Fuel Poverty

Thérèse Coffey Excerpts

Wednesday 19th January 2011 Westminster Hall

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

It is a pleasure to serve under your chairmanship, Mr Gray. I congratulate the hon. Member for Islwyn (Chris Evans) on securing this important debate. He has said that this is his first time in Westminster Hall. I have spoken a few times in Westminster Hall, where I always find the level of debate enlightening. The first time that I stood up to speak in Westminster Hall was in a debate that I secured on fuel poverty, with a focus on rural Britain. It is nice to see some of the same faces again for today’s debate, adding new issues for us to consider and re-emphasising the issues that make fuel poverty a constant topic for debate in our constituencies, as my hon. Friend the Member for Hexham (Guy Opperman) has said.

In the debate that I secured, I focused on people off the mains gas grid, concentrating on oil and LPG. I am pleased to say that, as a result of that debate, electricity companies were falling over themselves to let me know what they were doing for my constituents. If this message has not got out I will repeat it now: anyone who does not have access to mains gas is allowed to claim for a dual fuel discount from all their suppliers. The electricity companies made their position on that scheme clear, and if any constituent of mine, or indeed of anybody else, is not taking advantage of that scheme at the moment, they should alert their electricity company to that fact.

Since then, we have also had the oil price spike, and both the Minister and I have homes that are heated by oil. He was already taking action on the matter when it was raised in December, and I commend him for some of the work that he has done, but there is no question in my mind but that the spike has plunged more people into fuel poverty. We are talking about a significant differential of hundreds of pounds between the cost of heating our homes with gas and the cost of heating them with oil or LPG, and I encourage the Minister to think more creatively. I do not want to sound like a socialist, but when the market is not operating efficiently, regulation is at times necessary—or just the threat of regulation might help.

We have already heard stories about prices rocketing; they have now fallen back a bit, but not to where they were in October and November. Some of that is due to the oil price rising. The spikes were of 70 or 80%, although some people say that they were higher. Rises of 50 to 70% were typical in my constituency.

The price has now dropped back to about 62p per litre, from an average, at its peak, of about 72p. Considering, however, that in October the price was about 40p, that is still a significant increase. In my view, if the price of mains gas or electricity leapt by 50% in a matter of weeks, there would be more action than we saw over student tuition fees.

I do want to pay some tribute to the previous Government’s Warm Front programme. It would be wrong to dismiss it entirely as it did quite a lot of good but, as I have said previously, I encourage the Minister not to repeat some of its mistakes, because it was inflexible and took no real account of the housing stock. Several of my constituents took advantage of the programme, seizing the opportunity to get more efficient boilers and similar equipment, but they were in properties that were already connected to the gas grid. Most of my constituents who fall under the fuel poverty definition missed out on an opportunity to do something about their heating situation.

The hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith) mentioned that housing stock does not seem to be a factor in deciding how fuel poverty measures are applied. It absolutely needs to be, and the green deal is a great opportunity to do that. The green deal has been flagged up as being about efficiency, and I think that initially it over-focused on the insulation of existing houses. Energy companies and the Energy Saving Trust and similar bodies say that a lot of what is planned will be almost irrelevant if we do not all have thermostats in our homes. We can turn down our radiators manually and do other things, but if we do not have thermostatic control the boiler will still generate and consume the same amount of fuel. Prioritising thermostatic control is, therefore, one thing that we need to focus the green deal on.

There is also the issue of the funds available to households. I understand the simplicity of the green deal, and that it will mean about £6,500 for householders, but the plan is that the amount will be the same across the country. Frankly, with urban stock, householders could do a lot of what they wanted—insulation and draught excluding—for less than £1,000, as I did in my house in Hampshire, when I was living there. For about £12, I dramatically reduced my fuel bills, simply because I plugged the gaps that the old walls and doors did not—the change was significant. I am concerned that for my constituents who rely on LPG and oil, it will cost far more than £6,000 to rip out inefficient carbon-based fuel systems and replace them with more energy-efficient heating systems. I hope that the Government take that into consideration when doing their individualised, but hopefully targeted, programme. It would add complexity, but it would make a difference, rather than the programme just being about getting a bit more energy efficiency for the same money.

My hon. Friend the Member for Hexham talked about efficient markets—perhaps oligopolies—developing. I am not suggesting that suppliers in my constituency operate as such, but I am concerned about the efficiencies of the market because they have an impact on pricing. I have written to the Office of Fair Trading and, to my knowledge, it has not acknowledged my letters from over a month ago, which is disappointing. I hope that the Minister thinks about some of the suggestions that the hon. Member for Ynys Môn (Albert Owen) made about the importance to people of energy and of its pricing, and about whether the Office of Fair Trading is the best body to look at this energy sector, given that LPG and oil do not currently fall under the Ofgem banner. Despite my attempts to talk with that body about some innovative social tariff ideas, it keeps saying, “It’s not our issue.”

[Sir Robert Smith]

The hon. Lady makes an important point. When Ofgem is dealing with the other energy suppliers, those of electricity and mains gas, it looks at vulnerable customers and the way in which customers are treated, as well as the price of the product. The OFT, however, is far more limited in its powers and, it would appear, in its interests.

[Dr Coffey]

I agree strongly, and that is why I am keen to see an expanded role for Ofgem. I do not say that lightly, nor do I insist upon it, but I would like the Minister to consider the issue, because it is not going away. It is a fact of life that energy—certainly oil—is becoming more and more scarce.

It has been mentioned that quite a lot of people in this country live less than a mile from grid gas, so should we be considering introducing incentives to use some of the green deal money to get more homes on to the grid? Should we think about encouraging communities? Several communities already come together to do co-operative buying, so is there a way of rolling out best practice in that area? Again, I do not think that the OFT is the body to do that, and aspects of Ofgem could be involved.

I pay tribute to a collection of men who belong to a Rotary group, not in my constituency, but where I used to live in the North West Hampshire constituency. Every week they get together to chop wood and make it into kindling, which they supply to pensioners in the village—my mother is a beneficiary. It is a nice thing that these good people do, and spending £4 a week on a bag of kindling is welcomed by the pensioners. I am sure that the activity provides the men with exercise but, more importantly, it provides them with a sense of well-being and of knowing that they are doing a service. We should encourage good examples of communities working together to ensure that vulnerable people in those communities are well served.

In summary, I want the Minister to think more widely about the oil and LPG market, about its efficiency and how it operates, about how we can get social tariffs into oil and LPG provision, and about Ofgem’s role. Most importantly, the flexibility of the green deal is critical in making a difference to the fuel poverty of, and energy efficiency for, those not connected to the mains gas grid. I look forward to the Minister’s comments.