Fuel Poverty

Alan Brown Excerpts

Thursday 8th July 2021 Commons Chamber

[The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)]

I beg to move,

That this House has considered fuel poverty.

I am pleased to be able to open this debate, which is an annual opportunity for Members to raise their constituents’ views on the important question of fuel poverty. The past year has been a challenge for everyone, yet the impacts of the pandemic have not been felt equally. In particular, it has had a devastating impact on those already on a low income. The issues being faced by those in fuel poverty are not unique to the pandemic. The health implications of living in a cold home remain as serious as ever. Work is ongoing to address the issue and support those who are most vulnerable.

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

I appreciate the Minister giving way so early. She is illustrating the impact of covid and people in fuel poverty. Does that not underline the need to retain the £20-a-week universal credit uplift?

[Anne-Marie Trevelyan]

I will continue, if I may, and I hope I will answer the hon. Gentleman’s points.

Government-led energy-efficiency upgrades over the last decade have reduced the cost of heating homes, building resilience for all households, especially those on low incomes. I will come on to the energy-efficiency schemes that have kept households warm over the past year and the further action we are planning to take to accelerate progress towards tackling fuel poverty.

I would just like to acknowledge the importance of the strong relationships built with energy suppliers, which have been crucial during the pandemic. I thank them and their staff for their total commitment to looking after customers, despite risks to themselves. These relationships enabled us to quickly secure a voluntary agreement to support customers impacted by covid-19, which has been hugely successful in protecting those most vulnerable or at risk of debt, and came top of the Citizens Advice ranking of protection measures by industry. There is no doubt that more immediate support for those struggling to pay their energy bills and ensuring fairness within the energy market is important and I will come back to that later.

It is important to note that fuel poverty is devolved and that the Department for Business, Energy and Industrial Strategy has a responsibility for England. Each nation remains committed to tackling the issue and I welcome contributions from all hon. Members today as they raise their own nation’s issues.

In February this year, we published an updated fuel poverty strategy, “Sustainable Warmth: Protecting Vulnerable Households in England.” The strategy details our focus on energy efficiency, which enables warmer homes at lower cost, while also reducing carbon emissions in line with net zero. Our strategy reiterates the 2030 fuel poverty target in England, which is to ensure that as many fuel-poor homes—indeed, all homes—as is reasonably practical achieve a minimum energy-efficiency rating of band C by 2030.

A great deal has been achieved in the last decade, but there remain a significant number of households in need of support on our journey to the 2030 target. As of 2019, there are 3.18 million households in fuel poverty in England. That is a reduction of 1.6 million households since 2010. The main reason for the reduction in fuel-poor households over the last 10 years has been energy-efficiency improvements—improvements that are of benefit for many years to come.

Cold homes will often have issues with mould and damp. By installing energy-efficient measures, we are improving the comfort of our constituents’ daily lives. They are crucial in protecting and improving people’s health and helping to reduce the burden on the NHS, as well as reducing energy use and thereby reducing bills. We are focusing on improving the least energy-efficient homes first, to ensure some of those in the homes that are the most difficult and expensive to heat are prioritised. There has been significant progress.

Compared with 2010, there are now 1.3 million fewer low-income households living in the least energy-efficient homes—that is bands E, F or G. Our sustainable warmth strategy details the energy-efficiency schemes currently in place.

The green home grant local authority delivery scheme will deliver £500 million of energy-efficiency and low-carbon heating measures across the owner-occupied, private and social rented sectors. The home upgrade grant will support low-income households, with upgrades to the worst performing off-gas grid homes in England, providing energy-efficiency improvements and low-carbon heating alternatives.

In the 2019 Conservative manifesto, we committed to a £3.8 billion social housing decarbonisation fund over a 10-year period to improve the energy performance of socially rented homes. We have committed to a four-year, £4 billion successor scheme to the energy company obligation—the ECO, as it is known—across Great Britain. That will accelerate our efforts to improve homes to meet fuel poverty targets.

While these energy-efficiency schemes are crucial in reducing fuel poverty in the long term, we also recognise the need for short-term help, so our support for households in the winter months continues with the warm home discount, providing 2.2 million households with £140 off their energy bill this year. We are continuing to improve the scheme by expanding it and consulting on new ways to improve targeting to reach those most in need. Since 2011, it has provided more than £3 billion of rebates to households, helping keep homes warmer over the colder months.

Winter fuel payments provide pension age households with financial support worth up to £300 each year and cold weather payments support vulnerable households through particularly cold spells. They provided more than 3.6 million households in Great Britain with support last winter.

Alongside all the direct support, the voluntary agreement with energy suppliers has been crucial over the past year in protecting vulnerable customers. Our work with energy suppliers to ensure the best protection for low-income and vulnerable consumers and promote best customer service in a thriving energy market is vital, so we are working to reduce the impact of debt on fuel-poor households and identify those at risk of self-disconnection or self-rationing. Ofgem rules require suppliers to offer emergency and “friendly hours” credit to all prepayment customers at risk of self-disconnection. We are also working to improve the communications and advice available to everyone, to ensure that better engagement and information are readily accessible to consumers.

I assure hon. Members that we remain fully committed to addressing and reducing fuel poverty for our most vulnerable constituents so that all households can be assured of a warm and affordable home. We will continue to drive forward on delivering energy efficiency measures to reduce energy bills and create warmer, safer living environments, while providing direct support with energy bills and working alongside the energy market to ensure a better consumer experience and protect customers. I am grateful for the opportunity to discuss this important issue and look forward to hearing from colleagues.

--- Later in debate ---

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

Like you, Mr Deputy Speaker, I was shouting at the television last night.

The subject of today’s debate is very important. Everybody agrees that fuel poverty is a bad thing. It is debilitating. It causes mental and physical health problems. It is estimated that it can cost the NHS in England up to £2 billion a year in related health conditions. It causes people to die earlier, and it further shortens the remaining lifespan of those who have been diagnosed with a terminal illness. It can force the terminally ill out of their homes as they face a death that they would rather manage in their own homes with their families. So I ask the Minister to consider the recommendations of the report by the all-party parliamentary group for terminal illness, entitled “No place like home”. I pay tribute to the work it has done in conjunction with Marie Curie.

National Energy Action estimates that, shamefully, there are approximately 10,000 premature deaths a year related to fuel poverty, so we really need to do what we can to eliminate this scourge. In Scotland, we have greater pressures because we have a colder and wetter climate and a high proportion of homes are off the gas grid. Within the off-gas-grid cohort in the highlands, many customers pay up to £400 more per annum to heat their homes because they have restricted meters and pay up to 4p more per unit of electricity. I ask the Minister why she thinks it is fair that that surcharge is added in an area that is actually now a net exporter of electricity to the rest of the UK. When will that injustice be resolved?

As the Minister said, fuel poverty is a devolved matter, but energy policy overall is reserved to Westminster, and 85% of welfare spending in Scotland is reserved to the UK Government. Although the Scottish Government are trying to address the devolved aspects, they are constrained by UK Government policy. One simple example of that is that the UK Government have confirmed that the universal credit uplift of £20 per week will be removed. If that uplift was required for people to live through covid, it is obvious that it will be required going forward. Otherwise, more people will end up in fuel poverty.

In contrast, last year, the Scottish Government introduced child winter heating assistance, which will support the families of about 14,000 of the most seriously disabled children and young people with automatic payments of £200 a year. As always, the Scottish Government are having to work wonders within a fixed budget.

Energy efficiency is devolved, but the UK Government refuse to cut VAT on insulation measures, despite a request from the Scottish Government. I support the call from the right hon. Member for Wokingham (John Redwood) for that to be removed.

The UK Government designed the warm home discount and, although it provides welcome relief, it is actually paid for by other energy users, which puts others under pressure in terms of energy bills. It is the UK Government who are responsible for the energy company obligation scheme. The Committee on Fuel Poverty stated in 2018 that it has not been targeted at the correct audience. In March, the Environmental Audit Committee concluded that ECO will not achieve the fuel poverty targets required, and that the reality is that

“the poorest pay proportionally the most…this makes it a regressive policy.”

Energy UK, whose members are responsible for delivering the ECO scheme, has expressed concerns about the impact on the bills of the poorest. When will the UK Government and the Minister listen to those concerns and make relevant changes?

As we know, it is the UK Government who were responsible for the failed green deal scheme, which came about because they were determined not to have direct Government investment or on-book borrowing. I again ask the Minister: when will the HELMS victims be compensated for the mis-selling of green deals to them?

How renewable energy is paid for is under the remit of the UK Government. As a consequence, nearly a quarter of our electricity bills are now accounted for by energy policy decisions. That again puts more pressure on bill payers and could tip the scales for some, pushing them into fuel poverty, especially those in off-grid homes. The current imbalance in policy costs between electricity and gas bills really needs to be addressed as soon as possible.

Overall, we need more direct UK Government investment and the UK Government need to follow the lead of the Scottish Government. It is not just the likes of myself as an Opposition Member saying that. Energy companies say it; many third sector organisations say it; the Committee on Climate Change, in its 2019 progress report, said it; and so did the Business, Energy and Industrial Strategy Committee in its 2019 report, “Energy efficiency: building towards net zero”.

There are some key points in that BEIS Committee report, which stated:

“We note that Scotland’s investment of four times more than England cannot be explained by a less efficient dwelling stock…For example, in 2017, 49 per cent of homes in England had insulated walls, compared to 60 per cent of homes in Scotland…Scotland has made much faster progress in improving the energy efficiency of its fuel poor homes than England, where in some bands, progress has stalled.”

The statistics actually show that: 44% of Scottish homes were rated EPC band C or better in 2018, compared with just 34% in England and 28% in Wales.

The UK Government have given us a failed green homes grant scheme, whereby last year the Treasury clawed back £1.5 billion of the original allocation. What is actually needed from the UK Government is a long-term energy efficiency investment programme that will create jobs and deliver at best value, avoiding spikes in cost. It could be part of a green industrial revolution. It is no wonder that the BEIS Committee concluded its report by stating:

“The Government appears indifferent towards how public per capita spend in household energy efficiency in England compares to other parts of the UK…the governments of the devolved nations treat energy efficiency as a much higher priority than the UK Government.”

That comment on indifference is particularly damning. I would like to hear how the Minister responds to that.

By contrast, let us look to Scotland. The Scottish Government have an award-winning fuel poverty scheme, Warmer Homes Scotland, which is designed to help those who are living in or are at risk of fuel poverty through installing energy insulation and heating measures into individual properties. More than £124 million has been invested through the scheme since its launch in 2015, helping over 20,000 households. By the end of 2021, the Scottish Government will have allocated more than £1 billion since 2009 to tackling fuel poverty and improving energy efficiency, including nearly £200 million this year alone.

Another important measure in Scotland is Home Energy Scotland, which is also award-winning. It provides impartial free advice for anybody concerned about paying their energy bills. Yet again, UK and English-based consumer groups think it is a model that the UK Government need to adopt. As we look to decarbonise our heating systems, having an impartial advice service, as we do in Scotland, will be critical when people have to consider key choices such as whether to purchase a new boiler, or when they are considering low carbon energy such as heat pumps.

That brings me to the target of 600,000 heat pump installations per year by 2028. When will the Government bring forward a policy road map for the funding, and why are they not starting with a rolling programme aimed at off-gas-grid properties? That, combined with energy efficiency measures, would be an ideal way to tackle one category of fuel poverty. It is no wonder that the Committee on Climate Change, in its latest progress report, is scathing about the lack of UK Government policies. We really need to see the heat and buildings strategy, although it was disappointing that no energy Bill was listed in the Queen’s Speech.

The Scottish Government remain committed to implementing the Fuel Poverty (Targets, Definition and Strategy) (Scotland) Act 2019 in full. It is the most ambitious and comprehensive fuel poverty legislation in the UK, setting challenging but achievable targets, including that by 2040 no more than 5% of households are fuel poor and no more than 1% in extreme fuel poverty. That is compared with the UK Government’s targets, which are based solely on energy certification, which in itself is not sufficient to eliminate fuel poverty.

In conclusion, it is quite clear that fuel poverty is another matter where the UK Government hold Scotland back. Plenty of other bodies can see that change is needed in UK-wide policy, which the UK Government are responsible for. We really need to see policy in action—sooner rather than later.