Fuel Poverty (Wales)

Lord Barker of Battle Excerpts

Tuesday 19th March 2013 Westminster Hall

[Chris Ruane]

Those affected are the most vulnerable and elderly pensioners, and, specifically in Wales, they are also those who are off grid but cannot get connected to gas because of topography, geology or geography. Dyserth is an off-grid town in my constituency. I was successful in getting gas connected to Bodelwyddan, because it was low-lying, but unsuccessful with Dyserth.

As the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) said, Wales is a net exporter of energy. North Wales, in particular, is playing its role in renewable energies, and my constituency will have the biggest array of offshore wind farms in the world. I switched on 30 turbines at North Hoyle some eight years ago, and when he was Secretary of State for Wales, my right hon. Friend the Member for Neath (Mr Hain) switched on another 30 turbines at Rhyl Flats. Behind those, we will have 200 turbines at Gwynt y Môr and the 2,000 wind turbines at the Rhiannon wind farm array. When I was switching on the North Hoyle turbines, the Prime Minister was describing them as “giant bird blenders”, at the same time as sticking a mini turbine on his own roof in Notting Hill. He was looking both ways.

North Wales has in Wrexham the Sharp solar panel factory, which is the biggest producer of solar panels in western Europe. Sharp made its future plans when Labour introduced the feed-in tariff. It cranked up production and got all the workers in place only for the current Government to say that they were going to scrap the tariff. We and companies such as Sharp need certainty.

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

Will the hon. Gentleman give way?

[Chris Ruane]

The Minister will have plenty of time to address all these issues later.

North Wales has Wylfa nuclear power station, which will hopefully be replaced shortly. In Dinorwig, we have Electric Mountain, which is a hydroelectric power centre with a lake at the top of the mountain. It can produce electricity in seconds to respond to demand at peak times, such as at the end of “Coronation Street”. My constituency has all these fantastic renewables. Looking to the future, we have the OpTIC centre, which is working on fusion power. In the rest of Wales, we have the possibility of the Severn barrage, which could create 5% of the UK’s electricity needs. There is the Irish interconnector from Dublin to Prestatyn in my constituency, which will allow energy to go from north Wales to Ireland. We also have non-renewables in Wales, as we have the gas terminal in Milford Haven that brings a great deal of gas to the UK, as well as the Connah’s Quay gas-fired power station in north Wales. We create energy in Wales, but we have the highest energy bills in the UK. It is the same with water: we capture water and export it, but we have the highest water bills in the UK.

With 420,000 families living in fuel poverty, Wales already has a higher proportion of households in fuel poverty than any region in England. The problem will only get worse unless the UK Government act. The Welsh Government are doing what they can to improve energy efficiency in Wales and they have an excellent record. However, on the fundamentals of fuel poverty—lower incomes and rising bills—it is the austerity and inaction of the Tory-led Government that are hitting Welsh households hard. The Chancellor has an opportunity in tomorrow’s Budget to ease the strain that his policies are putting on families in Wales. He should adopt Labour’s proposal to force energy companies to pool the power that they generate and make it available to any retailer, as well as the requirement that energy companies put all over-75s on their cheapest tariff. In Wales, that would mean more than 250,000 pensioners being up to £200 better off. That proposal could be part of a Budget that would be much fairer than last year’s, which everybody, including some Government Members, rebelled against, and which asked millions to pay more so that millionaires could pay less.

--- Later in debate ---

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

I will try to cover as many points as I can; but with barely 10 minutes left, I apologise to any Member, not least the hon. Member for Vale of Clwyd (Chris Ruane), whose points I do not cover in full. I congratulate him on calling this debate on fuel poverty in Wales. It will not come as a great surprise that I did not agree all with all his points, which were somewhat theatrical, but what was not theatrical was his real passion for the subject, which is shared by other Members from both sides of the House.

I assure the hon. Gentleman that the coalition shares his real determination to end the affront of fuel poverty in 21st-century Britain. The Government are only too aware of the real daily choices that confront too many people—not just in Wales, but across the country—in making decisions about keeping warm, particularly during the winter, and we take that issue extremely seriously. If we are to take it seriously, however, we need a little less party political point scoring.

If we are to address fuel poverty, we need a little less disingenuous analysis and to recognise that every year from 2004 to 2009, with only a slight pause in 2010—every year of the last Parliament—fuel poverty went up in Wales. I do not say that the last Government were entirely to blame, because there is in fact a direct link between the international wholesale gas price and fuel poverty. We can score petty points and selectively choose dates that suit our argument, but the fact is that a bigger issue is at play that has eluded successive Governments, so we need to come together with a much more ambitious, comprehensive and honest way to address the issue.

In Wales, there is a degree of complication in the sense that fuel poverty is largely a devolved issue. Although the Welsh definition of fuel poverty is the same as the English one—namely, 10% of household income, as the hon. Gentleman said—the issue is devolved and is not therefore subject to the Hills review that we commissioned to come up with an accurate definition that will aid our policy making. One reason why we have suffered with ineffectual policies in tackling fuel poverty over successive Governments is the lack of specificity—the fact that our efforts have not been targeted enough on those who really need our help.

I am very glad that my hon. Friend the Member for Brecon and Radnorshire (Roger Williams) recognised that cold weather payments have been made permanent, but he made some sensible and informed criticisms of how they are triggered, particularly to the detriment of some of his constituents. I am very happy to meet him and certainly to hear about his discussions with the Department for Work and Pensions.

The hon. Member for Llanelli (Nia Griffith) highlighted the plight of off-gas grid customers. She particularly raised concern about a liquefied petroleum gas monopoly, which is again a real issue for not only her constituents or Wales, but right across the country. Those who are off the gas grid in rural areas get a raw deal from the market, and we continue to consider that issue. In fact, the coalition Government asked the Office of Fair Trading to look into that very matter, which we are keeping under close scrutiny. She made important points about standing charges, about which we are also concerned. We are looking at their impact, particularly because we are now entering the most radical period of reform of the electricity markets since privatisation in the 1990s.

The hon. Member for Islwyn (Chris Evans) mentioned Mrs Thatcher and asked whether, at the point of privatisation, she anticipated that, far from creating greater competition, she would end up triggering a consolidation. In fact, Margaret Thatcher did not create that consolidation; the big six are the child of new Labour. When Tony Blair came to Downing street in 1997, there were 12 energy companies, and when the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) left Downing street, there were six. That massive consolidation occurred on Labour’s watch, and it now falls to this radical, reforming coalition to take the measures that successive Labour Energy Ministers shirked and to reform the energy system.

We are not only reforming the wholesale market, which will drive competition and open up the market to the new entrants who were squeezed out by Labour’s love-in with big business, but reforming tariffs for the consumer and simplifying bills, which are important consumer issues that will make a real difference.

Several colleagues quite rightly referred to tariffs, so I am pleased to say that, far from doing nothing, as the hon. Member for Vale of Clwyd suggested, the Government are acting on the Prime Minister’s pledge and not only acting on a substantial review, but introducing legislation this year to sweep away the bewildering thicket of tariffs. That will ensure that everyone in the country—the fuel poor, the pensioner, the low-income household—is put on the best, lowest appropriate tariff for them. People do not need a PhD in internetology to get a good deal out of their energy company. That will be welcomed, as will our simplification of bills.

My hon. Friend the Member for Montgomeryshire (Glyn Davies) spoke with genuine compassion and concern about the terrible iniquity of fuel poverty, particularly in Wales. We do not always see eye to eye on issues such as wind, but he is right to say that we must not turn our back on a responsible exploitation of gas, particularly if that delivers greater energy security and brings down or limits energy prices for consumers.

The hon. Member for Swansea East (Mrs James) was quite right to point out that there is a bewildering array of tariffs. She said that she had been on the same supplier every since she married, which I am sure was only yesterday, and I hope that, as a result of the Prime Minister’s reforms, she will be having a change—of energy supplier.

Our reforms will bring in real competition. There may be some adjustment to the lowest tariffs, but we know that the big six energy companies use them to tempt 10% or 15% of us to switch, funding those tariffs at the expense of the 85% of the population that do not. Having much greater simplicity and transparency will make it easier for new entrants, who do not have an existing big customer base to milk, to come into the market and give the big six a run for their money.

The feed-in tariff was mentioned, but I have to say that, far from being dead, the feed-in tariff—particularly for solar technology—is alive and kicking. We now have the extraordinary figure of nearly 1.5 GW of small-scale solar having been installed under the coalition, and we are approaching 2 GW of total solar capacity. In fact, solar represents a very good return and a very good deal. I appeal to Opposition Members to stop talking down the solar industry, to talk to their local suppliers and to get behind solar, because it offers a very good deal and great opportunities for the whole supply chain.

Across the board, the Government are taking action to help the fuel poor. The Hills review will help us to do so more accurately, but we are very proud that, taken in total, our policies mean that more money is being directed in a more targeted way at the fuel poor than at any time in our history. We have a lot more to do and there is absolutely no room for complacency, but we are determined to do more.