Examination of Witnesses (Questions 540-559)
MALCOLM WICKS
AND MR
PAUL MCINTYRE
10 OCTOBER 2006
Q540 Chairman: Being as honest as
you are able to be.
Malcolm Wicks: I am sure the minute
will be amended to "being as honest as always". The
other thing which has happened which is more worrying is that
since the spat between Russia and the Ukraine you have seen in
certain countries a rise of a new kind of energy nationalism,
a more parochial concern. We shall just have to see how these
two forces battle each other out. From the UK point of view, we
are absolutely determined. Why? Actually this is good news for
European industry, it is good news for the European domestic customer
because the record in Britain, over ten years until recently,
has shown that this produces much lower prices and we want it
for Europe, we want it for Britain.
Q541 Chairman: We all accept that
the European market is dysfunctional, we all know it is going
to take a long time to sort out the dysfunctionality, there are
long-term contracts to be unwound, a mass of complex investigations
to be undertaken, it is not going to be a quick fix. We started
too late in the process, but we shall get there in the end. The
British market is also dysfunctional, that is what we have seen
recently, is it not? We have a problem of our own as well, as
Tony Wright was highlighting.
Malcolm Wicks: I am not sure I
would concede that. What I would say is that we recognise that
there are issues around supply and there are issues around storage
which we are consulting on.
Q542 Chairman: We shall now turn
to fuel poverty.
Malcolm Wicks: We touched on it
earlier.
Chairman: We shall touch on it at greater
length.
Q543 Roger Berry: I understand the
deep involvement of DWP in all of the work of this review, although
in over 200 pages of the Review document we have four and a half
pages on fuel poverty. I would be the first to acknowledge the
enormous amount the Government have done thus far in tackling
fuel poverty, there is no question about that, but does the Minister
not agree with me that in terms of new proposals this Review is
a little thin?
Malcolm Wicks: There are two or
three aspects to tackling fuel poverty. One is the price issue
of course. What we have seen is very considerable progress. I
am trying to find the figures here about the number of households
in fuel poverty. We can talk about the definition but we are down
from 5.1 million households in 1996 in fuel poverty to 1.2 million
in England more recently. Of course the line on the graph paper
starts to move in the wrong direction because of rising energy
prices, hence our need for the regulator and more supplies and
these big macro issues as well as those regulatory issues that
we need to touch on. There are no quick fixes on that. Secondly,
we need to move forward on income maintenance. When I was Pensions
Minister the development of pension credit particularly aimed
at the poorest householders, particularly the older elderly, was
very important. Winter fuel payments have been crucial because,
given the fear of the bill arriving, the arrival of the £200
or £300 shortly before Christmas does give some comfort.
It will be for the Chancellor to look at future provisions in
that direction. Then of course we need to move forward on the
home energy efficiency schemes, the Warm Front, the energy commitment,
all of these fronts.
Q544 Roger Berry: Which is why I
acknowledged all of that and sang their praises and asked where
we go from here. The specific emphasis in the Review is people
eligible for pension credit aged over 70. Presumably, given that
you cannot control gas prices, the three things you can do are:
the level of pension credit; the extent of take-up which is referred
to; and thirdly energy-saving measures, Warm Front and so on.
Given that of this group, as your report points out, one in five
of people eligible for pension credit over 70 are living in fuel
poverty, which of these three instruments will give us the biggest
bang, the biggest result?
Malcolm Wicks: It is a balance
between them all, is it not? You cannot just say one of the three,
to be honest. In the long term thermal efficiency and enabling
people to have drier and warmer homes through new appliances,
through loft insulation, all of those things, maybe using renewables
and microgeneration to tackle fuel poverty, which is something
I want to develop. That is important. The Energy Review was not
the place—and you will understand this—for us to make
public expenditure announcements and budgetary announcements.
That is properly the province of the Chancellor of the Exchequer
not the Energy Review.
Q545 Roger Berry: There are possibly
just one or two financial implications of this Review, but if
these are ones which have to be deferred, so be it. The question
was actually a factual question. The Department for Work and Pensions
must know, for example, if you had 100% take-up of pension credit
for this group, how many it would take out of pensioner poverty.
That is the kind of information which would be useful. If that
practically solves the problem them you have some idea about the
solution. If it is Warm Front type measures, could I ask you specifically,
given the approaching winter, where there is concern obviously,
are the Government contemplating fast-tracking people in this
group in terms of Warm Front?
Malcolm Wicks: That is what we
are trying to do.
Q546 Roger Berry: Is there a commitment
to fast track, because it is not in this document?
Malcolm Wicks: I do not know that
fast track is the right term because that suggests a queue-jumping
thing.
Q547 Roger Berry: For reasons you
have given this is a particularly vulnerable group of people.
Malcolm Wicks: Of course they
are; of course they are. We want to identify more people on pension
credit who could benefit from the help of Warm Front and the equivalent
in Wales and Scotland so that we can get the process moving just
as quickly as possible. That is what we are doing. I spend a lot
of time trying to improve the take-up of pension credit and it
is not for this Select Committee but the take-up rate is very
good, particularly amongst the poorest and so on. It would bring
a lot of extra money to people. Even if you did move to a 100%
take-up, it is not going to solve the problem of fuel poverty.
It is one answer, but it is only one answer.
Q548 Roger Berry: Which would suggest,
although obviously you cannot say anything this morning, that
the Chancellor ought to look at the level of benefits for people
over 70 as well as the energy saving measures. In paragraph 2.110
the report says "We recognise that older households in receipt
of Pension Credit are not the only group suffering from fuel poverty.
We will consider rolling out this approach to further identified
vulnerable groups after this winter". Is it possible to give
the Committee a clue as to who these other vulnerable groups might
be that you have in mind?
Malcolm Wicks: Clearly, although
there is a particular concern about the elderly, particularly
those over 80, say, because physiologically they are less resilient
when it comes to the cold—you may recall that as a young
man I did some research on this problem myself—but there
are clearly others with disabilities of different kinds, some
families with young children living in appallingly insulated dwellings.
These groups are of concern too; of course they are.
Q549 Roger Berry: This Committee
and others have pointed out that there is a very large number
of severely disabled people who, for example, have mobility impairments
and therefore if it really is a winter fuel allowance and not
simply an alternative way of topping up the basic state pension,
it really is meant to deal with people who face a winter fuel
crisis. I welcome the fact that you have said the Government are
considering extending support to groups such as that.
Malcolm Wicks: What I have recognised
is that it is not just the elderly who are vulnerable and obviously
there is a debate as to whether that income maintenance for some
of those groups is best delivered through disability benefits
of different kinds or in other ways. I do not think I have arrived
at the conclusion that you would like me to on that one.
Q550 Roger Berry: I think you are
getting closer, are you not?
Malcolm Wicks: I do not think
so. That is another ministry I used to be in and another select
committee I used to be a member of.
Roger Berry: May I just emphasise that
I really genuinely do believe that the attention in this Review
given to fuel poverty in terms of new proposals is a bit thin?
If it is waiting on the Treasury, so be it, but I very much hope
you will take some of these comments on board which I know have
been raised with you by some organisations outside this Committee
as well.
Q551 Chairman: Speaking as someone
whose fuel bill is going up very sharply this winter, despite
insulation and a condensing boiler—
Malcolm Wicks: I do not think
you are in our target group, but I shall check.
Chairman: My point is that I should like
to see the extra VAT I am going to be paying the Chancellor in
higher fuel prices directed back to vulnerable groups. The Chancellor
is making extra money so he has more money to spend on those vulnerable
groups.
Q552 Mr Weir: This particular phrase
struck me as well, "after this winter". Given that we
are told that the supply situation with gas will stabilise after
this winter, Scottish Gas—I presume British Gas down here—are
guaranteeing price falls next year. Why is it after this winter,
which is obviously going to be crucial to many people who have
had huge increases in bills over this year, before you are looking
at rolling these out? Are you not prepared to look at these for
this winter to help people now rather than when prices start to
fall next year?
Malcolm Wicks: Let us remember
that these home energy efficiency schemes in Scotland, England
and Wales are there already; they have helped many hundreds and
thousands of people in different circumstances and they remain
there. It is the task of different agencies, statutory and voluntary,
to find people who need help. That work continues. What we are
saying is that on top of that, for this winter, we are mounting
a special initiative to identify some of the most vulnerable elderly
people who might need help. This is not the only weapon in the
armoury in terms of trying to help these people.
Q553 Mr Weir: Yes, but you specifically
identify other vulnerable groups, but you are not doing anything
for them this winter according to what is said here.
Malcolm Wicks: I have just explained,
have I not, that through the existing programmes many of those
people are being helped? On top of that there is going to be a
special initiative for the vulnerable.
Q554 Mr Weir: What about the winter
fuel allowance which was mentioned earlier which is important
for many pensioners and we all concede that?
Malcolm Wicks: Mr Berry pushed
me on that one and I shall not hide behind the fact that I am
no longer in that Department. There is a perfectly legitimate
argument which would say that for many of those vulnerable groups
there are other income maintenance measures: the range of disability
benefits; for vulnerable families the tax credits and child benefit
and the rest. I understand the argument.
Q555 Chairman: They are not going
up on quite the scale of the fuel bill yet.
Malcolm Wicks: There is an argument
that winter fuel payments should be extended to other groups and
it is not for me to enter into that argument today.
Chairman: It is nice to have that on
the record.
Q556 Rob Marris: I just want to focus
a bit more on the Warm Front thing. In light of our earlier discussions
today it appears a bit contradictory to be handing out money to
people to burn more fuel when we are trying to protect the environment
and the way to square that circle is on the Warm Front kind of
initiatives in terms of energy conservation. I wonder whether
I could get an undertaking from you, because what seems to be
happening in my area is that Warm Front use very expensive contractors.
There is a threshold for the amount Warm Front will pay out for
a pensioner and the amount of the bill above that threshold is
sought from the pensioner himself or herself. Clearly if Warm
Front are using expensive contractors the proportion of cases
where a personal contribution is sought from the pensioner will
rise. It appears—and I stress the word "appears"—to
be a racket. I am still trying to get somewhere with Warm Front
on why they use the contractors they use and the prices they charge.
I wonder whether you could give a little help from your end to
look into this because of course if—and I stress the word
"if"—high prices are being charged by the contractors,
they are ripping off the taxpayer as well as the pensioners.
Malcolm Wicks: If you have evidence
of a racket, I should like to see it. We cannot have any racketeering
in this area.
Rob Marris: I should like the Department
perhaps to furnish the Committee with what oversight you do to
make sure there is no racketeering, what structures are in place
to make sure that exclusive contracts are not signed.
Chairman: We did not tell you we would
be asking this question so it would be helpful if you could give
us a note on this aspect of your procedures.
Q557 Rob Marris: No, I was not asking
for an answer today.
Malcolm Wicks: I shall take that
away. Many of us as constituency MPs have visited homes of quite
vulnerable people when this work is done and nearly always with
beneficial results and happy customers. It is awful to think that
some of those vulnerable people could be subjected to racketeering,
should that exist. I shall look at the oversight and the monitoring,
of course I shall.
Q558 Rob Marris: I wish to make it
clear that I support the scheme. I think it is a good scheme,
but I just wanted a note on what oversight there is to try to
prevent any such racketeering.
Malcolm Wicks: Right; we shall
do that.
Mr Hoyle: You pointed out that people
like the Chairman do not need the winter fuel allowance, but many
MPs actually receive a winter fuel allowance. Maybe we would be
better off looking, via your good offices in speaking with the
Chancellor, at certain groups who ought not to be getting this
money and we ought to give it to people who are much more in need,
such people as those with disabilities. Maybe we ought just to
re-look at that so we can actually re-circulate the money to where
people need it.
Q559 Chairman: We shall take that
as a statement unless you want to respond Minister.
Malcolm Wicks: I think we should
say for the chronological record that the Chairman is not yet
eligible for winter fuel payments and judging by his appearance
many years will elapse before he is eligible.
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