It would be good to be able to look at whether we have a sustainable network in Plymouth, for all the reasons that I have given. I have talked about the particular challenges of regeneration in Plymouth. We have gone from having the poorest ward in England and
some other very poor wards to having hugely ambitious growth. No other city in the country is doing anything remotely resembling that.
Mr. McFadden: As I said, the points that my hon. Friend made about transport and future house building are perfectly fair with regard to a consultation. The consultation exists so that information like that can be fed back to Post Office Ltd, and I think that she will ensure that the Post Office is aware of the things that she has said, not only in this debate but outside the House.
With regard to the future and where we stand with the post office network, there is a big issue coming up on the future of the Post Office card account. That is a decision for the Department for Work and Pensions, not for me, but I understand how important it is to the post office network. New products and new reasons to come through the door will also be needed. I have set out the position with regard to pensioners, as eight out of 10 no longer collect their pension at the post office. Indeed, that figure is now nine out of 10 for new pensioners, so there have to be new reasons to use the local post office.
One bit of good news that I can tell my hon. Friend is that the Post Office has been making significant progress on developing new products. It is now the largest foreign currency dealer in the country and is expanding its role in car and household insurance. She also mentioned a potentially significant area when she referred to her local sub-postmaster who was interested in biometrics. Although the Post Office, like any other body, would have to bid for the contract properly and win it, it could potentially play a role in relation to the biometric data and information necessary for driving licences, passports and possibly identity cards in the future. That could be a significant area of work in the future, so there are reasons for the Post Office to look forward.
Mr. McFadden: Part of the future lies in finding new ways to deliver services, and outreach in rural areas has been part of that. What my hon. Friend refers to as Post Office Light is something akin to an urban outreach, and the Post Office made an announcement about that in April. I will certainly watch that going forward. I appreciate that this is difficult for my hon. Friends constituents, but I believe that the closures are unfortunately necessary to stem the losses and create a viable network for the future in urban areas such as her constituency and rural areas.
Christopher Fraser (South-West Norfolk) (Con): I am pleased to have the opportunity to raise this vital issue with the Minister today. I shall start by setting the debate in context. Eradicating fuel poverty is not only a moral issue, but a statutory requirement. In 2001, the Government pledged to end fuel poverty for vulnerable households by 2010 and for all households by 2016. They are almost certainly set to fail in that duty and are facing court action from Friends of the Earth and Help the Aged.
Figures released by Age Concern and National Energy Action suggest that around 4.5 million people in Britain are currently living in fuel poverty. NEA also estimates that 12.7 per cent. of households in the east of England live in fuel poverty. However, in some of the more isolated areas of south-west Norfolk that figure might be twice as high. I am hugely grateful to NEA for providing me with those figures. The latest fuel poverty advisory group report reached a scathing conclusion. It stated that
it appeared as if the Government had given up rather than looking hard at the position and re-assessing its policies in a radical way when the fuel poverty target started to look very difficult.
How does the Minister respond to the charge that the Government have been complacent on fuel poverty? Does he agree that if the Government had taken sensible, positive action when times were good and oil prices were much lower, people would not be facing the difficulties that we are talking about today?
Media focus has been principally on the rising cost of motoring. In south-west Norfolka largely rural areapublic transport links are very limited. The private car is a necessity rather than a luxury for many people, and never more so than now, when essential rural services are closing down. We have lost rural banks and shops, and my constituency will shortly lose 15 sub-post office branches. People are forced to use their cars to go to work, and even to buy a stamp, and to go to the bank or buy food at ever-increasing prices. Trips are increasingly expensive.
Constituents are starting to tell me that they cannot afford to drive to work, but they have no other option. Why is fuel at the pump in the UK so expensive? The Government have pointed the finger at growing demand and higher oil prices, but the extortionate tax placed on fuel by the Government also plays a huge part. Before tax, the UK has the second cheapest unleaded petrol and the cheapest diesel in Europe, but we pay the highest fuel tax. A recent report from accountants Grant Thornton indicates that the recent rise in oil prices will generate more than £1 billion in VAT on petrolmore income than the postponed 2p increase in duty. Some estimates have put the figure at nearer £5 billion this year. The rise in duty has been postponed only until October, and hangs like the sword of Damocles over our heads. Is it not time for the Government to confirm that they will scrap that next rise?
Does the Minister accept that, for people in rural areas, fuel poverty can strike as a double blow? Those with no choice but to use a car must also contend with rocketing energy prices to heat their homes. On top of
already sky-high price increases, we are being warned that gas and oil could face increases of a massive 40 per cent. this winter.
But what about heating oil? Of all the regions, the east of England has the largest number of households with oil-fired central heating because they have no access to mains gas. According to National Energy Action, at least 50 per cent. of households in south-west Norfolk have no access to the gas network, compared with only 10.3 per cent. in England as a whole. The price of heating oil has risen from about 32p a litre last June to over 60p now. People on fixed incomes are being brought to their knees by these rising costs. Recent figures have shown that the poorest quarter of pensioner households saw their income rise by less than 1 per cent. last year. How can they cope when heating oil nearly doubles? Is it a surprise that oil suppliers increasingly have to come to the rescue of those whose tank has run dry because they waited and hoped for a price reduction? Unlike those for gas and electricity users, there are no social tariffs to help heating oil customers. The situation will only get worse as winter approaches.
Shockingly, National Energy Action has confirmed that the number of excess winter deaths in south-west Norfolk was almost double the national average in 2005-06. Where are we three years on? I have had stacks of letters from depressed constituents, many of whom are elderly, who increasingly face the dilemma of choosing between feeding themselves and heating their home. One elderly couple wrote to me recently and said that they could no longer afford to heat their house during the winter. Last year they needed to turn their heating down to a temperature well below the recommended level for the elderly. They do not know how they will cope next winter and dread running out of oil. Another elderly couple wrote to say that the husband is disabled and needs the heating on 24 hours a day all year round, but their pension will no longer stretch that far. What are they to do? It is a desperate situation, which calls for viable and effective solutions. We cannot just shrug and blame OPEC or City speculators.
I am a realist and I know that the Minister will tell me that measures such as the winter fuel payments are designed to tackle the problem, but will he explain why the value of the winter fuel payment has decreased in real terms while energy prices have continued to rise? The Government have given[Interruption.] The Minister has a perfect opportunity to respond at the end of my contribution. If he could be patient and listen to the arguments first, rather than jump in before he has heard my whole speech, he could then help my constituents out with his response.
The Government have given the elderly a one-off cash boost this year, but many, including the constituents whom I have just mentioned, say that the payment is nowhere near enough to cover the cost. One of the Governments solutions to fuel poverty has been the Warm Front programme. The Minister is not now listening. If he did, he might hear what I am saying and be constructive in his response, which I want to hear. Why have the Government reduced Warm Fronts budget for the next three years when they will almost certainly fail to meet their legally binding fuel poverty targets of 2001? The reduction amounts to £50 million this year alone, and to set the budget cut in context, the Government receive £400 million a year from VAT paid by domestic energy consumers. The Fuel Poverty Advisory Group was
completely taken aback by their
I suspect that the Minister will also say that the Government are using other measures. In April, they secured the agreement of the big six energy companies to increase their collective spend on social assistance to £150 million a year by 2010 under the carbon emissions reduction target scheme. I am concerned that those receiving help under the CERT scheme will not receive the same help that Warm Front offers. CERTs primary remit is to promote reductions in household carbon emissions; it does not aim to end fuel poverty.
I am not disputing the importance of improving energy efficiency when it comes to fuel poverty, but does the Minister agree that the Government must not allow their focus on reducing carbon emissions to subvert their duty to end fuel poverty? Elderly pensioners who receive improved insulation under CERT will hardly be helped if they then need a new central heating system to take them out of fuel poverty. Interestingly, the Fuel Poverty Advisory Groups report confirms:
Policies on climate change will raise prices and will make the fuel poverty targets harder to achieve.
EDF Energy also agrees that the social obligations to help vulnerable people and the requirement to reduce carbon emissions can sometimes undermine the efficiency of both schemes. What are the Ministers thoughts on that clash of interests?
The fuel-poor are able to apply for grants under the Warm Front scheme and to receive help from energy suppliers under CERT. However, CERT-registered installers who approach households are not obliged to tell customers that they may also be entitled to a Warm Front grant. Does the Minister accept that more should be done to encourage a joined-up approach between energy suppliers and Warm Front, so that vulnerable households do not miss out unnecessarily? Will the Minister also confirm the marketing policy of CERT-registered installers? It is terribly important to find out, so that people understand the installers objectives. CERT installers approach households that they believe may benefit from improved insulation, but their approach has left many households in isolated rural communities in my constituency out in the cold. Unsurprisingly, installers are less likely to approach homes that are in severe fuel poverty, simply because it might not be financially efficient for them to do sothey have to travel further, with all the added costs of doing so. Does the Minister accept that the Government must address that problem if they are to continue their shift towards energy supplier-led solutions?
I should like to cover another Warm Front issue. Constituents have complained that work carried out by Warm Front contractors is often more expensive than work quoted for by local contractors. That seems to be a common complaint throughout the country. As a result, grants given to Warm Front applicants do not cover all the costs, and applicants have to pay the balance themselves.
I accept that the independent report published last year found that Warm Front delivers a value-for-money programme, but questions remain. Does the Minister recognise the legitimacy of complaints from Warm Front recipients? Will the Government consider a system that puts customers in control by allowing them to choose a local contractor if the quotation is competitive?
In 2001, the Government set high goals for their fuel poverty strategy. They promised to eradicate fuel poverty by 2016. So far, they have fallen short of delivering on that promise. Will the Minister consider the plight of those who live in rural communities, particularly those in my constituency who are up against crippling prices both at the pump and in their home? I also ask the Minister to consider how we can help those on fixed incomes who rely on heating oil to keep warm or even to stay alive, because without help winter 2008 could be devastating.
I hope that the Minister will take this debate in the spirit in which I have presented it, and not come back with a diatribe of what the last Government may have done or Governments before them. As a Member of Parliament, I am dealing with the current Government. If the Minister wants to put it to the country, I suggest that he talks to the Prime Minister. I would like a positive response to a debate on a current issue that has resulted from decisions taken by the present Government.
The Minister for Energy (Malcolm Wicks): It is a great pleasure to respond to the hon. Member for South-West Norfolk (Christopher Fraser). I congratulate him on provoking this discussion. I can quite understand why he is able hand out the polemic but does not want to hear the historical comparisons.
Malcolm Wicks: I showed exasperation earlier because I have some knowledge of the subject, and I have a sense of history. Although most of my speech will be about what we intend to do, I am proud of our record. I am not complacent about what now needs to be done, but I find it rather difficult to take lectures from a member of a political partythe hon. Gentleman may not know of its recordthat when it left office felt it appropriate for single pensioners on income support to survive on £69 a week. At that time, there was no such thing as the winter fuel payment, energy efficiency programmes were in their infancy, and excess winter mortality was far greater than it is now
Instead of £69I am not sure whether the hon. Gentleman is defending that recordthe single pensioner on pension credit now receives £124. To me, that seems to be part of the issue that we are discussing: in attacking what we call fuel poverty, we need to recognise that a number of mechanisms, including income maintenance mechanisms, need to be deployed. I am pleased that the hon. Gentleman has given me the opportunity to set the record straight.
I am acutely aware of the impact of rising energy prices on the elderly and families on low incomes. I shall say more about the action that we are taking to tackle fuel poverty, but first I shall respond to the points made about energy prices, which is the serious context of todays debate. The high prices are the direct result of the unprecedented global competition for fossil fuels. That has pushed up gas prices; in the UK, those high gas prices have helped to push up electricity prices, due to the relatively high proportion of electricity generated from gas. Our high prices are also caused, to some degree, by poor liberalisation within the European market. Consequently, the Government strongly support the European Commissions ongoing efforts to improve competition in the internal market. At the recent Energy Ministers Council in Luxembourg, we were pleased to help the move towards legal unbundling, which is a halfway house to the liberalisation that we in the UK have been seeking.
Increased gas storage can also help to reduce future pressures on UK gas and electricity prices. There are now 10 gas and liquefied natural gas storage projects in the UK that have gained consent and are under, or are awaiting, construction. The Government are taking steps to improve and streamline the regulatory regimes for constructing gas storage facilities through the Planning Bill and the Energy Bill, which are currently before Parliament.
Heating oil is of particular concern. Prices closely track changes in crude oil prices, so the increases can largely be explained by the rises in crude prices of more than 100 per cent. in the past year. Because there is no duty on heating oilthere is 5 per cent. VATthe Government can do little directly to reduce its cost. The hon. Gentleman will know that our Prime Minister was in Jeddah at the weekend, at the request of the King of Saudi Arabia, attending an international conference to discuss the reasons for high oil prices internationally.
Tackling fuel poverty is a priority for the Government, and we have in place a range of measures to help vulnerable households that are struggling to pay their energy bills. I am certainly not complacent about that. Since 2000, £20 billion has been spent on fuel poverty benefits and programmes. The hon. Gentleman may wish that more had been spent, but I hope that he will concede that £20 billion spent on benefits and fuel efficiency programmes is a great deal of money. Warm Front is the Governments main scheme for tackling fuel poverty in England: it provides grants to vulnerable households for energy efficiency and heating measures. Funding for Warm Front will be just over £800 million for 2008-11; that is a significant investment in addition to the approximately £1.6 billion that the Government have committed to date.