Draft Electricity and Gas (Energy Efficiency Obligations) (Amendment) Order 2003

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Rob Marris (Wolverhampton, South-West): May I take the hon. Gentleman back to the figures that he has mentioned? He said that 6,700 eligible pensioners not taking up their claim was saving the Government £820 million. If I have understood him correctly, that adds up to £120,000 per pensioner. Is he sure about his figures?

Mr. Gray: The hon. Gentleman has been nimble with his calculator. The figure of £820 million was for all means-tested benefits that have not been claimed, including those not claimed by the 6,700 pensioners

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who are not claiming their proper pensions. The hon. Gentleman is right to say that the two figures do not relate to each other, but together they show that many deserving people are being flummoxed by the appalling bureaucracy created by the Government and are failing to claim the benefits due to them. My concern is that the very same people will fail to claim and take advantage of the good and worthwhile scheme before us simply because of the Byzantine complexity of the new Labour scheme that lies behind it.

The Minister should tell us how many people have benefited from the scheme since it was passed in this very Room two years ago? How many people does he expect to benefit over the next two years? What will he say to this Committee when he comes back in two more years, no doubt, to change yet again the Byzantine social security system? What will he tell us if there has been a lower uptake than both he and I hope for?

2.44 pm

Sir Robert Smith (West Aberdeenshire and Kincardine): The hon. Member for North Wiltshire (Mr. Gray) has certainly touched on the crucial point about the order in the sense that it comes the day after a Budget in which, yet again, the Chancellor tinkered and increased the complexity of an already difficult tax system. The heart of my worry about all the other benefits passported on the back of means-tested benefits is the danger that when someone fails to claim any of the things to which they are entitled, they disfranchise themselves from a raft of other benefits. It is crucial, if the orders are to be effective, that the Government ensure that all Departments do all that they can to encourage take-up. I ran a take-up campaign in my constituency on the minimum income guarantee for pensioners, leafleting all my constituents and holding surgeries involving the Benefits Agency to try to encourage greater awareness and take-up. Some of us would prefer a straightforward rise in the pension to get round such problems, but while the system exists, take-up campaigns will be essential in ensuring effective passporting.

The Minister touched on the fact that the order is part of the strategy to tackle fuel poverty and the wider problems of pollution and carbon emissions. There are three strands to fuel poverty—the price of fuel, the quality of housing stock and the income of the person concerned. Anything that can be done to improve individual income is a great benefit, of course, but the price of fuel has dropped, and the most effective fuel poverty strategy has been conducted through that rather than through the other available means. We must be wary of that, however, because we may be reaching the bottom on it. A better way may be market forces bringing further efficiency into the system, but there is every chance that fuel prices will start to go up. An effective fuel poverty strategy depends, therefore, on the housing stock, and we must ensure that we tackle that problem before prices start to lift.

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Targeting and help for those in poverty is extremely welcome. However, to guarantee that we tackle fuel poverty effectively, we must deal with the housing stock. People are becoming more mobile physically and in choosing where they live. In addition, people are dropping in and out of employment, and therefore dropping in and out of measures of poverty. Until the housing stock as a whole is improved, there is every chance that someone who is outside fuel poverty one week will drop into it later on. One of the benefits affected by the order is cavity wall insulation, but not everyone lives in a house in which there is a cavity wall ready to be filled. The Government will, in the long run, have to confront challenges to do with housing stock.

Obviously, the Minister can tackle the question of take-up, but will he also explain why he has not taken on board suggestions from the industry that he could deal with the problem of take-up being a barrier by examining paragraph 2(2)(a), which refers to those ''who are in receipt'' of benefits, then lists the benefits. If he altered that to say ''those who are eligible for'', it would be possible for those who are not claiming the benefits or do not wish to do so, but whom the energy companies discover by their own research to be eligible for the tax credit, to obtain access to this benefit without having been excluded by virtue of the fact that they were not actually receiving the benefit. In other words, they are clearly entitled, according to the Government's measure, because they are below the requisite level, but, for whatever reason, they are failing to claim. That should not necessarily be a barrier to their receiving the energy efficiency benefit from the energy supplier. The Minister may want to explain why the wording ''receipt'' has been chosen over ''eligible''. That would cut through some of the difficulties caused by passporting of benefits.

Finally, I welcome the explanatory memorandum, which is a great improvement, inherited from the Scottish Parliament. I note that no regulatory impact assessment has been conducted, although there was a suggestion in the initial consultation that companies were worried that if income thresholds were to be set, there would be an extra burden on the companies in assessing them. I think that the Minister has addressed that, but why is there no testing as a matter of course as to whether a regulatory impact assessment should be made, rather than making the assumption that there are no regulatory impact problems and, therefore, no need to carry out an assessment?

2.49 pm

Mr. Allen: I shall be brief, but I do not want the record to show that no Labour Member has deep concerns about the take-up of benefits, particularly by pensioners. We meet just a few days after the publication of the Public Accounts Committee report on tackling pensioner poverty and encouraging take-up of entitlement, which itself comes on the back of the report from the National Audit Office—an institution set up by Parliament to ensure the proper spending of public money.

We are discussing energy, but, if you will allow me to stray briefly, Mr. Cran, I will refer to council tax benefits. When I read the report on Monday, I did a

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brief calculation: about 2,000 people in each constituency are not taking up council tax benefits to which they are entitled. That averages out at just under £1 million a year. As we are talking about some of the poorest people in our constituencies, those figures should be salutary for Ministers when they examine issues such as that before the Minister today.

This Minister is particularly able and conscientious, but he has an onerous duty in ensuring that the orders that he takes through these Committees benefit the very people whom Members from all parties are here to represent. I make that plea on behalf of my hon. Friends to ensure that there is a proper party balance in the debate.

2.51 pm

Mr. Morley: I welcome the fact that the order has received a broad welcome on both sides of the Committee. Indeed, I would have been surprised if it had not.

I will deal with the points raised. The hon. Member for North Wiltshire specifically asked what has been the take-up under the scheme. I can tell him that 500,000 people have signed up since it was introduced in 2000, and we are on track to meet our public service agreement target of 600,000 between 2001 and 2004.

The hon. Gentleman also raised points on tax credits such as the working families tax credit and the child tax credit. There is an issue with pensioner take-up, which I shall touch on. It is not new: there has been a long-standing problem, but the Government are wholly committed to addressing it. As a constituency MP, I have to say that the working families tax credit, which has become the working tax credit, has been a huge success with enormous take-up. It has benefited a lot of people by getting them out of the poverty trap and into work. It is also one contributory factor to the lowest unemployment in this country for almost 30 years. It has been a tremendous success in tackling child poverty as well, and we are fully committed to that.

The same applies to the child tax credit. I was out in the streets with colleagues, giving out leaflets as part of an awareness campaign, and every parent I spoke to was aware of that credit, not only because of the successful publicity campaigns, but because the people in most in need—those receiving a benefit—got an automatic, targeted reminder about the child tax credit. There has been success on take-up there.

Mr. Gray: The Minister makes it sound as though I was attacking the benefit, which, of course, I was not, not least because I am not qualified to do so and because that is not a matter for the Committee. I asked the Minister how satisfied he is with the take-up of those tax credits. The figure is about 50 or 60 per cent., depending on the benefit. If those figures are replicated in this scheme, take-up will be remarkably low. I was attacking not the benefit, but merely the take-up.

Mr. Morley: I was addressing the take-up rates, which I understand are very high for the benefits that I have been talking about. There is a problem with pensioner take-up, and I said that it is long standing. However, we are addressing that as well.

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Mr. Allen: It is hard to think back as it seems so long ago that we had a Conservative Government. Will my hon. Friend refresh my memory and remind the Committee whether the Conservative Opposition voted against those tax credits when we introduced them?

 

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Prepared 10 April 2003