Off-gas Grid Households

Tom Greatrex Excerpts

Tuesday 16th April 2013 Westminster Hall

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship again, Mr Crausby.

I congratulate the hon. Member for Truro and Falmouth (Sarah Newton) on securing the debate and on comprehensively discussing the issues arising from the all-party group’s report. I also note the efforts made by the hon. Member for Suffolk Coastal (Dr Coffey) and my hon. Friend the Member for North West Durham (Pat Glass), as co-chairs of that group, in pulling that work together. It is a good example of the positive work that all-party groups—sometimes denigrated for other reasons—can do. The hon. Member for Suffolk Coastal is present but unable to take part in the debate, given her elevated status. Her compensation is perhaps that, due to the vagaries involved with recent ministerial changes, she has greater direct interaction with the relevant Minister than was the case before Easter. I am sure she will use that interaction to continue to reiterate to the Minister the concerns expressed this morning by hon. Members from all parties—five parties, from all parts of the UK—demonstrating that the issue arises in many constituencies and in every part of the country. Knowing the Minister’s constituency a little from my youth, he will have constituents in rural parts who are also off-grid.

I welcome the new and latest Minister to his role and wish him well in his new, or partly new, responsibilities. We look forward to debating and discussing with him a range of issues under the remit of the Department of Energy and Climate Change. I was going to say that I welcome doing so in the months and years ahead, but about six months ago I said that to his predecessor, so it might be presumptuous to look too far ahead. For the period in which he and I are in these posts, I look forward to dealing with some of the big energy issues.

Off-grid gas and off-grid power are significant issues that are discussed from time to time. I was a member of the Energy Bill Committee. The hon. Member for Angus (Mr Weir) mentioned the amendment he tabled to that Bill. There was frustration—not just his, but among members of the Committee from all parties—about the paucity of the response on why the proposals in the amendment could not now be implemented, or even further explored. Given the hon. Gentleman’s previous attempts at introducing that amendment, I hope the Minister will bear that matter in mind before we consider the Bill on Report, as it presents him with an opportunity to make progress on that aspect. I am sure that the hon. Member for Angus is right about the prospects for his private Member’s Bill and I caution him as to the prospects for ministerial militancy, given that the Prime Minister’s remarks on energy tariffs have given the new Minister—and gave his predecessor—a problem to deal with in that regard.

Hon. Members have pointed out that some 4 million UK households are not connected to the mains gas grid. According to the OFT, that is a conservative estimate and the figure may be much higher. I will not repeat the list of communities in the constituency of the hon. Member for Strangford (Jim Shannon) that are in this situation, but I will say that in Northern Ireland 80% of households are off the grid, largely because natural gas was introduced there only relatively recently. Although there is a different regulatory and market set up in Northern Ireland, we should pay attention to the efforts to get households on to the gas grid, because, as the hon. Member for Brecon and Radnorshire (Roger Williams) and other hon. Members have made clear previously, this is not just a rural issue; it is an issue in communities that, for some historical reason, have been left off the grid.

The issue is not just one of cost; it also involves the time it takes to get some of those customers access to the grid. I have experienced that in my constituency, which is urban and suburban, but has a number of former coal communities that have not been on the grid for exactly those reasons, although they are close to places that are. The cost and the time it would take are prohibitive. That matter deserves further consideration.

As well as being of concern in Northern Ireland, the issue is significant in Scotland, where 21% of households are off-grid, and in Wales, where the figure is 19%. Hon. Members will be aware that the average dual fuel on-grid bill has risen by more than £300 in about the past three years. For those who are off-grid, that problem is even worse. Consumers using heating oil, LPG or solid fuels pay considerably more to heat their homes than those using mains gas.

[Pamela Nash (Airdrie and Shotts) (Lab)]

We have rightly concentrated on the costs of LPG and heating oil for heating homes, but many of my off-grid constituents, like my hon. Friend’s, depend on electricity to heat their homes. I would like to highlight the benefits of “Switch Together” campaigns to communities that are wholly dependent on electricity, because, although we want to get them on-grid as soon as possible, this helps them in the meantime.

[Tom Greatrex]

My hon. Friend makes an important point. We would want to get more consumers on to the grid, but where they are not on it we have to consider what other things can be done. Perhaps the Minister heard about the power of collective switching this morning on the “Today” programme, in respect of a group of councils. A number of groups of councils, and the Labour party and others, have engaged in collective switching programmes, which can have some impact in helping people to reduce their bills. My hon. Friend is right that the long-term issue is about trying to get more communities—some in her constituency are similar to some in mine, in Lanarkshire—on to the grid.

Hon. Members mentioned the House of Commons Library figure on the typical cost for households using oil for heating and hot water in a typical three-bedroom house, which at the beginning of the year was just under £1,700, compared to about £1,250 for gas. The difference of £450 a year would be difficult to deal with at any time and is particularly difficult given the economic situation that the country and many of our constituents find themselves in.

The volatility of the price of heating oil in particular causes off-grid households huge problems. Hon. Members mentioned the winter of 2010-11, when the price of heating oil increased by 55%. High prices coupled with extreme volatility have resulted in many off-grid households being pushed into fuel poverty. According to Consumer Focus, in Scotland, 59% of those using solid fuel and 56% of those using LPG and bottled gas live in fuel poverty, compared with 24% of those using mains gas. The 24% figure is far too high while 59% is very high and should be a matter of concern.

Measures that the Government could take have been highlighted both in the all-party group’s report and by hon. Members. We have touched on the winter fuel allowance, including the timing of the payments. The hon. Member for Angus commented on that. I hope that, by the time we consider the Energy Bill on Report, the Minister will have looked at the new clause, because it is worthy of more consideration and of action now, given the response that his ministerial colleague gave in Committee. I encourage the Minister to look at that to see whether there is work to be done.

I urge the Minister further to consider regulation of the off-grid sector. As the hon. Member for Truro and Falmouth remarked, there is not a specific regulator for off-grid operations and Ofgem’s remit essentially extends only to the on-grid market. The role of the OFT and the Competition Commission is not comprehensive enough to deal with the off-grid market. The Government should give serious consideration to bringing those issues under the umbrella of Ofgem or any successor regulator.

The Minister is aware that his predecessor committed to a cross-party round table on this issue—I think that it will be held next month—and I invite him to confirm that that will still go ahead and that he will be involved. Will he also outline what progress we can expect on that initiative? In addition, will he, on the basis of the discussions he has had, tell us whether suppliers have made any progress on the recommendations outlined in the Consumer Focus report on off-grid gas?

We have heard from the all-party group and Consumer Focus, and we have heard about the OFT report, although it is deficient in some ways, as was highlighted by the hon. Member for Argyll and Bute (Mr Reid). We have also heard concerns expressed by Members from all parts of the United Kingdom and almost all the parties represented in the House. The Minister, who is in his early days in the job and his new responsibilities, will therefore be particularly aware of the fact that this is a considerable issue. We should not pretend that it was created overnight—I do not think anyone is pretending that—but that does not mean there should not be some impetus behind seeking to address it.

If we can have a better regulated system and consider a range of issues, including winter fuel payments and how consumers with gas connections close to them can be connected to the grid, we can provide some comfort to our constituents and ensure that they get a better deal on their energy costs—I say “our constituents” because the Minister and I will both have constituents who are affected by the issue, as will all Members who have spoken this morning. I hope the Minister will take that thought away with him as he starts his new role.