Fuel Poverty

Rebecca Long Bailey Excerpts

Tuesday 11th December 2018 Commons Chamber

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

As we enter another winter, I welcome the opportunity to stand opposite the Minister in what will hopefully be a collegiate debate. I regret, though, the urgent necessity once again to debate fuel poverty in this Chamber.

Fuel poverty epitomises what a UN statement recently described as the “great misery” that has been “inflicted unnecessarily” on the UK’s poor, and in particular on the millions of children locked into a cycle of poverty. The UK is one of the world’s largest and wealthiest economies, with all the means at its disposal to eliminate fuel poverty, and yet it is not being eliminated. The latest data shows there were more households living in fuel poverty in England in 2016 than in 2015. The figures were higher in 2015 than in 2014, when in turn they were higher than in 2013. It is not just the extent of fuel poverty that is on the rise, but the depth of fuel poverty—that is, the difference between households’ energy bills and what they can afford to pay. Fuel poverty is not only persisting, but getting worse. Members should be in no doubt that this is not an unavoidable fact of life. It is a political choice.

According to the Office for National Statistics, the number of excess winter deaths throughout England and Wales last winter exceeded 50,000. As we have already heard, that is the highest recorded number for more than 40 years. The figures were described by the charity National Energy Action as “preventable and shameful”. According to that same group, at least 10,000 of those premature deaths were due to vulnerable people being unable to heat their homes adequately. I would like Members to reflect on the people behind those numbers. It means somebody’s neighbour, somebody’s parent, and somebody’s child—10,000 people dying before their time just because they could not keep warm.

The terrible impact extends beyond preventable deaths. I have previously mentioned the impact on health. We know that children living in fuel poverty are twice as likely to suffer from respiratory problems, such as asthma and bronchitis, and that fuel poverty is associated with low weight gains in infants and higher levels of hospital admissions in the first three years of life. Adolescents living in cold homes are at five times the risk of having multiple mental health problems. On top of that, there are the negative effects on educational performance, emotional resilience and wellbeing. When combined with the fact that fuel poverty is not evenly distributed throughout the country, but concentrated in pockets of urban and rural poverty, we have the makings of what can only be described as a social crisis. In some parts of my constituency, fuel poverty affects one quarter of all households, and over one quarter of single-parent households. We know that it is a problem locally because, between April 2017 and March 2018, of those people who came to a citizens advice bureau in Salford and Eccles about energy issues, the most common was dealing with fuel debt repayments.

In last year’s debate, I stated that 22% of households in Salford have prepayment meters compared with the national average of 15%, so I was particularly troubled by a report this year by Citizens Advice on the phenomenon of self-disconnection by those using prepayment meters. The report found that around 140,000 households in Great Britain could not afford to top up their meter in the past 12 months and that 88% of those households contained a child or someone with a long-term health issue. Half of those surveyed said that keeping their meter topped up was a daily concern, which is particularly shocking when we consider that more than 4 million households currently use prepayment meters.

Fuel poverty is not just an issue for those on prepayment meters. Following an unprecedented number of energy price hikes by suppliers rushing to increase prices in advance of the price cap, about which I will say more later, household energy debt has surged over the past year by 24%. It is often said that fuel poverty is due to the confluence of three factors that we have heard about very briefly already: low income, high fuel prices, and poor energy efficiency. I wish to say a few words about each.

After a decade of austerity and lost growth, annual wages are still £760 lower than they were in 2008. Is it any surprise therefore that 47% of all fuel-poor households in England are in full or part-time work? For those out of work, the benefits freeze has deepened fuel poverty as families, already struggling on very little, have experienced a real-terms income cut. The industry body, the Energy and Utilities Alliance, has noted that the introduction of universal credit, which leaves households without an income during the five-week changeover, is pushing more people towards making the decision not to heat their home and to face the dilemma of heating or eating. Raising the national minimum wage to £10 an hour, ending the welfare freeze, and reversing cuts to people with disabilities would go a long way to tackling absolute poverty, which is at the root of so much fuel poverty.

On the cost of energy, last month Ofgem finally confirmed that an energy price cap will come into force in January 2019. That is almost two years after the Prime Minister first announced a price cap as Conservative policy, and it is set at a level that is hundreds of pounds higher than the cheapest tariffs available. In the intervening period, the big six energy suppliers have hiked their tariffs, some on multiple occasions. Ofgem has announced that the cap is likely to be revised upwards within months of being introduced.

In addition, wholesale prices are rising, I feel obliged to mention research published just yesterday by the UK Energy Research Centre, which finds that a no-deal or hard Brexit could increase electricity generation costs by £270 million a year. That is another reason, if we needed one, to redouble our efforts in this House to avoid no deal or a bad Brexit deal.

Labour’s 2017 manifesto pledged an immediate emergency price cap to ensure that the average dual fuel household energy bill remained below £1,000 per year. Had that cap been introduced in July 2017, it would have saved households £2.85 billion between July 2017 and November 2018.

[James Heappey]

I know the hon. Lady does a lot of reading into energy policy, so she will know that a price cap can only be a temporary correction to the market. What is her longer-term plan for delivering a fairer energy price?

[Rebecca Long Bailey]

The hon. Gentleman is very learned on the topic of fuel poverty, and I agree with what he said. The Labour party has persistently stated that an energy price cap is a sticking plaster while the wider energy market is reformed, because it is not currently working in the interest of consumers. It forms part of the wider plan of Labour’s energy policy portfolio completely to reform the energy system as we know it.

Network costs represent over one quarter of the cost of a gas and electricity bill, but customers have been getting a bad deal. Citizens Advice estimates that network companies will make £7.5 billion in unjustified profits over an eight-year period. A recent report by the Energy and Climate Intelligence Unit found even more excessive returns captured by distribution network operators than Citizens Advice had predicted, with the six distribution network operator parent companies posting an average profit margin of 30.4%. By bringing energy networks back into public ownership, Labour would reinvest and pass on to customers the money currently paid out in dividends.

[Eddie Hughes (Walsall North) (Con)]

Will the hon. Lady give way?

[Rebecca Long Bailey]

I will make some progress before taking an intervention from the hon. Gentleman.

I turn to energy efficiency. A well-insulated home saves households money, makes homes naturally warmer and more pleasant places to live, and cuts energy use, helping to tackle climate change. At least £1 for every £4 spent heating UK homes is wasted due to poor insulation. Improving the energy efficiency of the UK’s housing stock, which is among the oldest and least efficient in Europe, really should be a no-brainer, so how are we currently faring?

According to the Committee on Climate Change, insulation rates have fallen by 90% since 2012. The energy company obligation—known as ECO—which is funded by a levy on bills, is the only remaining domestic energy efficiency delivery mechanism in England. It has also been cut from £1.2 billion a year when it was first introduced in 2013 to £720 million per annum in its second phase, and has been reduced still further to £640 million—effectively a 50% cut. It is therefore no surprise that the Government are off track to meet their targets.

In their 2015 fuel poverty strategy, the Government set a target of ensuring that fuel-poor homes are upgraded to an energy efficiency rating of EPC band C by 2030. But according to the Institute for Public Policy Research think-tank, the Government will not meet their target for upgrading fuel-poor homes until at least 2091. That is why, as a policy suggestion to the Minister, the Labour party proposed investing £2.3 billion a year to provide financial support for households to insulate their homes, and for local authorities to drive take-up and delivery of insulation schemes, in order to bring 4 million homes up to EPC band C by the end of one parliamentary term.

Labour’s plans included fully covering the cost of insulation for low-income homeowners and all social housing, which will particularly benefit older people living in fuel poverty and pensioners on low income struggling to cover the cost of sky-rocketing energy bills. This would have delivered savings of at least £270 a year to affected households. As well as this investment, Labour was also committed to tightening the regulation of privately rented homes, blocking poorly insulated homes from being rented out.

I have tried to set out just some of the measures that will tackle the causes of fuel poverty: low incomes, high fuel costs and poor energy efficiency. I am not seeking to make party political points, but rather to indicate the level of commitment needed if we are truly to address the problem, because what is the alternative? Are we really willing to accept preventable and shameful winter mortality at current levels? Are we really willing to accept that we live in a country where some people go to bed early to stay warm, leave the curtains drawn and even paper over their windows? Is it acceptable that people, often vulnerable people, have to seek out a library, a café or even an A&E department just to stay warm?

I do not believe that anybody in this House wants to see that, but wanting to end fuel poverty is simply not enough; rather, we must be willing to deploy the resources available to us to bring an end to what remains an avoidable indignity for millions.

[Several hon. Members rose—]