Warm Home Discount (Amendment) Regulations 2014

Lord Grantchester Excerpts

Monday 3rd March 2014 Grand Committee

[Lord McKenzie of Luton (Lab)]

My Lords, I am grateful to the Minister for his clear exposition of his amendment. Like him, we see it as an issue subject to significant challenge. As the noble Baroness, Lady Maddock, has just said, it is the poorest who sometimes pay comparatively more for their fuel; those who of us who are better off can do it with direct debits and take advantage of various schemes on offer.

I have a couple of questions. I understand the thrust of what the Minister was saying. I am sure that my noble friend Lord Grantchester will chip in and support me on this, as I think that he has done the background work. I am a little unclear as to why the numbers in the core group are falling short of what was originally anticipated. My understanding is that the access to that group is determined by pension credit—either the guaranteed credit or the savings credit. I think that there is an age threshold of 75 and above for either savings credit or the guaranteed credit; for those below that age, it is just the guaranteed credit. Part of my question is, if it is because fewer people have been able to access pension credit—we know that pension credit is one of the benefits with the lowest level of take-up—what are the Government doing to address that?

Specifically, in relation to the core group, the non-core group and the criteria going forward, the Government are introducing a Pensions Bill at the moment with the single-tier pension. One consequence of that Bill is that, from April 2016, pension credit or savings credit is being abolished. Therefore, people who retire on or after that date will not be entitled to the savings credit. Fewer will be entitled to the guarantee credit because the idea of the single state pension effectively is to have a pension which is at the current guaranteed pension credit level or slightly above it. The income of people will not be substantially different but they may be swapping state pension for what was a guarantee credit top-up.

Therefore, there are two categories of people; namely, those currently entitled to savings credit, which will disappear in April 2016, and those currently entitled to guarantee credit who will end up with broadly equivalent income but will get it via the single-tier pension and not via the guarantee credit. If those two avenues, which I understand are the access to the core group, are no longer available, what discussions have taken place? What focus has there been on any alternative route and access to the warm home discount scheme? I am sure that the Government have turned their mind to that issue, which seems to me to be vital. I would be interested to hear from the Minister quite what is proposed.

I am not quite sure that I grasped what the Minister said. I certainly will read the record. I am sure that my noble friend Lord Grantchester will ask how the carryover will work. If the net effect is for an extra £34 million to be available in support of this scheme, clearly we would support that. I am not quite sure how the cut-off points work and whether the discounts are dealt with on a financial-year basis; that is, they run until 31 March, notwithstanding the fact that someone’s account might span that date and, in a sense, run over any period. Doubtless the Minister will be able to enlighten us. Those are my questions but my noble friend may well wish to supplement them. I thank the Minister for his exposition of these proposals.

[Lord Grantchester (Lab)]

I apologise to the Committee for being caught out in my public transport arrangements this afternoon and I am very grateful to my noble friend Lord McKenzie for stepping in at the last minute. He is right that the core group has been reduced and in asking his questions. In terms of the year being averaged with the following year, as I understand it, the shortfall in any one year and the expenditure can be carried over into the non-core group. The Minister is nodding his head in confirmation. Obviously my noble friend has asked the pertinent question of what is being done to make sure that the right people are targeted and helped in order to receive the money that they so desperately need to alleviate fuel poverty.

[Lord Gardiner of Kimble]

My Lords, I thank your Lordships for their comments. I had personal sympathy with my noble friend Lady Maddock when she spoke about simplification. I had to read some of this brief rather more than once or twice and the point is very much taken on board. This spring, we will be consulting on the future of the scheme, part of which is to see whether we can simplify it in a way that is perhaps more readily understandable and user-friendly.

The whole basis of this part of what we are seeking to do is to ensure that the most vulnerable in our society are protected as well as possible, given rising prices and, as I have explained, homes that are not as efficient as we would like. I know that my noble friend Lady Maddock has been a fierce champion of fuel poverty issues, and rightly so. As I said, that is part of what we are seeking to do. Certainly, the whole way in which this amendment is designed and why it is important is because it provides another £34 million for that non-core spending that will help families, which is so important.