Examination of Witnesses (Questions 100-119)
MALCOLM WICKS,
MP, AND DR
NICK PALMER,
MP
31 JANUARY 2008
Q100 Roger Berry: Everyone is agreed
that there are three things that determine the number of people
in fuel poverty. One is prices, then it is housing conditions
and then it is income. You cannot control prices, so it is presumably
what the Government is doing in relation to energy efficiency
in people's homes where Warm Front and other things are happening,
of course, but also people's incomes, fundamentally. What is the
Government going to do over the two areas, the two instruments,
it can have some influence on?
Malcolm Wicks: Let us recognise
that, the statistical target, which is an important one because
if people are having to spending too much, often on quite low
incomes, on energy, that is problematic for them—of course
it is—but I think other indicators show a great deal of
process. I think we should all be proud of the fact that across
the United Kingdom some two million households have benefited
from the range of different energy efficiency schemes that we
have and, as colleagues will know from visiting these homes during
Warm Homes Week, when you see someone benefiting from better loft
insulation, a more efficient boiler, decent heating systems, it
is a real gain for that individual, and some of us have seen the
human faces behind that two million figure, and that is important.
Q101 Roger Berry: With respect, I
think they are important, I think they are very significant, but
despite all of that, where we are today—you have just described
the extent, we are talking about a few million people whatever
figure we take—for the UK as a whole we are probably talking
about three million, I guess, people in fuel poverty. The question
is what, over the next two, or three, or four years, is the Government
going to do what further measures to address that problem? Why,
for example, did you decide not to mandate the implementation
of social tariffs by energy companies? That would have been one
way.
Malcolm Wicks: I will come to
that. One thing, of course, is that there will be an extension
of home energy efficiency schemes through the successor to EEC
(the Energy Efficiency Commitment) and that, together with the
programmes like Warm Front and the equivalent in the other nations
of the United Kingdom, will mean more people benefiting from energy
efficiency schemes in the future. That is a very, very important
and lasting investment and I put a lot of store on that. You will
understand, Mr Berry, that in terms of other social security benefits,
levels of winter fuel payments, I have to do the customary thing
and say, "That is a matter for the Chancellor". The
third area which you mention, social tariffs: the judgment at
the moment, but I emphasise "at the moment", is that
we do not need to legislate to require companies to develop their
social tariffs. All companies have social programmes of different
kinds. I have met with each of the chief executive officers of
the six supply companies on a one-to-one basis, by which I mean
not collectively, we have had individual meetings with them, to
urge them to do more and to review their programmes. As a result
of that the help available has increased from £40 million
this is for this coming winter, the one we are in, 2007-08—to
£56 million and that will benefit some 700,000 households.
Q102 Roger Berry: But Energywatch
is saying that only one in 15 fuel poor energy accounts are being
reached by the current schemes offered by the `Big 6'. That does
not suggest that they are a very significant instrument.
Malcolm Wicks: One in fifteen
of the fuel poor households, is that?
Q103 Roger Berry: Yes, one in 15
of the fuel poor.
Malcolm Wicks: Yes, sure.
Q104 Roger Berry: For 14 of the 15
these schemes mean nothing. It is not much of a strategy, is it,
really?
Malcolm Wicks: I am meeting, after
this meeting (and the timing is purely coincidental), all the
CEOs, or their representatives—I hope they are all coming—to
discuss this very issue, the very issue being that because of
widespread parliamentary and public concern can they do more,
are they doing enough, where are we on a range of issues, including
pre-payment meters? That is my main meeting this afternoon after
this one.
Q105 Roger Berry: May be the view
will be expressed to you, as Npower expressed to Ofgem, that the
interests of the fuel poor is best served by a mandatory social
tariff and this is the only means by which the Government's 2010
and 2016 objectives can be achieved. Npower believes that. Why
does not the Government?
Malcolm Wicks: We are not convinced.
My Secretary of State, John Hutton, has made it clear in the House
of Commons that we are looking at this and if we feel in the future
it is necessary to do it, we will do it. We are not convinced
at the moment (a) because we are seeing some movement in the right
direction in terms of social tariffs and (b) because there is,
I think, a very serious concern that there could well be a situation,
if you mandate social tariffs, that that simply becomes the minimum
that they all do and that there would be no competition between
them. Where would be the incentive to do more? They would come
up to the minimum and they would think they have done that. I
think that is a very real danger, Mr Berry.
Q106 Roger Berry: You raised winter
fuel payments, which was interesting, I think, because winter
fuel payments are allocated not on the basis of people's need
for financial support to pay winter fuel bills, they are a non-taxable
supplement to the basic state pension. Notwithstanding the fact
that other arms of government may have different views in terms
of the fuel poverty strategy, do you accept there is a case for
having winter fuel payments that are addressed towards those who
have extra need for paying their fuel bills: for example severely
disabled people under the age of 60 who at the moment are not
entitled to a winter fuel payment?
Malcolm Wicks: Can I make one
point, before I answer that, about winter fuel payments? It sounds
a rather technical point, but the way in which we have drawn up
our target that fuel poverty is about paying more than 10% of
your income, we are not going to revisit this but it is worth
pointing out that the winter fuel payment at the moment, which
after all, by definition, is to help with your winter fuel, is
actually counted—
Q107 Roger Berry: Initially it is
available for people over 60, whatever their winter fuel position
might be.
Malcolm Wicks: It is counted as
income when you do the analysis, rather than, as it were, knocked
off one's expenditure on fuel. I make that point because that
has always struck me personally as rather curious, given that
the intention is to help with winter fuel. It would slightly change
the fuel poverty statistics if you said against the expenditure
(someone said nearer £1,000 now) we can knock off the £300
for the over eighties. If you add £300 simply to the income,
then statistically it makes life more difficult in reaching the
target. It is just useful to point out that statistic.
Q108 Roger Berry: Your statistic,
of course, is that disabled people and their families are twice
as likely to be in fuel poverty as non-disabled people and their
families. Your department's figures show, twice as likely to be
in fuel poverty. That is the critical statistic.
Malcolm Wicks: I am coming to
your point, but occasionally I have this desire to be fair to
myself in terms of the statistical presentations and weakness.
We have discussed this before actually on different occasions,
and I understand the point, but the winter fuel payment is there
to help elderly people—the £200, the £300 for
the over eighties. It is worth citing the statistic, Chairman.
I think I am right in saying it is some two billion pounds public
expenditure every year which the former Chancellor, or the Prime
Minister, has committed ourselves to for this Parliament.
Q109 Roger Berry: With respect, that
is not the question. I support that. Of course, I do. I am asking
why is it that the people in fuel poverty under 60 who have particular
needs for warmer homes do not get a penny from what is a "winter
fuel payment scheme"?
Malcolm Wicks: Because of the
concern about the particular vulnerability of elderly people,
and, obviously, for people with disabilities of different kinds,
there is a range of other benefits, disability living allowances,
which are looking at their needs, but it is a perfectly reasonable
argument for you to present to the Chancellor.
Q110 Roger Berry: Does your department
have an estimate of the number of disabled people under 60 who
are living in fuel poverty?
Malcolm Wicks: I do not certainly
have that in my head. If we have that kind of data, I will send
it to you.
Q111 Roger Berry: I would be grateful
if you would inform us if you keep that data. A final question.
Malcolm Wicks: I certainly recognise
the issue. A lot of people with specific disabilities and in general,
as a generalisation, people with disabilities, spend more time
living at home than the rest of us and these issues are not just
about some magic cut-off point of over 60 or over 80, they affect
other people. How one addresses that is, I guess, a more interesting
and controversial issue.
Q112 Roger Berry: Part of the answer,
clearly, in terms of fuel poverty, is if we accept the fact that
what the Government can do relates to the conditions of home energy
efficiency on the one hand and people's incomes on the other,
then, as in one of your many publications on the Welfare State
that I have read, the benefit system is actually quite important,
is it not, and so I look forward to an answer too. I hope the
Government can continue to keep this under review. A final question,
because colleagues have other questions. Ofgem, interestingly,
has come up with a windfall tax proposal, you will be well aware
of, that you should take some nine billion windfall from the UK
energy companies that they are set to receive from the free allocation
of permits under Phase II of the EU Emissions Trading Scheme and
use this to help those in fuel poverty. A windfall tax seems to
me very commensurate with New Labour policy. It was there at the
very beginning. Is it worth going back to consider it, do you
think?
Malcolm Wicks: If it is, it is
a matter for the Chancellor of the Exchequer.
Q113 Roger Berry: You appreciate
the frustration we have here, in the sense that the key issue
in terms of raising resources to tackle fuel poverty you are very
reluctant to explore other than to say we should contact the Chancellor.
Malcolm Wicks: I do not think
it would entirely help the Chancellor if I speculated wildly—
Q114 Roger Berry: It would help us,
though, when you are giving evidence to this Committee?
Malcolm Wicks: ---about what we
should do. I am bound to say, Chairman, reflecting on Mr Berry's
comments, you will forgive me as Energy Minister, but I do want
the energy companies to have money to build power stations as
well and wind farms.
Q115 Roger Berry: You were the one
who said—this is my final comment and I simply remind you,
with respect, I believe this, I know it is your view that fuel
poverty is the issue you worry most about. That is what you said
and I believe that and I just put that back on the record.
Malcolm Wicks: I worry most about
it because it remains a disgrace that in a civilised society there
are some people who are cold when many of us at a macro level
are worried about global warming. Of course I worry about that.
I am pleased with the progress that we have been making in recent
years in home energy efficiency schemes and social security measures;
I am distressed that we are now being knocked off course because
of global factors contributing to rising energy costs and I, in
my own way, am going to do what I can to try to move us back in
the right direction. I am very concerned about these matters.
Q116 Chairman: Your answer just then
very usefully links us from the section on energy prices to the
section on security of supply. I have heard it said quite often
actually by various industries that, for example, the nine billion
windfall that the companies have received you are very happy with
because it will help give them the money to build nuclear power
stations. You sort of endorsed that in your answer just then.
Malcolm Wicks: I suddenly realise
it would not be parliamentary language to say, "Steady on"
to a Chairman of a select committee, but I think that is a little
leap.
Q117 Chairman: You did say it was
good for them to have money to build power stations though.
Malcolm Wicks: Maybe we are coming
on to this.
Q118 Chairman: We are.
Malcolm Wicks: But we are going
to need a great deal of investment in our power infrastructure.
Chairman: Let us talk about that. Tony
Wright.
Q119 Mr Wright: Let us move on to
the nuclear issue.
Malcolm Wicks: Less controversial.
Thank goodness!
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