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Energy Bill [Lords]

If the hon. Gentleman holds on for just a moment, I will come to those very figures. Indeed, the question that I wanted to ask the Minister was whether he could outline the latest thinking on the level of funding for the ECO pot. The figure of £1 billion has been cited in the past, but a recent all-party report recommended that the annual contribution through the ECO should be no less than £2.5 billion, focused exclusively on low-income and vulnerable households. Other reports have suggested that the contribution should be as much as £4 billion a year. Let us not forget that the introduction of the ECO will coincide with the end of all Exchequer funding for domestic energy efficiency programmes—the first time in three decades—when Warm Front is phased out. As we have discussed, the ECO will be funded through a levy on all customers' fuel bills, regardless of households' financial circumstances. That is inherently regressive and can result in perverse outcomes. I mentioned earlier that if we are not careful, we could push more people into fuel poverty by levying a fee on all bills—rather than by adopting a taxpayer-funded approach—than we take out of fuel poverty. It is simply not acceptable for low-income and vulnerable households effectively to subsidise those who just happen to live in hard-to-treat homes, but who are perfectly able to pay to heat them properly. The dual function of the ECO pot is therefore misguided and risks creating cross-subsidies from the poorest to the better-off. In their paper ““Extra help where it is needed: a new Energy Company Obligation””, published in May, the Government provide further information about the ECO, and in doing so, partially recognise the limitations and regressive nature of the policy, as well as acknowledging concerns about targeting and equity. That document says:"““As the delivery costs of ECO are assumed to be recovered by the energy companies through increases in consumer bills and therefore spread across all households, it is important for the credibility of the scheme to ensure that all households have fair access to the benefits, safeguarding distributional equity. In addition to providing for affordable warmth, this includes considering how the benefits of support for solid wall insulation can be delivered equitably. We are looking into learning the lessons from CERT””." Those are the challenges that need to be overcome. The case that I want to make—the same case as that made by the Committee on Climate Change—is that the funding available from the ECO should be used exclusively for low-income and vulnerable households, including those in hard-to-treat homes. Essentially, what we should not do is use ECO funds for those in hard-to-treat homes who can afford to pay for them.