Fuel Poverty

James Gray Excerpts

Wednesday 19th January 2011 Westminster Hall

[Albert Owen]

Yes. I will come on to the off-grid as well to provide some balance. I stress that Ofgem is doing a good job, but it needs more teeth. I know that we will have the opportunity to discuss both that matter and how we can beef up the regulator’s powers in forthcoming energy Bills.

I am a big supporter of winter fuel payments. The previous Select Committee included that matter in its report, to which this Government provided a response. Some people think that such payments should be modified, targeted or means-tested, but the benefit is a huge success. It is a substantial payment that is easy to claim and easily understood. I believe in universal benefits. As a nation, people contribute to the national pot, so that benefits can be given to people in need. I understand that we need a mixed package of targeted benefits in addition to the universal benefit. This particular benefit has been a huge success, and I am sure that the Minister will confirm that the Government have no intention of changing it. I know that there is a cost element to it, but the benefits far outweigh any negatives in this area.

I realise that there are other Members who want to speak, but it is important to highlight some of the points made by the hon. Member for Hexham about off-grid gas supply—indeed, a number of interventions have been about that matter. Households that are not connected to the gas mains experience a double whammy; many of them are in periphery areas and pay extra money for petrol and diesel, as well as having to pay more for domestic heating fuel. We need to consider that issue. For instance, liquefied petroleum gas is far more expensive than on-mains gas, and we have heard much anecdotal evidence in many debates about the huge rise in price for domestic oil and domestic LPG.

I do not believe that the Office of Fair Trading has been sufficiently proactive on this issue. I heard what the hon. Member for Hexham said about the importance of giving the OFT anecdotal evidence, which is one way forward although it is a cumbersome process. There should be a single regulator to look at gas and electricity prices, and it should consider both the grid and off-grid supply. We should have a single regulatory body, and I ask the Minister to consider that proposal for the future. There should be a single regulator looking at all domestic fuels with a view to regulating the off-grid supply as well as the grid supply, and that regulator should have real teeth and real responsibility to look after the most vulnerable people in our society, which is what the existing regulator was set up to do. In many areas, a huge number of people are not on the grid—in some areas, a majority of people are not on the grid—and they are suffering disproportionately as a result.

As the Minister may know, I have been campaigning on this issue for a long time. However, I have been frustrated by the responses that I have received from the regulator, from this Government and previous Governments, and from the gas distribution networks, agencies and energy retailers. There is no joined-up thinking on this issue—there is a blockage and things just do not happen. People who live within a short distance of gas mains are not connected to them. I am not talking about isolated properties. I am talking about villages of considerable size and hamlets that are close to the gas mains, but there is no incentive for them to be joined up, although to be fair to the Department of Energy and Climate Change the Government have had some schemes, agencies and partnerships over a number of years that have worked on that issue.

The differential between those who pay off the grid and those who pay on the grid is so great that there should be some real investment and a mechanism to provide connection to the grid, so that those people who are not on the grid can have additional choice. Choice is what I am talking about. If people wish to remain off the gas mains, it is a matter for them, but at the moment those people do not have any choice in the matter and are being hammered by domestic oil and LPG prices.

I hope that the Minister will act on this issue. I understand that new developments will need renewable sources of energy built into them when they are constructed, which I fully support—ground source pumps and other measures may be the future. However, we are talking about hamlets and villages that have been off the gas mains for an awfully long time. When coal was cheap, for historical reasons, it was okay for those communities; there was not the disparity that there is now between the price that they paid and the price that those on the mains supply paid. Today, however, because of the lack of regulation and the inability to connect people to the gas mains, there is a huge disparity between those who are on the mains supply and those who are not, and there is a huge amount of extra fuel poverty in those areas that are not on the mains supply. So it is something that we need to work on collectively. I am sure that the Minister will respond to that issue.

I want to make an overtly political point about fuel prices, which concerns the price of petrol at the pump in periphery areas. The extra fuel poverty that I have just referred to was made worse in January, because of the additional 2.5% hike in VAT, which is really hurting people. I am not talking about people who use their cars just for pleasure. I am talking about people who use their cars because there is a lack of adequate public transport in their areas and because they have to take their children to school or to leisure activities on a daily basis and the only means of transport is a larger car. Also, those people work in a communal fashion, as it were, by giving lifts to other people. Those people are paying—

[Mr James Gray (in the Chair)]

Order. We are drifting slightly away from the topic of the debate, namely fuel poverty, and it might be better to come back to it.