Fuel Poverty and Energy Efficiency

Caroline Lucas Excerpts

Wednesday 16th January 2013 Commons Chamber

[Caroline Flint]

It is very worrying, as my hon. Friend has stated, that Consumer Focus has indicated that both electricity and gas customers—often the same household will pay both bills—are finding that the debt that they owe their energy supplier is going up. That should be an indication that more needs to be done.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Does the right hon. Lady agree that it is a scandal that under this Government, for the first time in 30 years, there is no Treasury-funded scheme to insulate people’s homes? Does she support the call to use the revenue from the carbon floor price or the emissions trading scheme on fuel-poverty measures?

[Caroline Flint]

I agree; as I will say in my speech, when Warm Front closes on Saturday, it will be the first time since the 1970s that a British Government have not provided an energy efficiency programme. That is a shame. In answer to the hon. Lady’s second question, I believe that we should look at how we can better deal with the issue of energy efficiency. Although the motion does not cover the suggestion that she has made, we have outlined how we can use some money that is already available to get to some of the most vulnerable households.

The difference between Warm Front and ECO is that the Government pay for Warm Front, whereas consumers pay for ECO through their bills. Starting ECO is therefore no excuse for ending Warm Front before the budget is spent.

As a result of the choices that this Government have made, more people are being pushed into fuel poverty, more people are being forced to choose between eating and heating, and pensioners are going to bed early to seek warmth in a house that they cannot afford to heat. Not only Labour Members are saying that. Transform UK predicts that more than 9 million households will be in fuel poverty by 2016. The Hills fuel poverty review, which was commissioned by this Government, but about which we have heard little since its publication, warned that unless Ministers change course, 200,000 more people are set to be in fuel poverty in the next four years and millions of families will be pushed into even deeper fuel poverty. Before Christmas, the Government’s advisers on fuel poverty, the Fuel Poverty Advisory Group, predicted that 300,000 more people will fall into fuel poverty this winter.

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[Mr Davey]

My hon. Friend is not quite explaining the situation fully. There is an awful lot of coal being burnt in this country and elsewhere, because of its low price, but that has not changed the picture because of the high price of gas.

Britain cannot control the global market. We cannot drive down international wholesale prices, but we must still do everything we can to help the people and businesses facing those rising global prices, especially the most vulnerable and those in fuel poverty—and, despite what the right hon. Member for Don Valley said, we are doing that.

Government policy is designed specifically to drive a wedge between global energy prices and energy bills, now and in the future. It is designed to enable us to cushion and insulate people from the hikes in global fossil fuel prices as best we can. The coalition has a plan to tackle ever-rising energy bills. When the Labour Government were in power, they talked big but did very little. They did not effectively target help on those who needed it most, they did not establish a new market in home energy efficiency and they did not reform the electricity market. We are doing those things. We are acting, whereas they just talked.

[Caroline Lucas]

Will the Secretary of State explain how promoting a major new nuclear power programme, which will require a subsidy of about £4 billion a year and which will inevitably push up prices, is compatible with trying to reduce the impacts on people in fuel poverty? It is going to make energy far more expensive.

[Mr Davey]

Two things surprise me about the hon. Lady’s question. First, she seems to know the details of the ongoing negotiations between EDF and the Government. I pay tribute to her if she knows them, but I have to tell her that her figures are completely wrong. Secondly, I would have thought that, given the real threat of catastrophic climate change, low-carbon energy would have changed a number of people’s views on nuclear power, if we can make it cost effective without public subsidy, in line with the Government’s policy.

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[David T. C. Davies (Monmouth) (Con)]

We are all united today in lamenting the fact that so many people are suffering as a result of fuel poverty. I listened with great interest as the Minister, the shadow Minister and right hon. and hon. Members discussed what they would do about it—all the schemes that they have put in place, the Warm Front scheme, cold weather payments, the green deal, the affordable warmth scheme, collective switching, bashing the energy companies, subsidising people to put insulation in their lofts, and whether pensioners were getting £300 or £400 under Labour. There was no agreement about that, but it struck me that there was not a great deal of difference in what any of them were suggesting. The only difference was that Opposition Members were promising to do more of it and spend even more money, although of course they have no money because, as they admitted, they spent it all. There was very little difference.

We are failing to address a fundamental question. The energy policies of all parties in the House are predicated on the fact that man-made carbon dioxide emissions are causing global warming, that this is a problem and something must be done, and that the something that must be done is to change the way in which we generate electricity so that we do it through renewables and fund this through subsidies, which have to be passed on to consumers. Of course more people are suffering from fuel poverty under this Government and the previous Government. They always will, because we are pursuing policies that are increasing the cost of energy and we should be honest about that.

If we are to be honest about that, we would have to be honest about something else as well: the problem that we are trying to confront does not appear to be a problem. In 15 years, according to the Met Office website, there has been no increase in temperature. Let us think about that for a minute. Since 1992 the Intergovernmental Panel on Climate Change has been chucking out predictions, one after another, telling us that there are going to be monumental rises in temperature as a result of the fact that we are putting carbon dioxide into the atmosphere.

In the 150 years of industrialisation, the temperature increase has been around 0.7° and much of that will be due to the fact that we were coming out of a period of unusual cooling anyway from about the time that we industrialised. But for the past 15 years there has been no increase whatever. All the industrialisation that has gone on in China, India, Brazil and all those other countries has not led to a trace of an increase in global warming, which is another reason why so many people will stay in fuel poverty: they will continue to have to spend large amounts of money heating their homes.

I have spent a great deal of time looking into this issue. I voted for the various carbon taxes and the climate change Bills, and I am coming to regret the fact that I did. But I did not have the information that is now out there. For ages I could not even find the Met Office figures that show that there have been no increases. If there are no increases, it is surely reasonable to conclude that something other than carbon dioxide is affecting the atmosphere and climatic and temperature changes. If that is so, perhaps we need to rethink our entire energy policy—all of us.

I have come to the conclusion that it is time to do away with the carbon taxes, the subsidies and all the rest of it, to allow energy companies to generate electricity as cheaply as they can and to sell it to consumers as cheaply as they can. I look at America, where this approach has been tried out. The price of electricity for domestic users has halved in the United States as a result of the exploitation of shale gas through fracking. Obviously, Ministers will get no support from the environmentalists, but they will get no support from them anyway.

The first Member who intervened on the Minister was the hon. Member for Brighton, Pavilion (Caroline Lucas), the Green party Member, complaining about subsidies. I have never heard anything so ludicrous as a member of the Green party complaining about energy subsidies and energy price increases. We have followed its policies to some extent and obviously all renewable energies need subsidies and they will always lead to an increased cost, which is passed straight on to the consumer.

[Caroline Lucas]

I did not want to interrupt the hon. Gentleman because I did not want to give him any encouragement whatever, but he has now challenged me. Does he accept that fuel bills are rising now because of rising gas prices, not because of anything to do with support for renewables?

[David T. C. Davies]

I can assure the hon. Lady that I need absolutely no encouragement whatsoever. It would be a pleasure to discuss this issue with her at some point. She will understand that gas prices in the United States have not just halved—they are around a quarter of what they were a few years ago as a result of the exploitation of shale gas. I am tempted to suggest that she should join me in supporting that exciting new technology, but I have a feeling that I know what the answer will be. Of course she will not support it, and she will not support the Severn barrage, either, even though that would allow us to generate electricity without carbon emissions. She will not support nuclear power, even though that allows us to generate electricity without the carbon emissions that she would suggest are the greatest threat to our climate.

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[Andrew Jones (Harrogate and Knaresborough) (Con)]

This is a timely debate, given the weather outside and the big increases in fuel prices over the past few years, which are causing real problems for people. It is highly appropriate, therefore, that we are discussing this issue.

Ensuring that people stay warm requires progress in many areas: energy supply, energy efficiency, market reform and taking advantage of the opportunities that new technologies will provide. Progress in one area alone will not deliver us the desired outcome of cheaper bills for households and businesses. Market changes across the world are an important driver of costs, of course. Global demand has been growing, and that influences what happens here in the UK. We must recognise that wholesale prices have doubled here since 2007. The issue of supply is not covered by the motion, but increased supply will cut bills, so it should be recognised. I therefore support the Government’s initiatives to increase supply, whether it is the renewal of nuclear, opportunities presented by shale gas or the expansion of renewables. The answer lies in multiple solutions and multiple sources. Over the past few years, we have been too casual in recognising the importance of ensuring long-term, secure and affordable supply.

The motion states that energy efficiency is one of the most important ways of cutting bills sustainably. I completely agree that it is an important factor. We have made progress on that over the past few years, but the progress needs to be faster and better targeted. It is a complicated area, with that complication coming from different places. We all know that there are different ways of making our homes more energy efficient, but some times the range of options can be daunting. The installation of renewable energy also presents significant opportunities, but again the range of options is daunting. Do I choose solar, ground source, air source, water source, heat pumps, photovoltaic or biomass?

It is not easy to navigate those options, yet I remain a huge fan of renewables and would like to draw the House’s attention to my personal experience while a councillor on Harrogate borough council. We installed ground source heat pumps in council properties, starting in more rural areas that were off mains gas. Our motive was to bring cheap, clean power to homes that would not otherwise have had it. We were the first council in the country to do that, and it was a great success.

[Caroline Lucas]

I am pleased to support the hon. Gentleman’s enthusiasm for renewables. Does he agree that community-owned energy can play an important part, not only in increasing supply, but in getting fuel bills down, because communities can share in the profits? Would he urge his Government to bring forward their community energy strategy without further delay?

[Andrew Jones]

I think that community ownership will play an important part in the future, and I am sure that my right hon. Friend the Minister will pick up on that point later.

I have to say that retrofitting was expensive, because we were not just fitting heat pumps, but fully insulating homes. Nevertheless, the cost of heating fell for the homes with the pumps, and carbon emissions were much reduced as well. It required some changes in behaviour in how residents used their power, but that was easily communicated, and I spoke to many residents who were basically extremely positive about what had happened.

Ministers deserve credit for the green deal. I have seen the high upfront costs that insulation and energy efficiency improvements bring, and removing the challenges of these upfront costs will remove one of the biggest barriers to progress. Under the green deal, bill payers will be able to get their energy efficiency improvements without having to pay upfront, as businesses will provide the capital and consumers will pay back the costs over time through their energy bills. I like some elements of the scheme in particular, but I will emphasise just two things: the way businesses can be included and the way the scheme will be extended to the private rented sector.

The range of tariffs has been highlighted as something that can be confusing. I agreed with the points that the hon. Member for Rotherham (Sarah Champion) made. It has been hard—probably deliberately so—for people to see which tariff was right for them. It took me months just to get my supplier to merge my personal accounts, including gas, to take advantage of a dual-fuel tariff, and I was not even changing suppliers. My personal experience is mirrored up and down the country. It is simply far too hard to make changes, so I applaud the Prime Minister’s work to cut through all this and ensure that by next year everyone is on the lowest tariff that is right for their needs.

A further area of complexity is the range of schemes that are available to help. Sometimes they are hard to access or even know about in the first place. Last month I visited two constituents, Mr and Mrs Courtman, who needed a new boiler installed, as theirs was breaking down and they urgently needed reliable heat at home for their health. Unable to afford a replacement, they turned to the local council’s home improvement agency to see whether help was available. Help was available; the point is that it came through the SSAFA—the Soldiers, Sailors and Airmen’s Families Association—and an npower scheme. However, Mr and Mrs Courtman were not even npower customers, so how could they even become aware of the scheme? It is hard to know where to go. That is why I produced a guide called “How to Save Money on Your Energy Bills”—alongside other colleagues in the House—which I have been distributing locally in Harrogate and Knaresborough and which has been well received.

Let me end by reiterating the point that market simplification, Government assistance and new technologies all have important roles to play, but it is long-term work to boost capacity that will be critical to delivering what we all want for the future.