Examination of Witnesses (Questions 20-39)
MR DEREK
LICKORISH AND
DR BRENDA
BOARDMAN
8 DECEMBER 2008
Q20 Lynne Jones: That £200 million
could easily be spent, for example, on extending Winter Fuel Allowances
to groups that currently do not receive it who are perhaps under
60 but have disabilities which mean they are housebound and they
get nothing at the moment.
Mr Lickorish: Indeed.
Q21 Lynne Jones: There is not really
a lot of money to be saved in those terms, is there?
Dr Boardman: It has definitely
got to be refocused. I am a pensioner and I get the Winter Fuel
Payment and why should I have it? It is not taxed. I think there
are a lot of people who should not be getting it. If it continues
to be paid it should be seen as a pension supplement. It should
be incorporated into the pension and should not be called anything
to do with fuel poverty, yet the Government includes it in part
of the annual amount of money that they say they are spending
on fuel poverty and that is a nonsense.
Q22 Lynne Jones: Would that be a
universal pension?
Dr Boardman: The state pension.
Q23 Lynne Jones: Because that would
then be taxed.
Dr Boardman: Yes.
Q24 Chairman: Can I just intervene
for a second. The focus of your last comment was almost that all
fuel poor people are pensioners, but that is not the case, is
it?
Dr Boardman: No. It was not meant
to be that at all.
Q25 Chairman: What do you do about
all the others?
Dr Boardman: I want to shrink
the present pool and extend it to people who are not pensioners
but who are vulnerable households. I would shrink it quite extensively.
Only 20% of that money, and that is probably a slightly generous
figure hopefully taking into account what has happened most recently,
goes to fuel poor households and that cannot be right when we
are so short of funds for energy efficiency improvements.
Q26 Lynne Jones: It would be very
difficult in practical terms to actually release that unless you
went down a much more means-tested route and then we know, of
course, that lots of people who face a means-test do not actually
apply for them. Certainly your guns are out for the higher rate
taxpayers, or at least trying to have some device whereby the
money is taxed.
Dr Boardman: I would not limit
it just to higher rate taxpayers.
Q27 Lynne Jones: What would you do
then?
Dr Boardman: If you are not on
one of the passport benefits I do not think you should get the
Winter Fuel Payment as a fuel poverty measure. If it is needed
as a pension supplement then increase the pension.
Q28 Lynne Jones: We have got the
different schemes for energy efficiency, and you have been critical
about them, how would you make those schemes more efficient? How
can you join up CERT with Warm Front and with the whole idea of
area-based schemes? Should all the money be going into area-based
schemes, for example?
Dr Boardman: I think that is what
we should be working towards. The Government has introduced a
national indicator, NI 187, which is for local authorities and
those who have accepted this obligation have a target now to monitor
the numbers of fuel poor in their area. I think 40 out of 150
local authorities have taken that on board under their Local Area
Agreements. We are beginning to work towards targets for each
local authority in terms of the number of households with a SAP
less than 35 or a SAP more than 65. We are beginning to look at
national indicators. I would like to see that incorporated into
a universal national indicator for each local authority and to
start tackling the worst homes in their area, what I have called
low carbon zones, taking an area-based approach and working towards
a kitty which combines some of the money from Warm Front, maybe
EU Emissions Trading Scheme auction money. The Government has
raised a lot of money through extra VAT because fuel prices have
gone up, so 5% of a higher number is a bigger number. It is about
an extra £600 million a year coming in just from all households
in terms of extra VAT receipts. There are several pieces of money
that could be put into a kitty and that could be put into a funding
mechanism for local authorities. What else the Committee feels
about things like windfall tax I do not know, that is not my scene.
I know that places like Kirklees have already shown just how effective
a local authority can be if they are given a local fund.
Q29 Lynne Jones: Going back to the
issue of income, for example would there be an argument that if
an area had comprehensive energy efficiency measures that perhaps
the income maintenance elements could be withdrawn from those
areas, or would that be a disincentive?
Mr Lickorish: I do not think it
is as clear-cut as that because of the volatility of energy prices.
As was mentioned earlier, in a property with someone living in
it on their own, you carry out some measures, but you will not
necessarily alleviate them from fuel poverty.
Q30 Lynne Jones: Dr Boardman was
talking about getting these homes up to a SAP rating of 81. A
bit of loft insulation is not going to do it, but a truly comprehensive
programme which would really make homes energy efficient with
insulation, perhaps microgeneration, use of air-source heat pumps
and all these kinds of things, could actually make a huge impact
but it would cost a lot of money.
Dr Boardman: One of the difficulties
we have at the moment is no benefit is related to the costs in
your particular home. At the moment we do not have a system that
could be implemented to fit in with your argument, which is once
they are in a good home it can be reduced because once they are
in a bad home it is not increased. You would have to have some
other system implemented.
Q31 Lynne Jones: Would it be possible
to do that? If you had your area-based approach you would actually
have that information, would you not?
Dr Boardman: You have got to bring
a lot of things together and you have got to have something that
is based on the calibre of the house to start with in order to
reduce it and at the moment we do not. The point I would like
to make about what is really good about an area-based approach,
because whatever you are doing you are going to be dealing with
a neighbour who is not fuel poor and a neighbour who is fuel poor,
is they would both get the same sort of treatment but it is behind
the front door how the finances are worked out, so the fuel poor
household would get it for free but the household that has got
either some equity to release or sufficient income would contribute
and the people in the street do not know which is the poor household
so there is no stigma attached to having the implementation on
your property.
Q32 Lynne Jones: A bit earlier, Mr
Lickorish, you were implying there is too much emphasis on carbon
savings and not enough on fuel poverty. Do you think that DECC
ought to look at these as two separate roles and make sure that
they both have the priority that they deserve, and how would you
go about doing that?
Mr Lickorish: I absolutely believe
that is the right way to get the right focus and the right efficiency
for delivery. There is the overall requirement, as we all know,
as far as reducing our carbon output by about 80% and that needs
the most efficient way of doing that. Then there is the issue
of fuel poverty. Just to try and tie it in with the area-based
initiatives and so on, one would imagine if we were to look at
area-based solutions for things like tower blocks, consumers off
the gas network, that would create a whole new set of measures
and objectives, and to get that efficiently executed you will
not necessarily get the same carbon saving as you would on a whole
range of measures done as a macro-scheme. I believe there is a
realisation in certain parts of DECC that you will need to have
these two things as separate, certainly in terms of developing
the roadmap, and then there may be some points at which there
are some synergies between those two. Without the roadmap, in
the current context it is very difficult to give accurate answers
to those questions.
Q33 Mr Drew: Everyone refers to Kirklees
as the model. How has Kirklees managed to make the resources available
in this area in very simple terms whereas all sorts of other local
authorities seem to rail at what cost implications there are?
Mr Lickorish: I will pass to Brenda
on Kirklees. I would just make a few comments about the Newham
Warm Zone in London. That is a combination of local authority
money, CERT money and a unity of purpose amongst a lot of likeminded
people that they would address the fuel poverty issues in Newham.
That has grown significantly since it started back in 2002. That
has managed to leverage in other sorts of funds as well. There
is another model as well as Kirklees. I am not familiar with Kirklees.
Dr Boardman: I am not very familiar
with it but, as I understand it, it was mainly European Union
money.
Q34 Paddy Tipping: Sticking on area-based
approaches, the changes that the Government has announced give
us the opportunity to experiment. Presumably you are saying that
local authorities ought to take the lead on this?
Dr Boardman: I think it would
be excellent if they did. When you say the changes the Government
has announced, do you mean the Community Energy Saving Plan?
Q35 Paddy Tipping: Yes.
Dr Boardman: I do not know where
we are getting to on that.
Q36 Paddy Tipping: Nobody does, that
is why I am asking you the question.
Dr Boardman: I did hear that some
of the debate was taking place in terms of focusing on the poorest
households, concentrations of the poorest households, and they
mainly exist in social housing. Social housing, whether it is
local authority or housing association, is generally not the worst
housing. I think there is a very real debate as to whether an
area-based approach focuses on the poorest people or the worst
housing and I would favour the latter, that we move our policies
much more strongly towards the worst housing and, as I say, behind
the front door deal with who has got what capital.
Mr Lickorish: There is a huge
opportunity in the Community Energy Saving Programme, now that
you have got generators involved for the first time, to try and
see what the opportunity is there for creative use of electricity
with smart meters, say, in order to create an affordable warmth
approach. We ought to see some examples quite soon one would hope.
There certainly will not be anything for this winter because the
consultation does not start until next year. This does provide
an opportunity for creativity and certainly to get to the hard
to treat. The big difference between CESP and CERT is it is the
biggest bang for the buck in CERT, it is a commercial instrument
that the suppliers use, but one would hope with CESP you will
get a much greater opportunity to tackle hard to treat or expensive
to treat properties.
Q37 Paddy Tipping: Identification
is an issue and data sharing is a way into that. The argument
about data sharing has now been won but there are a set of fairly
sensitive issues around that. Dr Boardman, I think you suggest
that we should look at properties rather than people.
Dr Boardman: Yes.
Q38 Paddy Tipping: Just expand on
that a bit for us, please.
Dr Boardman: I know it is in the
Bill but I am rather nervous about the way in which utilities
will use information if they know people are on benefit. The situation
that has developed, as I said in our evidence, is what they did
with pre-payment meters did not seem to be a very good indicator.
I would much prefer data sharing to be on the basis of the worst
properties, not the poorest people. I would link that with the
Energy Performance Certificates that are coming out and a much
more universal approach to getting an address-specific database
of the energy efficiency of all of the housing so that we can
find where the Fs and Gs are and make sure those are the targets
of policy. That is particularly in connection with the fact that
most F and G properties are actually unhealthy to live in if you
are on a low income and local authorities, again, under the Housing
Health and Safety Rating System, the HHSRS, which is not the best
of acronyms, have a duty to tackle the worst houses if notified.
I think that is a rather passive duty and I would prefer to make
it a more active one so that if they walk past a local estate
agent and they see that there is a G rated property in the window
they start taking action.
Q39 Paddy Tipping: Is that your view,
Mr Lickorish?
Mr Lickorish: I understand the
anxiety but I think if you were looking at a social tariff, in
that context if the suppliers were the mechanism by which the
fund was made available there are two ways of doing it. You could
either tell the suppliers to credit those individuals' accounts
with that sum of money or, alternatively, the sums are passed
to DWP to credit that sum of money and the issue over data for
a social tariff does not come into being. I am perhaps not so
concerned about the suppliers and the pre-payment point that Brenda
made. I think there are some significant issues with pre-payment
meters which we will touch on later. For me, this is a welcome
development in the Pensions Bill. If we decide on a social tariff
I think that it is going to be required and it provides the mechanism
to identify the right recipients.
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