Government Levies on Energy Bills

John Pugh Excerpts

Monday 3rd March 2014 Commons Chamber

[John Pugh (Southport) (LD)]

Today is estimates day, and in the past I have made the mistake of talking about the estimates. That was a schoolboy error. Estimates day is rather like “Fight Club”. The first rule of fight club is that members do not talk about it, and we do not talk about estimates on estimates day. It is in fact an occasion to raise issues about energy levies and so on.

I have an issue, and I must preface what I say by disclaiming the expertise that has been shown in the Chamber. I am no expert in the matter. My background in it is limited, but I want to air some big concerns, or at least one big concern—the Government’s ECO scheme, which is paid for from levies and monitored by Ofgem. As I understand it—I repeat that I do not perfectly understand it—it is multi-dimensional and it subsidises insulation, community schemes, and boilers and their replacement. It has two distinct targets: fuel poverty, which needs addressing, and carbon saving, which is a general global imperative.

It has been acknowledged that the ECO scheme has slowed down since the autumn when the debate on energy prices took off, but even prior to that I had concerns about the operation of the scheme as it stands. It depends on an industry superstructure to enable boilers to be replaced and consumers to be provided with what they need. That industry superstructure and the industry in general are in a parlous state. I have been reliably informed by people who ought to know that there has been a collapse in the market and that boilers are not being fitted with the same frequency as previously. There has been a boom and a bust. Not so long ago, there was a huge boom; now there is a substantial bust, as there is with solar panels. There are lay-offs in the trade and providers do not want to engage further. We may be looking at a slower but similar car crash to that in solar. The reasons seems to be relatively straightforward.

The remuneration that the providers hope to get from the energy companies is either plummeting or is extraordinarily fickle and unpredictable so that they cannot make their business work. For a £1 saving in carbon over a lifetime they used to receive 25p, but they now get 8p or less, and sometimes they do not know what they will get. The alternatives are not wholesome. They can fit low-class boilers, probably with inadequate maintenance arrangements, or they can concentrate on houses where carbon savings are greatest: hard-to-heat mansions.

Apparently, hard-to-heat mansions are becoming increasingly attractive. Not so long ago, the Daily Mirror printed a report about a premier league footballer who benefited under the ECO scheme, and there have been reports of people in serious fuel poverty who cannot currently benefit. There is evidence that the big providers do not want to deal too much with the fuel poor. I have seen a letter from British Gas to Sefton council asking it not to send any more referrals because it does not want to deal with fuel poverty at the moment.

My constituency has many Victorian terraces of single occupancy, hard-to-heat accommodation with old, inefficient boilers, and it seems almost impossible to make a commercial case to any provider unless the applicant can make a contribution. However, if they are in fuel poverty, they simply do not have the resources to do so. Fuel poverty seems to be fighting the other target: carbon saving. A genuine case can be made for dealing with hard-to-heat mansions, particularly if they are occupied by pensioners who may be able to qualify under some criteria.

I have had discussions with Ministers at various levels and they are more sanguine than I and the providers are. Will the Minister explain why British Gas writes to Sefton council and why energy companies make representations saying they do not want to engage with fuel poverty now? Will the Government publish up-to-date statistics so that we can see what progress is being made to alleviate fuel poverty? Will they give figures for the number of boilers fitted in fuel poverty homes, and say how close they are to the £540 million target for alleviating fuel poverty? Above all, given that I am not the expert, I would like them to speak to the companies and providers. I know that this is not the Minister’s immediate responsibility, but will he arrange a meeting with providers and assessors to look at the evidence and, if the ministerial team believes that things are going right, explain why, and why the providers think they have a problem.

At the moment, there seems to be some slight evidence of a bunker mentality. The issue was raised on the “You and Yours” radio programme, but the Department did not provide someone to tell its story. It must tell a better story, or own up to a problem and try to fix it because the problem is genuine.

[Clive Efford (Eltham) (Lab)]

On a point of order, Madam Deputy Speaker. I wonder whether you have had any indication of whether the Secretary of State for Culture, Media and Sport intends to come to the House to make a statement. A letter has just been issued in which the Government now accept many of the amendments that we had tabled to the Gambling (Licensing and Advertising) Bill on such issues as the watershed, a one-stop shop for problem gamblers, spread betting and financial blocking. This includes adopting many of the measures that we were calling for to protect vulnerable people in relation to fixed odds betting terminals in betting shops. That is a complete turnabout from the Government’s initial position, when they resisted all our amendments. The letter also refers to the Government announcing their position over the weekend. I do not recollect the House sitting over the weekend. I think the most appropriate place for the Government to announce changes in policy is in this House, Madam Deputy Speaker, and I wonder whether you have had any notice from the Secretary of State that she intends to come here and explain herself.