Fuel Poverty

Debate between Julie Elliott and Chris Williamson

Tuesday 11th February 2014 Westminster Hall

[Julie Elliott (Sunderland Central) (Lab)]

It is, as ever, a pleasure to serve under your chairmanship, Mr Sheridan. I thank and pay tribute to the hon. Member for Brecon and Radnorshire (Roger Williams) for securing this vital debate. We could almost say that we have had a Welsh debate, because the three speeches have come from Welsh Members of Parliament, but that is not what it was; it has been much broader, although the speeches highlighted issues that affect rural communities, and much of Wales is rural.

There is wide agreement throughout the House that whatever measurement is used, the number of people in the country classed as fuel-poor is too high. It should be a source of shame that in Europe only Estonia has a higher proportion of its population in fuel poverty. Things appear to be getting worse, and among the reasons for that is the fact that the issues raised in the debate are so complex and wide-ranging that there is not one solution. There are knock-on effects for many Departments. Housing issues have been mentioned a number of times in this debate, but they are not the responsibility of the Department of Energy and Climate Change. There are also issues about the supply of energy to off-grid homes. The solutions to these difficulties will be many and multifaceted, and we must recognise that.

The scale of the problem of fuel poverty is severe. As a result of the age profile of the UK’s housing stock, we have some of the least energy-efficient dwellings in Europe. Earlier, an hon. Member mentioned the U-rating of public housing as opposed to private housing. In my experience, public housing—social housing—is often of a far better standard, particularly in the rented sector, than private rented housing, which has some of the worst energy insulation standards in our housing stock. There are some difficulties. The fact that our country has a long-standing population going back many thousands of years means that we have some beautiful old buildings, but we do not have buildings that are particularly energy-efficient, and some of the issues around modernising them are complex.

Recent figures show that 2.4 million households in the UK are classified as being fuel-poor. Furthermore, the distressing statistic that there were 31,000 excess winter deaths last year shows just how vital it is that we combat fuel poverty. I recognise the important work being carried out by organisations such as the Energy Bill Revolution, which the hon. Member for Brecon and Radnorshire talked about in some detail; the Association for the Conservation of Energy; and Age UK. Last Friday, I went along to support Age UK’s bobble day in my constituency, which highlighted some of the issues that we are debating. Such organisations are bringing the issue of fuel poverty to a wider audience, and I hope that the coalition of groups committed to fighting fuel poverty continues to grow.

I am proud of the good work that the last Labour Government did on fuel poverty, and I am concerned that the current Government are undoing much of it. Projects such as the carbon emissions reduction target, the community energy saving programme and Warm Front were not perfect, but they all helped to lift people out of fuel poverty.

The energy market reforms that my right hon. Friends the Members for Doncaster North (Edward Miliband), and for Don Valley (Caroline Flint), have set out in detail will help to address the issue of rising energy bills. Our reforms will improve competition and transparency in both the wholesale market and the retail market, establish a new energy security board to plan and deliver the capacity that Britain needs, and replace Ofgem with a new regulator with real teeth to prevent overcharging. Moreover, while these reforms are being implemented, we will freeze energy bills for 20 months.

It should go without saying that energy efficiency must also be a key consideration when combating fuel poverty. However, the Government’s record on fuel poverty and energy efficiency has been hugely disappointing. The energy company obligation in its original form, which I should remind Members was the only energy efficiency programme available to the public under this Government, was expensive, bureaucratic and poorly targeted at the fuel-poor. Of course, any scheme that attempts to address fuel poverty must be welcomed, particularly after the Government scrapped Warm Front. However, ECO was a scheme of only modest ambition, aiming to lift only 125,000 to 250,000 households out of fuel poverty, and it has been condemned by the Select Committee on Energy and Climate Change as

“insufficient considering the scale of fuel poverty”.

ECO could certainly be much improved. It could be made more efficient by focusing its delivery on specific geographic areas, and by devoting a far higher proportion of the money that it raises to lifting people out of fuel poverty. Alongside a properly functioning green deal, an improved ECO would also allow us to hit our carbon reduction targets and generate many thousands of jobs.

The Government’s announcement on ECO in the autumn statement was all the more frustrating and disappointing because just as ECO was beginning to achieve limited success, the Government caved in to pressure from the energy companies and let them off the hook, so that they did not have to extend ECO. The effect of that has been disastrous.

Many of the consequences of the changes to ECO are still unknown. In his response, can the Minister tell us when the impact assessment and consultation on the changes to ECO will happen? There are numerous examples of the devastating repercussions that followed the changes to ECO, such as the effect on the scheme in Clifton, which is in the constituency of my hon. Friend the Member for Nottingham South (Lilian Greenwood); there, the Government’s changes allowed British Gas simply to walk away from a project that was due to deal with problems affecting somewhere in the region of 4,000 homes. Does the Minister agree that where deals have been signed but the work has not been done, the energy company should honour its commitment?

The greater worry about some of the changes to ECO is that the more difficult solid-wall insulations will simply not happen and, as is often said, only the low-hanging fruit will be picked. However, until we start to tackle the very complex properties, particularly the solid-wall properties, we will not really tackle the problems.

I will briefly mention the green deal, the Government’s flagship project on energy efficiency. It was meant to dovetail with ECO, but it has been an abject failure. Just over 600 homes have taken advantage of the green deal financial packages. In its current form, the green deal is an unattractive offer, with a sky-high interest rate and an incredible amount of bureaucracy for both home owners and installers. To all intents and purposes, it has become a boiler replacement scheme. There is nothing wrong with boiler replacement schemes, but it was not the ambition and objective of the green deal that it should be a boiler replacement scheme. Boilers need replacing and get replaced, but the issues are so much more complex than that. We need a scheme that really works to address the wide-ranging problems, and that makes finance accessible to everybody to solve those problems.

I must comment on the reference the hon. Member for Brecon and Radnorshire made to Liberal Democrat party policy on energy. Much of it is honourable, and much of it I would not disagree with. However, it is a shame that the Secretary of State for Energy and Climate Change, who is a member of the Liberal Democrat party, does not vote in the House for Liberal Democrat policy. A particular example is the 2030 decarbonisation target. He is on public record as saying that he agrees with it, but he does not vote for it. Everyone I meet in the sector who invests in energy, whether they are in insulation or renewables, says that one of the things they want is that 2030 target, in order to secure investment. I had to draw attention to that.

At every stage of life, living in fuel poverty is a terrible way to live. Young people in cold homes are twice as likely to suffer from respiratory diseases and five times more likely to suffer from mental health problems. For adults, cold homes impact on existing health conditions, and for older people, cold homes can be a killer. We need to improve energy efficiency in all homes in the UK, but particularly in the homes where people need it most. That is why Labour would ensure that the help that is available would first go to people in fuel poverty and others who need it most. Better insulated homes mean warmer homes, lower bills and more comfortable lives, so it is shocking that the Government are scaling back their energy efficiency programmes.

It is our intention in the spring to publish our Green Paper on energy efficiency, which my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) will lead on.

[Chris Williamson (Derby North) (Lab)]

Is my hon. Friend aware of the poll carried out for the Energy Bill Revolution group, which showed that 85% of people—a massive proportion—want the Government to prioritise energy efficiency and make it one of the key things that they use their investment in infrastructure for? Clearly, that would be a popular policy, as well as one that would help to address the implications of climate change and take people out of fuel poverty.

[Julie Elliott]

I thank my hon. Friend for that intervention. Fuel poverty and energy efficiency are important issues. Whenever I knock on doors and talk to people, they are among the main issues that they are very concerned about. People are very worried about their heating bills, and tackling heating bills is not only about tackling energy costs at source but about ensuring that homes are insulated as well as they possibly can be, so that the amount of energy used is as low as possible; that is important because of the impact that it would have on not only climate change, but household bills. Of course, it is not just in the domestic market that energy is a key factor; energy bills are one of the biggest factors in industry, and in employing people. The knock-on implications of energy are massive, so getting it right is very important.