Draft Warm Home Discount (Miscellaneous amendments) Regulations 2016

Barry Gardiner Excerpts

Tuesday 19th July 2016 General Committees

[Barry Gardiner (Brent North) (Lab)]

It is a great pleasure, as always, to serve under your chairmanship, Sir Alan. You are one of the most experienced and knowledgeable Chairs that we have in Parliament, given all your years of service.

Of course, I am very grateful to the Minister for his kind remarks, which I entirely reciprocate. I said yesterday and I will reiterate today in this Delegated Legislation Committee that the new team at the Department of Business, Energy and Industrial Strategy is one of the most thoughtful sets of Ministers, and that has been evidenced in what the Minister has already said to us today, because some of the old shibboleths are being cast aside—we will get to that.

It would be incredible if Opposition Members were to oppose the delivery of this scheme and of course that is not our intention at all; we will not be moving to a vote. However, there are aspects of the scheme that the Minister has alluded to that we need to probe and seek further reassurances from him about.

As of 2014, the latest year for which we have official fuel poverty statistics, 2.38 million households in England were in fuel poverty, which is, of course, more than 10% of all households in England. The old Department, as we must now term it, of Energy and Climate Change estimated that across the UK, using the 10% methodology—whereby a household is in fuel poverty if it spends more than 10% of its income on fuel—an estimated 4.5 million low-income households could not adequately heat or power their homes, and that figure has grown by 500,000 over the last five years. The last recorded figures—also for 2014—show that there were 43,900 excess winter deaths in England and Wales. So the problem that we are discussing today materially affects millions of our fellow citizens and can be fatal for many, many thousands of them. I think the recent “Panorama” report on those 43,900 excess winter deaths said that 9,000 were directly related to a failure to heat homes adequately.

These figures show the huge importance of this scheme and other measures to support the vulnerable. Of course, when my party was in government we legislated to make the initial voluntary scheme compulsory. It was our intention then, when the voluntary agreement came to an end in 2011, to continue the discounts through compulsory support from companies. The amount spent was to be increased, which it was, and the most vulnerable consumers were to be targeted. However, that is where I and my party believe that this scheme is failing, and it would appear from what the Minister has said that he is of like mind.

There are 1.3 million lower-income pensioners targeted in the core group of beneficiaries of the scheme and 800,000 low-income families are in the broader group. By my reckoning, that makes 2.1 million households and, as I have said previously, as of 2014, 2.38 million households were in fuel poverty in England and Wales, as counted using the Government’s main methodology. It might seem, therefore, that the scheme is doing well, with 2.1 million out of 2.38 million households served. However, that would be to belie the facts.

The previous Minister in DECC, the right hon. Member for South Northamptonshire (Andrea Leadsom), acknowledged in a written answer to a parliamentary question that we posed on 25 April that only 15% of those 2.38 million households receiving the discount were in fuel poverty. That was a quite startling revelation. Of course, what it shows is that the targeting of this scheme has been absolutely abysmal. We found out in April that DECC tried to redress that. In an exchange between the then Secretary of State, whose constituency I have entirely forgotten, and the Chancellor, the Treasury said that it was

“unconvinced of the need to change a system that works”

and that it

“can’t approve changes to a successful scheme without having a clear idea of how many losers this will create and who those losers will be”.

If one knows that 85% of the scheme is delivering to the wrong people only to express concern about the losers—it is of course right that there is clarity, but it would appear that the Treasury was more concerned with the political impact of getting the scheme right than the health impact of targeting it correctly. That was an error and one that I am delighted to see from the Minister’s remarks that the Government are now looking to overcome.

The previous Minister also stated that the Government may consult later this year on better targeting but in a written answer she said that was

“subject to positive progress on data sharing legislation”.

The Minister went slightly further than that in his remarks, but we need real assurances that this is now a project for his Department, in liaison with his counterpart at the Department for Work and Pensions. For the scheme to address fuel poverty to benefit only 15% is unsustainable. The Minister has said today that he believes that it can be targeted more accurately through data sharing, and that certainly needs to be done.

The Government are also letting energy companies off the hook and I would be grateful if the Minister would look at the situation. Even though the Competition and Markets Authority said that customers were being overcharged by £1.7 billion a year over the past five years, incredibly it would appear that the Government have acquiesced in putting the blame back on to the consumer, saying that people should just shop around and switch more often, and in that way save this money.

There must be a much greater burden put on the energy companies; it should not always be left to the consumer. Yet again, it is the fuel poor, such as pensioners who perhaps do not have internet access and cannot go on switching websites, who have least capacity to redress their situation in the way the Government suggest on the back of the CMA report.

Will the Minister explain why the data on current recipients of cold weather payments are not shared, so that those recipients could also receive the warm home discount? Does the Minister agree that powers should be extended through legislation to enable that? These are families with children under five and people with disabilities. The data on those people should be shared with Ofgem to facilitate these schemes. Households may not even be aware at the moment that they are entitled to these rebates.

The data protection issues that are often cited as the reason sharing does not happen could be overcome by a simple clause authorising data sharing being incorporated into all the benefit application forms. Will the Minister undertake to meet his counterpart at DWP to try to agree that co-operation—whatever is necessary—to ensure that this scheme does not reach just 15% but 100% of those who need it?

[The Chair]

Just to be helpful, the former Secretary of State to whom the hon. Gentleman might have been referring is the right hon. Member for Hastings and Rye (Amber Rudd).