Fuel Poverty

Jonathan Reynolds Excerpts

Wednesday 3rd February 2016 Westminster Hall

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

It is a pleasure to see you in the Chair, Sir Roger. I congratulate the hon. Member for St Ives (Derek Thomas) on securing this debate and on a fine speech, the vast majority of which I agree with. I absolutely agree that fuel poverty is one of the most significant social problems in the UK and that more needs to be done, but what I find most frustrating about this debate is that this is an issue that can be solved. The technology and the workforce exist, but this country so often lacks the political will to address the issue. The Government’s strategy is not delivering the kind of gains that we need.

As the hon. Gentleman said, the UK has the worst fuel poverty in Europe except for Estonia. In my constituency, like his, some 10% of all households are in fuel poverty. What does that mean? It means that children are going to bed cold, that teenagers are falling behind at school when they should not and that pensioners are afraid to put on the heating when they need it, simply because our housing stock is so old and inefficient. Understanding that point is crucial, because we will not end fuel poverty until we can substantially reduce households’ energy consumption—not just the cost of each unit of energy but the overall consumption of energy in each household.

That is different from the Government’s approach. The Government often talk about fuel poverty. They talk about more liberalisation of the market and ending subsidies for renewables, but that will not bring us the gains that we need. Every form of new generation will require some form of subsidy. Renewables will need subsidy until they become cost-effective, nuclear will always need subsidy, and new gas will need subsidy as part of the capacity market. The only answer to those problems is greater energy efficiency and cutting consumption, which can be done.

Energy efficiency is the way that we can address climate change while keeping bills affordable, and of course it is far cheaper than any new generation that we could bring into the system. What does that mean? It means sorting out the simple stuff that needs to happen—cavity wall insulation, loft insulation, draft-proofing and modern windows. Energy companies are quite good at getting that out the door and into households, and they have gained considerable expertise in Government policy over the past few years. But energy efficiency also means addressing the very difficult stuff, such as solid wall insulation. Half of all fuel-poor homes in the UK require solid wall insulation, and a Government programme is required because it will never be economical for householders to make such large investments themselves.

In policy terms, we have now lost the green deal and the pay-as-you-save model. We are left with ECO, which I have never liked because it is not fit for purpose. ECO produces huge fluctuations in work for the workforce and in the price received for that work. Fundamentally, ECO does not go to the people who need it most. ECO brokerage will always find people who are in need, but not the most need. It will find people who qualify but who can also make a personal financial contribution, yet millions, or at least thousands, of people in the UK desperately need help but cannot make that contribution themselves. The Government changed ECO after one year of operation, and it does not offer anything for solid wall insulation. Now that we do not have the green deal, we are seeing many jobs lost in the energy efficiency sector at a time when we need them more than ever. Big and small companies have gone to the wall under this Government and at the end of the coalition Government’s time in office. That is a tragedy, because we need that workforce, those jobs and those skills more than ever.

The Government could pursue many alternatives to make things happen. We should have zero-interest loans, as happens in Germany, where they have been a tremendously successful programme for people who can afford to pay. There should be stamp duty incentives for buying a more efficient home or for turning an inefficient home into a more efficient one.

There should eventually be a degree of compulsion. Measures such as cavity wall insulation and loft insulation are effectively still free under Government programmes. Given our climate objectives, there has to be a point where we say to people, “If you want to move house, you’ve got to have these programmes in.” They are effectively free; it is just a matter of getting them out the door.

There are also a lot of small changes that can be made. In this country, 10 million homes do not even have thermostats. If someone does not have a thermostat, they cannot control their heating to any substantial degree, yet that problem could be easy to solve. In addition, we need to do something about the private rented sector, where I believe standards—particularly on energy—are extremely poor.

There is a lot more that I would like to say, Mr Gale, but I will respect the time limit. I will simply say now that we have the workforce and the technology to deal with this issue, but what we do not have is the political will. I would love to see that situation being addressed.

--- Later in debate ---

[The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)]

I congratulate my hon. Friend the Member for St Ives (Derek Thomas) on securing such an important debate, and on the conference that he is holding in his constituency this week focusing on what can be done to address the matter. Several hon. Members from across the House have asked me what they can do to help their constituents, and it is fantastic that so many are interested in seeing what they can do on the ground to help. I am thinking about providing some kind of support for Members who want to get involved locally.

Tackling fuel poverty is of utmost importance to the Government and energy security is the No. 1 priority. We have been clear that keeping the lights and heating on while meeting our decarbonisation targets at the lowest possible cost to consumers is a priority in this Parliament. All our policy work since we came into office last May has been resolutely focused on what more we can do to keep costs down for consumers and how technology can enable people to manage their own costs better. The human dimension matters enormously. Better insulation, better heating systems and better heating controls possibly sound a bit dry, but they can make a huge difference to people’s lives. Ultimately, this is about people living in warmer homes, paying lower bills and having more control over their own lives and comfort.

Several hon. Members, including my hon. Friend the Member for Somerton and Frome (David Warburton), raised the importance of focusing all our schemes on tackling fuel poverty. I can assure him and other hon. Members that we are reviewing all our policies to ensure that they prioritise the fuel-poor in every possible way. We have already made a difference. Since April 2010, Government policies have supported the insulation of 3.8 million lofts and 2.1 million cavities. In fact, the number of households in fuel poverty in England has fallen every year since 2010, but it remains a massive problem. Over 2.3 million households remain in fuel poverty in England alone, and our fuel poverty strategy must and does set stretching goals to continue to address the challenge.

My hon. Friend the Member for Congleton (Fiona Bruce) mentioned the particular problem for those with prepayment meters, and I agree that the challenges are huge. She will be aware that the Competition and Markets Authority is looking at how energy suppliers are behaving towards those with prepayment meters. Smart meters can make a big difference to the cost of a prepayment meter, and I urge all consumers to consider switching. They can seek help from their citizens advice bureau. In previous debate in the Chamber, I was able to highlight some of the cost savings that can be achieved even for those on prepayment meters with the support of the CAB.

[Jonathan Reynolds]

The Conservative manifesto contained a promise to insulate 1 million homes in this Parliament but, as the Minister just said, 5 million homes were tackled in the previous Parliament, which was lower than in the Parliament before that. Can the Minister see why hon. Members of all parties present feel that the target does not represent a particularly ambitious Government objective?

[Andrea Leadsom]

I can assure all hon. Members that focusing on tackling fuel poverty is our priority.

From April 2017, a reformed domestic supplier obligation focused on energy efficiency measures will upgrade well over 200,000 homes a year and tackle the root cause of fuel poverty. Our extension of the warm home discount to 2020-21 at current levels of £320 million a year will help households at the greatest risk of fuel poverty with their energy bills. We will focus our efforts through both policies increasingly on households in fuel poverty and will be consulting within weeks on how we can do that.

The hon. Members for Ross, Skye and Lochaber (Ian Blackford), for Coatbridge, Chryston and Bellshill (Philip Boswell), for South Down (Ms Ritchie) and for Strangford (Jim Shannon) and other Scottish, Welsh and Northern Ireland Members have asked what the UK Government are doing, but they are all aware that fuel poverty is a devolved matter. I am sure that they will be raising their views with their own Parliaments as well as in this place.

It is important to address the point about a single national network charge, particularly for Scotland. We had a debate in this room only recently and I pointed out that Ofgem’s recent report shows that there would be winners and losers from a national network charge. Some 1.8 million households would face higher bills and 700,000 would see reductions.