Cost of Living: Energy and Housing

Mike Weir Excerpts

Thursday 5th June 2014 Commons Chamber

[Caroline Flint]

I absolutely agree with my hon. Friend. I commend the fantastic work he is doing with rural communities the length and breadth of Britain and thank him for the support he has given my team in addressing some of the issues facing households who are off the grid. As he says, for those off the grid this is an equally disappointing Queen’s Speech. There is nothing on bringing forward winter fuel payments, which would allow people to buy their heating oil when it is cheaper, or on bringing those who are off-grid under the energy regulator so that they can enjoy some of the protections that everybody else would enjoy. Labour would have put both those measures in a Queen’s Speech.

[Mr Mike Weir (Angus) (SNP)]

I am pleased that Labour has now supported early winter fuel payments, for which I have been pushing for some time. Does the right hon. Lady recognise that one of the other problems is that the energy company obligation does not include off-grid boilers? Would Labour be prepared to push forward a measure on that? [Interruption.]

[Caroline Flint]

I am hearing from different parts of the House that the ECO does and does not allow it. Clearly, we must have an energy efficiency and insulation programme that meets the needs of various communities in the different circumstances in which they find themselves. With my hon. Friend the Member for Ogmore (Huw Irranca-Davies), I am working through a number of proposals and listening to communities about what would work. I am also listening to those working in the sector, as well as those who supply oil and gas and those who want to see what they can do to help more with energy and insulation. We are looking into this in greater detail.

That leads me to my next point. In the long term, the most sustainable way to cut people’s energy bills is to improve the energy efficiency and insulation of our housing stock. Despite the progress made under the previous Government, who helped more than 2 million households through Warm Front and millions more through the decent homes programme, Britain still has some of the least energy-efficient housing stock anywhere in Europe. Some 80% of our stock today will still be around in 2050, and this Government’s green deal, which I remind the House was billed as the biggest home improvements programme since world war two, has been an abject failure. Just 2,500 households have signed up for a green deal package. To put that figure in context, it is only slightly more than the number of Liberal Democrat councillors left after the party’s collapse in the local elections a couple of weeks ago, including on Kingston council in the Secretary of State’s area.

We have a big enough challenge bringing our existing stock up to scratch without having to worry about retrofitting the housing we are building now. That is why, when in government, Labour set a target that every new home built in Britain would have to be built to, or as near as possible to, a zero-carbon standard by 2016. In this Queen’s Speech, however, we have the bizarre but not uncommon spectacle of the Liberal Democrats trying to claim credit for a policy that was actually introduced seven years ago and which they have undermined. That is exactly what they are doing: taking our zero-carbon homes policy, exempting developments of up to 50 homes, watering down the standards for larger developers, and then wanting credit for it. Whatever the short-term benefits, in the long term there is a real risk that these decisions will leave consumers stuck with homes that are not meeting the high standards of energy efficiency. Given the scale of the challenge we already face, that is a problem we could well afford to do without.

On housing more generally, the country is suffering from the biggest housing crisis in a generation: house building is at its lowest peacetime level since the 1920s; affordable home starts are down by a third since the election; and home ownership is falling further and further out of reach for young families. As a result, more and more people are having to rely on renting a home in the private sector, but the cost of renting has gone up, rising more than twice as fast as wages since the election, despite the prediction of the former Housing Minister and, if reports are to be believed, the soon-to-be former chair of the Conservative party, the right hon. Member for Welwyn Hatfield (Grant Shapps), who reassured us that rents would not go up. But they have gone up, and renters are getting a bad deal and are being forced to pay all kinds of unfair charges and fees.

Nothing is being done to provide the certainties that families need to plan for their future. What does this Queen’s speech have to offer them? Nothing. All we have is Help to Buy. Of course, any help for first-time buyers struggling to get on the property ladder is welcome, but why is a scheme that is meant to help first-time buyers allowing for taxpayer-based mortgages for homes worth up to £600,000? How many first-time buyers can afford homes worth £600,000? As more and more voices are warning, unless rising demand for housing is matched with rising supply, house prices will inflate even further, making home ownership even less affordable for those on lower-middle incomes.

As my right hon. Friend the Member for Leeds Central (Hilary Benn) will set out in his speech later, if this were Labour’s Queen’s Speech, we know what we would do to get Britain building again, help people get on the housing ladder and give people who rent more security. We would get 200,000 homes built a year by 2020. We would unlock the supply of new homes by giving local authorities “use it or lose it” powers and boost the role of small house builders. We would legislate to make longer-term tenancies with predictable rents the norm and properly regulate letting agencies.

Like energy, water is another essential to life, but more than 2 million households are forced to spend more than 5% of their income on their water bills. At the moment, the water companies can choose whether or not to offer a social tariff to those customers who struggle the most. As a result, only three companies do so, and fewer than 25,000 households receive any help at all. That is just not good enough. If this were our Queen’s Speech, my hon. Friend the Member for Garston and Halewood (Maria Eagle) would use powers to establish a national affordability scheme, funded by the water companies, to ensure that help gets to those who need it and to put an end to the current postcode lottery.

As well as dealing with the problems that hold back our country, we should be making big, long-term changes to our economy so that we can grow and earn our way to a higher standard of living. Work should pay and people should always be better off in work than out of it. One reason it does not always feel like that is the rising cost of child care. As my hon. Friend the Member for Manchester Central (Lucy Powell) has highlighted, since the election the cost of a nursery place has risen five times faster than pay. There are 578 fewer Sure Start centres, and 35,000 fewer child care places. However, the Government’s new child care allowance will not even start until well after the next election. If this was our Queen’s Speech, we would expand free child care from 15 to 25 hours for working parents of three and four-year-olds to make work pay, and we would create a legal guarantee of access to wraparound child care for primary school children through their school from 8 am to 6 pm.

As my hon. Friends the Members for Streatham (Mr Umunna) and for Leeds West (Rachel Reeves) will set out next week, there is so much more that the Government could and should have done in the Queen’s Speech. Let us take zero-hours contracts. We welcome the fact that the Government have adopted our policy of banning exclusivity clauses, but that is only one part of the problem. What about people working regular hours for month after month, or even for years, who are still on zero-hours contracts? This Queen’s Speech does not help them. What about strengthening the national minimum wage, tax breaks for firms that boost pay through the living wage, job guarantees for the young and long-term unemployed, or help for small businesses by cutting business rates and reforming the banks? That is the sort of Queen’s Speech that our country needs.

I am afraid that what we got yesterday was a series of half-baked measures, re-announcements and policies brought in to solve problems this Government created in the first place. Why was it necessary to include a Bill to deal with the problem of people leaving one part of the public sector with huge pay-offs only to be re-employed in another part? Let us be honest about this. It is because of the thousands of people who have done exactly that since the Government’s reorganisation of the NHS. Let us remember, when they talk about getting the banks to lend to small businesses, to ask why they are dealing with this problem only in the fifth year of this Government.

Perhaps we should not be surprised that the Government have fallen short. While family budgets were being squeezed throughout the country, the Government were in denial; from this Queen’s Speech, we can see that they still are. They crow about a recovery, but as the Minister without Portfolio, the right hon. and learned Member for Rushcliffe (Mr Clarke) said on Monday, ordinary people have not yet felt any sense of recovery. I agree: a recovery that does not benefit ordinary working people is no recovery at all, and the promise of Britain—that the next generation should do better than the last—is being broken.

The test of any Queen’s Speech is whether it deals with the challenges the country faces today and sets the foundation for our country to be stronger and more prosperous for the future. On both those counts, this Queen’s Speech fails. In 11 months’ time, the country will face a choice between a Britain where a few at the top do well and everyone else is left to take their chances, where people are working harder for longer for less, and where the powerful play by one set of rules and the rest of us live by a different one; and Labour’s vision of a Britain with fair play at its heart, where businesses pay their taxes, do not exploit migrant labour and have an apprenticeship scheme alongside any workers they bring in from abroad, where there are fair rules for things such as welfare, selling energy or coming into our country, where there are fair rewards for a country in which hard work pays, responsibility is rewarded and everyone shares in its success, and where there are fair chances for a country in which people do not have to be born into privilege to get on or to have a secure roof over their head and their life chances are not defined by the postcode in which they were born. That is Labour’s vision for Britain.

--- Later in debate ---

[Mr Mike Weir (Angus) (SNP)]

I am pleased to follow the right hon. Member for Uxbridge and South Ruislip (Sir John Randall), who made some good points, particularly about the modern slavery Bill, and some effective comments about immigration and what happens to youngsters coming into the country. I think that that is something on which we could all agree.

I am pleased to make a small contribution to the debate and, perhaps unsurprisingly, would like principally to address some issues about energy. I am somewhat perplexed by the apparent headlong rush to do everything possible to allow fracking to take place. I remain sceptical about the potential of fracking and would be more cautious about taking it forward, because despite all the claims that are made of a new energy revolution, the situation in the UK is vastly different from that in the United States, and even there considerable controversy surrounds the technology.

Much of central and eastern Scotland, including parts of my constituency, is included in the latest map of possible sites for unconventional oil and gas. It seems to me, however, that we need to take a balanced, responsible and evidence-based approach, listening to the concerns of communities, and to proceed with caution. I particularly wanted to raise this issue, because I am a little unclear as to what is proposed in the infrastructure Bill. In Scotland, the situation is different from that in England. Although onshore oil and gas is vested in the Crown and subject to the same licensing regime at present as the remainder of the UK, planning law is devolved and the law of property is also significantly different, and both are the responsibility of the Scottish Parliament.

The changes to the law to allow fracking under properties without owners’ permission has already produced a considerable public response. In fact, I received a number of e-mails on the subject overnight. Although I accept what the right hon. Member for Uxbridge and South Ruislip said about the amount of misinformation and misapprehension over what is meant by those changes, I had assumed that the proposed changes to the law would not affect Scotland, since property and land law is a devolved matter. However, the notes to the Queen’s Speech issued by the No. 10 press office state, in relation to the infrastructure Bill:

“Subject to consultation, this Bill would support development of gas and oil from shale and geothermal energy by clarifying and streamlining the underground access regime.”

Furthermore, in a section headed “Devolution” it goes on to say:

“The provisions relating to roads, Nationally Significant Infrastructure Projects, planning consents for local projects and public sector land assets would apply only to England. The provisions relating to the local land charge aspects of the Land Registry and invasive non-native species would apply to England and Wales. Where the Bill deals with devolved matters, we are engaging with the Devolved Administrations as needed.”

Now, that raises a question in my mind: what is the situation with

“streamlining the underground access regime”,

as the notes put it? Can the Minister clarify whether it is the Government’s intention to seek changes in Scotland on these issues or is it indeed a specific matter for England? I had understood that the problem was with the specific English law of trespass, a law that is different in Scotland. If the Government’s intention is the former, what specific changes are they seeking? Many questions are being asked by my constituents and I do not want to give them false information, so I need to be clear about exactly what is happening and how far it will affect them.

The notes also refers to the future of North sea oil and gas and the report from Sir Ian Wood on maximising economic recovery of oil and gas reserves. This report perhaps already holds a special place in history as the only review to which both the UK Government and the Scottish Government, and almost everyone in between, has subscribed, even though it has some fairly uncomfortable things to say to both Government and industry. We will, of course, look closely at the part of the Bill that seeks to implement the proposals, although we have a different view of the future—these matters will become academic for this place following September’s referendum.

It will, however, be interesting to see how the Government propose to proceed. They say that they will

“introduce a levy-making power so that the costs of funding a larger, better resourced regulator can be paid for by industry rather than by the taxpayer as is currently the case.”

I support that objective, but as other parties now seem to be falling over themselves to offer some crumbs of further devolution to fight off the growing momentum towards a yes vote, it will be interesting to see whether that includes basing the proposed new regulator in Aberdeen, the oil capital of Europe, or whether it will be yet another London-based outfit.

What the Gracious Speech did not do was tackle some of the many issues affecting the energy industry and consumers in Scotland and throughout other parts of the United Kingdom. Over the years in this House, I have repeatedly raised the issue of the unfair transmission charging regime that increases costs for generators, particularly renewable generators, in Scotland, adding to the costs of producing energy, which are invariably passed on to the consumers. After much pressing, Ofgem finally came up with Project TransmiT, which seems to be interminable. Although far from perfect, the proposal was to make some changes to the regime that would have benefited renewable generation, particularly in Scotland, yet its implementation has been postponed yet again and is now promised for sometime next spring.

The project has been postponed several times, and energy producers and consumers continue to pay more. Dealing with such issues could do a lot to help ameliorate the costs that consumers must pay towards their energy. If this Government are truly intent on enhancing the United Kingdom’s energy independence and security, as stated in the Gracious Speech, they need to get a grip and ensure that we have a regime that truly encourages the growth of renewable energy, which will not only create jobs but, as I said, ensure lower prices to consumers in the longer term.

There are many other issues that impact upon energy consumers and the cost of living of specific groups which could be dealt with to give real benefit and relief, but yet again they are completely missing from the Gracious Speech. It is interesting to note in passing that much was said earlier by the Secretary of State about companies voluntarily freezing prices. That has undoubtedly happened in some cases, but as those of us who looked at price freezes in another context know, it comes at a cost. There is no magic bullet. Along with its proposal to freeze prices, Scottish and Southern Energy announced significant job losses and pulled out of several investment projects. That must be borne in mind when thinking about such a proposal. It is not a one-way street.

I have long championed the cause of introducing a simple measure that would help pensioners who live off the gas grid, and have introduced two Bills on the matter, as well as raising it during the passage of various energy Bills. I may well take part in the ballot for private Members’ Bills and, if successful, introduce such a Bill again. The simple fact is that those who are off the gas grid pay higher costs than those on the grid, and pensioners are particularly badly hit. The problem in many rural areas is exacerbated by the fact that much of the housing is old and of construction that makes it very difficult to install energy-saving methods, such as cavity wall insulation.

Of course, those households will continue to 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 the system therefore works very well for them. Indeed, in their 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.”

That is not the case for those who are off the gas grid. They face the difficulty that they have to pay for their liquefied petroleum gas 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 well not fill up the tank completely, leaving them having to do so in the depths of winter, which brings problems of its own.

When the Office of Fair Trading looked at the market a few years back, it found that there were many competing suppliers in the market. By definition, many of these were small suppliers, and although some of the larger players will offer greater flexibility for payment, many smaller ones are unable to so. The price of fuel is rising, often quite 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. There is also the problem of getting a delivery. Members will recall the dreadful weather two winters ago, during which many of my constituents faced huge difficulties in getting their tanks filled up, some being left with no fuel in the run-up to Christmas. That was perhaps exceptional, but it shows the additional problems that off-grid consumers face.

I am very pleased that the Labour Opposition have now supported the measure. I welcomed it when they did so and I welcome it again today, but the cynic in me notes in passing that I have now had support from all three of the other parties in the House for the measure. Unfortunately, it has always been when they were in opposition, not when they were in government. I hope that in the event of a change of Government, this time we will see an all-party approach to try to get the matter dealt with finally. It is an issue that has been going on for years and it is a simple matter that could make a real difference.

As I said, my Bill put forward a suggestion as to how we might tackle the problem, as was mentioned earlier by the hon. Member for Ogmore (Huw Irranca-Davies), by paying the winter fuel allowance earlier. The regulations could be amended simply by changing the date on which it is paid to off-grid customers. The scale of the problem was highlighted this week by a report from Scotland’s Rural College which showed that nearly 60% of the over-60s in rural areas are in fuel poverty, compared with 45% in urban areas. That is a truly shocking statistic. We need urgent action to tackle this situation.

The other point that I have often raised and will raise again is that there are no proposals in the Gracious Speech to tackle the problems of off-grid consumers under the present green deal. That is not working as well as it should, partly because it is left to the energy companies to set up and administer. There is such a complete lack of trust among consumers towards energy companies that many will not take up any deal offered by them. One example that I raised earlier and will mention again relates to the lack of ability to get a home fuel or LPG boiler under the energy company obligation scheme.

In Scotland the situation is slightly different. Under the home energy efficiency programme, the old scheme partly for central heating that was introduced by the Scottish Parliament, it is possible to get an off-grid boiler if it is replacing part of the central heating scheme. As I understand it, this is not available in other parts of the United Kingdom and it is not available under the energy companies’ ECO scheme. We have repeatedly been told that ECO is technology-neutral but this is clearly not the case, as none of the companies will include off-grid boilers in their schemes. I appreciate that these boilers are more expensive than traditional boilers, but that rather emphasises the point that those who are off the gas grid are doubly penalised—they pay much higher prices and at the same time cannot get replacement equipment that would be more efficient. Surely there are economies of scale that could reduce prices if the companies offered such technology, but I suspect that it will take the Government to force them to do so.

I am disappointed that despite talking about this matter—I know that the Minister without Portfolio, the right hon. Member for South Holland and The Deepings (Mr Hayes) took an interest in it when he was an Energy Minister—the Government have not grasped the nettle and included provisions to deal with these issues. There is a missed opportunity in many of the proposals relating to energy, which could have made a real difference to people’s lives.

[Mr Hayes]

As the hon. Gentleman cited the impressive record that I had as the Energy Minister, will he acknowledge—I know he is very generous about these things—that we have made strides in greater transparency and clarity, at least in terms of tariffs, and that that progress was partly inspired by contributions from Members across the House, including him?

[Mr Weir]

I have always acknowledged that even off grid the Minister was responsible for setting up the ministerial round table which has opened up discussion on these issues. I acknowledge that, but what we need is action before next winter on these specific issues, because there are serious problems among pensioners in rural areas, and not just in Scotland. In the highlands of Scotland it is a particular issue, but it is also an issue in rural Wales, Northern Ireland and many parts of rural England. We need action on that. It is not expensive. It could be done relatively easily and I am disappointed that the issue has not been tackled.