Fuel Poverty

Drew Hendry Excerpts

Tuesday 11th December 2018 Commons Chamber

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

I will rush through my notes because other Members want to speak, but we need more time for this kind of debate in the House, not the curtailed version we have tonight.

Far too many people are suffering cold and damp, in fuel poverty, and they should not be doing so. As my hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) pointed out, two of the most important drivers for fixing fuel poverty are reserved to this place: low incomes and fuel prices. Austerity has been one of the key drivers of fuel poverty for people across the nations of the UK. The UN special rapporteur has been mentioned tonight, so I will not cover that ground again, but he said that the

“manifestations are clear for all to see.”

Westminster austerity increases winter austerity for people.

[Patricia Gibson]

What my hon. Friend is saying is very important. I grew up in a household where the heating was never put on, and I remember trying to do schoolwork with my freezing hands trying to hold a pen. He has talked about the factors that drive fuel poverty. Does he agree that the high cost of nuclear will do nothing but exacerbate the high cost of energy, with the extortionate price rates involved hitting poorer families hard?

[Drew Hendry]

Indeed. I can only agree with my hon. Friend, and I will come back to that.

The key thing is that universal credit is driving the problems that people face in their houses. They have a genuine problem and have to endure pain in choosing whether to eat or put on the heating. That is not a cliché. It is a fact of life for people living in fuel poverty. Over the past five years and more, we have seen it in my constituency, with people suffering from the pilot of universal credit to its roll-out today.

The worst fuel poverty comes in areas of low income and, typically, rural areas. Unemployment levels are almost irrelevant when it comes to universal credit. The measures that the Chancellor introduced in his Budget do nothing for those already struggling on universal credit. They do nothing to reverse the cuts and nothing for those who are caught by the odious rape clause. Indeed, they do nothing to address the benefits freeze—even the transition funding will not come into place until next year. The Resolution Foundation has pointed out that the benefits freeze will cost low-income families £210 in 2019-20. Those are poor people, women, ethnic minorities, children, single parents and those with disabilities.

Measures can be introduced to reduce fuel poverty—for example, on insulation. The UK Government cut grants in 2015, and as a result, new insulation dropped by 90%. The new ECO programme is cautiously welcomed, but as green think-tank E3G pointed out,

“At least twice as much support is needed for low income households who struggle with their energy bills.”

It went on to say that the Government of Scotland grasped the importance of energy efficiency and that, including ECO support, they

“invest four times and twice as much per capita respectively in low income household energy efficiency as is invested in England.”

Low-income households need energy efficiency, and they need that to be invested in.

The Scottish Government’s green homes network has helped thousands of people to stay warm and save energy. It is clear to everyone except the UK Government that new industries such as carbon capture and storage and hydrogen need to be invested in. After the betrayal of Peterhead, with that £1 billion project withdrawn, it will not cut it for the UK Government to replace that with 10% of the investment promised. These new technologies need proper investment.

The Energy Saving Trust said that Scotland is not only “leading the way” in energy efficiency but

“regularly outperforms the rest of the UK when it comes to slashing carbon emissions.”

On public and community ownership, Local Energy Scotland, the Scottish Government’s arm, is going forward with local energy projects and community and renewable schemes through the community and renewable energy scheme—CARES. However, Ofgem’s consultation seems targeted to hit homes and businesses that generate their own electricity. The aim, it says, is to shift the burden to others; those who use more will pay less, and those who use less will pay more. That disproportionately hits those in areas of high fuel poverty.

We need fair pricing. People who are living off the grid need to be treated fairly. We need an off-grid regulator, and we need to bring forward payments for off-grid people. In 2012, my former colleague Mike Weir MP introduced a private Member’s Bill, the Winter Fuel Allowance Payments (Off Gas Grid Claimants) Bill, to help bring forward the timing of winter fuel payments to enable people to purchase fuel at a time of year when prices were likely to be lower. Yet this is not regulated.

Ofgem seems more interested in protecting the energy companies. It has also refused to do anything about the differential that households, particularly those in Highland and other rural areas, pay in energy unit prices. In Highland, it costs 4p a unit more for people to pay for their energy than in other parts of the UK. An Ofgem spokesman recently said to The Press and Journal:

“Network companies face different costs for serving customers in GB regions, for both gas and electricity. Licenced network operators recover their allowed revenues, set by Ofgem under the”—

RIIO, or “revenue = incentives + innovation + outputs”—

“price control arrangements, from customers located within their licensed areas... This is a reasonable way to allocate these costs between customers. Ultimately it would be for Government to decide if changes should be made to these existing arrangements. Typical network costs are around 25 per cent (about £250) of overall energy bills.”

Ofgem is more interested in looking after the energy companies than those consumers who are actually struggling. We need a fair redistribution of these costs, which does not mean costs rising for other people, but actually brings down the level for those who are suffering in rural areas. There is poor value and there are poor services.

In Scotland, despite benefiting from its energy wealth, Westminster has left an energy system in which consumers are struggling to pay their bills. Despite the huge renewable resources—25% of Europe’s offshore wind—and oil and gas tax revenues of £350 billion since the 1970s, investment has been in failing and failed nuclear power. Wylfa, for example, is rumoured to be benefiting from £6 billion in equity and £9 billion in debt funding from this Government. It has a strike price deal that, at £77.50, is way above a fair rate—it is, indeed, below Hinkley’s eye-watering £92.50, but way above offshore wind’s £57.50—and who pays? The consumer—those in fuel poverty.

The Scottish Government are bringing forward their publicly owned energy company, and we look forward to seeing the benefits of that. I will wind up soon, Madam Deputy Speaker, but you must understand that there is a lot of ground to cover in this debate, and we have been given very little time for everybody to do so. We look forward to bringing forward a publicly owned energy company to reduce bills for people in Scotland and to help them out of the poverty trap of fuel poverty, low wages and the crippling application of universal credit and austerity to people in their homes and across our communities. It is time that the UK Government took some responsibility for this and took action to alleviate the pain that people suffer on fuel poverty.