Memorandum submitted by Mr Ronnie Campbell
MP (FP 21)
This submission has been produced on behalf
of Member of Parliament for Blyth Valley Ronnie Campbell. It is
in response to a growing number of queries and complaints being
dealt with through his office and a need for a more cohesive and
simplified strategy on dealing with Fuel Poverty.
Ronnie Campbell has been an MP since 1987 and
provides very busy local office in his constituency of Blyth Valley.
As an ex-miner Ronnie has been involved in the sharp end of energy
production and with the New and Renewable Energy Centre (NaREC)
being established in Blyth Valley he is conscious of the new technologies
coming on stream and through his office he is also acutely aware
of some of the problems being faced by consumers and especially
those who rely on Key/card meters where previous debt, administration
charges and card costs severely hit the more vulnerable clients
coming through his office.
Ronnie has also been involved in discussions
with an international firm looking to establish a Biomass power
plant in the area and has brokered meetings between local land
owners and the company which is looking favourably at a new biomass
power station being established within the next few years.
Headline issues for consideration by select
committee on Fuel Poverty.
The main points being made are:
— The need for a more accurate method of
calculating the levels of fuel poverty which would not be unduly
swayed by single elements such as fuel costs.
— The need for a statuary social tariff
on energy costs allocated for eligible households basis and based
on the estimated energy requirements for that home on an annual
basis any excess of the allocation would be at the standard cost.
— The need for key/card meters payments
to be at the standard or social energy tariff level and without
administration charges, financial penalties or old debts being
added. Fuel cards/keys are to help lower income families/clients
budget for energy use not a way to make money and not a way of
clearing debt.
— The need for a continued programme to
have EVERY home in the country insulated to the highest standard
by 2020.
— The need for a combination of energy
campaigning organisations to form an implementation partnership
to manage the energy efficiency programmes and grants including
Warm Front, CERT and other government schemes. These are all not
for profit and work in the best interests of the consumer and
do not have a profit element/requirement to sway their activities.
Local councils should be given a monitoring role to ensure delivery
and efficient practices are maintained.
— The need to extend the gas pipeline network
into all areas over a period of time to fit in with the overall
strategy from the implementation partnership.
— The need for a programme of introducing
renewable solutions for "hard to treat" homes. This
could be during or after the insulation programme is running.
In areas where solutions are not simple then a combination approach
is needed.
The need for a more accurate measure of Fuel
Poverty is vital and needs to be a combination of several elements
including, house type, fuel type, insulation status of the property
(SAP measurement), the estimated fuel requirements to heat the
property, The occupancy, financial position of occupants, medical
conditions and other relevant details need also be added into
a system of evaluating the fuel poverty status and thus arrive
at an accurate measure of each households position.
A social tariff is also vital to help those
householders in the lowest demographics but this has to be tied
to an assessment of the standard assessed fuel needs of the house
being occupied so energy efficiency can be encouraged. Thus a
family (two adults with two children in a three bed home) would
be allocated a social tariff allowance of say 5,000KWh and anything
over this should be at the standard rate. Similarly a single person
would be allowed 3,000KWh as their need is much less.
Alongside all plans has to be the removal of
extra charges on key/card meter payment methods. These extra charges
create massive problems for families already struggling to heat
their homes and have a direct impact on the health of families
using this method of paying for their fuel. Outlawing these charges
would be a huge step forward on tackling fuel poverty.
In order to tackle energy efficiency a full
programme of insulation for EVERY home should be brought in coordinated
by EST, NEA and the Warm Zones (all not for profit) and monitored
by local authorities and set a timescale of say 2015 to have every
home insulated to its maximum. The resources to cover this would
come from an amalgamation of Warm Front grants, CERT funding and
other funds available to tackle energy usage.
Winter fuel and cold weather payments are a
vital lifeline at this point in time but could be phased out if
legislation introduces a social tariff and removes extra charges
for key/card meters. These resources could be incrementally added
to those available for the national insulation programme which
would lead onto a programme of tackling "hard to treat"
homes and the development of renewable energy and community energy
systems and availability. Alongside the strategy on the use of
renewables can be run a roll out of gas pipelines to areas of
most need initially and then to all areas over a structured timescale.
1. When considering the impact of government
policy on fuel poverty it is important to consider clearly several
issues. These can be broken down into the causes, the people affected
and then potential solutions which differ according to the client
group and the solutions vary according to the various situations.
2. I would also suggest that the current measure/identifier
of "Fuel Poverty" (FP) should be reconsidered as the
current definition of FP being when a household needs to spend
more than 10% of their household income on all domestic fuel use
including appliances to heat their home to an adequate level of
warmth is producing an inaccurate evaluator of need.
While this indicator is simple and sounds good
it is too often affected by outside influences which don't always
reflect the energy efficiency status of a property and it is heavily
influenced by the world oil price levels which in turn impact
upon the costs of gas, electricity and other energy sources in
the domestic market.
3. In order to avoid repetitive information
I have addressed the key questions posed by the Call for written
evidence:
— Progress against Government targets.
— The definition of households in fuel
poverty commonly used—ie those households where more than
10% of income has to be spent on fuel for adequate heating.
— The coherence of the Government's initiatives
on energy efficiency.
— The methods used to target assistance
at households which need it most.
— Social tariffs and plans to put social
price support on a statutory footing.
— Winter fuel payments and cold weather
payments.
— Support for households which are not
connected to the mains gas grid.
Progress against Government targets/The definition
of households in fuel poverty commonly used—ie those households
where more than 10% of income has to be spent on fuel for adequate
heating
4. The problem with measuring the progress
of the government's fuel poverty target is in the measure itself
and thus I combine the two issues in one because without a more
accurate calculator the targets being set will continue to be
unattainable. This can be and is easily warped by larger than
expected increases in fuel poverty and takes no consideration
of the thermal efficiency of a property. There is also an issue
with the occupancy of a home and the size of a property particularly
in the owner occupied sector. It is neither feasible nor right
to try and take action against these home owners to remove them
from FP.
5. What is needed is a method of comparing the
required fuel usage of a standard home in normal use, on which
data already exists. This needs to be compared alongside the occupancy
of a home, the thermal efficiency, The estimated fuel use of that
type of property, the actual fuel use (as per supplier), and then
a means tested element which considers the income of the occupier
(using a banding method to get a number), benefits recipients
status (banded according to severity to consider health situation
of occupier). By using all these in formulating an indicator and
giving different elements a multiplier to highlight greatest need
it would be possible to develop an FP indicator not affected unduly
by any single element. This would allow a much better evaluation
of need and thus allow the targeting of resources more effectively
to target those most in need as well as identifying those homes
most in need of insulation/energy efficiency action.
It should therefore only be by the accurate
evaluation of a homes FP status that government targets can be
judged.
The coherence of the Government's initiatives
on energy efficiency
6. With the government having invested heavily
in a range of initiatives over the years it is inevitable that
some confusion exists over the various schemes. It is without
doubt that more resource has been invested in tackling FP than
ever before and a lot of good has come about because of this investment.
However the results should be considered critically against the
investment overall and the resources available from all of the
various sources should be combined in order to come up with a
more cohesive, understandable and sensible strategy.
For example the money invested in the Warm Front
scheme needs to be combined with the financial equivalent of the
Carbon Emission Reduction Target (CERT) funding as well as local
authority resources being invested in energy efficiency to come
up with a global "pot" which can then be used to target
Fuel Poor homes. By doing this and then moving the resources into
the control of proven operations without huge overheads or high
administration costs such as the Energy Savings Trust (EST), National
Energy Action (NEA) and Warm Zones a central cohesive strategy
can be developed. These organisations would, under monitoring
by local councils, be tasked with establishing a central one stop
shop "FUEL POVERTY TASK FORCE" by working together to
maximise their existing resources and minimising the costs of
running an effective national strategy. This strategy would be
set goals to be achieved by 2020 to insulate EVERY home in the
country to its highest standard and at the same time be developing
a database which contains the thermal details of EVERY property
to enable a national work programme to bring to modern standards
the thermal efficiency of every home. By measuring this against
the revised measurement of FP it should be possible to measure
accurately the progress being made. This would allow everyone
to be able to understand the government strategy, recognise where
the resources are coming from and what is available to the occupiers
of homes in every sector. By developing this "one stop shop"
approach it will eliminate confusion, encourage involvement and
take us down a path which takes the thermal efficiency of a property
out of the FP equation completely.
At the same time as this is happening it will
be necessary to consider the homes in the country which are "hard
to treat" due to their build type, age or location. Solid
wall homes needing external or internal insulation need to be
brought into the overall development of a national strategy right
from the outset to avoid "cherry picking" by installers
and a ratio of "hard to treat" properties to standard
ones should be laid down to ensure action is taken on these as
well as ensuring finance to do this work which is inevitably going
to cost more money per property.
7. By using local authorities as the managers/monitors
of the energy efficiency process you would enable a combination
of databases detailing every property, its energy efficiency position
(insulation, heating etc) and build type. This information is
often already held by planning departments and by combining data
from insulation installing companies, warm front and warm zones
data and HECA information an accurate evaluation of the PROPERTY
is possible. By then adding data on occupants from council tax
records, benefits departments within the LA and the benefits agency
and Pensions service as well as medical and social care records
an assessment on the occupiers needs can be added. This then allows
you to ascertain accurately, the complete picture on Fuel Poverty
and also have a reliable indicator of the action needed to tackle
the problems within each home. This "solution" would
not necessarily be the same for each home and some people may
need benefits advice or simple advice on energy usage whereas
others may need more significant help and even renewable technologies
to make the home energy efficient and out of Fuel Poverty.
The methods used to target assistance at households
which need it most
8. The current targeting method for resources
are very much a blunt instrument approach and based on benefits
which do not necessarily provide help to those households in FP.
Because some clients can receive a grant from Warm Front because
of their being on Disability Living allowance they may actually
be living in a very advantageous situation financially while others
on low income cannot qualify. This is morally wrong and has to
change. One option would be to establish a programme by which
EVERY home in the country has to be fully insulated by 2020 as
part of a revised policy and by linking this to the householders
on means tested benefits who are the ones only to receive free
measures and the rest pay a grant supported cost of around one-third
of the standard installation. This installation cost should also
be weighted according to the area as it costs much less to insulate
a home in the North of the country than it does in the South.
An evaluation of insulation costs needs to be established from
every area to allow an accurate measure of investment needed to
insulate homes. Once ALL homes are insulated and new ones have
to comply with modern building standards, activity can then be
directed (with resources) to renewable energy options for "hard
to treat" homes along with a review of how welfare benefits
and social energy tariffs are mnanaged.
Social tariffs and plans to put social price support
on a statutory footing
9. One of the biggest problems families
needing help face is the disgraceful situation by which they are
penalised even more for being poor. Despite energy companies knowing
the situation poorer families face due to their lack of income
they continue to charge them extra for using a key or card meter!
While they insist the energy costs the same for these customers
they avoid explaining the administration costs they charge or
the payment made to the retailer for collecting the money on their
behalf which also comes off the already poorer client. What is
currently happening is people self disconnect and often the stark
choice of heating or eating which in this day and age is an absolutely
disgraceful choice facing a parent or an older person. The situation
is exacerbated even more when a key/card customer goes into the
emergency portion of their energy use and is charged even more
for doing this. In some cases previous debt is added on and it
is not uncommon for a client to be actually receiving less than
half of the energy they think are paying for due to the charges
taken first. Further, due to them already having less money they
cannot afford to mitigate these charges by putting larger amounts
on their cards because they haven't got it. Therefore they are
continually hammered for being poor in the first place and the
energy companies hide behind bland statistics.
10. The answer is not simple and certainly not
single faceted. What is needed is a social tariff to be brought
in by statute and this could be included as part of an extra "windfall
tax" on energy companies profits or by using part of their
CERT responsibility. With an energy efficient home, a social tariff
set at around half or three quarters of the standard rate and
with the abolition of any extra charges on key/card meters it
would be possible to see families/householders avoiding the stark
choice of feeding themselves and their families or keeping warm.
One way of controlling by statue a social tariff would be to set
this at 60% of standard fuel cost and every home should be identified
and the standard energy use required by the occupant/s evaluated
as per the national tables available already. The occupier would
receive this amount of gas/electricity and any use over this would
be at the normal price. This would encourage fuel efficiency,
avoid abuse and allow fuel companies to operate a straightforward
system. The qualifiers for the social tariff would be based on
the fuel poverty calculation which would be arrived at in a new
way to take into consideration all the various elements such as
health, property type and size and energy efficiency status.
11. One issue which is not mentioned in the
consultation is the health impact and it is well documented what
the impact of a cold damp home has on winter death figures. The
lower attainment levels of poorer children and the repetitive
culture of doctor/hospital resources going into treating the affects
of people living in these energy inefficient and homes costs the
health service billions of pounds and this should also be factored
into any long term strategy. Trial schemes need to be put into
operation where treating a cold damp home can be measured on the
impact on families and their health. Altogether social tariffs,
energy efficient homes and renewable technologies can all be used
to improve the FP levels in this country.
12. One method of managing and controlling abuse
of a social tariff could be in the establishment of a set amount
of energy needed to maintain adequate levels of heat in a standard
home. The various householders type/size of properties all have
estimated standard energy requirements and these need to be the
basis for a social tariff. This would also encourage more effective
insulation and energy waste and avoid the consumer using excess
and irresponsible amounts of energy.
Winter fuel payments and cold weather payments
13. The continuation of winter fuel payments
should be continued but in a different format and the recipients
should receive a voucher payable only to the energy company instead
of cash. They would be non transferable to avoid any misuse and
only refundable by the energy company as part of their annual
tax liability.
14. Once it has been established that 100% energy
efficient homes have been achieved and social tariffs brought
in the number of people in FP can be reconsidered and a decision
of the winter fuel payments and cold weather payments can be made.
Both at this point in time are essential and are a valuable asset
to many of the people in receipt of these. The fact some people
sue these for other purposes at the time of issue is one thing
but the fact is hat the extra resource does help them.
Support for households which are not connected
to the mains gas grid
15. One of the main causes of rural fuel
poverty has to be the lack of access to gas supplies. The costs
of running pipelines into every part of the country would be expensive
to say the least but unless action is taken to reduce the costs
of fuel for rural and other non gas properties the problem cannot
be solved in a simple way. In the long term we should be setting
down a programme of gas line extensions to try and help those
not on the main gas networks and this could be funded after the
completion of the insulation programme and as this part of the
scheme winds down the resources being used for this would be transferred
over to the gas pipeline extension project. In the meanwhile it
should be considered another priority to develop and install renewable
energy systems for individual properties or in the case of clusters
of homes community energy schemes. With the organisations such
as the New and Renewable Energy Centre (NaREC), EST and NEA working
together a simplified project design and build system could be
developed for every property off the gas main areas.
16. These would be either air or ground source
heat pumps, solar, PV or wind turbine options depending on restrictions
in National Trust or National Park areas or areas with planning
restrictions.
February 2010
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