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Until we get a grip on them, the energy industries are getting money for old rope at the expense of everybody, and they are forcing more people into fuel poverty
20 Mar 2009 : Column 1153
among those who are already badly off. So I support the Bill, but it is only half of what is needed. We need a concerted effort by our Government and other Governments in the world at this point, when there may be an opportunity to get them to see sense—

Stephen Pound: I am grateful to my right hon. Friend both for giving way and for sharing with the House some of the things that went on behind the scenes. Do I detect from his comments that he is a supporter of a civil nuclear power programme as a component of energy supply?

Frank Dobson: We have a civil nuclear power programme. The biggest problem with a further civil nuclear power programme, if it is proposed, is that it will cost about 10 times as much as people say it will, and it will take 10 times as long to build. I give as an example Dungeness B nuclear power station which, 35 years later, may eventually produce the amount of electricity that it was supposed to produce, but it has not done so yet. I am not fundamentally opposed to nuclear power, but the idea that it will be either cheap or quick is crackers.

Albert Owen: I did not intend to speak about nuclear power, because I have done so on many occasions. I fully support it and do not accept the scenario envisaged in the energy and planning legislation. We will get security of supply from nuclear, which will benefit this country. My right hon. Friend is making an important point about the coupling of gas to oil prices. Is he suggesting that the regulator should have more teeth, or that direct international Government intervention is needed to decouple the prices of those two fuels?

Frank Dobson: Only international intervention would decouple the relationship. Up to now, it seems to have suited the consumer countries and the producer countries to go along with the private sector in agreeing to a totally absurd arrangement. The biggest problem was probably the United States, which is usually seen as a consumer of oil and gas, but it is also a major producer, and it is somewhat ambivalent in these matters, to say the least. The previous presidential regime was, in effect, the political wing of the oil and gas industry so no common sense was likely to come about. It would be very difficult for an individual country to break the link. As with so many things these days, we need some sort of international agreement.

In short, I broadly support the Bill. There may be defects in the drafting, but every Bill that has ever been brought before the House has had something wrong with the drafting, including those that I introduced. We must accept that, and there should be no crowing by anybody about a few defects in the drafting of a private Member’s Bill. That is and always has been the case with all Government Bills as well. That is why we have Committee and Report stages and why the House of Lords gets a look at Bills. However, the proposals that we are discussing will not work unless we get a grip on the price that people have to pay for their fuel and power, and we are a long way short of doing that.

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11.4 am

Mr. Geoffrey Cox (Torridge and West Devon) (Con): I congratulate the hon. Member for Somerton and Frome (Mr. Heath) on introducing the Bill and support its general tenor.

I shall make a few succinct points, which I hope the Minister will take into account. I have the honour to sit on the Environment, Food and Rural Affairs Committee which, as she knows, is concluding its inquiry on fuel poverty. We have heard evidence, both written and oral, from a wide range of sources. My plea to the Minister and my hope for the Bill is that it will inculcate and engender a greater sense of coherence and focus in the various and often laudable measures being taken by the Government to combat fuel poverty.

I am aware that in the Chamber today there may be a disproportionate number, at least among those who originally attended the debate, from rural constituencies, and I am one of that number. Representing a rural area, one cannot fail to become conscious of the great amount of the housing stock that does not fulfil any reasonable specification for energy efficiency. That, as other Members have commented, is because the houses are often old and rubble-built, with solid walls, and are often in remote and isolated places.

In representing my constituency, it has occasionally been my sadness to come across some extreme cases of fuel poverty, in which I have done my best, as any constituency MP would do, to resolve them. As the Minister knows, the main instrument of the Government’s targeting of those who are fuel poor is the excellent Warm Front initiative. She knows what I am about to say because she has heard it before while she appeared before the Select Committee. I do not know what is happening in urban areas, but there is a serious flaw in the Warm Front initiative, at least in relation to a proportion of those who take up the scheme.

In 2007-08 some 20,400 households, although they had advanced towards taking up the scheme, did not in the end take it up. More than 6,000 households withdrew from it, and nearly 15,000 households did not progress it. In its report last month, as the hon. Lady knows, the National Audit Office commented on those 20,000 households. It is important to compare that with the fact that 129,000 households did take up the scheme in 2007-08, but 20,000 households is a worrying proportion, as I hope she will agree. The National Audit Office suggested that among those households must be a sizeable proportion that did not take it up because of the top-up payments that the grant still requires.

The top-up payments seem to be disproportionately impacting people in rural areas largely because, if I may hazard a guess, people in rural areas are separated from the gas main and therefore have to install oil boilers. There is no doubt, and again the NAO commented on this subject, that when oil-fired heating is installed, eaga is at the higher end of the scale—that is, the least competitive end of the scale—for the installation of that kind of equipment. So in the rural part of Devonshire that I represent, Torridge and West Devon, people come from great distances to install the equipment, the equipment itself is at the higher end of the scale of competitive price for eaga, and households have to stump up large top-ups.
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Mrs. Yvonne Smalldon in Buckland Brewer has waited longer than two years simply to be able to take a shower in her house in that village. She would visit her sister several miles away. She has shivered in the cold and sometimes in anxiety and fear at the prospect of another winter. Because a number of charities rallied round, including Torridge council, to help her with the top-up, she has, I am glad to say, been able to install her oil boiler. She is now able to run hot water, have a bath and feel warm in her home. That has been achieved only because of the charitable help and the extraordinary efforts of many people to scramble round and raise that top-up. Before those people could manage that, Mrs. Smalldon waited two and a half years in those uncivilised and primitive conditions.

Joan Ruddock: It might be useful for me to respond at this point to the questions raised by the hon. and learned Gentleman. He is absolutely right: where people being connected are off the gas grid, a disproportionate level of top-up payments has been required. We are looking at that issue seriously; in fact, we are looking right across the piece.

It would be simple to raise the grant maxima so that we could reduce the top-up payments required by people wanting the treatments. However, before that decision is made—and it is under active consideration—we are determined to make sure that we are getting the best value for money from the existing contract, as the hon. and learned Gentleman would want. We want to see the thing in the round, and that is why there has been no urgent announcement on raising the grant maxima. However, I take seriously what the hon. and learned Gentleman said about his constituent. I am delighted that she now has what she needs, and I am only sorry that it took all this time.

Mr. Cox: I am grateful to the Minister for those assurances, but many voices have been warning the Government for a number of years about how a worryingly large percentage of people in a specific category are being denied access to this generally successful and laudable scheme. I am pleased that the Government are taking the issue forward, but I am going to make a number of other constructive criticisms of the fragmented approach taken towards the relief of fuel poverty.

I support the Bill because I hope that it will engender a clarity and coherence that we do not yet see in how the Government are taking forward their policy. I shall leave the Warm Front scheme, because the Minister has got the point: there is no doubt that the scheme has a flaw, and Members on both sides of the House have commented on it. I urge the Minister to allow the Bill to go through because it might considerably focus and sharpen attention across the House on that important problem.

Let me give the Minister another example of why I say to her that the root-and-branch review is so badly needed and that we have waited for coherence for far too long. Let us take winter fuel payments; I expect that the Minister also knows what I am going to say about them. Last year, winter fuel payments cost the Government £2.7 billion, yet only 12 per cent. of those to whom the payments were made were in fuel poverty. Why on earth should I, or any relatively affluent Member of the House—who had reached the requisite other qualification,
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I hasten to add—enjoy the benefit of a winter fuel payment? I am thinking particularly of people on higher-rate tax bands. It makes no sense. One thing that the Government could do quickly—and I urge them to do it—would be to remove winter fuel payments from those on higher tax bands. There would be no injustice in that, and it would free up about £250 million a year. That money could be applied to the very causes that the hon. Member for Somerton and Frome is bringing his Bill forward to promote.

Stephen Pound: The hon. and learned Gentleman is slightly widening the scope of the debate, but in an interesting way. Does he feel that means-testing should be applied to child benefit, for example? Is he espousing a universal principle?

Mr. Cox: I will be entirely frank. Yes, I would consider the removal of child benefit from those in the higher tax band. The measure would be simple; it seems to me that those on the higher tax band could do without child benefit. I say frankly to the hon. Gentleman that I—and I know others who feel the same—have felt embarrassed by the issue on occasions. I have had three children, for each of whom we received child benefit. As all Members are likely to be, I am in a state of relative affluence, and on occasions I felt embarrassed at receiving the payment. The approach could be widened, but let us concentrate on fuel poverty. We are considering how we target help better at those in fuel poverty, which is a serious problem, as I know the hon. Gentleman understands. Help, although a limited amount, could be given by targeting the winter fuel payment better.

Let us turn to the issue of cold weather payments, which are triggered when there have been five successive days at 0° C. As the Minister knows, because I have raised the issue with her before, the cold weather payment is not well targeted because it is measured from some bizarre stations. The problem particularly affects rural areas. For example, people in Princetown, a relatively deprived area in the high moorland of Dartmoor, do not get cold weather payments, even though they may have shivered at below 0° C for weeks. Why is that? It is because the temperature applied is measured in the centre of Plymouth, some 25 miles away, and the temperature in Plymouth is usually 3 or 4° C higher than in Princetown. That applies across rural areas, and not only in my constituency. There should be ways in which the Government can look more flexibly at the issue, so that the cold weather payments actually go to those who are so badly in need of them.

These may seem to be relatively minor criticisms, but I hope that they are constructive. I respectfully suggest to the Minister that cumulatively they demonstrate a sense of incoherence. That is why I urge the Government to allow passage to the Bill, which puts forward some worthy objectives and should be generally supported.

I shall now conclude, because I do not want to provide any further excuse for the Bill’s not passing through today. I make one other plea. It is that, as the hon. Member for Somerton and Frome said, in the consideration of energy efficiency we must not lose sight of the value of microgeneration. In certain of the more remote rural areas, microgeneration offers the prospect of alleviating fuel poverty and it should be included in any policy that the Government develop. For all those reasons, I support this important Bill.

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11.17 am

Fiona Mactaggart (Slough) (Lab): I must apologise to the House; Herschel grammar school in my constituency is receiving an award later today, so I will not be able to remain for the whole debate.

I welcome the Bill, which is a sensible general approach through which we can win on a number of fronts. First, it will address poverty and how it is increased by fuel bills; secondly, it will contribute towards addressing issues of climate change; and thirdly, it will create employment in this credit crunch.

I wish to focus on the poverty aspect of the debate; that is what I know about and understand. I welcome any strategy to tackle poverty, and fuel is an important part of any poor household’s budget. It is estimated that more than 5 million households are in fuel poverty, more than half of which are made up of pensioners. When the Government first introduced the winter fuel allowance—a hugely popular, important strategy—the £200 covered more than a third of the average fuel bill. Now it covers less than a fifth of most people’s fuel bills. Therefore, although it still makes a real difference, it does not make as much as it did.

It is striking that, given the level of fuel bills at present, the average standing credit energy bill takes up almost a fifth of the income of a single pensioner receiving pension credit, despite the one-off increases to the winter fuel payment this year. Citizens Advice tells me that in 2008, 43 per cent. of its debt clients were in fuel poverty. I raised the issue in a debate on child poverty in Westminster Hall not long ago, because I am concerned about the fact that the poorest households pay a premium. I noticed that the Bill’s promoter, the hon. Member for Somerton and Frome (Mr. Heath), rather pooh-poohed a proposal that I have made consistently on prepayment meters. He pointed out that some people on prepayment meters—I believe it is a minority—lived in yuppie flats in London. If I am summarising unfairly I am sure he will intervene.

Mr. Heath: I should hate the hon. Lady to think that I pooh-poohed her suggestion. I did not. A lot of people are at a disadvantage because of the premium on prepayment meters. I was simply pointing out that there is no easy way of identifying those who have prepayment meters who are also in fuel poverty. The two are not identical. One is a subset of the other but not a perfect identity.

Fiona Mactaggart: They are not identical, but there is a relatively easy fix and we should take it. That situation is a classic example of the poverty premium. I am furious about the fact that my poorest constituents are likely to pay three times as much for a washing machine as me, simply because of the way in which they have to get credit. I am furious about the fact that my constituents who are forced on to prepayment meters because of past debts pay more than I do for fuel. Indeed, some of them are further pushed into debt by fuel companies because the companies do not recalibrate the meters in time. I welcome the fact that Ofgem has taken action on that, but it has not taken action on the fundamental pricing issue.

The poorest people sometimes want a prepayment meter. As a client of Barnardo’s—a young mother in Wales—rather tellingly pointed out:

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People in debt, who find it hardest to pay, are overwhelmingly on prepayment meters. Not long ago, the charity National Energy Action produced figures showing that the number of prepayment meters installed in households by energy companies to recover debt has increased by 19 per cent. for electricity and by 6 per cent. for gas in the past year. According to Transact, which is a consortium of debt advice agencies, housing associations and credit unions, prepayment customers are charged on average £215—£215: let us compare that to the winter fuel payment—more for their energy than people paying by direct debit, as I do.

The problem is fixable now. It would not be hard for Ofgem to require all energy suppliers to set the prepayment meter tariff at their lowest tariff. I do not say what the tariff should be, but it should be the same as the supplier’s lowest tariff. It would cost them. One way they could recover the cost might be by creating new charging mechanisms for people who want to install prepayment meters in flats. Ofgem might be able to negotiate such a scheme with landlords who want to organise their flats in that way. In a country led by a Government who are committed to eradicating poverty and who have made real progress on child poverty, even though we are not likely to meet our target, I seriously think we should take that simple straightforward step to eliminate fuel poverty right now before the Bill comes in—if it is ever passed.

Secondly, I want to look at targets. As we know, the High Court has decided on duties and so on, but I am quite anxious about the way that we create for Governments legally binding duties that do not legally bind. I am concerned that the Bill might be following a tradition that I am quite prepared to say my Government are to some extent responsible for starting; it is good for Governments to do such things but they do not seem to be effective in reality. We need to address that issue, because if we set ourselves legally binding targets that turn out not to be legally binding, and if we create ambitions for Government with no mechanism to hold them properly to account—in the words of my hon. Friend the Member for Hendon (Mr. Dismore), to be properly justiciable—politics comes into disrepute. We are not really doing what it says on the tin. That is a potential risk in the structure of the Bill, and we should avoid it. As the Bill progresses, I should be interested in discussing more carefully how one can put legally binding duties on Governments and bring them into effect.

I want briefly to make a couple of other points. Like the hon. and learned Member for Torridge and West Devon (Mr. Cox), I am concerned about extreme cold weather payments, not because in Slough, which is a jolly small and rather condensed place, we have the problem he described of the temperature in one place being rather different from the temperature in the place where the measurement is made, but because of the attitude taken sometimes by the Pension Service.

One of my constituents told me that he believed that someone down the road had received a cold weather payment while he had not. My assistant phoned the Pension Service, which assured him in terms, “No, Slough hasn’t qualified this year.” I thought that that was extremely unlikely, as I told my constituent, and it turned out that Slough had qualified on three occasions. My suspicion is that a civil servant at the Pension
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Service simply could not be bothered to check properly. I might be wrong—I might have slipped—but the question is how much we care. Given the importance of that payment for so many of the families whom we are talking about, we really need to make sure that those responsible for administering it deliver the policy properly, as I know the Minister understands.

Finally, I want to praise Slough council for having a “photograph” that measures the energy emissions from every property in my constituency. We can go online and see how much of the air above our homes we are heating. In the middle of Slough, there is a combined heat and power station that shows up scarlet, because like any power station it inevitably emits huge amounts of energy, but it is possible to see the difference between houses in a road that have a high quality of insulation and those that do not. I have been able to use the site for people who say, “Oh, I don’t want eaga to come mess with me.” I can show them that the people next door are heating less of the air above their home, so I say, “Go for it; eaga will help”, even though they say, “But I won’t have any hot water for a day and a half.” The site can help to encourage people to take the steps that are available. We can also make sure that the rest of us, who are not facing fuel poverty, realise how energy-efficient our homes are. That kind of information is powerful in the hands of the consumer, and consumers can use it to insulate their homes, if they can afford to do so.

The strategy for reducing fuel poverty requires a number of different bits of action; I think that all of us accept that. The Bill emphasises work on homes, but before we get a complex fuel strategy, the first thing that we should do—I urge the Department of Energy and Climate Change to do this—is make sure that the regulator ensures that people on prepayment meters do not pay a premium for the terrible service that they receive, because that is very oppressive for them.

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