Fuel Poverty (Wales)

Nia Griffith Excerpts

Tuesday 19th March 2013 Westminster Hall

[Nia Griffith (Llanelli) (Lab)]

Thank you very much, Mrs Riordan. The figures for Wales on fuel poverty are very stark indeed because more than a quarter of all households are affected, with a much higher figure in some areas. The housing stock in many areas is fairly old, and we also have a prevalence of coal fires. If people have a coal fire, they need an air flow to keep it going, and consequently we have had many poorly insulated properties. The Welsh Government are doing a good job of trying to remedy the situation through the Arbed and Nest programmes, but the legacy remains, and some homes are very hard to heat and to make energy-efficient.

We also have the major problem that a number of homes are not on mains gas, and they are not only isolated farmhouses, but whole villages. That is often the case because those villages were mining areas in which coal was the predominant fuel, meaning that gas was not seen as a priority.

[Jonathan Edwards]

The hon. Lady and I represent the area that contains the anthracite coal field, where the gas network was vehemently opposed. We are all dependent on solid fuels in my village of Penygroes, for instance, and throughout the Amman and Gwendraeth valleys, which she represents. Does she agree that it would be really helpful if payment of the winter fuel allowance was brought forward for those who are reliant on oil, gas bottles or coal so that they would be able to buy those fuels in the summer, when they are cheaper?

[Nia Griffith]

The hon. Gentleman is absolutely right. The November payment is made at exactly the time when solid fuel is at its most expensive, and it would be much better if people had the money earlier so that they could then spend it in preparation for the winter.

There is a particular problem for homes that are not on mains gas, because that limits people’s choice of fuel. They might use solid fuel, more electricity, or bottled gas for cooking. More recently, of course, people have been using liquefied petroleum gas, but some areas face a problem because one supplier of LPG gas has a monopoly. I corresponded with Chris Huhne about that matter when he was Secretary of State for Energy and Climate Change, so I hope that the Minister will be able to continue work to examine LPG competition, particularly when people are trapped into continuing with the same supplier because a whole estate is supplied by one supplier, which creates a difficult situation.

The major problem involving some of the insulation and energy efficiency programmes is a real slap in the face when that is combined with the cuts to the feed-in tariff that the Government brought in. Housing associations, which house some of the most vulnerable people who are often in fuel poverty, were going to roll out a comprehensive solar panelling programme to lower people’s bills and generate additional cash through the feed-in tariff, which would then enable them to improve yet more homes. Following the cut, those programmes are completely gone, which is a real tragedy for those people who would have benefited.

I congratulate the Government on ensuring that cold weather payments keep up with inflation, but Wales rarely experiences seven continuous days with an average temperature of 0º. We are far more likely to see the temperature fluctuate, so the payment is not the answer that we would like to think it is. It is definitely important for emergencies, but it is not something that the Government can be proud of because, at the same time, they have taken £100 off the £400 winter fuel allowance for the over-80s, and £50 off the £250 winter fuel allowance for other pensioners. That has left people over the past two years with an even greater struggle to pay their bills than previously.

It is worrying that the Government have not got a grip on energy companies that are letting prices go up and up. They really need to step in and have a far stronger regulator, which is certainly something that Labour would be doing in government. One thing that has distressed me most is the issue of SWALEC—now SSE—which is a large supplier in south Wales. Because many people tend to be loyal to their original company, they have not switched from their supplier, and that particularly applies to people who are perhaps elderly, or not in a position to make price comparisons on a website. Such people often stick with their original supplier.

The supplier has chosen to impose a standing charge of £100 for people’s electricity, and if they also have gas supplied by the company, they do not get a decrease or a discount—they pay another £100 for the privilege. When I took that up with the supplier, saying that it was absolutely outrageous that the standing charge had rocketed to the extent that the poorest families were paying £200 before they used even 1W of electricity or one therm of gas, I received the answer that the practice was encouraged by the regulator, because it would simplify things. However, it is clear that that is a regressive way of charging people, because those who are trying to scrimp and save—such people are often single pensioners, who make a terrific effort, perhaps by heating only one room and being very careful about what they use—are being hit the hardest.

I am cynical about the motives behind the charge, and one reason why is that I am aware that energy companies know that politicians are trying to suggest that they might offer the lowest tariff to the most vulnerable customers. If the lowest tariff is upped, a buffer is created against politicians doing that. Additionally, bills go up every time energy prices rise. Again, as politicians, we would like to see energy companies decreasing their charges when prices fall, but of course a standing charge will not be decreased. It seems to me that that is an extremely sly ploy to fix a price that will not be hit by the whim of politicians and that will escape such scrutiny. If that is what the regulator is recommending, I ask the Minister to have a serious discussion with it about whether that is the best way forward. I have singled out one company, because it is one in Wales whose actions hit a lot of my constituents.

[Chris Ruane]

The company that my hon. Friend has singled out, SSE, is the company that spent £15 million on a golden handshake for its chief executive.

[Nia Griffith]

That is a real inversion of priorities.

Many other companies are carrying out that practice. In fact, there are few that offer tariffs that do not involve a fixed standing charge. However, the one to which I am referring is particularly obnoxious, because a high proportion of the money that a low-income family ends up paying goes on just the standing charge.

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

I have a brief question arising from the previous intervention. Will the hon. Lady inform us whether the contracts that resulted in those big pay-offs were entered into under the previous Government?

[Nia Griffith]

I expect that the hon. Gentleman will answer his own question when he has the chance to speak later, but it is certainly not something that I am going to deal with now.

I want to get back to the families I have been dealing with and the people I see from day to day. I ask the Minister to examine very carefully the ways in which energy companies set their bills and to consider whether there is any way in which he can alleviate some of the desperate fuel poverty that we are seeing in our communities.

--- Later in debate ---

[Glyn Davies]

I thank the hon. Gentleman for his intervention and I certainly agree with him. I have encouraged DECC to do a number of things recently in relation to energy and oil prices. One thing it should not be doing is building wind farms and destroying the countryside in mid-Wales.

We must consider seriously the issue of shale gas. I know that there are an awful lot of conditions and we must be very careful about how we go forward with shale gas, but as a nation we must take the issue seriously. We have to take it forward and understand whether there is potential there to help us with energy prices.

[Nia Griffith]

Will the hon. Gentleman accept that in areas such as mine, where we have the Loughor estuary, which is famous for its cockles, the sort of drilling and exploration to which he refers could have devastating effects, both in terms of flooding along the coast and on the industry itself, because of the disturbance of the wildlife?

[Glyn Davies]

The hon. Lady makes a fair point, which is why I think that we must be incredibly careful. We have to do a great deal of research. It is right that Cuadrilla, the company involved, is making certain that it goes to an awful lot of trouble. If there is somewhere in Britain that is unsuitable, we should not be allowing shale gas drilling there. We can allow it only where the potential for bringing down energy prices is such that we have to go forward with testing and seeing what the potential is.

Most of my objection to onshore wind is due to the impact on not only my constituency but the whole of mid-Wales and, indeed, much of rural Britain—much of the wild land of Britain. There is no doubt at all that the level of subsidy that is paid to the international companies that are going forward with the proposals is obscene. It is the biggest transfer of money from the poor people, very often, to massively rich foreign development companies. This transfer of money is the opposite of what we should be seeing, the like of which I have never seen before. The whole thing is obscene. The Government have reduced the level of subsidy by about 10%—I think the order might have been signed off in the past couple of weeks—but there is much more scope for that.

Other hon. Members have referred to the level of subsidy in relation to solar panels, but the same money will produce an awful lot more solar panels. There was a shock to the system when the new levels were brought in. There was what we hoped was a temporary slowdown in the number of solar developments that went forward. My sense is that that is recovering. I think we are now getting a lot more development for the same money.

The trouble with onshore wind is that it hits people in two ways. One is fuel poverty. Onshore wind hits the poorest people; indeed, it hits everybody. The Government force them to hand over money that is then given to mega foreign companies, which can bribe their way, through community benefit, into the hearts of local people. Well, in mid-Wales, that has not been successful; it is having no impact at all.

The other aspect is that energy prices are driving jobs overseas. More and more companies find that the cost of the energy they need to run their businesses is just too high. We talk about all the jobs that renewable energy and onshore wind will create, but the truth is they will drive jobs and business overseas—not just to Europe, but outside Europe, and that will be devastating.

In general, however, today’s debate is about fuel poverty. I am very supportive of what the hon. Member for Clwyd West—

--- Later in debate ---

[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.