Fuel Poverty

Albert Owen Excerpts

Wednesday 19th January 2011 Westminster Hall

[Chris Evans]

Yes, I agree. I will come to off-mains gas later, but let me just say that fuel poverty is really bad in rural areas, and the hon. Gentleman is right to raise the issue.

The impact of price rises on fuel-poor consumers, many of whom are in low-income households, will be devastating. It is likely to push thousands more people, including many pensioners, into fuel poverty.

As a Welsh Member of Parliament, I am deeply concerned that Wales is one of the parts of the UK that is most badly affected by fuel poverty. Many pensioners in Wales have illnesses such as heart disease and diabetes, and many living in constituencies such as mine are former miners with lung diseases. They often have high fuel bills because of their health problems and need to keep their homes at a much higher temperature than other people. That problem is made even worse in older and poorly insulated houses.

Older people in Wales bear the brunt of increases in fuel prices. In my constituency, there were an average of 41 excess winter deaths between 2003 and 2008. Across Wales, more than 1,700 people die in winter every year as a result of fuel poverty, and that figure is certain to rise.

National Energy Action estimates that about 28% of households in Caerphilly county borough, where my constituency is situated, are in fuel poverty and have to spend at least 10% of their income on energy to keep warm. Some 20% of the population does not have access to mains gas. About 40% of fuel-poor households in Wales are pensioner households, and 28% contain single pensioners—often widows and widowers—who are desperately trying to make ends meet. Those pensioners face a double whammy, because electricity prices in Wales are up to £25 a year higher than in England.

A recent report on fuel poverty among vulnerable groups produced by Consumer Focus Wales found that 75% of those with a long-term illness or disability suffer fuel poverty. Some 62% of those aged 65 and over were concerned about paying their winter energy bills and were also more likely to cut back on their energy use at home to save costs. Across the population, the figure was 54%. What is more, more than 50,000 households in Wales are in debt to electrical suppliers and more than 46,000 are in debt to gas suppliers. It should be pointed out that the report was compiled before the recent energy price announcements.

The hon. Member for Upper Bann (David Simpson) mentioned cancer sufferers, and Macmillan got in touch with me to say that cancer patients, in particular, are struggling to pay their energy bills. According to its research, seven out of 10 working-age cancer patients suffer reduced household income, losing 50% on average. It is estimated that about four in 10 cancer patients of working age do not return to work after treatment.

Higher utility bills are one of the major additional costs that cancer patients face. One in five people with cancer turn off their heating in the winter, even though they still need it on. One in four wears outdoor clothing indoors to stay warm and reduce energy bills. Cancer patients have higher heating bills. In a survey for Macmillan, 59% of respondents said they had used more fuel since being diagnosed with cancer. Three quarters of those said that that was because they felt the cold more, and a similar number said that it was because they spent more time at home after being diagnosed.

A statement by the Secretary of State for Energy and Climate Change on 15 December muddied the waters further. He informed the House that the budget for the Warm Front scheme in England is fully allocated for this financial year. We are told that the scheme is fully subscribed and will be unable to take new applications for the remainder of the current year. The reason is that the scheme has a substantial order book of work, which will take until at least March 2011 to complete.

Essentially, the major problem with fuel poverty is that people who are victims of it do not necessarily know that they are. That may seem a strange statement, but many accept the difficulties they live with. When I worked for the previous MP for Islwyn, Lord Touhig, we prepared for a debate on this topic, and spoke to the secretary of the National Old Age Pensioners Association of Wales to ask what effects fuel poverty had on his members. We were both surprised to discover that members simply accepted that rising fuel prices are a fact of life. Whey they get cold they simply have to slip on an extra pullover, or heat just one room. Therein lies the great problem with fuel poverty. It can be difficult even for energy companies to identify customers who are fuel-poor.

[Albert Owen (Ynys Môn) (Lab)]

My hon. Friend is making an important point about vulnerable groups such as pensioners. Indeed, prior to coming to the House, I worked with several agencies, including Age Concern, as it then was, to identify them. That is why a universal benefit such as the winter fuel payment is important. For all its flaws, it gets to those people, who are often very proud and do not make claims. They are difficult to get to. All hon. Members should work with agencies to maximise benefit take-up so that people can get the benefits they deserve to help them with fuel poverty.

[Chris Evans]

My hon. Friend makes an important point. The dignity of pensioners is astounding, but in many respects they do not help themselves, because sometimes they are too proud to claim the benefits they are entitled to. I have said to every pensioner I have spoken to: “If you are entitled to it, claim it.” Those people have served this country. Many are veterans. Some people have devoted their lives to industry. If there is a benefit and they deserve it, they should claim it.

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[Albert Owen (Ynys Môn) (Lab)]

It is a pleasure to follow the hon. Member for Hexham (Guy Opperman), who made an important point about off-grid supply. Before I touch on that matter, I congratulate my hon. Friend the Member for Islwyn (Chris Evans) on proposing and sponsoring this debate. Given the time that he has been in this House, tribute should be paid to him for the way in which he has battled with this matter on behalf of vulnerable people—Lord Kinnock and Lord Touhig in the other place also have a strong record on standing up for the vulnerable. I welcome my hon. Friend’s contribution.

I pay tribute to the Energy and Climate Change Committee, the report of which many hon. Members must have read. I am a current member of the Committee and cannot take any credit for the 2009-10 Session. It conducted an excellent inquiry into fuel poverty, and two members of that Committee are here today—the Minister himself and the hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith). I pay tribute to them for their work and to the organisations and agencies that have worked long and hard to alleviate fuel poverty in our country.

In his opening remarks, my hon. Friend the Member for Islwyn mentioned Macmillan Cancer Support, which is carrying out pioneering work on identifying the hardships that are suffered by people with terminal cancer, and Consumer Focus. I will not make many political points today, but I will enhance some of the points that have already been made.

I am sure that the Minister agrees that the previous Government were right to give such a high priority to fuel poverty. Although the target for 2010 was not met, it was a bold one—to reduce the fuel poverty in England of vulnerable households—and the Government were right to set it. The Committee’s 2009-10 report said that average domestic fuel prices pushed the Government off their target. According to the Fuel Poverty Advisory Group, some joint electricity and gas bills went up by as much as 125% during the period from 2003 to 2008. The hon. Member for West Aberdeenshire and Kincardine has said that we cannot rely on just keeping prices down, but we cannot turn a blind eye to such rises either. We need to keep our foot on the pedal and keep the pressure on the energy companies that have been making excessive profits, which is why this Ofgem inquiry is so important. We must continue to work with the Minister, the Government and the devolved Administrations on the matter.

[Dr McCrea]

Is the hon. Gentleman aware of the appalling statistics on fuel poverty in Northern Ireland? For example, National Energy Action has found that in Craigavon borough some 44% of households are unable adequately to heat their homes. In Magherafelt and Ballymoney, there is 40% fuel poverty. We must not forget that behind every one of those statistics is real human hurt.

[Albert Owen]

The hon. Gentleman is absolutely right. I was not aware of those specific statistics. The hon. Member for Hexham was right to say that this matter affects not just parts of the country but all the country. We all have semi-rural and rural areas in our constituencies. Indeed, I represent a periphery area, which is something that I shall discuss in more detail later. Such areas face a double whammy in that they also have to get in fuel supplies. Cumbria faces such a situation, so I agree with the hon. Member for South Antrim. What connects us all across the political divide is that we are talking about not only statistics but real people. We are talking about how we can alleviate hardship for people. Indeed it is a common endeavour of all political parties to do that, although we disagree on the mechanisms by which to achieve it.

Earlier, I referred to how it is essential that we work with the devolved Administrations. I have been working with the Welsh Assembly Government on delivering energy efficiency, and they have a good record in that regard. Although provision is patchy across many parts of Wales, there is, as my hon. Friend the Member for Islwyn has highlighted, some good work being done by organisations in the areas of energy efficiency and loft insulation. None the less, we need a mechanism to deal with hard-to-treat properties. Some older rural properties do not even have proper insulation in the foundations, let alone in the walls, windows and roofs.

[Guto Bebb (Aberconwy) (Con)]

When we discuss rural areas, it is right to consider how to deal with hard-to-treat housing. It is also important to consider the fact that average wage levels in rural areas are significantly lower—that is certainly the case in north Wales. As a result, fuel poverty is a larger issue, because a larger percentage of income is spent on heating and housing. Fuel is also more expensive in rural areas. Therefore people in such areas suffer from both low income and high fuel prices, so there is an issue relating to economic development in rural areas and a need to create economic opportunities for people, so that they can enjoy an income level that is sufficient to allow them to meet fuel costs.

[Albert Owen]

Of course household income is an issue. In areas in which GDP is low, household incomes are not necessarily low; such indicators do not necessarily go together. There are joint incomes in rural areas. Many people feel that they have to have a supplementary income to pay the bills. None the less, the hon. Gentleman is right; in some of the more deprived areas of the United Kingdom, fuel poverty is worse. There are also other factors such as rurality and the problems faced by areas on the periphery of the United Kingdom, which is something that I will discuss later.

I welcome the Ofgem inquiry into the big six, which looked at their price mechanism and their excessive profits, and we must keep up the pressure on the companies. Indeed the Select Committee, of which I am a member, met Ofgem yesterday. A few weeks ago, we spoke to the big six. I make no bones about it; excessive profits are being made and they should be curtailed. We must give the regulator teeth to bring that about. We have peaks and troughs, and the inquiries always seem to come when the prices are subdued for a period of time and then there are the excessive profits. We have not been able to prove that through the Competition Commission and various other mechanisms, but it does happen and real people are paying the price.

[Jim Shannon]

One example can be found in Northern Ireland. The oil comes in through Belfast. We have variations in price across the Province. The price for 800 litres of fuel can vary by as much as £20 to £25. The hon. Gentleman has rightly said that it is an obscenity that companies are making excessive profits while people are experiencing difficulties. We need an extensive inquiry and some rules and regulations from the regulator.

[Albert Owen]

Yes. I will come on to the off-grid as well to provide some balance. I stress that Ofgem is doing a good job, but it needs more teeth. I know that we will have the opportunity to discuss both that matter and how we can beef up the regulator’s powers in forthcoming energy Bills.

I am a big supporter of winter fuel payments. The previous Select Committee included that matter in its report, to which this Government provided a response. Some people think that such payments should be modified, targeted or means-tested, but the benefit is a huge success. It is a substantial payment that is easy to claim and easily understood. I believe in universal benefits. As a nation, people contribute to the national pot, so that benefits can be given to people in need. I understand that we need a mixed package of targeted benefits in addition to the universal benefit. This particular benefit has been a huge success, and I am sure that the Minister will confirm that the Government have no intention of changing it. I know that there is a cost element to it, but the benefits far outweigh any negatives in this area.

I realise that there are other Members who want to speak, but it is important to highlight some of the points made by the hon. Member for Hexham about off-grid gas supply—indeed, a number of interventions have been about that matter. Households that are not connected to the gas mains experience a double whammy; many of them are in periphery areas and pay extra money for petrol and diesel, as well as having to pay more for domestic heating fuel. We need to consider that issue. For instance, liquefied petroleum gas is far more expensive than on-mains gas, and we have heard much anecdotal evidence in many debates about the huge rise in price for domestic oil and domestic LPG.

I do not believe that the Office of Fair Trading has been sufficiently proactive on this issue. I heard what the hon. Member for Hexham said about the importance of giving the OFT anecdotal evidence, which is one way forward although it is a cumbersome process. There should be a single regulator to look at gas and electricity prices, and it should consider both the grid and off-grid supply. We should have a single regulatory body, and I ask the Minister to consider that proposal for the future. There should be a single regulator looking at all domestic fuels with a view to regulating the off-grid supply as well as the grid supply, and that regulator should have real teeth and real responsibility to look after the most vulnerable people in our society, which is what the existing regulator was set up to do. In many areas, a huge number of people are not on the grid—in some areas, a majority of people are not on the grid—and they are suffering disproportionately as a result.

As the Minister may know, I have been campaigning on this issue for a long time. However, I have been frustrated by the responses that I have received from the regulator, from this Government and previous Governments, and from the gas distribution networks, agencies and energy retailers. There is no joined-up thinking on this issue—there is a blockage and things just do not happen. People who live within a short distance of gas mains are not connected to them. I am not talking about isolated properties. I am talking about villages of considerable size and hamlets that are close to the gas mains, but there is no incentive for them to be joined up, although to be fair to the Department of Energy and Climate Change the Government have had some schemes, agencies and partnerships over a number of years that have worked on that issue.

The differential between those who pay off the grid and those who pay on the grid is so great that there should be some real investment and a mechanism to provide connection to the grid, so that those people who are not on the grid can have additional choice. Choice is what I am talking about. If people wish to remain off the gas mains, it is a matter for them, but at the moment those people do not have any choice in the matter and are being hammered by domestic oil and LPG prices.

I hope that the Minister will act on this issue. I understand that new developments will need renewable sources of energy built into them when they are constructed, which I fully support—ground source pumps and other measures may be the future. However, we are talking about hamlets and villages that have been off the gas mains for an awfully long time. When coal was cheap, for historical reasons, it was okay for those communities; there was not the disparity that there is now between the price that they paid and the price that those on the mains supply paid. Today, however, because of the lack of regulation and the inability to connect people to the gas mains, there is a huge disparity between those who are on the mains supply and those who are not, and there is a huge amount of extra fuel poverty in those areas that are not on the mains supply. So it is something that we need to work on collectively. I am sure that the Minister will respond to that issue.

I want to make an overtly political point about fuel prices, which concerns the price of petrol at the pump in periphery areas. The extra fuel poverty that I have just referred to was made worse in January, because of the additional 2.5% hike in VAT, which is really hurting people. I am not talking about people who use their cars just for pleasure. I am talking about people who use their cars because there is a lack of adequate public transport in their areas and because they have to take their children to school or to leisure activities on a daily basis and the only means of transport is a larger car. Also, those people work in a communal fashion, as it were, by giving lifts to other people. Those people are paying—

[Mr James Gray (in the Chair)]

Order. We are drifting slightly away from the topic of the debate, namely fuel poverty, and it might be better to come back to it.

--- Later in debate ---

[Albert Owen]

I will certainly bring the debate back to fuel poverty, because petrol is a fuel, people are in poverty and the VAT hike is compounding the problem of the increase in their daily household bills, because they have to pay extra fuel duty on top of paying extra money for the off-mains supply of gas. It is a big issue in my area; people who are already paying additional money for their fuel also have to pay extra for their travelling costs, and as a result their household budgets have been squeezed considerably. That is the point that I am making. It is a serious point about fuel poverty and not just a political point about the VAT rise, although in my opinion that rise could have been avoided. It was a political decision and on top of the duty escalator it has hurt periphery areas the hardest.

I support the Government in looking for a stabiliser mechanism, because the peaks and troughs in prices are too great. I want to see some stability in prices, so that we can hold household bills down. I also welcome the proposals for a freeze on duty when there is hardship. I lobbied for that for a long time, and we achieved limited success under the previous Government. However, we need some stability because of the volatility of the prices. I want to see some sort of stabiliser mechanism, and I also want to see periphery areas receiving some benefit from that mechanism, which is an issue that the Government propose to re-examine. The pilot schemes that the Government are talking about for diesel and petrol are limited to the Western Isles and to St Ives and other parts of Cornwall. I want to see a Welsh and Northern Irish dimension to that programme, to include periphery areas in those regions.

[Roger Williams]

West Wales.

[Albert Owen]

And west Wales. I am calling for that extension, because those of us in those periphery areas are paying so much extra for fuel. The argument that we hear about petrol and diesel delivery is the same one that off-grid providers use; they say that they pay an extra amount to deliver fuel to those periphery areas. I do not think that we should be paying that extra amount for fuel in periphery areas.

I hope that the Minister will take that point on board. I am supportive in principle of a stabilising mechanism, although I would like to see how it works in practice. I also want to see area rebates extended to Wales and Northern Ireland in addition to England and Scotland, because they will help to alleviate poverty.

The differences between us on this subject are small, although I do not agree with scrapping the Warm Front programme, which was a success. I am not sure about the details of the green deal, but I will support those measures that help to alleviate poverty. As I have said, it was wrong to raise the VAT on petrol and diesel, just as it was wrong of a previous Government to try to introduce VAT on domestic fuel. Governments can disinherit some of these measures. I hear the Government saying now that they have to go ahead with the fuel duty price rise because they inherited it. However, the previous Labour Government disinherited the plans to put additional VAT on domestic fuel, and we are all comfortable with that move now. It was wrong to propose such a rise, which is why we should re-examine VAT and fuel costings.

We need to have a proper regulatory system, and we need to bring Ofgem and the OFT together in a single body when it comes to off-grid supply. That point is important, and I hope that the Minister will take it seriously. I believe in the retention of the winter fuel payment, which is a universal benefit that helps to alleviate fuel poverty. I also want to see an extension to the gas mains, whereby we have a proper, clear way of moving forward and a mechanism that allows people to choose whether to connect to the gas mains.

I am conscious of the time, so I will leave it at that. We have a common endeavour here to alleviate poverty. I know that the Minister, as a member of the previous Energy and Climate Change Committee, is at one with me on that issue, and I look forward to hearing his responses to my points. Finally, I again thank my hon. Friend the Member for Islwyn for securing this important debate.

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[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

It is a pleasure to serve under your chairmanship, Mr Gray. I congratulate the hon. Member for Islwyn (Chris Evans) on securing this debate and thank him for the interest that he has shown in this incredibly important issue. It is vital for his constituents, for Wales in general and for the country as a whole. I also congratulate him on the comprehensive way in which he outlined his thinking and his assessment of the challenges that we face. I reassure him from the outset that we share the same objectives. We both recognise where things have not been working, and we are both determined to do better. I look forward to working with him, as we try to make progress on the issues over the coming years.

I have also been encouraged by the contributions of my hon. Friends the Members for Hexham (Guy Opperman) and for Suffolk Coastal (Dr Coffey), and the hon. Members for Ynys Môn (Albert Owen) and for Brecon and Radnorshire (Roger Williams), as well as the extremely constructive contributions of many other hon. Members who have intervened in the debate, during which the full range of issues that affect fuel poverty have been considered. That breadth has made it extremely constructive.

Reference has been made to the Fuel Poverty Advisory Group, and I would like to put on record my respect and admiration for that group’s work, particularly the incredibly assiduous work of its chairman, Derek Lickorish, in drawing attention to the issues and how we should seek to address them.

The figures for fuel poverty, which have been set out by the hon. Member for Islwyn, make it clear that the situation in Wales is worse than in much of the UK as a whole. From 2005 to 2008, the number of households in fuel poverty rose from 2.5 million to 4.5 million, and it is estimated by many organisations that today’s figure is probably 5 million, so it has doubled over the past five years. In Wales, 26% of households—332,000 of them—are estimated to be in fuel poverty. That figure has more than doubled over the past six years. It is, therefore, absolutely clear that more needs to be done to address the problem. As the hon. Member for Liverpool, Wavertree (Luciana Berger) has said, this is not about rhetoric, but action.

The hon. Member for Ynys Môn talked about the importance of targets. They are important, but every bit as important as a target is a road map—a strategy for how one intends to meet the target. What we have lacked lately is a strategy on how to meet ambitious targets. The hon. Member for Liverpool, Wavertree said that we need action, not rhetoric, and that is exactly what we are determined to put in place. However, given what we inherited on the issue, we cannot continue to pretend that the previous policy was working. We need a different approach and there needs to be much greater urgency in how we address the issue.

Historically, Warm Front has been one of the main vehicles for trying to achieve that. I have no doubt that Warm Front has done much good work, but it has simply not been up to the scale of the challenge. Between 2008-11, Warm Front spent more than £1.1 billion helping 580,000 homes. In 2009-10 alone, it assisted 210,000 households by introducing 112,000 heating measures and 82,000 insulation measures. That will help to improve the standard assessment procedure rating of those properties from 33 to 66 points on average, which is the equivalent of an energy efficiency rating increase from band F to band D. The scheme has, therefore, been doing a good job on energy efficiency, which has led to average savings of £650 and more in the running costs of those households.

Those are real benefits, but, as other hon. Members have said, particularly my hon. Friend the Member for Suffolk Coastal, they have been dwarfed by the scale of the problem. The Association for the Conservation of Energy estimates that a quarter of the homes supported by Warm Front are in fuel poverty. Therefore, even at the peak of its work, when Warm Front was helping 200,000 households a year, only 50,000 of those were in fuel poverty. Some 5 million homes are estimated to be in fuel poverty, so it would take 100 years, using Warm Front, to deal with the problem. That is simply not adequate.

The vast demand for the Warm Front service has highlighted the problems, which is why we had to announce in December that the budget for this year had been allocated and was fully subscribed and that we could take no new applications in this financial year. We will still help 130,000 households in this financial year, and we expect the 55,000 jobs that are still in the queue to be completed by March. The measure is, undoubtedly, temporary and the scheme will open for new applications from next year. However, Warm Front has clearly not been able to deal with the scale of the problem, and we need a better approach.

Warm Front will continue for the next two years with a budget of £110 million in the first year and £100 million thereafter, as we get new measures that we think are more fit for purpose up to speed. We are consulting on the eligibility criteria, so that we can ensure that, for its remaining period, Warm Front is more targeted on the most vulnerable people, who are likely to be those on income-related benefits. Warm Front will be more targeted on the least energy efficient homes in particular, so that it can be more effective. Alongside that, we are committed to maintaining winter fuel payments, which were planned by the previous Administration, at a higher rate of support this winter.

There were some questions about how the cold weather payment would work, and I am keen to receive more information from the hon. Member for Strangford (Jim Shannon) about his concerns. It strikes me as a particularly well-targeted benefit. It is automatic and based on a postcode approach. When the temperatures in a postcode trigger a payment for those who qualify because of the benefits that they receive, they should receive it automatically. If the hon. Gentleman would like to write to the Department with his concerns, we would be keen to respond to them in more detail to ensure that the scheme is working as effectively as possible.

We are also committed to doing more to work with the energy companies to identify vulnerable customers. The energy rebate scheme has been an extremely effective mechanism. It has matched information from the Department for Work and Pensions about those who are on pension credits with the consumers of each energy company. That has enabled the companies to target those people with an £80 discount on their electricity bills, which has enabled 200,000 households to benefit to the tune of £16.5 million in total, with additional running costs paid by the energy companies themselves. That shows the benefits of the Government and industry working together.

We are determined to build on the success of that scheme through the warm home discount, which will also help to address the issue—this was mentioned by the hon. Member for Islwyn earlier—of hidden fuel poverty for people who do not necessarily come forward. It will require the energy companies to give a greater discount and to target it on the most vulnerable customers, sharing more information about other people who are in receipt of benefits. We expect it to be £140 a year, which almost doubles the discount on electricity bills. We are also looking at how we can spread the breadth of that for low-income families, those with long-term illnesses and those with disabilities, which are issues that have been raised in this debate. We are in touch with Macmillan to try to make this scheme work for those homes with someone suffering from cancer, for whom we all have tremendous sympathy and wish to help as much as possible. The scheme will be mandatory and worth £1.1 billion over four years. We expect it to help 2 million households a year.

Against that background, we also believe that the time is right for a fuel poverty review, and I am grateful for the recognition and support that it has received from hon. Members who have spoken this morning. It will ensure that the available resources are focused most effectively on tackling the problems underlying fuel poverty. It will be an independent review of the target and the definition of fuel poverty. We believe that that is the right place to start. Given the failure so far to meet the targets that have been set, it is right that the target and the definition should be the starting point. Additionally, if we are to have someone truly independent to chair the review, we are keen that they should also help to frame its terms of reference and its priorities. It will be fundamental in helping us to assess what will be the right measures to deal with the challenges.

We have heard a significant amount—understandably so—from hon. Members on both sides of the House about their concerns about the domestic oil market and the liquefied petroleum gas market. I want to make it absolutely clear that we understand those concerns. As a Member of Parliament, this is the largest issue raised in letters in my constituency postbag. As a Minister, it is the largest element of the letters in my ministerial postbag that express concerns to me in the Department. I have no doubt whatsoever that many hon. Members and members of the public do not believe that the market has been working as effectively as it should.

We recognise that many issues can affect prices—refinery capacity, stock levels, distribution costs, retail margins and exchange rates all have a role to play—and we are liaising with the Office of Fair Trading, which has the responsibility to consider any example of market failure. What has struck me in many of the letters that I have received and in the contribution of the hon. Member for Brecon and Radnorshire is the specific—not anecdotal—examples of where things have not worked as we would expect them to. I hope that the Office of Fair Trading will consider those matters very carefully. It is currently consulting on its annual plan and on proposals to prioritise markets impacted by high, rising and volatile commodity prices. The Department of Energy and Climate Change supports such an independent assessment of the off-gas grid supply issues for consumers and competition in the relevant markets.

Many issues need to be addressed in this context. However, we also need to consider how we address these matters more fundamentally. There are plans to extend the gas grid, but it is a slow process and we recognise the challenges that exist. That is also why we have attached so much importance to taking forward the work on the renewable heat incentive. We want to encourage those people who are off-gas grid to look at other renewable ways of heating their homes and providing hot water. The renewable heat incentive, on which details will be announced shortly, will be a crucial way to try to deliver on that.

[Albert Owen]

The Minister is very skilful in his reply. He mentioned the apparent failings of the Office of Fair Trading. Will he consider—I am asking for a consideration—whether DECC will look at the work done by Ofgem on the on-grid and by the OFT on the off-grid? Will he consider the comparisons and think about whether there should be a single body dealing with the matter, because the complexity of making reports to the OFT, which must then do so to the Competition Commission, does not benefit vulnerable people in those areas? I ask him as a DECC Minister to go back to his officials, look at those comparisons and come up with a possible regulator for the off-grid in the future.

[Charles Hendry]

If the hon. Gentleman looks at some of the speeches that I made when I was the Opposition spokesman, he will see that I raised those exact issues. It has been argued that there are many competitive companies in this area. We have heard about some of the challenges to the market in this morning’s contributions. The matter is so important—it is such an enormous part of so many people’s household budgets—that we are determined to ensure that we get the policy right. We will consider how the market is working and the role that the OFT can take, which is primarily independent in its ability to assess these matters. We will also look at the role of Ofgem, as we reform its role as a regulator. It is critical that we learn a great deal from the lessons of this winter.