our country if that is the case.

Some of the comments made by people who participated in the Turn2us survey are stark. They include, “The bills are killing me, sometimes I have to contemplate paying all the rent or heating my home”; “There are many pensioners like myself who don’t qualify for any help but still have to decide whether to eat or heat”; “We have stress, debt, arguments and a low mood at home”; “Starve or freeze? Either way you get ill and can’t work, eat or pay any bills”; “No lights, only candles, only hoover once a week, only use washing machine once a week, no heating, meals that cook quickly.” Those are the consequences of the high levels of fuel poverty we suffer from in this country.

The Scottish Government have used their powers to intervene to mitigate some of the effects of rising energy costs, but it has been the failure of Westminster, and of the regulator, to properly protect consumers that has led to marked deterioration in the level of fuel poverty. The Scottish Government are committed to tackling fuel poverty head on and ensuring that everyone in Scotland lives in a home that is warm and affordable to heat. However, those measures are undermined by austerity made in Westminster and delivered by a Conservative Government who are having such a huge impact on low and medium-income earners. That goes to the heart of the issue. There is evidence that families have to make the choice between heating and feeding.

There is not just a moral and ethical impact of that but a cost to society, with increased health costs as a consequence of the mental health issues that arise. Also, children are being sent to school in less than ideal circumstances because of family pressures, and our young people are not flourishing to the extent they should, which increases the burden to close the attainment gap. That is the social cost of fuel poverty, and the Government in Westminster have to accept responsibility for it. The proposed cuts to tax credits and other welfare cuts have caused concern that low-income, hard-working households’ finances could be harder hit. The Government must change tack in the autumn statement tomorrow.