Fuel Poverty and Energy Efficiency

Luciana Berger Excerpts

Wednesday 16th January 2013 Commons Chamber

[Mike Crockart (Edinburgh West) (LD)]

I will start on a positive note. The motion states that

“the most sustainable way for households to cut their energy bills is to make their homes more energy efficient”.

I could not agree more, as I said in my speech on Second Reading of the Energy Bill. To recap:

“Energy saving is the quickest and cheapest way to cut carbon emissions and so should be at the heart of…reform.”—[Official Report, 19 December 2012; Vol. 555, c. 930.]

However, I struggle with much of the rest of the motion, as Labour’s record on fuel poverty was appalling. Between 2004 and 2009, the number of households in fuel poverty rose from 2 million to 5.5 million, with the burden falling disproportionately on vulnerable households. If we accept the shadow Secretary of State’s logic, this was entirely—or at least mainly—down to choices made by the then Government. Under Labour, fuel poverty among vulnerable households trebled in just six years, with an increase of 500,000 from 2006 to 2007, just before the financial crash. In 2008, the Fuel Poverty Advisory Group went as far as to say:

“The Government appears to have given up on the legally binding 2010 Fuel Poverty Target”.

I am prepared to admit that a lot of that was due to wholesale energy prices, and that is what one does in a grown-up debate when one is searching for solutions and consensus. But it is a pity that Labour Front Benchers do not seem capable of that.

In Government, we are introducing measures to help millions of low-income and vulnerable households to meet the cost of heating their homes through the energy company obligation and the warm home discount scheme. There are winter fuel payments for more than 12.6 million pensioners in 9 million households and additional cold weather payments. We have welcomed the report by Professor John Hills that suggested a move away from the current definition of fuel poverty. The review is right to say that we should direct support to those who need it most rather than merely those with very large, difficult-to-heat houses, regardless of their income. I am pleased to say that we are not taking, and will not take, our lead on the issue from Labour, because this Government are committed to sustainable and affordable energy reform that will help people today while protecting our planet, our jobs and the economy in future.

In the medium to longer term, unfortunately, pressures on wholesale energy prices will probably mean that household energy bills go up. However, we have introduced new measures to ensure that energy companies are up front with people about the tariff they are on, and we are making suppliers more accountable to consumers by strengthening Ofgem’s role. Let us be clear: wholesale energy prices are a reason for increasing our investment in renewables to increase our energy security and help to insulate this country from the unpredictable wholesale market instead of running headlong towards the mirage of cheap shale gas. These reforms are radical and positive, and they will ensure that people get the best value for money.

Measures announced by the Government to ensure that consumers get the best deals on their energy prices reflect our determination to tackle rising energy bills. This is not just for fuel-poor households. Which? has stated that 82% of consumers list the cost of energy and fuel as a top financial concern, and it is even worse for those who are off-grid. We are therefore encouraging increased competition in the sector, and we have also made sure that providers are up front with consumers about whether they are on the cheapest tariff. Only yesterday it was announced that the £5 million made available by this Government to set up collective switching schemes has been awarded to 31 successful bids. One of those is Changeworks, which has formed a group of several Scottish local authorities, including Edinburgh, as well as Kingdom housing association. I welcome the £414,000 that they have received to assist with that.

As I have said here before, the best way for most consumers to reduce the impact of rising bills is through energy efficiency measures. The green deal will have a positive impact on the energy efficiency of households. As the report of the Fuel Poverty Advisory Group states, it provides

“an opportunity to establish an effective framework that can deliver against the twin objectives of eradicating fuel poverty and significantly reducing carbon emissions”.

Time is beating me.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

Will the hon. Gentleman give way?

[Mike Crockart]

No, I will not, because—[Interruption.] If the hon. Lady listens for a moment, she will learn that I have missed out on the opportunity to speak at the end of debates in the past because other hon. Members have taken interventions, so I will not do that.

Finally, the Fuel Poverty Advisory Group notes a lack of public knowledge and awareness of Government schemes aimed at improving energy efficiency. That is certainly a concern and I am sure that the Minister is taking it seriously. As local Members, however, we need to assume our own responsibility, so I encourage each and every Member to set an example by becoming an early adopter and having our own houses assessed and improved under the green deal.

--- Later in debate ---

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

This debate has been lively and informed, with eloquent and powerful contributions from those on both sides of the House. It has shown once again that we have an energy Department that is in chaos and unable to deliver its policies, and it is the public who are paying the price in higher energy bills.

As many hon. Friends have said, particularly my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe), Ministers cannot hide the shambolic management of the Warm Front scheme. Over the past two years, the scheme’s budget has been cut by two thirds, and the number of people getting help from it has fallen from nearly 250,000 homes per year three years ago to fewer than 22,000 households so far being selected for help this year. I listened carefully to the speech by the hon. Member for Bedford (Richard Fuller), but the situation is contrary to what we have heard from Government Members. The criteria for people who want to apply for Warm Front explicitly say that in order to qualify people must have a poorly insulated home or not have a working central heating system, and, further, must have a household income of £15,860 or less. I strongly believe that when the scheme was created back in 2000 it was a good scheme. In fact, it is important to note that in the statement that was released by the Department today the Minister of State, the right hon. Member for Bexhill and Battle (Gregory Barker), said:

“The Warm Front scheme has been an important policy in tackling fuel poverty among private sector households”.

Under this Government, the amount of support that each household is receiving has fallen and there is a massive backlog of people who want help but cannot get it. To add insult to injury, in addition to the £50 million of underspend last year there is £50.6 million this year. I have listened carefully to representations from both Ministers. I have also had time to go through the press statement that was released back in October, which makes no mention of the fact that the pot of money for local authorities was going to be taken away from the Warm Front scheme. Why did Ministers not announce that at the time? Was it part of a deliberate strategy to undermine Warm Front so that people did not take it up? I listened to what the Minister said a moment ago, but there is not an exact match in relation to the underspend. Further to that, thousands of people this winter are suffering with high heating bills.

My right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr Clarke) reminded us of the price that people up and down the country are paying for this incompetence, with huge increases in the price of gas and electricity. Energy bills have risen by almost £300 since this Government came to power, and the average fuel bill now stands at a record £1,400. I have spoken to many people in my constituency who cannot afford to turn on their heating even on the coldest of days. Those who have least are being hit the hardest. My hon. Friends the Members for Stoke-on-Trent North (Joan Walley) and for Islwyn (Chris Evans) mentioned the rise in fuel poverty in our country. As the hon. Member for Arfon (Hywel Williams) and other hon. Members said, our constituents are having to make the choice between heating their homes and putting food on the table. The Government’s own fuel poverty advisers are warning them that this winter 300,000 more households will go into fuel poverty.

In his opening remarks, the Secretary of State referred to the energy company obligation, but he did not say that according to his own impact assessment the Government expect to see by 2023—10 years’ time—a reduction of 250,000 in the number of homes in fuel poverty. To have a reduction of only 250,000 in 10 years is a very sad state of affairs, and it is less than the increase in fuel poverty that will occur this winter.

My hon. Friends the Members for Llanelli (Nia Griffith) and for Rotherham (Sarah Champion) rightly highlighted the problems that their constituents and people right across our country are facing and suffering because of the increase in direct debit payments. This is against the background of the startling fact from Save the Children and YouGov that 71% of parents on the lowest incomes are worried about their energy bills pushing them into debt. My hon. Friend the Member for Birmingham, Selly Oak pointed out that nearly 1 million people are in debt to their energy company; that is information from Consumer Focus.

As my right hon. Friend the Member for Don Valley (Caroline Flint) highlighted in her opening speech, the Government’s mismanagement of the Warm Front scheme is not the only thing that we are concerned about. A number of Members from all parties have talked about the green deal. Ministers have promised us this flagship scheme, but we are worried that what they have delivered so far is more like a submarine, because it is so far below the radar that polling shows that most people have not even heard of it, let alone want to take it up. [Interruption.] The Minister of State, Department of Energy and Climate Change, the right hon. Member for Bexhill and Battle says from a sedentary position that the scheme has not started, which is in stark contrast to what the Secretary of State told Building magazine, namely that the green deal had started on 1 October.

As has been said many times, all parties support the principles behind the green deal. The former Energy Minister, the hon. Member for Wealden (Charles Hendry) intervened earlier and made a point about an amendment tabled to the 2010 Energy Bill. The reason why that amendment was not accepted is that Labour was already running a pay-as-you-save energy efficiency scheme—a green deal pilot was already running when the amendment was tabled.

We do not believe that expecting people to pay £100 just to get an assessment, or to pay double the up-front cost of the measures because of high interest rate payments, will inspire the millions of people who need to take up the green deal scheme in order urgently to improve the energy efficiency of properties and homes up and down the country. We have some of the most energy-inefficient properties in Europe.

The hon. Member for Bedford asked about practical solutions. I would ask him to refer to our motion, which makes some practical suggestions. Likewise, we highlighted all our concerns about the green deal when we discussed it during the Committee stage of the Energy Bill, but we are still talking about them a year and a half down the line.

The hon. Members for St Albans (Mrs Main), for Edinburgh West (Mike Crockart) and for Harrogate and Knaresborough (Andrew Jones) talked in positive terms about the green deal, but I would ask the hon. Member for Edinburgh West, who talked about a report by the Fuel Poverty Advisory Group, to look at the group’s most recent report. It raises serious concerns that we will all be subsidising expensive works for people who can afford to insulate their homes, rather than distributing money to people who cannot afford to heat their homes in the first place. In the FPAG’s evidence to the Environmental Audit Committee, it notes that it

“has consistently stated that the Green Deal per se will not benefit the fuel poor.”

I was disappointed that the Secretary of State did not respond to a serious point raised by my right hon. Friend the Member for Don Valley, so I shall raise it again. My hon. Friend the Member for Edinburgh North and Leith (Mark Lazarowicz) was right to highlight the tragic figures released today by the Insulation Industry Forum, which show that, so far, 1,782 jobs have been lost in the insulation sector—800 of them in the past two weeks—and that a further 1,100 insulation workers have been put on notice of redundancy. I urge the Minister to respond to that, because those are people up and down the country who are now not in work and struggling to get by.

Ministers cannot say that they were not warned. Last year the Association for the Conservation of Energy projected that there would be up to 16,000 job losses in the sector if the Government did not seriously address the issue of the transition from previous schemes to the green deal and the energy company obligation. We know that in the run-up to Christmas more than 34,000 insulation works were cancelled as a result of energy companies withdrawing their funding ahead of the CERT and CESP deadline. We also know that a further 27,284 installations have been put on hold because new funding is not yet available. If Ministers had acted to put in place a smooth transition from CERT and CESP to the green deal and ECO, this work could then have gone ahead and job losses could have been avoided.

It is not as if there is no work that could be done now. I refer Ministers to a report on page 2 of The Independent today. Despite Ministers’ claims to the contrary, DECC’s own estimates show that at least 8 million homes in the UK still need loft insulation and 5.8 million need cavity wall insulation. Is it not time that Ministers got around the table with the industry and sorted out this mess?

It is clear from this afternoon’s debate that Ministers have taken their eyes off the ball. The motion proposes simple things that the Government could do today to clear up the mess and fix the green deal by taking tough action to force the energy companies to keep their obligations and extending Warm Front so that help is given to those who need it most during the current cold snap. I urge all Members on both sides to support the motion and I commend it to the House.