Fuel Poverty

Debate between Caroline Lucas and Lord Harrington of Watford

Tuesday 11th December 2018 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)]

I beg to move,

That this House has considered fuel poverty.

I hope that no Members will leave the Chamber during such an important debate. I have just spilt a glass of water over the Secretary of State for Environment, Food and Rural Affairs and I apologise. [Interruption.] Yes, it is not the worst thing that has happened to Members today from what I have heard.

Fuel poverty is debated annually in the House. Let me give some background to that. Our 2015 fuel poverty strategy for England committed us to ensuring appropriate parliamentary scrutiny as we take action to tackle fuel poverty. That commitment to transparency is why we created the Committee on Fuel Poverty and why we hold the annual debates.

The problem of fuel poverty crosses party lines and needs action from many different stakeholders. I welcome all contributions today and the positive way in which I know they will be made. I am looking at the shadow spokesman when saying that and pleading with her to show her usual grace and dignity in opposing me.

[Caroline Lucas (Brighton, Pavilion) (Green)]

I am afraid that the Minister cannot expect quite so much grace and dignity from me—I apologise. To be serious, there is good reason to be deeply concerned about the fuel poverty statistics because we have just heard from the Office for National Statistics that last winter, the figure for premature winter deaths exceeded 50,000— the highest for more than 40 years. With respect, the Government are not doing anything near enough on fuel poverty, and I want to put that on the record at the beginning of the debate.

[Richard Harrington]

I would ascribe grace and dignity to the hon. Lady’s usual contributions. This is a serious matter. The hon. Lady is right that last winter’s severely cold weather included wind-chill factors of minus 10° C and I accept what she says about the statistics. However, I do not accept her assertion that the Government have done nothing about that. If she will bear with me for the rest of my contribution, I will answer her point, and if I do not, I am sure that she will intervene.

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[Richard Harrington]

I agree with the hon. Lady. The Government have many different strategies, and energy efficiency measures are one of them. The importance of working together with the devolved authorities on this issue was never in more evidence than during last winter’s beast from the east—I see the hon. Member for Bolsover (Mr Skinner) is not in his seat. As temperatures plunged, many households throughout the UK faced broken boilers and frozen pipes. The sustained cold weather made it even more difficult for those on the lowest incomes and in the worst properties to be able to heat their home.

As has been mentioned, last month the Office for National Statistics reported there were 50,000 excess winter deaths last winter. The figure was said by the ONS to be unusually high because of multiple causes, including the virulent strain of flu, the relative ineffectiveness of the influenza vaccine and the colder than average winter temperatures. However, old, inefficient and cold homes, combined with occupants who are vulnerable to the impact of living in a cold home, certainly have been a factor.

The fabric of our building stock cannot continue to be a source of ill health. We have put in place an ambitious framework to tackle this issue, based on energy efficiency being the best long-term solution to tackle fuel poverty.

[Caroline Lucas]

I do not know how the Minister can say he has put in place something that is so ambitious when no public funds are going into domestic fuel poverty and energy efficiency, for the first time in years. In the past we had Warm Front and other schemes, but right now the Government are putting no taxpayers’ money into these schemes.

[Richard Harrington]

I respectfully disagree with the hon. Lady, and I will outline the £3 billion-worth of Government help.

Our 2017 clean growth strategy sets an ambition of improving as many homes as possible to energy performance certificate band C by 2035, wherever practical, cost-effective and affordable, but the truth is that the most vulnerable must be helped first. We are committed to improving the homes of the fuel poor to band C five years earlier, by 2030, and we have set interim milestones to keep us on track. As many fuel-poor homes as reasonably practical will be improved to band E by 2020, and to band D by 2025.

A key way in which we are delivering energy efficiency measures to meet that ambition is through the energy company obligation, which has led to energy efficiency upgrades to nearly 2 million homes across England, Scotland and Wales since 2013. Recognising the need to support low-income and vulnerable households first, we have taken action to ensure that ECO is targeted at those who need it most.

When the scheme was first introduced in 2013, 30% of ECO spending was focused on addressing fuel poverty, and by 2015 it had been increased to 70%. Today 100% of the energy company obligation is focused directly on low-income and vulnerable households, and we have introduced a new innovative element that will bring down the long-term cost of low-carbon measures.

DMB Solutions: Liquidation

Debate between Caroline Lucas and Lord Harrington of Watford

Monday 5th March 2018 Commons Chamber

[Richard Harrington]

I hope that the hon. Gentleman will bear with me. I do not want to run out of time without having tried properly to answer all the questions. If there is time left at the end, I will be delighted to give way to him.

I am aware that complaints have been made to trading standards, and we will have to wait for that authority to reach its conclusions. In the meantime, however, we are not sitting idly by. All traders are subject to consumer protection regulations which, for example, require them to provide clear and full information and allow consumers to unwind a contract if they have been the victim of a misleading commercial practice. It is right that any alleged breaches of those regulations should in the first instance be reported to trading standards.

I will set out how the regime impacts on creditors. The first thing to say is that directors who do not play by the rules can expect to be held accountable. It is a long-established principle of company law that directors must act in the best interests of their company, but once the company approaches insolvency, their first duty must be to the creditors. I note from the hon. Members’ comments that, in this case, some of the money was paid a few days before insolvency. Without speaking specifically about this firm, I can say that that is highly relevant to the possible actions open to the authorities. I will say more about that in a moment.

In the majority of company insolvencies, the law is obeyed. Once it has been established that the company cannot pay its debts, a responsible director should take steps to protect creditors, and if a solution to the problem cannot be found, the company may enter into formal insolvency proceedings.

However, not all directors are that diligent. Sometimes, they bury their heads in the sand and continue to run the company as if nothing has happened, or they try to use money owed to creditors as working capital, so that the company may continue to operate, and pay their own salaries. In those few cases, the position of creditors, such as customers who have paid for work in advance, may deteriorate, which would seem to be the case here, given what we have been told. Such directors may be subject to disqualification proceedings, which if successful will prevent them from acting as a director of a company, whether formally appointed or not, for a period of between two and 15 years.

The Government are responsible for disqualification of unfit directors via the Insolvency Service, which assesses insolvent company cases to decide whether to investigate the conduct of the directors and, where appropriate, seek disqualification orders. A person who acts as a director while disqualified is committing a criminal offence and, further, they are personally liable for any debts of a company incurred while they were breaching the disqualification.

[Caroline Lucas]

The people who have been affected have already contacted the Insolvency Service, which has said that it will not investigate, so where do they go now?

[Richard Harrington]

At this juncture, the hon. Lady and her constituents have to accept that this is the beginning of the proceedings.

An investigation may lead to evidence of criminal offences committed by directors, such as fraud. In those cases, directors may face prosecution as well as disqualification proceedings. All that will usually start—this is the relevant point—with the receipt of a report on the conduct of the directors of an insolvent company, which must be submitted by the liquidator within three months of their appointment. Having said that, in deciding whether there should be an investigation, all sources of information will be considered, including information from creditors of the company, its customers, its records and other agencies. If the hon. Lady’s constituents have information about the conduct of the directors of DMB—it appears that they certainly do—that they feel would help to decide whether there should be further investigation, they may, and should, submit it to the Insolvency Service, which has a link on its website for precisely that purpose.

Rogue directors will also discover that they may be personally liable for a company’s debts if it traded while they knew, or ought to have known, that it was insolvent and creditors suffered as a result. While I cannot comment on this particular case, if the circumstances that the hon. Lady described are correct—I have every reason to believe that they are because they are based on what her constituents have told her—the firm was trading when the directors knew or ought to have known that the company was insolvent, and creditors have suffered. A court can order that they repay money to the company out of their own pockets if it can be shown that their actions, or inaction, have harmed creditors. In this situation, the directors would have breached their duty to the creditors of the company, which has the serious effect of preventing the directors from hiding behind the normal veil of incorporation that is a limited company.

[Caroline Lucas]

Will the Minister give way on that point?

[Richard Harrington]

I am going to run out of time, so I will continue. I ought to emphasise again at this point that I cannot comment specifically on the case of DMB or indeed the conduct of its directors.

I mentioned earlier that the Government continue to look for ways to strengthen regulatory and enforcement systems, and disqualification is one area where there have been recent improvements. From 2015, the powers of the Insolvency Service to investigate have been expanded, and the system for liquidators reporting on the conduct of the directors has been modernised, allowing for quicker and more efficient investigations. In addition, there is a new process whereby if a director is disqualified, and it can be shown that their actions caused direct losses to creditors, the court can order that they make a payment from their own pocket to compensate creditors or the estate. These compensation orders were introduced in the Small Business, Enterprise and Employment Act 2015.

The insolvency of a construction company such as DMB may often result in some customers having paid for work that it was not possible to complete. It is not unusual to ask the customer for a proportion of the payment up front, such as in the circumstances described by hon. Members tonight. Those circumstances may be different from insolvencies that may happen when directors behave perfectly properly and get into financial difficulties, but I will not describe that as the “normal” way, because few companies do become insolvent. There are things that become a serious matter of misconduct on the part of directors and that lead to periods of disqualification, personal liability and possibly prosecution proceedings being sought.

[Caroline Lucas]

Apparently, we have a couple more minutes. The Minister says there is provision to get a court to order a pay-out from people’s own pockets. Does that still apply if it was a limited company?

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[Richard Harrington]

That is not currently the situation. As the hon. Gentleman will know, some creditors are protected above others, such as banks with mortgages, and we have to be careful that companies can legitimately borrow money and pay their taxes.

[Caroline Lucas]

The hon. Member for Hove (Peter Kyle) and I would be grateful for the meeting the Minister describes. We will follow up with his office.

[Richard Harrington]

I apologise for the fact that in some cases I may not have been able to answer as fully as I had hoped.

Question put and agreed to.