Gregory
Barker: The new clause is interesting. At a time of an
unprecedented rise in household energy costs, we must examine all
options available to us to help bring down the cost of heating and the
electricity bills for hard-working families, particularly those who
live in fuel
poverty. It
is, I am afraid, an indictment of the Government that 2.9 million
people are still living in fuel poverty in this country. Bill payers
already contribute £500 million a year to the alleviation of
fuel poverty, through the carbon emissions reduction target. However,
it is worth putting on record how inefficient much of that
£500 million spent is. I thank the Local Government
Association for the sterling research that it has carried out in this
area and published in its report, “Switched Off, Switched
On”. Three
central flaws were found with how the CERT process is run. First, as
there are numerous suppliers serving the same areas, there is a lack of
systematic area focus, which often means that vulnerable people in
homes in need of insulation are left out because of the haphazard
nature of the programme. Also, as suppliers are working towards meeting
specific targets, once those targets are met the insulation programmes
sometimes instantly stop, leaving a job half done.
Secondly, part
of the £500 million CERT fund is spent on advertising the
schemes and targeting houses that are eligible for upgrades. That
results in a duplication of effort and wasting money, which would be
far better spent providing insulation for the homes in most
need. Thirdly,
a lack of accountability means that, while the insulating contractors
are spending public money, they are only accountable to Ofgem, not to
the householder in whose home the work is being done. For those
reasons, I am happy to support new clause 19, which would require
energy suppliers to work more closely with councils in targeting areas
where fuel poverty is most
severe. Gordon
Banks (Ochil and South Perthshire) (Lab): I do not know
whether the hon. Gentleman is aware that monitors, which can be placed
on the electricity box, have been distributed in Scotland, possibly by
the energy companies. The monitors send a remote signal to a screen
that tells the householder their usage by the minute or the hour. When
somebody switches something on, they can see the growth in usage. That
is significant in making people aware of how much they are spending on
electricity for their appliances. Does he agree that it would be worth
expanding that scheme
UK-wide?
Gregory
Barker: Absolutely, a far more ambitious roll-out of smart
meters, the technology to which the hon. Gentleman is referring, would
be ideal. However, that is not central to the new
clause.
Mr.
Gummer: I remind my hon. Friend that that was a proposal
of the Quality of Life Policy Group’s report, which we presented
recently, and one of the criticisms in it was that the Government have
had the opportunity of rolling out the technology under current
legislation, which was introduced by the Liberal Democrats and went
through the House of Commons, but which the Government still have not
implemented. If they had done that 10 years ago, the whole country
would have smart metering today.
Gregory
Barker: Indeed, once again we have simply come back to the
lack of ambition, drive and pace of Government progress. Let me come
back to the point in hand. As a Conservative, I think that, where at
all possible, local affairs should be organised and run locally, not
directed centrally. This is a prime example of where more local
co-operation would mean better value for money and a better quality of
service for those families most in need of insulation and
help.
Councils and
other local authorities are best placed to engage with fuel poverty;
they know the local area better than the energy companies do and, as a
recent YouGov poll showed, 89 per cent. of British people feel that
they are being ripped off by energy companies. One suspects that people
will trust their own council more than they trust many of the energy
companies. I would be interested to hear what the Minister has to say
about those flaws in the CERT programme, identified by the LGA in its
report, and what his response is to the eminently sensible proposals in
new clause
19. The
new clause also deals with the emotive issue of what to do with the
estimated £9 billion windfall, which energy generators have made
from the first phase of the EU ETS. The chief executive of Ofgem,
Alistair Buchanan, said in a statement earlier this year:
“This
windfall is nothing to do with collusion or anti-competitive behaviour,
but stems from the free emission permits given to companies. That is
why Ofgem is renewing its proposal that this windfall could be used to
help customers in fuel poverty, who have been hardest hit by the recent
energy price
rises.” The
proposal in the new clause that energy suppliers match the £500
million in investment with an equal amount drawn from their own funds
not passported through from customers’ bills, is certainly an
idea that warrants the Government’s attention, although there
are arguments against it, of course. I am looking forward to hearing
what the Minister has to say about it. We must be mindful of the caveat
that there is no point in legislating for such a requirement, if the
cost will simply be passed back to the consumer again. This is no time
to be adding additional burdens to the electricity, gas or heating
bills of householders. That is where Alistair Buchanan and his Ofgem
team come in. They will ensure that that does not happen. The
Government would have to ensure that Ofgem had the regulatory powers to
police that
effectively. This
is an important and timely new clause. I hope that it will encourage
the Minister to address some of these issues. It could make a
qualitative difference to the everyday lives of the nearly 3 million
people living in abject energy poverty in the UK
today. Mr.
David Chaytor (Bury, North) (Lab): If hon. Members were
delighted that my hon. Friend the Member for Southampton, Test chose to
move the motion after the House adjourned, they will be even more
delighted that one or two other Members want to speak. I will be very
brief, but I want to speak in support of the principle of the new
clause because it emphasises the importance of reducing demand as a
solution to the problems of energy supply, as well as to climate
change. It also introduces the importance of the role of local
government in delivering policies to alleviate climate change. Too
often in recent years, the role of local and regional government and of
the devolved Welsh Assembly and Scottish Parliament have been
overlooked. I
will use the new clause to raise an issue that I hope the Minister will
take up in his response, and that is the role of local area agreements
in delivering climate change policy. Within the new performance
indicator regime, there are 185 performance indicators, only three of
which are directly relevant to climate change and none of which is
compulsory in the local area agreement system. I think that that point
will be highlighted in the latest report of the Environmental Audit
Committee, which examines the role of local and regional government in
delivering climate change policy. Will the Minister discuss the range
of performance indicators with his counterpart in the Department for
Communities and Local Government with a view to reconsidering whether
the three out of 185 indicators are sufficient to make a meaningful
difference in the way in which local government pursues the climate
change
agenda?
Steve
Webb: I add my support to the new clause. The scale of
fuel poverty that we face and that we will face when the next round of
gas and electricity price increases comes through, is far worse than
the hon. Member for Bexhill and Battle indicated. The scale of fuel
poverty is always understated by the figures because they are always
years out of date. There are big fuel price increases coming down the
track. As has been said, it is vital that,
rather than solely help poor people to pay soaring bills, we tackle the
demand side and do something about the soaring bills. That is why I
welcome the new
clause. I
want to home in on one aspect of the existing programmes that was
touched on by the hon. Member for Southampton, Test. It relates to the
current structure of the Warm Front programme and the CERT programme.
The new clause is preferable because of the integration with local
government and the idea of neighbourhood-based initiatives. My worry is
that the balance in the spending on home insulation and energy
efficiency programmes is overwhelmingly on piecemeal, individual-based
schemes. Warm
Front is a good thing, but individuals have to hear about it and apply
individually. It is very time and energy intensive to find the right
people and to get the programme to individual households. Likewise,
with the CERT obligation, energy companies have to identify vulnerable
households and we know the problems with that. Again, it deals with a
house here and a house there. Some are geographically concentrated, but
some suppliers are nationwide. It feels incredibly
inefficient. The
worry about all such initiatives is the gaps. One can think of the
types of households that are hard to reach: houses in multiple
occupation, those in more rural and remote areas and old houses that
are hard to heat and insulate. Only an area-based approach would
address all those categories. I want the new clause to lead local
authorities to work with the energy companies to sweep through whole
areas, to take owner-occupied, social-rented, owned-outright,
fuel-poor, non-fuel poor, old and young households and get on with the
process of insulation and energy efficiency in a systematic way. The
piecemeal schemes have done their bit, but it is now time to be
systematic. When I raised the matter with the Under-Secretary of State,
the hon. Member for Lewisham, Deptford, she said that the Government
had a budget for area schemes, but my sense was that their budget for
area-based initiatives was tiny in relation to the cost of Warm Front
and the cost of the
CERT. In
my judgment, the balance needs to be completely swapped over because
the time for one here, one there—in a world of scarce energy,
soaring energy prices and the need to tackle demand—has gone. I
warmly welcome the sweep and ambition of the LGA’s proposals,
and I hope that the Government will respond sympathetically to the new
clause. 10.45
pm
Mr.
Woolas: My hon. Friend the Member for Southampton, Test
who spoke to the new clause, backed up by the Local Government
Association, is on to a policy that carries a lot of merit. I shall
explain our support in principle for the thrust of the policy as well
as the specific problems that we have with it at the moment. Of course,
the Government recognise the crucial role of local authorities in
helping to tackle energy demand from existing homes, both social
housing and private, to which my hon. Friend the Member for Bury, North
referred. Local authorities have a unique relationship and have the
best knowledge of where the housing need is
situated. Indeed,
the best partnerships for tackling emissions through homes, and fuel
poverty, are when the schemes join together. I point the Committee to
Easington in
County Durham where the local authority and Warm Front have a
partnership that has identified not only the heating system in every
building in the district, but the number of radiators, the type of
radiators, which have been done and which have not been done. It has a
database to that
effect. Joan
Walley (Stoke-on-Trent, North) (Lab): When my hon. Friend
comes to Stoke-on-Trent in the not too distant future, will he say a
little about the way in which the local agreements actually
work?
Mr.
Woolas: I am grateful to my hon. Friend, and I shall
fulfil that pledge before the
recess. Having
steered local government legislation through this place, I am in a
unique position to respond to the point about local area agreements. I
shall explain the architecture briefly. There is, in fact, a suite of
235 performance indicators set down by the national Government in
agreement, including the children and young people’s indicators,
some of which are compulsory as we would expect. However, the suite of
performance indicators from which local councils can choose, as part of
their local area agreements in conjunction with other public sector
departments, including central Government Departments, is voluntary, as
part of the devolutionary move that the Government have made. Within
that are a few indicators, two specifically on climate
change. The
first indicator is for the local authority to address its own
emissions, activities, buildings, social services, transport and so on.
The second more important indicator is for the local authority to take
responsibility for the whole of the emissions in its area. I am
delighted to report the high numbers of local authorities that have
chosen to include climate change performance indicators in their
agreements. I stress that 99 per cent. of local area
agreements—and all of them are signed off—now include at
least one of the two climate change mitigation indicators, and 100 out
of the 150 include targets relating to the per capita emissions
throughout the area. There is a huge thrust of support for the argument
of my hon. Friend the Member for Southampton,
Test. The
targets are not compulsory, but the argument put specifically by the
hon. Member for Northavon is that the economies of scale of
retro-fitting UK housing point towards geographical area-based schemes.
The cost of retro-fitting, which goes back to his point, is incurred in
the visit, not the kit. In social housing one can get around that by
having state-wide schemes, although I am not saying that they are
without problems. One has to counter against that the energy market
that we have. I say to the hon. Member for Bexhill and Battle, who is
substantially younger than I, that, regarding where this energy market
comes from, the response is, “Tell Sid”. Had we not told
Sid we would not be here now, we would have probably finished the
retro-fitting by now, but I tease the young gentleman.
The Committee
should not underestimate the work that has been done already in
retro-fitting homes. It is not a small exercise that has already been
completed. It was this Government who introduced the energy efficiency
commitment scheme in 2002, so some of the criticism is a bit rich, but
perhaps I am getting old and grumpy at this time of
night.
The difficulty
comes in the nature of the energy market. We have placed a greater
obligation on the CERT scheme to provide for
retro-fitting—[Interruption.] I have completely lost my
thread. My Whip is questioning my age; she is being kind, I think. The
obligation to help vulnerable households has been increased in terms of
the total number, with 40 per cent. of the £1.5 billion aimed in
that direction. There are two difficulties, however. First, my
officials, in preparation for this debate, have talked to the energy
regulator, the Office of Gas and Electricity Markets. Under the
existing framework for the energy market, there is no way that we could
guarantee that the new clause as it stands would not simply put up the
prices to consumers. There is no way of achieving the desirable
objective that my hon. Friend the Member for Southampton, Test
outlined, which is that the costs should be passed on to the company
rather than the consumer. That would be one thing that we would need to
look at in the run-up to the successor to CERT, as we take this debate
forward. Secondly,
the new clause would apply to all energy companies, whereas CERT
applies to the six major energy companies, so there would be an
unintended consequence. There is no doubt, however, that the
partnership approach under the new devolved performance indicator
regime, using the Warm Front, CERT and other programmes, is a good one.
The hon. Member for Northavon was kind enough to mention the sums of
money specifically and he is right that it is a big sum of
money—about £6 million—but compared with CERT it
is not a huge sum. There is much merit to the campaign and to the new
clause, but there are specific difficulties that would have unintended
consequences, given the current legislative framework under which we
are working. That is why I accept the spirit of the new clause, but
would ask hon. Members to consider the specific
practicalities.
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