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Fuel Poverty

Volume 476: debated on Thursday 22 May 2008

5. What his most recent estimate is of the number of (a) households and (b) individuals living in fuel poverty. (206984)

The most recent figures show that approximately 2.5 million UK households were in fuel poverty in 2005. Fuel poverty is not measured at individual level. UK figures for 2006 will not be finalised until later this year, when the results of efficiency programmes will be known. I am conscious that there is a time lag in the data because of the methodology required. I am also conscious that fuel poverty is now moving in the wrong direction, partly for the macro level reasons of global energy prices that we were discussing. The Government are committed to doing their utmost to protect the most vulnerable in winter from rising fuel prices.

I am grateful for those estimates. As the Minister’s answer indicates, two or three years ago perhaps 5 million or 6 million men, women and children were living in fuel poverty and the numbers have soared since then. Can he estimate what proportion of them the Budget measures will have taken out of fuel poverty, and given that vast numbers will remain in it, what is his strategy for abolishing fuel poverty, which is his stated policy?

It is our stated policy because it has to be intolerable that vulnerable people, particularly the very elderly who often live in the most energy-inefficient dwellings, can be cold in winter. As the hon. Gentleman knows, in the Budget the Chancellor increased winter fuel payments by £50 for the over-60s and by £100 for the over-80s. Since 2000, the Government have spent some £20 billion on fuel poverty benefits and programmes. My right hon. Friend the Secretary of State has reached agreement with the six largest energy supply companies to increase their collective level of spend on social tariffs and programmes from £50 million to about £150 million a year by 2010-11. We are also working very hard on other measures.

The Minister will be well aware that the Business, Enterprise and Regulatory Reform Committee is conducting an investigation of energy prices. He has mentioned the social tariffs from the big six companies, but many people rely on home fuel oil and bottled gas, especially in rural areas, and they are not subject to any social tariffs. When the Committee asked Ofgem and Energywatch about regulation of that sector, it became apparent that there is none. Will the Minister look into that and will he ask the National Consumer Council, which will take over from Energywatch, to ensure that those people who do not have any protection are included in the energy section for future investigation?

Obviously we are looking into that, and we need to ensure that we have fair trading wherever possible. I have received many letters from Members of Parliament on behalf of concerned constituents about this very question. We have had a programme to connect people to mainstream gas supplies and have made some progress with that, although it is not always possible. We also need to look hard at the contribution that can be made by microgeneration, such as heat pumps, to tackle some of the difficult and important questions that arise in many constituencies.

Is the Minister aware of and sympathetic to the real concerns of pensioners in my constituency about the rising cost of fuel? Is he aware of the Age Concern report that says that more than 150,000 people aged over 65 died in the past six winters? What is his assessment of the current situation?

This Government have taken unprecedented action on energy efficiency and winter fuel payments compared with other Governments—I recall pressing another Government to take action 30 years ago, but only this Government have done so. My assessment of the situation is that, after years of progress because of our action, it is now much more difficult because of rising energy costs. We are therefore redoubling our efforts to ensure that we can tackle that evil problem through better targeting—although there are data protection issues—energy efficiency programmes, enhanced social tariffs and winter fuel payments.

Is the Minister aware that yesterday gas was trading at 57p a therm, but that the forward price for next winter is 94p a therm, an increase of more than 80 per cent. and twice the level at which it was trading last winter? Is he also aware that other European countries are seeing increases in their domestic energy prices of some 40 per cent. and experts here predict that we too may see increases of that shocking magnitude? Does he understand the pressure that that will have on all consumers, but especially the devastating effect that it will have on the increasing numbers in fuel poverty? What steps can the Minister take now to prepare for what will be a very tough winter and ensure that his commitment to remove vulnerable people from fuel poverty by 2010 is met?

We only recently had a meeting, hosted by Ofgem, with all the key Departments, and some announcements of new measures will be made soon. I have mentioned the recognition by the Chancellor in winter fuel payments and the recognition by the energy supply companies, encouraged by us, in trebling the amount that they offer through social tariffs. I am aware of the issues and I am even more interested in practical recommendations, so I would be happy to talk about that with the hon. Gentleman. We need to target our resources better, not least the energy efficiency programmes, and to examine whether new technologies such as microgeneration can make a contribution.