Fuel Poverty

David Mowat Excerpts

Wednesday 3rd February 2016 Westminster Hall

[Callum McCaig (Aberdeen South) (SNP)]

Thank you, Sir Roger. I am pleased to have the opportunity to speak in this debate and congratulate the hon. Member for St Ives (Derek Thomas) on securing it. We have had an interesting discussion that has taken in both aspects of the issue. First, there is the issue of direct fuel poverty—how we insulate our homes and pay for our bills, and how we can make that better. Secondly, there is the broader issue of poverty—if people cannot afford to pay for anything, fuel poverty is clearly going to happen. I am always somewhat perplexed that we focus our poverty debates not on poverty itself but on specific manifestations of poverty. In this case it is fuel poverty; sometimes it is food poverty or child poverty. The issue is not the individual manifestations but poverty as a whole. Nevertheless, as this is a debate on fuel poverty, I will address my remarks accordingly.

The hon. Member for St Ives gave an excellent speech. The phrase that stood out to me was that it was time to “wage war on fuel poverty”. That is absolutely correct. I was struck by the comment by the hon. Member for Strangford (Jim Shannon) that we need to learn from the different approaches in the UK’s different jurisdictions. I welcome the comments made by the hon. Member for St Ives about the Scottish Government’s projects and how they could be replicated in England to deal with rural constituencies such as his. The situation in Scotland is by no means perfect, and we can learn from others. Debates such as this can help.

The hon. Member for St Ives also mentioned making fuel poverty a national infrastructure priority, which is what the Scottish Government have announced. That could bring jobs and support, along with benefits in terms of climate change, but above all it could ensure that people can live in homes that they can afford to heat. The hon. Member for Stalybridge and Hyde (Jonathan Reynolds) mentioned the lack of political will and how many of the attempts to tackle fuel poverty were being directed at reducing subsidies for renewable energy. That is completely and utterly the wrong way to go about it. The cost of the contributions to renewable energy projects is infinitesimal when compared with fuel poverty. Yes, we should be looking to bring down bills, but a far bigger issue is the failure to pass on savings from wholesale prices, as has been mentioned. We risk throwing the baby out with the bathwater and missing some of our climate change targets, which will not help those in need.

The hon. Member for Congleton (Fiona Bruce) and my hon. Friend the Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron) both mentioned the scandal of prepayment meters and how those who are in greatest need face the highest bills. I can see no justification for that—I have heard several justifications for it, but none of them cut the mustard. It is unfair and iniquitous and it must stop. There are barriers to switching and it is a trap for people who can least afford to be trapped like that.

A number of Members talked about how fuel poverty is incredibly acute in rural areas. My hon. Friends the Members for Ross, Skye and Lochaber (Ian Blackford) and for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) mentioned the need for a universal market. In a previous debate, my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey secured a commitment from the Minister that she would launch, around the end of last year, a public consultation on the most appropriate level of support for electricity distribution charges in the north of the country. It is clearly now the start of this year, so when will that consultation be coming?

One of fuel poverty’s hardest impacts is its effect on people’s health, education and lives as a whole. The hon. Member for Castle Point (Rebecca Harris) mentioned a GP talking about prescribing insulation—that really stands out as testament to the scale of the problem. We are tackling the symptoms of fuel poverty and paying millions to deal with its manifestations. Investment at source in the form of insulation is money that will pay itself back many, many times in improved health, education and social outcomes, as well as in reduced bills and less need to seek energy from elsewhere.

[David Mowat (Warrington South) (Con)]

I am listening carefully to the hon. Gentleman’s arguments. He will be aware that the country that has reduced fuel poverty the most in the world over the past few years—indeed, it has also reduced carbon emissions—is the United States. That is because gas there is now one third of the price of our gas. Does he think that unconventional oil and gas in our country could make a big contribution to relieving the fuel poverty he is so concerned about?

[Callum McCaig]

I have had several conversations with people in the onshore and offshore oil and gas industries. Because of the nature of the European gas trading market, very few people seem to think that such options would reduce the costs here anywhere near as much as they have in the United States. They are also likely to be less cost-effective, so I do not believe that that is the answer to fuel poverty. It might be an answer to another question, but that is for another time.

--- Later in debate ---

[Clive Lewis]

Yes, I agree. I went to see the new head of the National Infrastructure Commission, Lord Adonis, with Frontier Economics and E3G, which have been quoted. We asked him whether energy efficiency could be made a priority in the National Infrastructure Commission’s first tranche of spending. I will not say we were given short shrift—he was very polite—but I understand that he will not make the case for such spending in his recommendations. I think that is a missed opportunity. Unfortunately, the Treasury still refuse to see energy efficiency spending as infrastructure spending. Frontier Economics made a compelling case when it said that the characteristics of spending on energy efficiency are exactly the same as those of traditional infrastructure spending on, say, transport or broadband. We will press Lord Adonis on that issue, and I will happily keep the hon. Member for South Down (Ms Ritchie) informed.

I have worked on fuel poverty and participated in debates on that issue, and I am struck by how easy it is to get sucked into the statistics and detail. Other Members made that point, too. Clearly, the detail is an essential to understanding not only the scale of the problem and the sheer depth of the Government’s failure, but the resources required to turn the problem around.

Before I get into the stats, let me remind hon. Members that behind every percentile, every missed target and figure and every set of depressingly high numbers there is a fellow human being. Perhaps they are one of the thousands of people expected to die this winter as a result of living in a cold home. Perhaps they are over 65—an age group in which one person is expected to die every seven minutes because of fuel poverty. I am sure someone much better at maths than I am will be able to work out statistically how many will have died over the course of this debate. Perhaps they are disabled, unable to get out of their home, and reduced to living in one or two rooms for the duration of the winter because they fear racking up excessively high fuel bills. Perhaps they are one of the 1.5 million children living in fuel poverty across the UK. Perhaps they are one of the Prime Minister’s strivers, and are working as hard as they can but are still struggling to heat their home. There is somebody in work in more than half of the 2.3 million households in fuel poverty.

That is the reality behind the statistics. Those are the people who, this winter, will pay a heavy price for the Government’s failure to tackle this issue meaningfully. I see that failure compounded day in, day out. I sit on the Energy Bill Committee, and throughout our proceedings the Government have routinely used fuel poverty as an excuse for inaction or, worse still, for slashing the UK’s renewables industry. They claim to care so much about poorer consumers, yet by attacking the two cheapest renewables—onshore wind and solar—they damage investor confidence, increase risk, and push up the price of renewable investment and, ultimately, our energy bills. At the same time, they are setting an incredible strike price for nuclear-generated electricity and are happy to heap those costs on to consumer energy bills.

One of the most cost-effective ways of meeting our climate change commitments and tackling fuel poverty is to increase energy efficiency, which has been mentioned so many times today, but it is being fundamentally undermined. Any serious attempt to tackle fuel poverty will require serious action to improve our housing stock. Poor-quality housing and fuel poverty are almost inseparable. The figures speak for themselves: 73% of households in fuel poverty live in properties with the lowest energy ratings—E, F or G. Only 2% live in properties with the highest energy ratings—A, B or C. The Government’s goal of ensuring a minimum energy-efficiency rating of band C by 2030 is woefully inadequate.

[David Mowat]

I am listening carefully to what the hon. Gentleman is saying on renewables. Is his position on the speed and velocity with which we should go down the renewables route—ours is the fastest, certainly in terms of energy emissions targets, in Europe—the same as that of the Scottish National party, which regards its impact on bills as infinitesimal? Does he think that the Government and Opposition have a duty to match the speed of carbon reduction with cost, so that at the margin there are fewer energy deaths in the short term?

[Clive Lewis]

The Energy and Climate Change Committee is clear that the most cost-effective option for decarbonising our economy is set out in the carbon budgets. We have made it clear in the past few weeks that if we intend to decarbonise our economy, renewables will play a crucial part. Our problem with Government policy is that it is going backwards on renewables. Renewables will play a crucial part in ensuring that this country meets its climate change commitments and carbon budgets cost-effectively. We must have a balanced energy portfolio; the dash for gas and going all out for fracking is not the way forward. The Opposition are calling for a more balanced approach as the best way to achieve our commitments.

Between 2010 and 2013, only 70,000 fuel-poor households upgraded, leaving 95% still to be improved. As the hon. Member for St Ives said, at that rate the Department will miss its own target by 100 years. The Energy and Climate Change Committee estimates that investment of £1.2 billion to £1.8 billion per annum is needed to attain the Government’s fuel poverty strategy for England. The cheapest third of our approach to tackling our climate change commitments is the energy that we never use. Energy saved through efficiency is the cheapest. We talk about energy security, but energy that we never use is the securest. Funding for energy efficiency for the fuel-poor has been cut in real terms by a fifth, and the installation of energy efficiency measures has been cut by a third. As Members are aware, two new Government incentive schemes were introduced in 2013: the green deal and the energy company obligation. Two years later, the green deal has been stopped, and support for ECO is yet to be set beyond 2017 and no new funding is due to be announced until 2018.

Schemes aside, we come to the grim reality of this litany of failures. An estimated 43,900 excess winter deaths occurred last year in England and Wales—the highest number since 1999. Some 27% more people died in the winter months, compared with the non-winter months. It does not take a genius to understand that the situation will get worse the longer this Government refuse to have any semblance of a coherent fuel poverty strategy, and as long as growing inequality and poverty are at the heart of their economic policies.

The hon. Member for Aberdeen South (Callum McCaig) touched on that and we sometimes forget that fuel poverty is often just another term for old-fashioned poverty. Why? The vast majority of the 2.3 million households living in fuel poverty are also on low incomes. The link is inescapable, but rather than tackling it, the Government have opted to lower the bar and reduce their ambition. Dithering, inconsistency, U-turns and failure are the trademarks of this Government on this matter, and I look forward to hearing the Minister explain how they will tackle this most pressing issue.