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25 Jun 2008 : Column 140WH—continued

5.38 pm

On resuming—

Malcolm Wicks: I should have said before, Mrs. Dean, that it is a pleasure to serve under your chairmanship during what has been a fairly raucous discussion so far. I am sure that behaviour will improve.

Since 2000, Warm Front has assisted more than 1.7 million vulnerable households. In addition, the carbon emissions reduction target means that the major energy suppliers are now obliged to meet carbon reduction targets, which will lead to the investment of about £1.5 billion over the next three years to install better insulation, improve heating systems and implement a wide range of other measures to help the elderly and low-income households. I listened very carefully to what the hon. Gentleman said about Warm Front, but the total help available for energy efficiency for the elderly and other low-income households will rise by £680 million, compared with the previous spending period, to about £2.3 billion.

I listened to what the hon. Gentleman said about the difference between climate change and fuel poverty policies, but of course better insulation in houses helps to tackle fuel poverty. The energy efficiency commitment, which will soon become the carbon emissions reduction target, has a perfectly proper bias towards helping those on lower incomes.

Christopher Fraser: Will the Minister confirm that the Government have reduced the Warm Front budget for the next three years, with a reduction of £50 million this year alone?

Malcolm Wicks: I was trying to make the point that we need to look at the subject in the round, because with the money committed to CERT, investment in energy efficiency will increase.

Christopher Fraser: What about the budget?

Malcolm Wicks: Yes, but the extra money for CERT more than makes up for that. Indeed, we will be seeing enhanced expenditure.

I recognise the particular difficulties for rural communities, which often present greater challenges in tackling fuel poverty. Those without access to mains gas face higher heating bills, and the Government face a challenge in finding ways to help them. Some deprived communities will have encountered difficulties in obtaining gas connections at an affordable price, and it would simply not be economically viable to connect others. Those communities, and the households within them, will be reliant on more expensive or less convenient fuel sources.

The Government have explored the scope, therefore, of helping those communities on two fronts: encouraging gas connections where viable, and considering alternative technologies in other cases. The design and demonstration unit in my Department has successfully developed a model for the provision of gas connections to deprived communities by independent gas transporters. The unit
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has also developed models to provide lower-cost household energy from renewable and other technologies for those deprived communities where gas connections are not economically viable. These approaches are being piloted in deprived communities in the north-east, Yorkshire and Humberside, with the approach chosen being the most appropriate one for the particular community. I should say that the results are very promising and we see scope for rolling out similar projects in other areas.

Christopher Fraser: Can the Minister say whether Norfolk is a county being considered for such transfer of energy from one type to another?

Malcolm Wicks: I think that something that I will say shortly will be of some help in that regard.

The work in the north-east, Yorkshire and Humberside suggests that for communities off the gas grid, microgeneration technologies can offer an efficient and cost-effective alternative to mainstream fuels. That is why I recently announced, just a week or so ago, a new pilot project that will create a fuel poverty work stream within what we call the low carbon buildings programme. Some £3 million has been allocated to that pilot, and the work will be undertaken in Wales and in three English regional development agencies to fund the purchase of microgeneration technologies and their installation in households in deprived communities.

One of the regions in which we intend to run that pilot is the East of England Development Agency area. I hope that we will see measures that will not only benefit some of the hon. Gentleman’s constituents, but show us how we can best use these technologies more widely at a time when we expect the use of renewables in domestic heating to increase considerably. So I hope that that statement will be of some interest to the hon. Gentleman.

It seems to me that in these rural communities, where there are quite isolated households, and given the price of oil, which is at record levels—the price of a barrel of oil has more or less doubled in a year—and the sheer difficulty sometimes of connecting to the grid, microgeneration offers some hope, including technologies such as ground source heat pumps. Through the moneys that we have allocated for the pilot, we wish to test the hypothesis that microgeneration could be a new mechanism to help with fuel poverty. However, the pilot is of course also a mechanism to help other households that are considering which energy technology might suit their particular location.

Christopher Fraser: Does the Minister accept that ground source heat pumps require a considerable area of ground to install them in, that a lot of people living in houses in rural areas in my constituency simply do not have the land around them to allow for that sort of technology, and that they therefore have a particular problem that must be overcome?

Malcolm Wicks: It is certainly the case that one of the ground source heat pump technologies does require a considerable amount of land, to lay out the pipes as it were, so it is often more suitable for new build. However, there is another kind of heat pump that can be buried in
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the ground, which does not take up so much space. I now recall that they are called vertical ground source heat pumps—I think that my visual suggested a vertical presentation. Such heat pumps could be useful, which is why I want to pilot them in tackling fuel poverty. Before I go on, I am reminded that there are air source heat pumps, as well, which is one of the new technologies around.

I should add for the record what we are doing on winter fuel payments. We should be proud that the Government have introduced winter fuel payments, which last year helped to keep 11.7 million households in the UK warm in the winter of 2006-07. As alluded to, in this year’s Budget the Government announced an additional one-off payment of £100 to the over-80s, making a total of £400, and another £50 to the over-60s, making a total of £250, which will arrive shortly before winter.

Improving the income of households is another key factor in reducing fuel poverty. That is why we offer benefit entitlement cheques to everyone who applies for the Warm Front grant. In 2007-08 those cheques resulted in an average increase in potential income of over £1,400 a year for those found to qualify for additional support.

The Government announced in the Budget action to investigate and tackle the high cost of energy for those using pre-payment meters. Ofgem is conducting a probe into the energy market and will publish its results in September. If we find that pre-payment meter users are being treated unfairly, we will look to Ofgem and the energy suppliers to provide a solution. If they do not make enough progress by this winter, we are prepared to legislate to reduce the differential between pre-payment meters and other forms of payment.

The hon. Gentleman referred to the social tariffs, which the Government have been discussing with the supply companies. Energy suppliers, we believe, have a key role to play in helping to alleviate fuel poverty. They recently agreed to up their collective spend on programmes to help vulnerable customers to £150 million a year by 2010; the spend currently stands at £50 million. Each of the suppliers offers a different form of assistance—for example, social tariffs, assistance with clearing debt, rebates, fixed bills. Our expectation is that the suppliers will continue to provide a wide and varied range of assistance under the new voluntary agreement, but the details are still being discussed.

We are working with the energy companies on those proposals, but also on proposals to see how we can access Government data in a sensitive way, so that we can better target programmes on those who need help the most. The Government have data that could help the most vulnerable—perhaps the over-80s—but we are not able to give them to the supply companies for perfectly proper data protection reasons. The Minister with responsibility for pensions is working hard on cracking that problem. We are in ongoing discussions with him and other colleagues.

I hope that I have left you in no doubt, Mrs. Dean, about the Government’s continuing commitment to tackling fuel poverty. More importantly, I hope that I have left the hon. Gentleman in no doubt about that. We have a range of policies in place—from the Warm Front programme, to our pilots to deliver renewables to
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communities that are not able to access the gas grid. The Government are committed to maintaining significant investment in fuel poverty programmes and benefits—£2.3 billion for energy efficiency, and £2 billion each year on winter fuel payments. We are committed to
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looking for ways to improve delivery and to exploring further options for alleviating fuel poverty.

Question put and agreed to.

Adjourned accordingly at twelve minutes to Six o’clock.

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