Examination of Witness (Question Numbers
110-119)
MR DAVID
KIDNEY MP
10 MARCH 2010
Q110 Paddy Tipping: Minister, thank you
for coming and thanks to your officials for joining you. I am
sorry to we have kept you waiting a few minutes. Can we start
with the obvious question about the targets? We are in 2010 now.
Is the 2010 target going to be achieved and, more particularly,
what about the 2016 target?
Mr Kidney: We have not given up
on our targets but you, like I, will take a look at how far we
have got to travel between now and the end of 2010 and conclude
that it is going to be very difficult to hit that target, and
I would make the same conclusion. But we have not given up on
trying and certainly 2016 for the eradication of all fuel poverty
in this country is still an achievable target that we aim for.
Q111 Paddy Tipping: As you know,
we have just been talking to Derek Lickorish and he was very keen
and the Advisory Group are very keen on what they call a road
map to achieve the target. I got the impression that the Department
were not very keen on that kind of approach.
Mr Kidney: I think it is a great
development we set up an Advisory Group. I have to say that was
a good part of the Fuel Poverty Strategy, I think, and Derek is
an excellent Chair and he has got a very feisty group of people
who represent the consumer groups, the energy industry and everybody
else with an interest in making sure we eradicate fuel poverty.
I can understand their pushing me, as they should, for specificity
in how we are going to hit our target. It is very difficult to
set out a road map with milestones that is meaningful. For example,
we did a great job from when the Fuel Poverty Strategy was published
in 2001 to 2004 following a good set of policies and making huge
progress in reducing fuel poverty, and then along came those four
years of huge price rises which nothing in our plans could have
prevented and it is they that have blown us so badly off course
in meeting our targets. There is a limit to how much we can anticipate
and plan for those kinds of events. Nevertheless, we should be
confident that we have got a set of policies in place and that,
if they all work and there are no such external shocks, we will
hit the target by 2016. That is what we are striving for and we
are close to being at that point at the moment.
Q112 Paddy Tipping: Take us through
those plans, those initiatives, which make you confident that
we can still meet the 2016 target. What are the headline issues
for you?
Mr Kidney: First of all, across
the three drivers of fuel poverty let us start with what is the
most sustainable way of helping people out of fuel poverty, and
that is energy efficiency. We have got now eight years' experience
of energy suppliers' obligations, first EEC, and now CERT. They
have delivered millions of household insulation measures which
have made a difference, and building on those experiences we have
just announced in the Household Energy Management Strategy a new
energy suppliers' obligation, from 2012 going forward, where we
think, having learned the lessons of those two periods of suppliers'
obligations, we can add to the direction and requirements on the
energy companies as part of the obligation to target the resources
and the efforts more effectively. That is one part of what I expect
to happen, because I expect to see a much improved performance
in terms of energy efficiency of properties. Perhaps I could digress
a little bit to say a little more about the HEM Strategy. The
new role for partnerships being required between energy companies
and local authorities is, I think, a very significant measure
too, as is the target for the number of hard-to-treat properties
that we are going to see improve by 2020. That is one strand.
Another one which we should never overlook I think is the smart
meters implementation; every home having a smart meter by 2020.
That will make a big difference to people's appreciation of what
they can do to manage their own energy needs better and in a way
that makes it more energy efficient and therefore cost efficient
for them to do so. Then comes the price support that we have trialled
with a voluntary agreement for three years by 2011 and, as you
know, there is legislation passing through Parliament at the present
time to put that on a statutory footing, so that we have moved
on to the price part of the three limbs of fuel poverty. The second
limb is direct help to people with their prices. Alongside that
is the measures in the Energy Bill to strengthen the regulatory
powers of Ofgem so that whilst we are subject to market forces
and competition for keeping prices down, nevertheless, if there
are problems with the way the market works, Ofgem has stronger
powers to step in and do something about it. The third limb is
people's incomes with a target to eradicate pensioner poverty
in this country and, now with the legislation to impose a target
to eradicate child poverty in this country, you can see the Government's
commitment ramping up to help people on the lowest incomes with
the income third of the three legs.
Q113 Charles Hendry: Can I come back,
Minister, to the issue of the road maps? You say that road maps
do not really work here because there are too many factors which
are outside the control of Government, but in other areas where
you have got road maps there are similarly huge issues which are
outside the control of Government. You have got one on the nuclear
side and there is a big issue there which will affect that. You
are publishing one shortly, I think the road map for renewables
for 2050, and clearly over a 40-year period there are an incredible
number of external factors which could impinge on it, so why have
you decided with fuel poverty that those external issues are so
great that it would invalidate a road map?
Mr Kidney: To take those two examples
that you have just given, the nuclear road map was about, having
taken the policy decision, a new generation of new build in this
country and setting out a road map for how we deliver the construction
and then operation of this new generation of nuclear power plants.
That is a single objective that we can focus on and say what the
milestones will be to when we have got up and running a fleet
of new nuclear power stations, whereas here, as I have explained,
there are three limbs to what we need to be juggling, so there
is no single objective. Inasmuch as I have said that I think the
most sustainable way to help people out of fuel poverty is the
energy efficiency of their homes, I think the Household Energy
Management Strategy, the Warm Homes, Greener Homes Strategy, is
the closest to a road map with, by 2015, every loft and cavity
wall insulated, by 2020 seven million properties receiving an
eco-upgrade, and that is the nearest we have got that is equivalent
to a road map. I just caution against putting too much faith in
the 2050 road map being specific because, as you say, it is 40
years away with many uncertainties, and I think there will be
a limit as to how much specificity there can be in that document.
Q114 Charles Hendry: But would you
accept that there is a degree of cynicism about targets? It seems
to be very often the cast iron rule of a target is that it is
set so far in the future that the minister responsible will have
changed by the time somebody else has come along and explain why
it has not been met, and you are rather in that situation today;
you have inherited somebody else's targets. If there was greater
clarity about what was expected to be done each year, maybe even
each month or each quarter, there would be much greater understanding
about whether it was going to be met some time out rather than
in the last few months saying, "It is still challenging but
we are still going to do our best".
Mr Kidney: I am not resiling from
the target on fuel poverty, which I accept I need to do all that
is reasonably practicable to eradicate by 2016, and I do believe
that what I have just said about the targets in terms of energy
efficiency measures is they are capable of being firm and being
measured and being met. Insofar as there is something that I can
be given to aim at that is achievable and it is a reasonable objective,
I think the targets in HEM are fine.
Q115 Mr Anderson: We heard earlier,
Minister, that there are between £10 billion and £12
billion of unclaimed benefits in this country, and a £300
difference between what somebody on pre-payment pays and what
somebody who is paying their bills via internet and direct debit.
Is that not a real issue that has never been grasped properly
by this Government and should be?
Mr Kidney: When we talk about
one of the three legs of fuel poverty being household income,
obviously if there are people being offered benefits and they
are not taking them up, then that is affecting their household
income, and it is something that we should be determined to do
more about. We have done a lot of work on trying to make sure
people get the benefits they are entitled to. For example, the
pension credit claim now can be done by one simple phone call.
The benefit claim is taken over the telephone, the form is filled
in and sent to the person just to sign and send back, and when
they send it back the form receipt is notified to the local council
to get them help with their housing benefit and council tax as
well. We have done everything possible to make it as easy as possible.
Just to take the scheme that I am responsible for, Warm Front,
whenever anybody applies for a Warm Front grant, Eaga, the scheme
manager, carries out a benefit entitlement check, if they want
it to be done, and even people who might have been turned down
because they were not on an eligible benefit, might be found as
a result of the check to be entitled to one, so not only do they
then get the Warm Front grant, they also get the extra income
every week from then on in the benefits that they pick up, so
there are measures we do to try to ensure that people take them
up. I would urge you as individual Members, you as a Committee,
to do everything that you can to help with benefit take-up, but
as long as there are some measures that are income related, and
they have to be applied for and proof given about the income,
there will be this challenge of making sure that everybody we
want to help gets the help they are entitled to. You also threw
in the measure about pre-payment meters. The statistic you have
given I do not recognise as of today but I certainly do recognise
it in history. There was a big campaign, and as a backbench MP
I was part of it, for something to be done about that, and at
last last year something was done about it. Ofgem changed the
licence conditions to prevent those excessive and unjustified
differences in price between pre-payment meter customers and standard
credit and direct debit customers, and as a result, even within
a month of that new licence condition coming into effect, the
differential for the average customer on a pre-payment meter compared
to somebody on standard credit went from a £41 differential
in favour of the standard credit customer to a £4 differential
in favour of the pre-payment meter customer, so there was a big
difference once that licence condition was put in place last autumn.
Q116 Paddy Tipping: Perhaps there
is a difference of view about the figures. Perhaps you could drop
us a note about that and at the end of that you can say, "I
was a campaigner on this and now I am a minister I have sorted
it out."
Mr Kidney: I am not going to claim
I have sorted it all out, but certainly the licence condition
is making a big difference. I am happy to give you the statistics.
Q117 Sir Robert Smith: Just on the
benefit and then there is the passport to access to other measures,
Macmillan Cancer Support are very concerned that a lot of the
people they support need help with fuel poverty and because of
the new working capability assessment, and the fact decision makers
are ignoring medical evidence, people about to undergo chemotherapy
are being denied the benefits and therefore cannot access the
support for their fuel poverty. Are you having any representations
with DWP on this problem that Macmillan have identified in terms
of the medical evidence not being taken on board with issues like
chemotherapy?
Mr Kidney: In the context of the
Energy Bill and the proposal for social price support, Macmillan
Cancer Support carried out a vigorous and effective lobby of members
of the Bill Committee about support for cancer patients within
the social price support, and I was sufficiently impressed by
the campaign to give a commitment in committee that I would meet
representatives of Macmillan Cancer Support, which I then did
and we had a very fruitful discussion about the things that they
think I should do to help them with the patients they are concerned
about, and the advice I gave them so that they would be able to
play a better role in the future in influencing these kinds of
decisions and taking part in the administration of the decisions,
so that was quite useful. They did not at that time mention that
particular problem of a tighter medical test for eligibility for
disability living allowance and attendance allowance affecting
the patients that they represent, so that is new to me. Obviously,
what I can say is that somebody who is in receipt of disability
living allowance or attendance allowance is in receipt of a qualifying
benefit for Warm Front works. If it were put to me that they could
not get the DLA or the attendance allowance but could they still
have the Warm Front allowance, I would say by what measure then
would I judge it if it was not the receipt of the benefit? Some
people have argued to me that because DLA and attendance allowance
are based on medical condition rather than income, it is not a
well-targeted use of Warm Front resources to deliver help to those
groups of people, something I would resist, obviously, because
I think that with their disability they are entitled to this help,
and certainly with the cancer patients, especially one who has
got terminal cancer, I would want the state to be as compassionate
as possible and give all the help possible.
Q118 Sir Robert Smith: But it is
the DWP that have got to sort out this problem of the medical
evidence not being taken on board.
Mr Kidney: Yes. As I say, it is
not something I had heard, even from Macmillan Cancer Support
themselves when I met them a few weeks ago. You have mentioned
it to me for the first time. I am certainly happy to join in the
inquiry of DWP as to what is going on about those medical examinations.
Q119 Dr Turner: It is a sad fact
that even given all the efforts that are made to target fuel poverty
amongst low income groups, there are still people that slip through
the net, for whatever reason, because they do not claim pension
credit frequently, they are too proud, and whatever, and they
are in fuel poverty but may not actually be aware of it. Is there
more that we could do by data sharing between government bodies
alone, because HMRC must have a lot of very useful data which
if it could be shared would help very much in the targeting?
Mr Kidney: I am very hopeful that
going forward this issue about making sure that, for obvious reasons,
the limited resources which are available to Government and Parliament
to help people should get to the right people, that we should
be able to target better and that data sharing is a good way of
ensuring that targeting. We are at the moment operating the first
data matching pilot to see whether this can work effectively,
as thanks to a provision in the Pensions Act 2008 we have got
the power to share government data with energy companies in order
to bring a benefit to a defined group of energy customers. We
are presently going through the first data matching to see whether
a group of elderly pensioners in the poorest income bracket can
be identified and as a result receive an automatic amount off
their electricity bill. If that works, I personally would want
to be coming back to Parliament to say, "I would like more
facilities for more elements of data sharing in order to continue
this trend into the future". I think I need to prove the
pilot works so that Parliament will listen to me. The reason it
is Parliament's responsibility is that because of data protection
and human rights legislation I cannot hand over this information
without the specific permission of Parliament in primary legislation.
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