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11.19 am
Mr. Matthew Taylor (Truro and St. Austell): I congratulate the hon. Member for Bury, North (Mr. Chaytor) on securing this debate and, more important on his excellent comments. I shall follow his comments rather more closely than I had expected during the early part of his speech, because I share his concern about the Government's attempt to deal with this problem by helping people to pay to waste fuel, rather than by helping them to save fuel, keep their home warm and thus cut their bills, cut pollution and solve fuel poverty in the long term.
Fuel poverty is not like general poverty: being fuel poor means being unable to afford to keep warm at home not because people are short of money, but because the fuel they buy is largely wasted. Warmth leaks out through doors, windows and the roof when it need not do so.
Fuel poverty is the result of a vicious circle that traps low-income families in cold homes. Despite being poor enough to be living in a home without proper insulation and with a decrepit heating system, vulnerable families and pensioners have to shell out on large heating bills just to stay warm enough to remain healthy. They often fail to keep warm enough, despite paying large bills, because so much fuel energy is wasted. The more their money is eaten up by that waste, the more difficult it becomes to pay their fuel, food and other bills, let alone to pay for their homes to be insulated.
As the fuel poor try to put up with the cold and damp, even more CO 2 emissions are pumped out of power stations that fuel homes where energy is wasted, so everyone suffers increased pollution. That position is worsened by several of the policies that have been designed to help people to pay excessive bills rather than insulate to cut waste, to cut bills and to keep the home warm. Meanwhile, the taxpayer shells out on a national health service that treats hundreds of thousands of people who would not be ill but for the lack of a few simple measures to improve the energy efficiency of their homes.
The energy report of the 1991 English house condition survey is a testament to years of ad hoc Government action to tackle fuel poverty. Almost 6 million homes are completely inefficient in the way they consume energy. Vast numbers of people live in inadequately insulated and heated homes. Unsurprisingly, those having to live in such conditions are more often than not the most vulnerable in society: the very old and the very young. The state that the housing stock has been allowed to get into is inexcusable.
The energy report included a comparative study of fuel poverty in Europe. It found that fuel poverty is virtually non-existent in much of western Europe, where the quality of the housing stock is much higher. Indeed, the figures are better in many of the former eastern bloc countries. In an advanced industrial society such as ours, it cannot be right that so many people lack the basic necessity of a warm home to live in, whereas other countries do not allow that problem to arise.
Evidence shows the effect that cold, damp homes have on occupants' health. Once again, Britain is put to shame when we compare the numbers of those suffering from cold-related illnesses in this country with those in other countries. Every year, Britain experiences a phenomenon known as "excess" winter deaths. Thousands of people are bereaved every winter because of a massive seasonal increase in deaths. Official Government statistics show an extra 60,000 deaths on average each winter, and many more people spend time in hospital.
"Excess" is a rather odd, bureaucratic word: it really describes unnecessary winter deaths. Such a phenomenon is not experienced, certainly not on the same scale, in other countries that have similar or even colder climates. In Britain, for every 1 deg Centigrade drop in temperature, an extra 8,000 deaths occur. In countries such as Sweden and Norway, which can have terrible winters, no extra deaths occur.
Our elderly relatives are not our only worry. The extra pollution caused by this wasted burning of energy contributes to global warming, which is gradually making the world uninhabitable for our grandchildren.
The reality of the impact of cold homes on the elderly and vulnerable is best illustrated, not by those grand, national figures, but by local figures from the Office for National Statistics. In my county of Cornwall last winter, 414 people died unnecessarily--excess deaths, as the Government statistics put it. In Devon, the figure was 984 last year. We must remember that each and every unnecessary death causes unnecessary grief to friends and relatives.
The complex causes of fuel poverty do not lend themselves to ad hoc or half-hearted solutions. What is missing from action to improve the energy efficiency of Britain's homes is an integrated, national approach on anything like a sufficient scale. Although many welcome
small steps are being taken--by local authorities and at national level through home energy efficiency schemes and the Energy Saving Trust--they do not add up to enough. Some statistics suggest that the quality of the housing stock is falling rather than improving, because of inadequate investment in many homes, not least in the public sector where local authority spending has been badly cut.
The work of the Energy Saving Trust is an excellent example of the positive action that must be taken, but on a much larger scale. When the trust was established, the previous Government expected that it would have hundreds of millions of pounds to work with, generated by the levy on power companies. That was approved by the Treasury and by Conservative Ministers, but blocked by the gas regulator, Clare Spottiswoode. The Energy Saving Trust ended up with little more than the Government's grant: an utterly inadequate £25 million. The Conservative Government betrayed those whom they had promised to help by doing nothing to overturn the regulator's action.
Despite the lack of funds, the Energy Saving Trust has managed to introduce many innovative schemes. It has built on the Home Energy Conservation Act 1995, which was secured by my colleague and friend, Baroness Maddock, the former, excellent Member of Parliament for Christchurch. It has helped local authorities to improve the quality of their housing stock. Ordinary people are also receiving help: they get free advice on how to reduce their fuel bills from the energy efficiency advice centres set up by the trust.
The sad fact is that such projects are no substitute for a whole-hearted, properly funded, Government-backed energy efficiency programme on a sufficient scale to deal with the millions of fuel-poor homes, not just a few thousand.
Labour promised such a national home energy efficiency programme when in opposition, but the idea has now been blocked, apparently by the Treasury. However, that has become even more necessary as the Energy Saving Trust's funding has fallen rapidly: it is £19 million this year, and if Tory spending plans are adhered to as proposed, under the new Labour Government funding will fall to a mere £14 million. I understand that a final decision on this matter is expected next week. The trust is not certain what the final figure will be, so I hope that the Minister will have some good news for us today.
The new deal for young unemployed is not the answer either. We are told that they will have the option of work on environmental schemes, with energy insulation being the top priority. I welcome that. However, there are no new funds for the materials required, which suggests that existing funds will be diverted. If so, few, if any, extra homes will be insulated, and existing jobs in the young companies that have been established to undertake work under the home energy efficiency schemes will be lost. The Minister must explain how the materials will be funded on a scale large enough to make a real impact.
Money is always hard for Ministers to find, but the financial position should be put in context. Right now, the vast majority of pensioner couples and lone parents live in dangerously cold homes--cold enough to make them and their children ill--because they cannot afford enough heat. Families must daily choose between food and
warmth, while money leaks out of their poorly insulated homes. They waste the little money that they have, while the NHS spends an estimated £1 billion every year treating people who get ill in their cold, damp homes.
It is not just a question of the Government giving more money: that is the least of it. The scale of the problem goes beyond what any Government could provide. The average home in England is only half as energy efficient as the Government think is satisfactory, so there is a huge backlog of work if we are to achieve the standards of other countries. One in 10 low-income homes has no loft insulation, a third are still without adequate hot-water tank insulation and nearly 70 per cent. have no draught proofing. I could go on, but the point is made.
A vast amount remains to be done to give less-well-off people warm homes and a chance to use less power to better effect. The majority of homes in Britain could do with extra work, and a sensible way must be found to meet the large cost of that. The previous Conservative Administration found a solution--a levy on the energy companies--which was cleared by the Treasury. However, it was never put into practice. The regulator's block on such a levy must be overturned, by legislation if necessary. There would be overwhelming support in the House for such action.
The companies that make large profits from heating our homes and, incidentally, polluting our environment must be required to put far more of their profits back into the community through the funding of energy efficiency schemes. At a time of falling energy prices and high profits, there is no reason for that to lead to higher bills next year for anybody. Through insulation, the fuel poor would gain lower bills and warmer homes.
In addition to the levy, the free market should be harnessed to encourage energy conservation, not energy sales. A commitment to invest in energy efficiency should be secured before any energy supply company receives a trading licence under the new competition rules. The companies should be able to set up longer-term contracts with customers only if they have installed energy-saving equipment in customers' homes. The power company would get the profit from supplying a customer for a fixed period, which is not guaranteed in the new free market, and the consumer would get lower bills and a warmer home. The Government would not have to pay for that: it is harnessing the power of the free market, and the incentive would be the supply of energy saving to gain customers and not just selling ever more energy to people who cannot afford it in homes that waste it.
There must be a reversal of the absurdity under which there is less tax on using energy than on conserving it. If the Government want to attack fuel poverty, they should reduce VAT on all energy-saving materials to 5 per cent. which is the same rate as on energy so that it is not more expensive to save energy than to waste it. The Chancellor took a welcome, but, as was evident from the figures, rather tiny step in the right direction in his Budget by doing that for energy-saving materials that are used in Government projects. The same incentive must be given to every householder and business. Labour Members, including the Chancellor, voted with us two years ago to achieve that policy.
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