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Fuel Poverty

It is a pleasure to serve under your chairmanship, Sir Nicholas, and to have listened to the debate. The debate is not only important, but topical for our constituents. I congratulate my hon. Friend the Member for Edinburgh, North and Leith (Mark Lazarowicz) on the way in which he introduced it—not only for form's sake, but sincerely. We heard important contributions from my right hon. Friends the Members for Islwyn (Mr. Touhig) and for Coatbridge, Chryston and Bellshill (Mr. Clarke)—the latter takes a strong interest in such social matters—and from my hon. Friends the Members for Southampton, Test (Dr. Whitehead) and for Selby (Mr. Grogan), who demonstrated a great deal of expertise. I welcome the hon. Member for Northavon (Steve Webb) to his role of Liberal environment and energy spokesperson. He is a colleague who has a great deal of expertise. We worked together on pensions some two and a half years ago—I rather hoped that I had shaken him off but that turns out not to be the case. We also heard an interesting speech from the Conservative spokesman, the hon. Member for Wealden (Charles Hendry). It was interesting, of course, because of the history of the matter—I do not have half a degree in history, so I do not bring the 50 per cent. of expertise that my hon. Friend the Member for Selby brought. The Government inherited from the Conservative party a massive amount of fuel poverty, which the hon. Member for Wealden did not acknowledge. Of course, we inherited a social security system whereby, following those years of a Conservative Government, it was felt proper that elderly women living alone could live on as small an amount as £69 a week under the income support system. Given that record, I listened to the hon. Gentleman with interest but also, if I may say so, a certain amount of cynicism. Tackling what we now call fuel poverty involves a range of issues. We are talking about the impact of poverty and low incomes, energy-inefficient housing, cold housing and, especially at the moment, rising energy costs. Tackling those problems is a significant priority of the Government. We have set challenging targets and we remain committed to maintaining and strengthening the framework to help us to reach our 2010 target in England and, beyond that, to reach our ultimate goal of eradicating fuel poverty altogether in the whole of the United Kingdom by 2016 to 2018. I shall say something about what the Government have achieved, which was acknowledged by colleagues, how the issue stands at present, and what we need to do in future. Since 1996, more than 4 million households in the UK have been removed from fuel poverty. Some £20 billion has been spent on fuel poverty benefits and related programmes. The Government introduced the winter fuel payment, which has helped some 11.7 million people, the importance of which was acknowledged by hon. Members. I am always struck when I talk to older people by the comfort that that £200 or £300 brings just before Christmas to many who are worrying about fuel bills and costs at that time of year. If counted against fuel bills, the winter fuel payment is estimated to have removed a further 1 million households from fuel poverty in the UK. In addition, we have assisted more than 2 million households in the UK through energy efficiency measures of different types. I certainly agree with colleagues when they stress the importance of energy efficiency measures in housing—in both new build and the existing stock. I think that that is the key to tackling this issue, and doing so in a way that is in full accord with our climate change objectives. The hon. Member for Wealden is right. I have to say to him that even in opposition one cannot have it both ways. Of course programmes such as the renewables obligation increase costs. That is inevitable and it puts pressure on the fuel poverty issue, but we need some consistency here. Surely such climate change measures are important. Let us recognise that millions of homes have been lifted out of fuel poverty, but now, because fuel bills are increasing—much of the debate has focused on that increase—the number of people in fuel poverty is also increasing. It is important to recognise the context, although, to be fair, the hon. Gentleman did so. Wholesale energy costs are rising across the world because of global demand. A great global grab for energy is going on, not least in emerging economies such as China and India. Since January 2007, crude oil prices have increased by some 80 per cent. Gas forward prices have increased by 50 per cent. and, in north-west Europe, coal prices have increased by 85 per cent. There can be no getting away from the fact that those increases are bound to have an impact on domestic prices. However, it is important that we ensure that the supply companies are playing fair by customers, particularly the most vulnerable ones. It is therefore altogether appropriate that my right hon. Friend the Chancellor of the Exchequer has written to the regulator, Sir John Mogg, the chairman of Ofgem, to ask for his assessment of the association at present between wholesale and domestic prices. I think that that is an important initiative because I am aware of the allegations—I think that they remain only allegations—that supply companies are not playing fair. We need to assess that very carefully. Colleagues have made points today that are very important to our constituents. The recent announcement on the next comprehensive spending review period of 2008 to 2011 showed the Government's continued commitment in the area of fuel poverty. Warm Front is the Government's main scheme to tackle fuel poverty in England—there are related schemes in the other nations of the UK—providing grants for energy efficiency and heating measures to some of our most vulnerable households, not just the elderly. Funding for Warm Front will be just over £800 million for the period between 2008 and 2011. That is significant further investment in addition to some £1.6 billion that the Government have committed to date. Warm Front now offers a benefit entitlement check to all eligible households, increasing income on average by £26 a week and £1,300 annually. We have been examining very carefully what data we can share with supply companies to maximise take-up—that is a familiar theme for some of us. Because of data protection issues, we have decided that we cannot legislate in this area. We will discuss the issue when we consider the energy Bill, particularly in Committee, but the Department for Work and Pensions is keen to help us on this matter so that we can reach the most vulnerable. That will be a feature of the discussion on the energy Bill. In addition, new proposals laid before Parliament at the end of last year in the form of a carbon emissions reduction target—the successor to the energy efficiency commitment—mean that the major energy suppliers will be obliged to meet carbon reduction targets that will lead to investment of about £1.5 billion over the next three years to install better insulation and improve heating systems. A wide range of other measures will improve efficiency and increase comfort for many of our constituents. The measures will have a particular focus on priority groups such as older people, people on low incomes and those with disabilities. That will double what energy suppliers currently have to do to improve the energy efficiency of their customers' homes, and much of that effort will help people who are most at risk of fuel poverty. That means that the total help available for energy efficiency for the priority group will rise by £680 million, compared with the previous spending period, to about £2.3 billion. I take on board—of course I do; it was our proposal—the need to move to the concept of the energy services company that helps all households, whether better-off or worse-off, to reduce their energy demand. That is the revolution that we need to bring about in the future and I am very committed to that.