Government Levies on Energy Bills

Debate between Tom Greatrex and Sarah Newton

Monday 3rd March 2014 Commons Chamber

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

I thank the hon. Member for South Suffolk (Mr Yeo) and his Committee for their report on parliamentary oversight of the levy control framework. It has been an important underpinning to this debate, and many of the issues it raises have been mentioned by Committee members and other hon. Members who have spoken. I hope that the Minister, if I give him enough time, can respond to those points before we conclude the debate. I am sure that he has paid attention to, and will want to respond to, the concerns raised by those who have spoken, and to the reflections of wider concerns expressed in recent months by several bodies and individuals, notably the National Audit Office. We have heard a refrain from some Members about the costs of so-called green levies. However, this has been a constructive debate and the more misleading aspects have not taken up much of our discussion.

A number of Members, including my hon. Friend the Member for Glasgow North West (John Robertson) at the start of the debate, spoke about the scale of the levies as a proportion of consumers’ energy bills. He said that more than half the cost of the levies goes to support pensioners and people on low incomes who need help to pay their energy bills.

My hon. Friend the Member for Nottingham South (Lilian Greenwood) has just described powerfully the immediate impact that the changes to the ECO scheme have had. She rightly said that we are yet to see an impact assessment from the Government. I wonder whether the Minister will enlighten us on when we will see the impact assessment of those changes, which were announced three months ago.

It is important to reiterate that that help focuses on improving energy efficiency, which can help to reduce consumption and minimise increases in bills. I would expect most hon. Members, whether they are here this evening or not, to sign up to that as a common-sense proposition. The housing stock in the UK is among the most energy inefficient. Much of the stock in the private rented sector, which has many of the poorest tenants, is the most inefficient of all. Improving efficiency is a sensible step, to help keep people warm and to ensure that we are not just heating the streets outside the windows and the air above the roofs. It also has the positive economic benefits of creating jobs and controlling the amount of generating capacity we need to invest in, which I hope will be well recognised.

Members will be aware that levies have been applied to bills for various schemes. When the Government introduced the ECO scheme, the enthusiastic Minister of State at the Department of Energy and Climate Change, the right hon. Member for Bexhill and Battle (Gregory Barker) proclaimed it to be “transformational”. So transformational has it been that it has led to schemes, such as the one in Nottingham that we have just heard about, being abandoned. He has presented the cutting and spreading over time of ECO as though it is extending the scheme. That feat of verbal dexterity has not been surpassed in this debate so far.

The number of contributions from hon. Members from all parts of the House this evening has demonstrated the level of interest in and concern about these issues. My hon. Friend the Member for Glasgow North West, who has a strong, consistent and unrivalled record of standing up for the fuel-poor in his constituency, in Scotland and across the UK, set out powerfully the way in which some people have used the debate over levies as a diversionary tactic to distract attention away from the need for reform in the retail and wholesale energy markets. I think that I heard him say that he is now convinced by the case for reform that is being set out from the Opposition Front Bench. I take that as a gain. I am sure that he will support our proposals in future.

The hon. Member for Southport (John Pugh) highlighted concerns about the delivery of aspects of the ECO scheme, which was introduced by this Government, and the impact on his constituents and businesses that are involved in replacing boilers.

My hon. Friend the Member for Southampton, Test (Dr Whitehead), who is a distinguished and long-serving member of the Energy and Climate Change Committee, underlined in his usual thorough and comprehensive way which levies are included and are not included in the levy control framework. I got the sense that he anticipates with keenness the forthcoming secondary legislation on the Energy Act 2013, which I hope we will see shortly. Indeed, I think he anticipates it almost as keenly as I do.

The hon. Member for Truro and Falmouth (Sarah Newton) highlighted the importance of energy security and a balanced energy mix, given the impact of geopolitical events on the price of imported energy. She also referred to the potential of wave and tidal energy in her constituency and throughout the south-west more widely. Last week, I was fortunate to be in Belfast to speak at RenewableUK’s wave and tidal energy conference and had the chance to meet and to speak to representatives of companies, universities and other bodies in her area. The local enterprise partnerships in the area have joined up to create almost a regional development agency, after the RDAs were abolished, to ensure that they get the best possible benefit from that huge energy potential.

[Sarah Newton]

The Government created the South West Marine Energy Park. The hon. Gentleman is right to say that the LEPs joined together to enable them to benefit from that very good Government initiative.

Welfare Reform Bill

Debate between Tom Greatrex and Sarah Newton

Monday 13th June 2011 Commons Chamber

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

I listened with interest to the hon. Member for Aberconwy (Guto Bebb), who said that this debate reminded him of the Committee stage of the Bill. I feel a bit like an intruder, because I did not serve on that Committee. I am not sure whether he meant that he was enjoying the experience or enduring it.

I want to make a few remarks about new clause 6. I am not sure whether it comes into the category of superfluous detail to which the Minister referred—or blessed detail, as one of his hon. Friends described it—or deals with something that was considered in Committee. Last week, I had a discussion with people at Rutherglen and Cambuslang housing association in my constituency, who are concerned about the payment of the housing element of universal credit and the changes that are being made to the current arrangements on direct payments. As someone who is not an expert in these matters, the new clause seems to me to draw a good balance between the desire to try to ensure that universal credit gives people responsibility for the money that they receive and protecting the interests of tenants of social landlords and the effectiveness of social landlords such as the housing association I mentioned and, I am sure, many others around the country. The new clause would allow the housing element of universal credit to be paid directly to the landlord if the person in receipt of universal credit requests it or if the tenant is in considerable arrears.

Social landlords are worried that income streams might be significantly reduced because households facing financial constraints as a result of rising food and fuel prices and other calls on their budgets which may be greater in future choose to spend the money received from universal credit on items other than rent, for which the housing component of universal credit is primarily designed.

[Sarah Newton]

The hon. Gentleman is making a good point. Is he assured, as I am, by what the Minister has said—that the vulnerable types of household that the hon. Gentleman is so well describing can make those payments directly to landlords at the moment, and that because the Government do not want to disadvantage anyone in the transition to universal credit, that mechanism will be allowed to continue?

[Tom Greatrex]

I am seeking an assurance from the Government that that system will be able to continue.

The proposed change has potential difficulties for the social landlord as well as for the tenant. On several occasions over the past year, I have heard the Government express determination to try to ensure that organisations in receipt of public money are as efficient and effective as possible. That is also important for social landlords and housing associations. If we move to a new arrangement whereby direct payment is not possible, there is a risk that they will end up spending a disproportionate amount of their time, resources and effort on attempting to get arrears from tenants instead of trying to be as effective and efficient as possible in prioritising and concentrating on improving their stock and dealing with the other issues that they face. That could constrain their ability to repay private finance that they have borrowed to finance new building. If housing associations are seen as higher risks, they may face even stricter conditions on their borrowing, which would affect their ongoing business.

There is also the question of whether tenants may resort to doorstep lenders or other loan sharks. I am sure that I am not the only Member present who has seen examples in their constituency of people being driven into that sector. I know that Members on both sides of the House have addressed that issue in debates on other measures. In seeking to ensure that people are responsible for the benefit that they receive, we must not put ourselves in a worse position by removing that direct payment.

As I said at the start of my remarks, I am new to this area of debate. I was not on the Committee and have not dealt with it in the same detail as others. However, it is important to protect a system of direct payments, particularly for social landlords. I hope that the Minister reflects on that, even if he thinks that the new clause is superfluous.