Winter Fuel Allowance Payments

Mike Weir Excerpts

Wednesday 27th November 2013 Commons Chamber

[Mr Mike Weir (Angus) (SNP)]

I beg to move,

That leave be given to bring in a Bill to provide for the early payment of winter fuel allowance to eligible persons whose residences are not connected to the mains gas grid and whose principal source of fuel is home fuel oil, liquid petroleum gas or propane gas; and for connected purposes.

This is an issue that I have raised on numerous occasions, during the passage of energy Bills, in debate and by means of a private Member’s Bill, and it has had support across the House on other occasions.

I do not intend to speak on the general problem of fuel poverty, the details of which should be well known by Members in all parts of the House. I merely note that the percentage of households off the gas grid that are in fuel poverty is more than twice as high as those that are on the gas grid. I acknowledge that the present Government have taken some action in respect of off-gas grid consumers, including the establishment of the ministerial round table on heating oil and liquefied petroleum gas, which led to the Federation of Petroleum Suppliers’ customer charter.

My proposal will not end fuel poverty for off-grid consumers; nor does it seek to extend winter fuel payments to additional groups or to tread on the contentious subject of means-testing which concerns some Members. It does not attempt to tackle the many issues that surround the topic of off-grid energy, but it is tightly drawn to give some relief to a particularly vulnerable sector—those pensioners who are off the gas grid. I have many of these pensioners in my constituency and they face a number of particular problems.

Like all forms of energy, the price of home fuel oil has rocketed in recent years, but there is clear evidence that the price of home fuel oil rises in the early autumn and stays high over the winter period. This year it has been somewhat skewed by the long cold spring, with prices staying stubbornly high over the spring before falling in the summer, but they are now rising again. The rise in prices affects all areas of the United Kingdom over the winter months. It is important to note that this is as much an issue for the rural areas of England, Wales and particularly Northern Ireland as it is for the rural areas of Scotland.

The House of Commons Library note that was produced for my Bill in the previous Session states:

“The average costs of heating and providing hot water for a typical three bedroom house with LPG have been estimated at around £2,300 per year (based on April 2012 prices with a conventional boiler), heating oil is thought to cost around £1,700 and gas around £1,200.”

The figures may now have changed but the general point stands: the cost of heating an average home with propane or home fuel oil is higher than heating with mains gas. Not only that, but the costs are also rising much more sharply. It is also important to note that the main use of LPG and home fuel oil is for heating, so although those homes generally have electricity, they still face greater costs.

Traditionally the Government have called for an extension of the mains gas grid as one way of tackling the problem, but realistically such schemes will help only those homes where there is a gas mains nearby, although even then the costs can be very substantial. I have had cases in my constituency in urban areas where the quoted cost of connecting to the grid is thousands of pounds, even when the mains are relatively close by. In many rural and island areas, where the cost of connection would be enormous, there is absolutely no chance of that being done.

The Government’s advice to switch does not work in a market where there is often a practical local monopoly on supplies. The problem in many rural areas is exacerbated by the fact that much of the housing is old and of a construction that makes it very difficult to install energy-saving measures, such as cavity wall insulation.

Of course, these households will receive the same winter fuel allowances as pensioners on the gas grid, but the crucial difference is how the energy is delivered. Those who are on the gas grid will receive their winter fuel bill around the time that the winter fuel allowance is generally paid, and it therefore works well for them. Indeed, in the explanatory notes to the regulations that last amended the benefit, the previous Government said specifically:

“They are paid in a lump sum each winter to ensure that money is available when fuel bills arrive.”

This is clearly not the case for those off the gas grid. They face the difficulty that they have to pay for their LPG or home fuel oil up front at the beginning of winter, well before they have the benefit of the winter fuel allowance. Many find it difficult to do so and may not fill up the tank completely, leaving them having to do so, if they can afford it, in the depths of winter, which brings problems of its own in getting a supply through in bad weather. That has been a serious problem in many rural areas in past winters.

The price of fuel is rising substantially as winter approaches, and even those suppliers who offer a fixed winter price will do so at a price higher than the summer price. My Bill suggests how we might tackle this problem. The current winter fuel allowances are paid as a result of regulations that specify a date by which pensioners must apply. It is worth noting that once they are on the system, they do not have to apply every year. Clause 1 seeks to vary the regulation to bring forward for those off the gas grid the qualifying date from late September to late July. Clause 2 seeks to bring forward the payment date for those off-gas grid to no later that 30 September to allow them to buy a complete tank of gas prior to the winter.

These proposals would ensure that money is available when fuel bills arrive, as the regulations put it. I have debated this with the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb) and, with the greatest respect to the hon. Gentleman, it seems to me that the objections to the proposal are bureaucratic excuses. The first objection is that the payment would have to be paid to everyone earlier or other claimants may feel aggrieved at being denied early access. The whole point, however, is to tackle the problem of having to pay for energy up front. Other claimants will have access to the allowance when their quarterly bills become due. I reiterate the point made in the memo to the regulations that the payment was meant to be available when the bill arrives: for those who pay up front, the most appropriate way to achieve parity would be to make payment as close as possible to the time of the outlay, which is precisely what I am attempting to do.

The second objection is that the Department would need to create a separate category of people who are off-grid, and that the situation of individuals could change from year to year. I recall the Minister giving us a rundown of his own situation—by buying a house, he subsequently became connected to the grid. That objection seems ludicrous, as the number of new connections would be low, and unlikely to be a major problem. As Members know, it is not unheard of for the Department to insist on claimants of other benefits notifying a change in circumstances, so I do not see the problem. A low number of claimants are likely to be affected in any event.

Moving the date forward could result in some people losing out on the payment in the initial year. I accept that that could be a problem, but it is hardly insurmountable. As I said, it would be a problem only in the first year of each claim, since once applicants are on the system they do not have to apply each year but receive an allowance automatically. It would be possible, for example, to allow off-grid consumers who miss the earlier date to apply at the later date but be transferred to the earlier date for year 2, so avoiding any difficulties. If, on the other hand, the Government have real problems with an earlier date, we could keep the September date and simply allow payment to off-grid consumers at an earlier date from year 2.

There is nothing revolutionary about this proposal, which simply seeks a very minor change to begin to address the problems of off-gas-grid consumers by targeting a particularly vulnerable group. With political will, none of the problems is insurmountable. I hope that the House will support this Bill and allow it to proceed.

Question put and agreed to.

Ordered,

That Mr Mike Weir, Dr Eilidh Whiteford, Hywel Williams, Angus Robertson, Mr Elfyn Llwyd, Sarah Newton, Mr Nigel Dodds, Jonathan Edwards, Ms Margaret Ritchie and Mr Angus Brendan MacNeil present the Bill.

Mr Mike Weir accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 28 February and to be printed (Bill 135).