John Hayes
Main Page: John Hayes (Conservative - South Holland and The Deepings)(12 years, 1 month ago)
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The Minister of State, Department of Energy and Climate Change (Mr John Hayes)
It is a delight to speak in this debate under your chairmanship, Mr Weir, and a delight to respond to the right hon. Gentleman, whom I congratulate on securing it. He is right that it is a trailer for tomorrow’s debate on the Floor of the House, but it is more than that because it is an opportunity for us to rehearse some of the important arguments. I do so mindful of the fact that he is an authority on these matters, whereas I am new to energy. However, like him, elevation of the people is central to my political mission, and I go further than many of our colleagues because I believe in the redistribution of advantage in society, as he does.
Redistribution of advantage requires knowing when the Government should act and when they should not, knowing when the Government need to step forward in some of the ways he described and knowing when stepping forward might obscure or limit opportunities to achieve that goal. Chesterton, whom I hope the right hon. Gentleman admires as much as I do, said:
“The honest poor can sometimes forget poverty. The honest rich can never forget it.”
I hope to be rich—I am certainly not at the moment—but I aspire to be honest, and I hope that I can deal honestly with some of the issues he raised.
The right hon. Gentleman is right to divide his remarks. Similarly, half of my remarks will dwell on what we can do to support the most vulnerable in respect of the cost of fuel, but it is also appropriate to talk about how we can change the character of demand and consequently deal with the other part of the equation. The big debate about energy sometimes neglects how to attune people’s demand for energy more precisely to their circumstances. That is the other part of what the Government can do.
I will deal with some of the specific points that the right hon. Gentleman raised. I often think that Ministers do not do so sufficiently, and I do not want to be accused of falling into that camp. He spoke about when the definition of fuel poverty emerged, and he will probably recall that it emerged in formal terms in 2001 as part of the UK fuel poverty strategy.
Before that, the definition came from a series of academic studies that began to look at how being fuel-poor was defined in relation to the average or aggregate spend on fuel in households. That was deemed to be around a median energy spend of 5%, which meant that if someone was spending 10%, the median would be doubled and they would be deemed to be fuel poor. The average spend on energy may have changed over time, and perhaps that is why we need to update our understanding of fuel poverty. However, that is the history.
I will say a bit more about the core group of poorest pensioners who lie at the heart of the warm home discount, which the right hon. Gentleman spoke about at some length. He was right to say that the measures we put in place must not be just about the provision of information, for provision of information alone is not enough. Some people with simpler minds than his believe that the provision of information and the exercise of choice are not only virtues in themselves, but automatically lead to virtuous outcomes. I have never believed that, never having been preoccupied with the concept of choice in those terms. The right hon. Gentleman may want to read “The Paradox of Choice”, which argues that sometimes not only does it not lead to a virtuous outcome, but it can positively inhibit virtue.
None the less, information matters to some degree. For example, there is a strong case for being clear about what information people should receive, and for making that information comprehensible so that instead of being presented with all kinds of different options and having to navigate a system that is ever more confusing, simplified information is provided to people about energy costs and bills.
A strong argument that has been put to me, and is part of what the Government have and will continue to consider, is that there should be some obligation, and that is consistent with what we have already done in our voluntary arrangements on energy suppliers. I wholly agree with the right hon. Gentleman that provision of information is not a sufficient end point, but it is part of the package, and we might agree that it is appropriate to address the issue.
By the way, none of my comments has been prepared for me by my officials. I would not want to be limited by that.
The other important point made by the right hon. Gentleman was that the mechanisms we devise to identify those with the greatest need must be as sensitive as possible to circumstances. Of course, that is partly because need is dynamic. People’s needs change—by their nature, they are not static—and to that end, there is a real opportunity to engage with some organisations that are experts in particular areas.
As the right hon. Gentleman will know, Age UK prepared a briefing for the debate and there are organisations that represent the interests of chronically sick people, who have profoundly significant energy needs, in terms of both heating and light. Disabled organisations and charities also need to be engaged in the process, and we need to be open-minded enough to draw in a number of sources to identify need. That is also true of Departments, and I shall cover that in more detail in a moment or two. It is important that we learn from the policy levers used by other Departments to alleviate poverty and that we share good quality information.
I turn to the warm home discount, which the right hon. Gentleman spoke about. We want to provide immediate assistance to those who need help with their energy bills and to help energy companies find vulnerable people so that they can be offered longer-term support. The four-year warm home discount scheme provides that help. Launched in 2011, it requires energy companies to provide help with energy bills to about 2 million low-income households a year, and it is worth about £1.1 billion over four years.
The energy suppliers are required to provide the majority of that support to pensioners on the lowest income. As a group, such people are particularly vulnerable to the ill effects of a cold home over winter, as the right hon. Gentleman highlighted. The characteristic of that group—I have also mentioned other groups to which this point relates, such as housebound disabled people and the chronically sick—is that, by nature, they tend to spend more time at home. They are often in poorly insulated homes and may be using energy highly inefficiently, as well as which, put simply, very old people, like the very young, need to be kept warm, so a coincidence of factors make that group particularly vulnerable.
To return to the point about information, it is also true that the most vulnerable often have the greatest difficulty with complex forms and the provision of information in an insensitive, over-complicated way. They may find it hard to navigate the system and, as a result, become relatively undiscerning consumers through no fault of their own. Therefore, rather than having to apply for the warm home discount, most receive it automatically without needing to claim. The right hon. Gentleman has spoken about that matter in the broader context of welfare reform many times, and I am hesitant even to address—I will not say “lecture about”—the matter in his presence, because he knows so much about it and I know my limits.
However, further to my remark about sharing information, I would advertise that through innovative work we have developed good systems to match data between the Department for Work and Pensions customer records for those on pension credits and the information held by energy companies. Although it is true that energy companies play a key role in the process, we have engineered an appropriate level of co-operation between Departments and the energy companies to identify the target group. This winter alone, that means that 1 million pensioners will receive an automatic £130 discount by 31 December, providing them with the certainty that they need about heating their home over the coldest months.
Mr Hayes
Yes, the right hon. Gentleman is correct. It is, of course, true that a number will not be found through such mechanisms so we have set up a dedicated line and a call centre will be established for people to make a simple claim. All those who we believe may be eligible will also receive a letter telling them whether they receive an automatic discount or need to claim by the end of January.
The warm home discount also provides help to other low-income and vulnerable households who may be struggling to heat their homes, including those on a low income with children under five and those on a low income who are disabled. I accept that the eligibility for that broader group is determined by each energy supplier, but it is against criteria that must be approved by Ofgem. There is, therefore, an independent voice in that process, and it is not entirely a matter for energy suppliers.
A further 230,000 homes have benefited in that way from those discounts. The big six energy suppliers are all offering those schemes, which I encourage every hon. Member to advertise to their constituents. They should broadcast the availability of the schemes and work with local community organisations, voluntary groups and charities in their areas to ensure that we get the best value from that work.
We could discuss fuel payments, cold weather payments and so on, but we do not have time; the other part of what we are working on is the Warm Front scheme, which is about demand and dealing with the consumption of energy in a way that reduces costs. The scheme provides assistance, as the right hon. Gentleman knows, to low-income, vulnerable households through the installation of a range of heating, insulation and energy efficiency improvements to private sector households. We have recently made changes to the Warm Front regulations to broaden the eligibility criteria and allow even more fuel-poor households to access the assistance available under the scheme, which has assisted more than 2.3 million households vulnerable to fuel poverty. It is, however, the scheme’s final year, so we again urge people who are eligible for assistance to apply to Warm Front.
The obligations on energy companies are an important part of addressing the problems. I share the right hon. Gentleman’s view that it is simply not enough to stay where we are in respect of tariffs. That is precisely why the Prime Minister addressed that matter last week and why I was able to say the next day that we would use the energy Bill to facilitate change in that area. A strong case can be made around the kind of proposals set out by the right hon. Gentleman and others, which essentially are about creating greater obligation in the system. I want energy companies, consumer groups and other organisations that I have described to help shape that, so that it is deliverable. The imposition of such an arrangement now, without a proper discussion, would be inappropriate, but the Bill will come before the House in weeks rather than months. As the right hon. Gentleman knows, the Prime Minister has made it clear that the Bill provides a great opportunity for us to address this issue.
Like one of my political heroes, Joseph Chamberlain, I am in favour of tariff reform. They may be different tariffs and different reform, but if it was good enough for Joe, it is good enough for me.
Mr Hayes
I am a unifying figure. I bring together all the elements of my party and the coalition around an absolute, undiluted, unabridged determination, as I have described, to redistribute advantage, address poverty and elevate the people; my party and I regarded Disraeli as a hero before it became fashionable. To that end, we will address the issue of fuel poverty in a new way, mindful of the right hon. Gentleman’s comments. We are determined to make it work; the response will no longer be supine, but proactive, and it will assist those in the greatest need.