Fuel Poverty

Drew Hendry Excerpts

Tuesday 24th November 2015 Westminster Hall

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

I beg to move,

That this House has considered fuel poverty.

It is a pleasure to serve under your chairmanship, Mr Hamilton. The independent charity National Energy Action estimates that two thirds of working parents will not meet their energy costs. Alarmingly, it has discovered that 67% of people with disabilities are already signalling struggles. Tomorrow, the Chancellor will set out Government proposals for spending and there is an opportunity to take action on poverty. There are large opportunities—big things that can be done—and other straightforward measures that the UK Government can take forward to support those under pressure and to reduce costs.

Fuel poverty is a thief. It creeps into homes virtually unnoticed. It steals into people’s lives, begins taking people’s health, starts stripping them of their dignity and forces them to make choices that none of us would want to face. It makes its mark over years and months, often with the victim unaware of its progress in the first instance until the bills start hitting the mat.

People expect to be able to switch on the lights. If we find our house is getting cold, we want that cold vanquished. People should not be living in uncomfortable houses but, at first, they try to get by. They see whether they can cope. They make do. They make changes to the way they run things, and they make choices. They might turn the heating down or use it a little less; they might put on some more clothes. They will do more with their household budget to try to do what they can. They basically try to manage the impossible, but that becomes harder as next month rolls around and they have to go again, so they make choices about what groceries they buy, what they get for their children and what clothes they wear. Another bill hits the mat, and the worry starts to bed in and the sleepless nights take effect, and then the dreaded red bills start arriving and dignity starts to be stripped away.

The cycle of mental and physical deterioration caused by fuel poverty starts to work on people’s health. Children in the cold have issues with concentration; it affects their homework and, of course, their future chances in life. Children are also at risk of respiratory problems. Many hon. Members present will have knocked on doors during the election campaign to speak to people who are fighting fuel poverty in damp houses and who complain about their children being unwell, but it affects adolescents, too. Many mental health problems, once the contributing factors are stripped out, can be accounted for by fuel poverty. I was surprised by a statistic from National Energy Action that fuel poverty is a bigger killer than road accidents, alcohol and drug misuse combined.

The nations of the UK are split into 14 electricity regions, but in the highlands in my constituency of Inverness, Nairn, Badenoch and Strathspey, and across other nearby constituencies, our consumers are having to face electricity tariff charges of 2p to 6p a unit more than people elsewhere. There are parts of the highlands where fuel poverty has hit 70%. Electricity is charged at a premium in the coldest and darkest places. We are told that the cost of transmitting power makes electricity more expensive for people in the highlands, which is a terrible irony in a place with great renewable energy resource and a history of energy expertise. Of course, there is enormous renewable energy potential not only throughout Scotland but throughout the UK and Europe.

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

My hon. Friend is making a valid point. Would it not be better to address fuel poverty by having a strategic overview of the electricity system? That would mean a fairer transmission charging system in the national grid that allows further renewable energy in the area about which he is talking. Does he share my concern that electricity poverty can only get worse following the deal to sign the Hinkley Point C agreement with a £92.50 per megawatt-hour strike rate, which is twice the market rate, with Government plans for more nuclear power stations to come?

[Drew Hendry]

I agree with my hon. Friend that that is a clear problem. Later, I will outline more measures that I believe could be taken in addition to the ones he rightly points out.

The highlands and islands pay more to produce electricity because of the way in which the system is currently set up, and residents pay more to use electricity, which is hardly a great story; it is definitely not a plan for people. The UK Government have spoken warm words about fuel poverty, yet families still sit freezing at home. The inaction is cold comfort to those facing such difficulties. As my hon. Friend mentioned, we need a new national pricing structure that is fair to people across those areas where the hardest conditions are faced. That solution must be based not on robbing Peter to pay Paul but on something that is fair across the piece. We need to consider something that does not just shift the problem from one place to another. The issue should be addressed.

Fuel poverty is not unique to the highlands and islands, and the constituents of many hon. Members in Scotland and across the rest of the UK face similar issues. National Energy Action, which I quoted earlier, estimates that 4.5 million people are facing fuel poverty. The austerity agenda being pushed forward by the UK Government will further hit people on low incomes, which will have the combined effect of ensuring that those struggling the most with poverty and fuel poverty face the coldest cuts. The proposed cuts to tax credits and the changes to social security have the potential to drive fuel poverty to catastrophic levels. Of the people who are already struggling, and nearly half have been struggling for more than a year, only 12%—there is a big communication job to be done—have told their energy supplier and only 5% have sought advice from a supporting organisation.

[Stuart Blair Donaldson (West Aberdeenshire and Kincardine) (SNP)]

Does my hon. Friend agree that the Government’s policy of encouraging customers to switch is completely useless for many of my constituents, as it is for many of his constituents? In some parts of my constituency 80% of local tenants are on dynamically teleswitched all-electric systems, which can be provided by only one fuel supplier. That, coupled with the 2p per kilowatt-hour surcharge, demonstrates that we need a real and practical solution for those in fuel poverty in rural areas of Scotland.

[Drew Hendry]

I completely agree with my hon. Friend that we need a more equitable solution that takes people out of situations in which they have limited choice, or no choice at all. Later, I hope to propose at least a partial solution for the future, but we need action now, too. That must be taken on board. As I said, fuel poverty is not unique to people in the highlands and islands. In the past year, a third of those who are already struggling have skipped a meal to try to afford their bills; 20% are suffering from stress or mental health issues because of fuel poverty; and 40% are struggling with other essential bills.

As the Chair mentioned, I took part in an openDemocracy forum yesterday with MoneySavingExpert.com. The issues raised in that forum, and in subsequent emails to me, were common with those of my constituents in many cases. Highlanders are mostly off the gas grid, which they have in common with some 4 million households across the UK. If people are unable to gain access to the grid, they have to rely on alternative energy sources, including heating oil, liquefied petroleum gas, electricity and solid fuels. The average cost of heating a three-bedroom house with heating oil is circa 50% higher than the UK average; those using LPG pay 100% more on average than those with mains gas. There is limited opportunity to switch to other alternatives. In Scotland, people living off the gas grid are more than twice as likely to be living in fuel poverty as those with mains gas.

The Scottish Government have put in £0.5 billion since 2009 to introduce a raft of fuel poverty and energy efficiency programmes. Uniquely, they have brought into being the Scottish rural taskforce, with which I recently had the pleasure to interact, to find ways of making it easier and more affordable for people in rural and remote areas of Scotland to heat their homes. In 2015-16, an unprecedented £119 million has been allocated to fuel poverty and energy efficiency measures, split between advice and support services for householders through the “home energy Scotland” network and a variety of home energy efficiency programmes—HEEPs. Since 2008, nearly one in three of all households has had energy efficiency measures put in place. The Scottish Government have done more to help than the UK Government and other devolved Administrations, with Energy Action Scotland’s report from 2013-14 showing that the average energy savings are £36.48 in Scotland, £31.31 in Wales, £27.55 in Northern Ireland, and £3.52 in England.

There are some issues that could be addressed. For a start, the off-grid energy sector is not covered by Ofgem or the energy ombudsman, which is a deficit that could very easily be rectified. As my hon. Friends have mentioned, there should be a fairer pricing structure across the UK that removes the inequality and prevents people from being charged more in the coldest and darkest areas.

Measures could be taken on prepayment meters, which routinely charge people more than other billing methods. The forthcoming roll-out of smart meters offers an opportunity to give homeowners and constituents meaningful advice about how to use them, and the UK Government should also consider ensuring people can switch seamlessly from one supplier to another through the smart meter, without having to make an application. It should happen automatically to give people the lowest possible tariff. Wholesale prices should be passed on immediately by the energy companies to consumers as fuel savings. There should not be a delay.

A ComRes poll to be published tomorrow for the No Cold Homes campaign showed that 81% of people think that the UK Government should do more on fuel poverty, and 82% of people surveyed believe that the energy sector should do more. Tomorrow, the Chancellor will have an opportunity to take measures to increase household incomes by abandoning tax credit cuts. Austerity is not working for people. The cost of poverty through austerity is more misery. The solution to poverty is not to push those closest to the edge into further crisis. It is time to dump the failed dogma of austerity and turn to a path that focuses on the outcome of a fairer and healthier society.