Fuel Poverty

Michael Shanks Excerpts

Wednesday 6th November 2024 Westminster Hall

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)]

I thank all right hon. and hon. Members for participating in the debate. I particularly thank the right hon. Member for Orkney and Shetland (Mr Carmichael) for securing the debate and for his commitment on this issue in debates over many years. I know that it is a considerable issue in his constituency, where I think 31% of households are in fuel poverty, and he is right to raise it in this House. I always appreciate conversations with him, including our recent conversations on many of the topics that have been raised today.

I agree on the importance of this debate on tackling fuel poverty, although I should say at the outset that fuel poverty is devolved across the UK. Certain things that I will speak about relate to the UK Government’s responsibility for fuel poverty, which focuses on England. In the Budget last week, a considerable amount was assigned to the devolved Administrations, including one of the biggest devolved settlements for the Scottish Government in many years. I am sure that the right hon. Gentleman will raise these issues with colleagues in the Scottish Parliament to get much-needed funding to projects in Scotland as well.

On devolution, it is also important to say that we measure fuel poverty in very different ways across the country, with different metrics and targets for how we identify it. In Scotland, the metric for fuel poverty is the same as that used in England to measure energy affordability. It includes deeming a household fuel-poor if it has to spend a certain proportion of its income after housing costs on energy, which is a slightly different figure from the one used in Scotland.

Nevertheless, much of what we have heard today is true across all parts of the UK. Many hon. Members made the point that the choice between heating their home and feeding their family or paying other bills is a stark one for any family. In a country as wealthy as ours, that should not be a choice that families have to make.

I welcome the point made by the shadow Minister and others that we can all work together to move forward on the issue. However, we need to take more action than has been taken in the past 14 years. That is why our manifesto committed to slashing fuel poverty and delivering our warm homes plan. We have already taken the first steps in delivering that. In the Budget last week, the Chancellor committed £1.8 billion to support fuel poverty schemes, helping over 225,000 households to reduce their energy bills by over £200. We have announced that we will consult this year on increasing the minimum energy standards in the domestic private rented sector: 35% of all those in fuel poverty in England are in the private rented sector, so it is vital that we provide as much support as we can.

I will pick up on several points raised during the debate, but the critical point was about trying to bring all the different policies together into a cohesive fuel poverty strategy. That is indeed what the Government have committed to publishing in due course, to ensure not only that we have a clear focus on tackling fuel poverty but that the whole Government are aligned on delivery. That is the approach that the new Government have taken on a range of issues; in my Department that includes clean power by 2030. We making sure that all Ministers, wherever they are—in whichever Department and with whichever responsibility—come together to make the situation better.

I want to provide a little bit of context. I repeat that much of fuel poverty policy is devolved. In 2023, an estimated 13% of households—just over 3 million—were in fuel poverty in England, under the metric that is used here. That remains effectively unchanged since 2022. The Committee on Fuel Poverty, which advises on the effectiveness of policies and scrutinises them in England, stated that progress towards tackling fuel poverty has effectively stalled. In England, the target is to ensure that as many fuel-poor homes as possible achieve the minimum energy efficiency rating of band C by 2030, but 46% of all low-income households in England were still living in a property with a fuel poverty efficiency rating of band D or lower. That shows the sheer amount of work we have to do on the issue.

We are therefore working on a number of policies. In reflecting on the point made by the hon. Member for Mid Dorset and North Poole (Vikki Slade), I accept that there is an urgency to moving forward on all these issues. We have inherited quite a lot of issues that require urgent action. I ask for just a little patience, but I absolutely recognise the point that for someone living in fuel poverty, the impending winter is a crisis. The Government are therefore moving as quickly as possible on the issue.

The warm homes plan, which we announced in our manifesto and on which we are moving forward, is about transforming homes right across the country by making them cheaper and making energy clean to run, rolling out upgrades from new insulation to solar and heat pumps. We will partner with local and combined authorities, and the devolved Governments where possible, to roll out the plan. That was in the Budget speech last week, in which an initial £3.4 billion was announced towards heat decarbonisation and household energy efficiency over the next three years. That includes £1.8 billion to support fuel poverty schemes, which, as I said, will help more than 225,000 homes.

The right hon. Member for Orkney and Shetland raised several points. He rightly notes that the radio teleswitch service situation will be a worry to many people, particularly in rural communities. As he said, a roundtable was held, which was important and brought together the key stakeholders. Ofgem has updated its action plan to make sure that we are pushing forward and in particular that we are putting pressure on the energy companies responsible for delivery, to make sure that the upgrades are made and that targets are in place, including some key milestones that they must meet early next year.

Several hon. Members mentioned community benefits. This is a debate that we have had in this Chamber and across the House before. It is extremely important that if communities are hosting energy infrastructure such as the Viking wind farm in the right hon. Gentleman’s constituency, which I visited not long ago, there should be some benefit. We certainly do not want the communities that host vital energy infrastructure to be those that are most likely to be in fuel poverty. We are therefore doing a lot of work, building on the previous Government’s consultations, on what community benefits might look like. We want to make sure that communities and individuals get a genuine benefit, because some community benefits do not currently deliver quite the change that we would like.

[Mr MacDonald]

Will the Minister allow humble servants such as myself to get involved in that? I have spent several years working with the Highland council and others on community benefits, and I would appreciate a meeting.

[Michael Shanks]

I am always willing to take help from any Member. If the hon. Gentleman can take some of this work off my plate, I will be very happy to work with him. Of course, we will first have to work out the answer to the question of where God comes from, but if we can settle on the fact that it is self-evidently Rutherglen in the central belt, I will be happy to work with the hon. Gentleman. That spoils the joke I was going to make about his comparison of temperatures, which is that seeing him wear a very woolly jumper this morning in London made me wonder what he wears in Skye, but that is for another debate.

Genuinely, though, we want to have an open and collaborative approach, and we want to make this work. The consultation that the previous Government carried out and the feedback we have from a number of partners show that there are really good examples of community benefits working well, along with a lot of examples where they are not working well. If we could build on that approach together, I would very much appreciate it.

While we are discussing the hon. Gentleman, he made a very good point about remembering the different types of fuel that households use, and the real issue for off-grid homes—particularly in the north of Scotland, but right across the UK. Again, fuel poverty is devolved, so some of those questions are for the Scottish Government to answer—I know that the questions will be put to them—but we are aware that in England, for which the Department for Energy Security and Net Zero is responsible, 12% of rural households are in fuel poverty, and those are the ones with the largest fuel poverty gap. Tackling those particular challenges in the rural context is therefore really important.

[Jim Shannon]

rose—

[Michael Shanks]

Ah! I was just going to refer to the hon. Member.

[Jim Shannon]

I am very much listening to the Minister, who was perhaps about to tell us what will happen in Northern Ireland, where 62% of households are dependent on oil. In comparison, the proportion for England—I say this gracefully, Sir Roger—is only 4%. The greater emphasis on Northern Ireland will therefore fall upon us. The Minister says that this is a devolved matter and that money has been set aside by Labour to help, but the differential is massive and cannot be ignored.

[Michael Shanks]

The hon. Gentleman, as always, makes a very good point, although I noticed that he called the shadow Minister his friend but not me. But, over time, I think we will build on that and—

[Andrew Bowie]

Aspire to that.

[Michael Shanks]

I aspire to that—quite. The hon. Member for Strangford (Jim Shannon) made a number of important points, and I have to confess that I was not aware of the statistic that he cited. That puts the difference into stark contrast, so I absolutely take the point.

The hon. Gentleman spoke earlier about engaging with the Northern Irish Executive. I have met both Ministers with responsibility for different parts of the energy policy—most recently, in fact, in the inter-ministerial working group across all the devolved nations. One of the key topics that we discussed was decarbonisation, particularly of such households, so we absolutely are taking that issue forward.

I am conscious of time, Sir Roger, so I will just pick up on a couple of other points that hon. Members raised. The hon. Member for Wokingham (Clive Jones) tempted me to be drawn into Beveridge’s “five giants”. Actually, I think that is an important statement about where this Government have come in, because it feels to me like want, disease, ignorance, squalor and idleness are yet again the five giants that we have to tackle as a country, and we are tackling them all as quickly as we can. I take his point, but it brings into stark contrast the fact that we have come in with some really tough decisions to make. There are pressing needs in the NHS, the education system, housing and energy, and we are doing what we can to improve all those. The Budget last week was about fixing the foundations and investing in our public services again. We can undoubtedly do more, but we are moving forward as quickly as we can.

I want to touch on consumer protection, which a number of Members have raised, and the point of the regulator. The ministerial team in the Department have had a number of meetings with Ofgem over a variety of issues, but there is no doubt—Ofgem shares this view—that suppliers could do much more to protect customers and provide them with a better quality of service. We are therefore looking at how we strengthen the regulator—a consultation is under way—so that it can hold companies to account for wrongdoing, require higher performance standards and ensure that there are much better levels of compensation when providers fail.

Last year, Ofgem introduced much more stringent rules around the involuntary installation of prepayment meters, an issue that I raised in one of my first questions after I was elected to Parliament. That was a shocking situation, but much more stringent requirements are now in place. We continue to monitor the situation to see whether much more is required.

I thank all hon. Members who have participated in the debate. There is agreement across all parties that this issue is extremely important. Progress has stalled in recent years, and we now need to make significant advances. The Government are committed to slashing fuel poverty. We will do that through the fuel poverty strategy for England, and also, we will look across the whole of the UK at what we can do with our energy system to reduce bills and provide more secure energy for everyone, and to improve home standards. We will do that by protecting low-income and vulnerable consumers and by trying to raise households out of poverty across the board. Our strategy on child poverty, the raising of the minimum wage and other factors combine to support households struggling in fuel poverty.

We will no doubt return to this topic again. We do not pretend to have all the answers, so we are open to any ideas from hon. Members right across the House. Together, we can tackle this issue, but it needs concerted effort and investment, and this Government have started that.