Fuel Poverty and Energy Efficiency

Nia Griffith Excerpts

Wednesday 16th January 2013 Commons Chamber

[Mr Davey]

I want to make a bit more progress.

In addition to the winter fuel allowance and cold weather payments, the coalition brought in the warm home discount—a legal obligation on the energy companies that we introduced for direct cuts to the energy bills of the most vulnerable. The Opposition rarely mention this, although to be fair to the right hon. Member for Don Valley she mentioned it today. She will know that so far this winter, more than 1 million low-income pensioners have already received the warm home discount to help keep them warm—and, with them, almost a million other vulnerable households with mandatory rebates worth £288 million this year alone, automatically cutting the bills of the most vulnerable by £130 a year. The Opposition do not normally mention that because it is clear evidence that we are doing everything we can to tackle fuel poverty, despite the financial situation we inherited. Even before cold weather payments can be claimed, a poor pensioner over 80 is guaranteed to receive £430 of help with their energy bill. Under Labour, a vulnerable household was not guaranteed anything, but with the coalition’s warm home discount, they can get £130 off for sure. That is real help.

[Nia Griffith (Llanelli) (Lab)]

How can the Secretary of State say that a pensioner over the age of 80 was not entitled to £400 under Labour, when they were entitled to £400 under Labour’s winter fuel scheme? Will he come clean and tell the House that his Government have cut that to £300, at the same time as cutting the £250 to £200? Can he tell us one week in this winter in which the cold weather payment has been paid to people in the UK?

[Mr Davey]

First, cold weather payments are related to the weather, which the coalition Government do not control, as the right hon. Member for Don Valley was at least good enough to acknowledge. I am afraid that the hon. Lady’s figures are wrong. Under Labour, £300 of winter fuel payments went to all pensioners, but through the warm home discount we guarantee £130 off their bills from the energy companies, so that amounts to £430 off for elderly pensioners. That did not happen under Labour.

--- Later in debate ---

[Kwasi Kwarteng]

I am grateful to my hon. Friend for that pertinent remark. Not only was there a reduction, but there was no recognition of any long-term strategic need of this country.

[Nia Griffith]

Will the hon. Gentleman give way?

[Kwasi Kwarteng]

Forgive me. There was, however, a considerable amount of spending, and as the right hon. Member for Don Valley (Caroline Flint) has acknowledged, that spending was not particularly smart. It was not directed to the most vulnerable; Labour simply spread it around in their usual style and hoped they would get results as a consequence. Again, that was a deeply irresponsible way in which to conduct the public finances.

--- Later in debate ---

[Nia Griffith (Llanelli) (Lab)]

This Government are failing to tackle fuel poverty because they have not managed to tackle the energy companies and bring in the tough regulation needed to make them moderate their prices. As we have said, we would make the energy market more transparent and create a tough new energy watchdog to replace Ofgem.

I will cite just one example of why we need a much tougher watchdog. Ofgem allowed Swalec, which is now part of SSE, to double its standing charge between September 2011 and October 2012—a massive 100% increase. Since October 2012, Swalec has been charging customers a standing charge of £100 a year for their electricity and an additional £100 a year should the customer also get their gas from Swalec. Such charges just feed into the bills of my constituents. Swalec’s prices are of particular concern to people in south and west Wales, because Swalec is the traditional supplier for the area, and Wales has one of the lowest percentages of people who have switched energy company for their electricity.

That doubling of the standing charge in less than 15 months is hitting low users disproportionately hard, punishing people who are struggling to keep their bills down and who switch off appliances whenever they can. No matter how much they switch off, whether to save money or to save the planet, Swalec is taking £100 off them just to stay connected—£200 if they get gas from Swalec as well. I am sure that if these people had computers, they would be thrilled to know that the SSE site tells them that £50 per customer per fuel is profit—is that not wonderful news for them? It is an absolute kick in the teeth for loyal customers. SSE knows jolly well that many customers who have stuck with the traditional south Wales company for years are probably the least likely to switch provider. It is all very well to say that customers can shop around, but unless people have easy internet access it is impossible to compare the prices. Even where people do have that access, the process can be extremely confusing. In any case, people are wary of switching. They hear horror stories and they are worried about being caught out by some sort of penalty charges for switching, or worried about the goalposts being moved just after they have switched and finding that things have changed yet again.

As my hon. Friend the Member for Rotherham (Sarah Champion) explained, people are wary also of going on to direct debit because they are pretty well convinced that the companies take more than they should be taking, and that they will take advantage at every turn to make sure that the money is in the banks of the energy companies, rather than in the pockets of the people that they are taking it off. The energy companies tell us that that is for simplification purposes, but I am cynical about that. By increasing the standing charge, energy companies avoid the problem of having to decrease energy prices if there are fluctuations in price. They have heard that that is what people are talking about. They have heard that we, the politicians, would like to see them decrease energy prices, but if they stick the increase on the standing charge, they will not need to do that.

Energy companies have also heard that we might want them to put people on to the cheapest tariff. So what are they doing? They are raising the cheapest tariff, aren’t they? They are making energy more expensive for the lowest users. The cynic in me says that the companies have good reasons for upping the standing charge. The effect is regressive. Like any form of regressive taxation, it means that those who have the least money are proportionately punished the most.

It is right and proper that the Government’s cold weather payments should be raised when energy prices are rocketing, but they are for exceptional circumstances. For the vast majority of the UK it is not often that temperatures for an entire seven-day period average zero. It is far more likely that there are three or four days of cold weather, then a slightly milder period, then more cold weather and so on. There are fluctuations, so the number of times during the year when people will be able to claim those payments is extremely limited.

Finally, I wish to say a word about the Warm Front scheme. I am horrified to hear that £50 million is not being spent on good insulating programmes. I contrast that with the Welsh Government, who are continuing with their Arbed and Nest schemes, which they have adapted. They have looked at many different ways—

[Gregory Barker]

I can assure the hon. Lady that that is exactly what is happening. Any underspend from the Warm Front scheme is being spent on exactly the type of measures that she mentioned.

[Nia Griffith]

So are we clear, then, that that money has been ring-fenced and that it is in addition to any other planned money that was going to come into energy schemes anyway?

[Gregory Barker]

We are scaling up the proposals that we had for the community challenge in order to deliver into that programme a much greater amount of money than would otherwise have flowed.

[Nia Griffith]

I hope the Government will follow the example of the Welsh Government, who have also drawn down European money. I am sure the UK Government could do that for the areas of the UK where that might be possible. The Welsh Government have rolled out a number of programmes in their Arbed and Nest schemes, which cover a range of different types of property, particularly those that are hard to heat and those that are part of social housing, as well as properties that are privately owned.