Fuel Poverty (Wales)

Luciana Berger Excerpts

Tuesday 19th March 2013 Westminster Hall

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

I congratulate my hon. Friend the Member for Vale of Clwyd (Chris Ruane) on not only securing the debate, but his excellent speech on behalf of his constituents and the people of Wales. I extend those congratulations to all hon. Members who have taken part in the debate. It is clear from the contributions of Members of all parties that fuel poverty is a serious problem in Wales and a subject on which many have campaigned on behalf of their constituents. We heard excellent contributions, and I want to use my time to pick up on a few of the themes that have emerged over the course of the past hour.

Despite falling by 1.75 million people under the previous Labour Government, it is clear that fuel poverty in Wales and across the UK is now increasing rapidly. The Hills fuel poverty review, which was commissioned by the Government, estimates that 8.5 million homes will be in fuel poverty by 2016, which is up from the 4.75 million homes that were in fuel poverty in 2010, according to the Department of Energy and Climate Change website. With the average energy bill going up by more than £300 since the coalition came to power and Government help to support the fuel-poor being cut, it is hardly surprising that fewer and fewer households can afford to keep warm.

My hon. Friend the Member for Swansea East (Mrs James) told us the cost of a dual fuel bill, but I am sorry to say that the figure is even worse. I read on Sunday that the average dual electricity and gas bill is now £1,410 a year, although I appreciate that many customers in Wales are off-grid. My hon. Friends the Members for Vale of Clwyd and for Llanelli (Nia Griffith) spoke about the challenges of switching, particularly for vulnerable customers and those who do not have a bank account, or who do not have access to the internet or know how to use it, particularly where there is a digital divide. My hon. Friend the Member for Islwyn (Chris Evans) spoken eloquently and in detail about the particular challenges that people with cancer face in paying their fuel bills.

Although there are many people who are struggling with the impact of rising prices, today’s debate has highlighted that the impact is felt nowhere more severely than in Wales. Many Members referred to the double whammy of rising bills and falling living standards that is hitting households in Wales right now. The hon. Member for Brecon and Radnorshire (Roger Williams) eloquently presented the issue: in 2013, it is a shocking indictment that people have to choose between eating and heating. We are the seventh most industrialised nation in the world, and the Government should urgently consider the fact that 250,000 people in our country have accessed emergency food aid.

As my hon. Friend the Member for Newport East (Jessica Morden) rightly pointed out, not only are Welsh consumers paying the highest energy prices of anyone in the UK, but they are hit disproportionately hard by the Government’s tax and benefit changes. We heard reference to the TUC report published last week, which showed a 7% reduction in household income in Wales since 2010. The effect is clear: higher fuel poverty in Wales. The 2012 DECC annual report on fuel poverty statistics shows that the proportion of households in fuel poverty across the UK is 18.6%, but the figure in Wales is 26.2%—more than a quarter of households. Consumer Focus estimates that about 420,000 households in Wales are in fuel poverty, which is more than a third of the population and a higher proportion than in any region of England.

We heard from my hon. Friend the Member for Islwyn about how the Welsh Labour Government are acting in response to the standard of living crisis. They are providing help for low-income and vulnerable households to reduce their energy bills and heat their homes through something that I learned about recently—the Nest scheme.

My hon. Friend the Member for Llanelli told us that many homes in Wales are not on mains gas, or require urgent improvements to their energy efficiency, and it is Labour in Wales that is investing £100 million over five years through the Nest scheme to improve the energy efficiency of about 4,000 eligible homes each year. It is estimated that the energy improvement packages will deliver annual benefits averaging £550 per household, and 6,700 of them have been installed since April 2011.

The Labour Government in Wales are helping the fuel poor and endeavouring to eradicate fuel poverty, and they have a target that they take very seriously. I am sorry to say that the same cannot be said for the coalition Government here in Westminster. Sadly, the Minister admitted when the Energy Bill was in Committee that we are not going to meet our targets to eradicate fuel poverty.

Unfortunately, as we have already heard, the Government have gutted support for the fuel-poor since coming to power. The Warm Front scheme, which helped more than 2 million households over 10 years to improve their heating and insulation, was scrapped, and lower-cost social tariffs have replaced the warm home discount, offering far less help to far fewer people. We have also seen the end of the carbon emissions reduction target scheme and the community energy saving programme, which together insulated more than 4.2 million lofts and 2.1 million cavity walls across the UK, lowering carbon emissions and reducing energy bills for millions. This is the first time since the 1970s that we do not have a Treasury-funded scheme to tackle fuel poverty across the UK, and according to analysis by National Energy Action, the net result of the Government’s cuts is that funding this year for the fuel-poor and for low-income and vulnerable households will be half what it was last year.

[Nia Griffith]

Does my hon. Friend share the very real concerns about the green deal? Even for better-off consumers, it does not provide a very attractive deal, and it does absolutely nothing for those who struggle to make ends meet.

--- Later in debate ---

[Luciana Berger]

I am about to get on to the green deal, and if my hon. Friend will wait just one moment, I will make several points about it.

When the Minister gets to his feet, I am sure that he will tell us in great detail what he believes his Government are doing through the introduction of the green deal and the ECO, after scrapping the three schemes I mentioned. Will those new schemes do anything to help the fuel-poor in Wales or anywhere else in the UK?

I ask the Minister to respond directly to the important points about cold weather payments that were made by the hon. Member for Brecon and Radnorshire. I also ask him to listen carefully to his hon. Friend the Member for Montgomeryshire (Glyn Davies), who raised a concern about new homes. We know that the green deal addresses the energy efficiency of existing homes, but the hon. Gentleman was keen to ensure that we have energy-efficient new homes. I hope that the Minister will tell us what he thinks the coalition Government should be doing, specifically regarding their commitment to zero-carbon homes. He will know that Opposition Members have many concerns about the Government’s intention to scrap the zero-carbon homes policy for new homes.

On existing homes and the green deal, I share many of the concerns raised by my hon. Friend the Member for Swansea East, and I want to respond to the intervention made by my hon. Friend the Member for Llanelli. According to the Government’s own predictions, the number of homes getting insulation under the green deal will fall this year. The Department’s impact assessment shows that the number of loft insulations will fall from 900,000 last year to just 150,000 this year—a decrease of 83%—while the number of cavity walls being insulated will also go down from about 700,000 last year to just 400,000 this year—a fall of 43%. We understand that the number of solid wall insulations will stay largely the same.

By the Government’s own admission, the way in which the green deal is designed means that most fuel-poor households will not benefit from it, because they are unlikely to meet the golden rule. They currently under-heat their homes, so a more energy-efficient property would ensure only that they lived in a warm home rather than a cold one. I heard the concerns of my hon. Friend the Member for Llanelli about the cost to households, and we have had many a discussion on the Floor of the House about the interest rate and whether the green deal will present a good deal for households.

Perhaps we can be more hopeful, however, about the ECO. After all, the Minister told me during DECC questions in May 2011 that the ECO

“is going to be much more effective than any measure that the Labour party introduced.”—[Official Report, 19 May 2011; Vol. 528, c. 478.]

However, according to the Government’s own impact assessment, by 2023—in 10 years’ time—the ECO will have reduced the number of homes in fuel poverty by only 250,000. That is fewer than the 300,000 households that were put into fuel poverty this winter alone, and a fraction of the millions of homes that were helped under the CERT programme that the ECO replaces. Again, the Minister’s claims to be supporting fuel-poor households simply do not stack up.

Perhaps the Minister will want to mention the £46 million boost for 132 local energy schemes that was announced by his Department on 15 January. If so, perhaps he will tell us why none of that money, which was designed to help to reduce fuel poverty and boost energy efficiency, was awarded to a project in Wales. That is further evidence of the double whammy I mentioned earlier and the Government’s lack of support for Wales.

I hope that the Minster will tell us why he is cutting support for the fuel-poor in Wales and around the country. Why have his Government halved support for the fuel-poor this year? Why did he reject Labour’s amendments to the Energy Act 2011 that would have targeted the ECO primarily at the fuel-poor? He will have heard many representations about how our energy market is broken, so why will he not accept our proposals for reform and introduce a pool, breaking open the market and ending the regional monopolies that lead to people in Wales paying more for their energy than people in any other part of the UK, despite Wales being a net exporter of energy? Why will he not introduce a real energy regulator with the power to stand up to the big energy giants and insist that energy companies automatically put the over-75s on to the cheapest tariff and help the most vulnerable and disadvantaged in our communities?