Warm Home Discount (Miscellaneous Amendments) Regulations 2016

Debate between Baroness Jones of Whitchurch and Baroness Miller of Chilthorne Domer

Thursday 21st July 2016 Lords Chamber

[Baroness Jones of Whitchurch (Lab)]

My Lords, first, I welcome the Minister to this addition to her brief—that is the best way of putting it—and look forward to debating energy issues with her in the months to come. I thank her for introducing the regulations this afternoon.

The Minister will of course know that it was the last Labour Government who initially took steps to convert the earlier voluntary scheme into a compulsory scheme back in 2009, so of course it is natural to expect that we welcome the proposed extension of the scheme. No one should struggle to heat their homes over winter, and the continuing scandal of fuel poverty and excess winter deaths shows how vital this policy has become. However, we have major concerns about the delay in tabling these regulations, which have now been echoed by the Secondary Legislation Scrutiny Committee, which concluded that the delays will make the policy intent unobtainable this winter. That is the reason I am moving the amendment this afternoon. I will therefore ask the Minister about the timing of these extended regulations, as it appears increasingly unlikely that the policy objective of reaching customers before the winter months will be achieved.

The policy was announced by the Chancellor in November 2015, but by all accounts—the Minister confirmed this—there was a delay of five months while cross-departmental wrangling was resolved. However, I do not accept what the Minister said—that this can be written off as an unusual period. After the four-week consultation ended, it took another two months for the regulations to be laid before Parliament, and now here we are on the last day, rushing them through.

The result of this delay is that the rebates will begin to apply only in December, with some not being received until January or February next year, which is well after the cold winter weather will have set in. A number of respondents to the consultation raised particular concerns about customers on prepaid meters, who have to pay up front, often on the most expensive tariffs, and who will not receive the payments in time to make a difference to their fuel poverty. Does the noble Baroness agree that this delay is unacceptable? What steps is she taking to address the problem through departmental co-operation so that these events do not happen again? What dialogue is taking place with the suppliers to introduce the rebates in the speediest possible way, given that this delay has occurred?

Secondly, there remains a problem with targeting the payments effectively. The then Secretary of State acknowledged earlier this year that only 15% of households in receipt of rebates have both low incomes and high energy costs—that is, they are in fuel poverty. Meanwhile, in 2014 over 10% of households were classified as being in fuel poverty, and the number is rising. There is an urgent need to target the payments more effectively to those most in need. Therefore, can the Minister clarify how the proposed data sharing will improve targeting to the most vulnerable customers, many of whom are unaware of their entitlements to these payments?

Finally, how do the Government intend to address the criticisms of the CMA and others that energy companies continue to overcharge their customers? This is compounded by the difficulties that suppliers put in place for customers seeking to switch. Indeed, a recent Sunday Times consumer advice article recommended that people did not even try to switch suppliers until the Government had made the process easier. For that reason, I am moving the amendment and I look forward to the Minister’s response.

[Baroness Miller of Chilthorne Domer (LD)]

My Lords, I am very grateful to the noble Baroness, Lady Jones of Whitchurch, for bringing several aspects of these regulations to our attention—not least the comments from the Secondary Legislation Scrutiny Committee.

Of course, as the Minister said, the Prime Minister, in one of her first speeches, made many comments on social justice, but I fear that these regulations were written before she made that speech and perhaps there has not been a chance to assimilate the new spirit that she wants to introduce. As I understand it—perhaps the Minister will correct me if I am wrong—the regulations contain several things that are less than desirable, one of which is that they cover only the next two years, whereas in last year’s spending review there was a guarantee that the scheme would carry on until 2021.

On the larger picture, it is very depressing that the long-term strategy of reducing bills through energy efficiency—particularly measures that came in under the coalition Government, such as the zero-carbon homes measure—have been put on hold and we have seen this Government back-track, not least in the recent Housing and Planning Bill. Therefore, we have a big problem. The fact that people are in severe fuel poverty and are unable to heat their homes during the winter is, as has been said many times in this Chamber, one of the biggest disgraces for a civilised society.

The funding for the years after 2018 will be based on the number of customers who have benefited from rebates. What do the Government intend to do to promote the scheme to people who can benefit from it, making sure that they do not miss out?

Finally, the Explanatory Memorandum says that the Secretary of State can conduct a review if it is thought desirable. Perhaps the Minister can say a little more about under what circumstances it will be desirable. She mentioned that there would be another opportunity for noble Lords to comment, but we feel very strongly that this review needs to happen so that we are quite clear about the effect of the regulations and so that we have another chance to push for something better.