I beg to move, That the Bill be now read a Second time.
I have religiously put in for the private Member’s Bill ballot for the best part of 12 years, but I have never appeared anywhere on the list until this year, when I came second. That is perseverance rewarded.
And no doubt other Members’ perseverance will be rewarded in due course.
Having appeared as No. 2 on the list, I cast around for an appropriate Bill to introduce. There were a number of very worthy topics—some have been debated on previous Fridays—that I carefully considered. I believe, however, that the Bill that I eventually chose to present is of crucial importance. For a start, it is supported by a huge range of organisations outside the House. I will not name them all, but they include the Association for the Conservation of Energy, Age Concern, Consumer Focus, the Disability Alliance, Friends of the Earth, Help the Aged, the Child Poverty Action Group and Unison. That will give Members some idea of both the scope of the Bill and the level of support for it among widely differing organisations.
It has been gratifying to receive the support of Members in all parts of the House, not just those who were happy to sponsor the Bill—to whom I am very grateful—but those who have simply wished me well, and those who have signed early-day motion 1069, tabled by the hon. Member for Nottingham, South (Alan Simpson). As of today, 172 Members have supported the Bill by adding their names to the motion. I am grateful for the informal contacts that I have had with Members on both sides of the House, and particularly grateful to Labour Members, who have been fully engaged with the issues and have discussed some of them with Ministers. I am also grateful to Conservative Front Benchers, with whom I have had long discussions about the Bill. Although they favour the use of a slightly different mechanism to secure the Bill’s objective, they have indicated that, should it prove necessary, they will support me in the Lobby.
The Bill is supported by many individuals, including councillors. I am sure that many Members will have received communications not just from their constituents but from their local councils, which have passed motions in support of the Bill’s intentions. The reason for that is simple. The Bill is good for those living in poverty, a group that encompasses the old, young families and people with disabilities. It is good for the public health of the United Kingdom; it is very good for the environment; and, at a time when it is desperately needed, it is good for the economy. I believe that supporting it is a no-brainer.
My constituents are very grateful to my hon. Friend, because the Bill stands to assist thousands of people in Montgomeryshire who are not well off and who need such assistance desperately. Let me thank him personally for what he is doing for Montgomeryshire folk and others.
I am grateful to my hon. Friend for what he has said. It underlines a point to which I shall return shortly. His constituency, like mine, is extremely rural, and although many people see fuel poverty as an urban issue, it is very much an issue in rural areas as well.
I too am grateful to my hon. Friend, and congratulate him on selecting this Bill. In my constituency, 5,700 families are living in fuel poverty. Does he agree that the investment in energy efficiency measures that his Bill requires would not only help to eradicate fuel poverty across the country in a sustainable way, but would give a vital shot in the arm to our economy, particularly the construction trades which are so hard pressed at the moment?
Of course fuel poverty affects rural areas, but it affects rural and urban areas alike. No Member has missed out on it; it affects every constituency in the United Kingdom. Does the hon. Gentleman agree, however, that the villains of the piece are the energy companies, with their immoral profits and the excessive salaries that they pay their chief executives? That is where the blame lies, and that is why the Bill is so important.
I am very tempted to pursue the hon. Gentleman’s logic, but I have to say that I have had extremely helpful conversations with some of the energy companies over the past week, and I feel that I should put on record their support for elements of my Bill. I am a bit worried about alienating them too much at this stage, because I need their assistance to make the Bill work. Nevertheless, as the hon. Gentleman knows, the fact that bills rose but have not fallen at the same rate is a real issue. It appears to be an over-bloated industry, and that gives many of our constituents cause for concern.
I am delighted that my hon. Friend is presenting this Bill. The hon. Member for Chorley (Mr. Hoyle) pointed out that fuel poverty affects rural and urban areas alike. I was shocked to discover that more than 15 per cent. of people are in fuel poverty in Solihull, which is hardly renowned as one of the poorer parts of the country. That shows how pervasive the problem is throughout the United Kingdom.
That was a helpful intervention. If there is one place that those in ignorance might consider less likely to be affected, it is Solihull, which is an affluent borough in most respects. Yet there are people who, although apparently invisible to the authorities, live in squalid surroundings and are suffering as a result. That, too, underlines the need for the Bill.
My constituency, like the hon. Gentleman’s, contains a mixture of rural, urban and semi-rural areas. One of the reasons for fuel poverty in those areas is a lack of gas mains. That brings us back to the energy companies. Because many of them supply both electricity and gas, they have no incentive to install gas mains and alleviate fuel poverty.
That is a very good point. The—I have forgotten what the commission on rural areas is called. Could someone help me? [Hon. Members: “The Rural Commission.”] The Rural Commission has provided me with the useful information that 42 per cent. of households in rural areas are not connected to gas mains—my constituency is very similar to that of the hon. Member for Ynys Môn (Albert Owen) in that respect—but half the communities that are not connected are within 2 km of a gas pipeline. I suspect that both a lack of will and a lack of investment are preventing many rural communities from benefiting. About 220,000 fuel-poor households, despite their proximity to a gas main, cannot take advantage of the dual-fuel discounts.
I congratulate the hon. Gentleman on introducing the Bill. Does he agree that a major economic opportunity is offered by energy efficiency and microgeneration measures—the sort of measures that are described in clause 2(3)(a) and that might provide the green jobs and green business that we need if we are to emerge form the recession with new skills and new opportunities?
The hon. Gentleman has identified one of my key proposals. The Bill does not merely propose a basic insulation scheme. It does not aim for easy targets such as cavity wall insulation, which is relatively simple to install. It contains a wider basket of measures. Microgeneration measures, for instance, would be more appropriate in many of the rural areas that we have been discussing. Put together, the measures could offer businesses a huge stimulus. They arrive exactly at the time we need them. There is an urgency to get the job done and there is the capacity within the system to help us to get it done. That is why the hon. Gentleman is absolutely right.
Will my hon. Friend give way?
While my hon. Friend is on the subject of hard-to-treat homes, particularly those that rely on fuel heating oil, may I make the point that one of the great benefits of the Bill, which has led to the Highland Senior Citizens Network wishing to add itself to the list of groups that support it, is that it does not concentrate solely on easy-to-insulate homes but would allow the benefits to be spread much more widely? That is particularly important in rural areas such as the highlands, where many old, hard-to-treat homes are inhabited by people on low incomes, who are most likely to be in fuel poverty.
My hon. Friend is absolutely right. I am not sure what the vernacular building material is in his area, but a lot of houses in rural areas in my constituency—I do not want to overstress the rural dimension but it is important—have rubble-built, solid walls with inadequate roofing. I do not know what the conditions are in the borders, but in Somerset they are damp. Cold and damp equals ill. If one is elderly, disabled or trying to bring up a young family, a cold damp home in the middle of winter is not a good place to be. That is the key.
What does my Bill do? As Members will see from the text, it requires the Government to introduce a strategy to eliminate fuel poverty by 2016. It does that by means of a basket of measures, including insulation and sustainable energy. Essentially it would require hard-to-heat and energy wasteful houses to be treated in a sustainable way. Therefore, it deals not only with the people who are living in those houses at the moment but with the generations to come. It will have a permanent effect. It introduces as an interim measure, on a statutory basis, social tariffs for the utilities, so that we deal with those people who are waiting for measures to be introduced in an effective way, so that we ease the burden on them and so that perhaps fewer people are cold and unhappy over the coming winters.
I add my personal congratulations on the service that my hon. Friend has done all of us by introducing the Bill, which as we have heard from other hon. Members, would help constituents up and down the land. Does he not agree that there is a real urgency for the Bill to be introduced precisely because the Government have already admitted that they are not going to reach their existing targets? They have already effectively conceded that the targets for dealing with fuel poverty and vulnerable households by 2010 are not going to be reached. Does he agree that it is therefore even more difficult to understand the apparent lack of support from those on the Government Front Bench?
I am going to deal with the Government's position in a moment. I think that the Government are taking action. They are involved in reviews and discussions that will greatly improve performance in this area, but that is not incompatible with my Bill. This is a belt-and-braces approach. It recognises work where it is being done. However, my hon. Friend is right to suggest that we are barely scratching the surface. As a country we need to do much better. I believe that the Government are actively considering how they can do that. What I want to do is to set clear objectives, which, as I will discuss later, we thought we already had, in order to make that happen in a time scale that is recognisable and reasonable, considering the urgency of the situation. I now give way to my very patient hon. Friend the Member for Romsey (Sandra Gidley).
I too welcome the Bill, but is my hon. Friend aware of the briefing from the Energy Retail Association? He has been very kind about some of the energy retailers, but was he as concerned as I was to read that they are saying that:
“There are dangers that putting a customer on a social tariff could undermine the benefits of a competitive market”?
He may have an opinion on that. I do not necessarily subscribe to their view—I want to make that clear. He may recall that, a few years ago, tariffs designed to help old people were introduced at a very low rate and then there were swingeing increases year on year. People were trapped in the system. Does he trust the energy companies to deliver on this?
First, there is quite a difference in performance between some energy suppliers and others. Secondly, it is almost impossible to compare what is offered because the tariff arrangements that they suggest are complicated. Thirdly, there is enormous churn, with people being badgered into changing their accounts from one company to another on the assumption that they are getting a better deal, which often is not a better deal at all. Although I hear what the suppliers say and understand the need to maintain a competitive market, it is in their interests for there to be a statutory basis for a social tariff so that everyone understands what it should comprise of and they work on the same basis.
The hon. Gentleman has probably been talking to the same energy companies as I have. I will not mention the name of the company that I am referring to, but I was surprised to be told that the mechanism to decide on eligibility is more often than not income support. I asked the company in question how it checked that people were on income support, to which the answer was, “We don’t.” Therefore, it is a fairly open door, which may be good, but there is no mechanism by which to find out who is eligible and why. I do not think that that is terribly clever. I am sure that he would agree.
I agree. There are people benefiting from schemes at the moment who are not in fuel poverty. Others are not benefiting who should be given more support. That is one of the arguments for putting the scheme on to a statutory basis. It would involve the Government determining eligibility criteria; there is a precedent for that to an extent in a recent Pensions Bill. Again it is common sense. We need common criteria to ensure that these measures are targeted at the right people and that the right people benefit. Often that is not the case.
How many pages are there?
This is what the Bill does. It offers a strategy to eliminate fuel poverty by 2016, to treat homes with lasting and sustainable improvements and, in the interim, to introduce a statutory social tariff.
I cannot believe, and a lot of Members here today find it difficult to believe, that in this so-called civilised country, which is affluent even in modern circumstances, we can allow 3.5 million households at a conservative estimate—the figure is probably 5 million—to be in fuel poverty. It is a disgrace. I think that all sides recognise that that is a disgrace, so we are talking about how to deal with that.
It cannot be right that one in three older people live in one room over winter to keep warm. It cannot be right that one quarter of all older people stay in bed to keep warm. It cannot be right that one in 10 older people in this country cut back on essentials such as food and clothes to pay fuel bills because they cannot do both. That is a national disgrace and it is one that we need to address. It cannot be right also that every year in this relatively temperate country of ours people die because of the cold. Department for Environment, Food and Rural Affairs figures from 2004 show that, each year in the United Kingdom, there are between 25,000 and 45,000 excess winter deaths—that is the clinical and unexpressive term that is used. That does not happen elsewhere; it does not happen in much colder countries than ours, such as Norway, Sweden or the other Scandinavian nations. They have severe winters, but they keep their citizens warm in their homes. We fail, and we as a House are responsible for the fact that that is happening. Also of course, for every person who dies from a cold-related death, many more are made ill or put in hospital as a result of cold.
Given that we all identify climate change as the biggest and most urgent issue we face, it cannot be right that so many homes in our country leak energy—energy is wasted simply because the houses are not up to the necessary standard. If my Bill were implemented and the houses that we have identified as being lived in by people in fuel poverty were brought up to standard, their carbon emissions would be reduced by 59 per cent. Should that not be a priority for the House and the Government? If we are going to make a real difference on climate change, we must start with domestic households and stop wasting energy. Of course, that would reduce costs as well—not only costs to the individual, but costs to the state in providing support. It therefore makes sense to do something about such a loss of energy.
I have touched on the fact that this is a rural as well as an urban issue. Indeed, I have stressed the rural dimension, but I do not want Members who represent city constituencies to feel that I have left them out. We have heard from my hon. Friend the Member for Solihull (Lorely Burt); I think I would describe her seat as a suburb constituency, but perhaps that is a dangerous thing to say. [Interruption.] There are perfectly nice and very pleasant suburbs; suburbs are good—country is better, but suburbs are good. My point, however, is that this is an issue for the entire nation.
Let me reiterate the economic dimension. It makes sense to create green jobs. I thought the Government wanted to do that. I thought they said that one of their initiatives to beat the recession was to stimulate areas of the economy that were going to produce sustainable work for the future. That must start with those jobs that provide an environmental benefit. There is huge scope here, as a lot of individuals will be involved.
My hon. Friend the Member for Mid-Dorset and North Poole (Annette Brooke) has been very patient, so I shall now invite her to intervene.
I thank my hon. Friend for giving way, and I congratulate him on introducing the Bill. He has presented some shocking statistics on fuel poverty. Is it not also shocking that our poorest and most prudent constituents use prepayment meters and they are being rewarded with even higher charges? That is disgraceful.
My hon. Friend is absolutely right. It is one of the tragedies at the moment that some of our poorest constituents end up paying the most for their fuel. They do so via tariff systems, and prepayment meters are part of that. I do not think, however, that we can draw an easy equation between those buildings with prepaid meters and the people who are poor. It is not as simple as that. It is true that a lot of people who are in poverty have prepaid meters, but many people who are not in poverty have prepaid meters, particularly in London where many private sector landlords install them as a matter of course. Often yuppies who work in the City live happily in those flats—perhaps we should call them the new poor, but I do not think they are poor yet. The equation is, therefore, not quite that simple, but my hon. Friend is right that this issue needs to be addressed as part of the social tariff arrangements.
The Government are discussing social tariffs with the Ofgem-regulated electricity and gas companies, but, as the hon. Member for Ynys Môn said, a lot of people in this country do not heat their houses with gas or electricity—gas because they cannot get it, and electricity because that is not the way they have traditionally heated their home. They rely on liquefied petroleum gas, fuel oil or solid fuel, and those fuel sources have increased in price the most over recent years. People who rely on them are now having the greatest difficulty in paying their bills. I should declare an interest here: my rural hovel relies on fuel oil and the bill has gone up enormously this year compared with last year. I can just about pay the bill, but I recognise that others will be in great difficulty.
There is a permissive element within the social tariff part of the Bill. It permits the Government to bring other fuel sectors into the equation if they can— although I am not sure whether it is possible. I would not necessarily want those sectors to be brought within the Ofgem bureaucracy, because that may result in more regulation than is required, but if we can find a way of extending the social tariff to non Ofgem-regulated fuel sources, that would be of great benefit.
I am glad my hon. Friend has mentioned the people who are not on the gas network and who rely on Calor gas as their only means of heating, because that is an even more uncompetitive market than the oil market. It involves a commitment to a tank, which effectively determines which supplier they are going to use. I hope that he will continue to stress, therefore, that there is a series of reasons why many people in rural areas are more likely to be fuel poor, and that is one of them.
I have discovered that a number of people living in social housing in my constituency use LPG. It is the council that orders the LPG, but the LPG company sets the tariff, so the customer has no control at all. They have no involvement with the supplier, and the council obviously has no incentive to work on their behalf. Does the Bill contain any measures that might address those problems?
That is a very interesting observation. First, one wonders why the council feels it has no duty of care to those people; a council should have regard for the poorer people whom they house. There is certainly no barrier to that issue being addressed in the Bill.
I congratulate my hon. Friend on introducing the Bill. I want to emphasise the point made by the two previous party colleagues who have spoken. In large rural constituencies such as mine, many houses are well outwith the 2 km distance from the gas network that my hon. Friend referred to earlier. There is no possibility of those properties ever getting gas, and they are reliant on a variety of other sources, such as oil, Calor gas and solid fuel. I hope the Bill gets its Second Reading today and that when it reaches its Committee stage we can explore ways of bringing such heating systems within regulatory networks, so that they too can benefit from regulation. Last year’s spike in oil prices is causing severe problems for people with those heating systems.
That is absolutely right, and I suspect that in the highlands and islands, part of which my hon. Friend represents, there is also an additional premium because of the distances involved in delivering to those far-flung areas—far-flung from us here, but not far-flung from them there. This part of the Bill covers Scotland and Wales, although I have to emphasise to hon. Friends representing constituencies in Scotland and Wales that the part that deals with statutory matters does not cover them because of the devolved arrangements. I hope that if we can succeed in getting the Bill through this House and on to the statute book, it will serve as a pattern for the devolved Administrations, so that they, too, will wish to do something similar in their own areas.
May I be the latest in a long line of colleagues from all parts of the House to compliment my hon. Friend on this fantastic Bill and speak about its importance for all our constituents? The fact that, as he says, the entire United Kingdom is covered by certain parts of the Bill is very important. Clause 10, which relates to the energy assistance packages, is also important because it would require a supplier to supply energy to eligible customers at a lower tariff than any other rate available from that particular supplier. Earlier, he said that he had had some constructive discussions with the suppliers about that, so can he give us an insight into their response to that particular proposal? How can we make sure that those packages work as effectively as they need to do?
I am grateful to my hon. Friend for that intervention. Opinions differ—suppliers are not all united—on this; some think that the packages pose a potential difficulty in their competitive structure, whereas others are worried that the social tariff that they have introduced provides for a better deal than is likely to emerge in a universal concept. There are many discussions still to be had, but I know that Ministers are having such discussions at the moment and are committed to making progress. It would be wrong for me to prescribe in a private Member’s Bill anything that would cut across current work, and I have stressed that throughout in my discussions with everybody on this. My Bill is essentially a permissive one—it would put a duty on the Secretary of State to provide the strategy and it would permit the Secretary of State to bring in a statutory social tariff, but the elements making up that strategy and tariff would be left to the Secretary of State. I make no apologies for that, because this is a highly technical issue and the last thing I want to do is torpedo work that is in progress, but I want to focus that work in the right direction—the one that I think will achieve the best results.
May I take the hon. Gentleman back a couple of minutes to when he mentioned the impact of his Bill on Scotland? I am sure that he will be aware that it appears that no Member from the Scottish National party is here. Does he agree that far from standing up for Scotland, as is the party’s slogan, more often than not its Members do not turn up for Scotland?
It is very noticeable that the SNP Members are not here today—I would have thought this matter ought to have interested them—and it is noticeable that Members from all the other parties, who have interests in all parts of the United Kingdom, are here—I shall leave it at that.
I congratulate the hon. Gentleman on introducing his Bill, which I assume he is now getting on to discussing. I would particularly like to talk about the question of duty and clause 2. He knows that a legal action was brought for judicial review under the Warm Homes and Energy Conservation Act 2000 and was dismissed. Is his intention to create a duty that is fully justiciable against the Secretary of State, so that the courts could second-guess and, indeed, overrule the Secretary of State if we were not to meet the duties set out in clause 2?
I am grateful to the hon. Gentleman for that intervention, for signing the early-day motion that stands in the name of the hon. Member for Nottingham, South and for the fact that he is committed to the Bill’s progress today, because his interest in the matter is much appreciated.
I was about to come to the contents of the Bill. The first thing that we need to address is the fact that this is not a new concept; there are Members in all parts of the Chamber who have achieved a huge impact on this policy area in previous Bills that have been taken through the House. A series of Bills and of initiatives have dealt with fuel poverty, and that tells me that there is an appetite within the House for tackling it effectively.
May I just deal with these issues for the moment? The most important is the one to which the hon. Member for Hendon (Mr. Dismore) referred. The most recent enactment was the 2000 Act, which we all felt put a clear duty on the Government to eliminate fuel poverty, with a time scale in which to do so. I do not think that there was any dubiety among Members of the House or among members of the Government as to the duty that that particular enactment conferred. That was the case until 17 October when the High Court determined that it was not a duty in the sense that any of us understand a duty and that it was merely a desirable outcome as far as the Government are concerned.
That brings me to the justiciability of the duty. I have carefully set out in this Bill a duty to produce a strategy. That is a perfectly reasonable duty and I think that any court would hold that it is a perfectly reasonable duty for the Government to have. It is not a duplication of the previous duty—the one struck down by the High Court in a decision that, I believe, is still subject to appeal—because that would be a futile action on the part of the House. My proposal is framed in an entirely different way, but it reinstates what I believe to have been and, I assume, still are, the Government’s intentions.
I have good reason to believe they are the Government’s intentions because they have said so repeatedly. Labour’s election manifesto in 2005 stated:
“Our goal is to eliminate fuel poverty for vulnerable groups by 2010, and for all by 2015.”
That target has slipped a little, but my Bill’s provision in respect of 2016 is consistent with Labour’s manifesto. The then Minister of State in the Department for Environment, Food and Rural Affairs, the hon. Member for Dudley, South (Ian Pearson), said in May 2006 that
“the Government remains committed to achieving…the targets”—
set pursuant to the 2000 Act.
He went on to say that
“we aim to eradicate the range of consequences of fuel poverty”.
The Minister who sits on the Treasury Bench today, the Under-Secretary of State for Energy and Climate Change, the hon. Member for Lewisham, Deptford (Joan Ruddock), in giving evidence to the Select Committee on Environment, Food and Rural Affairs on 14 January—only a couple of months ago—said that the Government
“do not intend to miss the 2016 target”.
There is a very clear intention on the part of the Government to do what my Bill requests.
I congratulate my hon. Friend on introducing this Bill. I understand the circumstances of a private Member’s Bill, which mean that he has to be as kind as he possibly can be to the Government. The problem is that the Government themselves told the High Court in October that
“it is not considered reasonably practicable to take all of the measures that would be required to eradicate fuel poverty, as such measures are not necessarily cost effective and the resources are not available to pay for them”.
This Bill rightly would introduce a clear duty on the Government to carry out their previous promise, and I do not think he should be at all vague about that, because it is at the heart of the Bill and it is the reason I am here to support it.
I do not think I am being at all vague about it. I am merely saying that I am hopeful, even despite the performance to date, that the Government have the intention of meeting the targets in the Bill. That is one reason why I do not believe—I hope that I am correct—that the Government will disagree today with the Bill’s progress into Committee.
I simply wish to reiterate what the hon. Gentleman has just stated, because that is, indeed, the policy of the Government and will continue to be so. The argument that I shall come to when I get the opportunity to speak is about the absolutist position embodied in the Bill and the fact that current legislation does say
“as far as reasonably practicable”.
I assume that the answer to my previous question is therefore yes—that it is intended to be fully justiciable. I wish to correct something that the hon. Gentleman said. The duty would not only be to produce a strategy. The duty would be to achieve an objective, with no qualification, by 2016, no matter what happens, in this country or the rest of the world. Clause 2(1) would impose an absolute duty to achieve that objective, and that is one of the concerns that I have about the Bill. I support what he seeks to achieve in policy terms, but I am concerned that the Bill could create a duty that might prove to be impossible to meet, and the court could force the Government to prioritise it over all the other things that they have to do.
That is an interesting discussion that I will be happy to have in Committee. I do not want to resile from the objective, because it is very important. The Labour party manifesto did not put any conditions on the promise: it was a clear goal, and that is what I hope to achieve. But the Bill would provide sufficient flexibility within the strategy for the Government to adjust to circumstances and apply resources as appropriate.
We have to decide whether we are serious about dealing with climate change and ending fuel poverty. We cannot say, “But it might get a bit difficult.” It is a priority. People are dying every year, so I make no apology for making it a priority.
My hon. Friend has said that this is not a new issue, and he gave some examples from recent years. I first became politically active in 1983, when I joined a political party during the general election that year, and one of the policies of the then SDP/Liberal Alliance—the forerunners of the Liberal Democrats—was a massive programme of home insulation, to cut the fuel bills for those in fuel poverty and create labour-intensive work to get people back into employment to counteract the Thatcher recession. The 18 per cent. of my constituents who live in fuel poverty today cannot understand why, a quarter of a century later, these issues still need to be raised and the Government need to be pushed to take effective action on such a serious issue.
My hon. Friend underlines why simply having good intentions is not enough. We have all had good intentions for a long time, but they have not delivered and that is why we now need something more concrete.
I am being nice to the Government, as my hon. Friend the Member for Cambridge (David Howarth) suggests, because I have talked to the Minister, and I am grateful for the time that she spent telling me about what the Department is doing. I recognise that it is travelling in a similar direction, and I hope that out of its reviews will come a recognition that the present approach is insufficient and that more energy and resources need to be directed at the issue. I see no difficulty in reconciling what is happening with the Bill. It is a belt and braces approach that says that this Government, or any other Government, need to address the issues. There is a deadline and it is not good enough simply to produce policy papers: we need action.
One issue was a sticking point in my discussions with the Government, and that was the requirement that buildings be brought up to an energy-efficient state consonant with the current band B designation. Ministers were unhappy with that, because they thought that it was a very expensive commitment and would be very difficult to achieve. I do not apologise for putting the band B requirement in the Bill. It is the standard that the Government have designated necessary for all new build, so it is not an absurdly high standard. It is what the Government hope will become the norm for private dwellings, in which case it should be the norm for people in fuel poverty. We should not short-change those people. However, I am happy to make a concession on this point if that will be helpful to the Government, because I do not want the best to be the enemy of the good. I have therefore written to the Minister to say that if she is so minded, I will accept an amendment in Committee to bring the band B requirement down to band C. It will still achieve most of my objectives, such as a step change in the way we address this issue, but it will reduce costs and some of the technical difficulties. It is much more important to achieve consensus on this issue, rather than confrontation, if at all possible.
My compromise would save money, and the Government were concerned about the cost. According to the Fuel Poverty Advisory Group, there are 2.4 million households in fuel poverty in England. The change from a band B requirement to a band C requirement would slightly reduce the number of fuel poor from 82.9 per cent. to 76.8 per cent., but it would reduce the cost involved significantly from £24 billion to £12.9 billion. The average cost per fuel-poor household would fall from £9,890 to £5,290. If cost is the blockage, let us make that change. If we achieve band C across the piece we will have done much to take people out of fuel poverty.
Pursuant to the intervention by my hon. Friend the Member for Rossendale and Darwen (Janet Anderson), DECC officials calculate that the fall will be from £50 billion to £20 billion, rather than the figures that the hon. Gentleman has just given. Will he explain the origin of his figures and in so doing, perhaps he will address the point that my hon. Friend made?
I cannot give the House any provenance for the figures quoted by civil servants, because they do not accord with those given to me by the Fuel Poverty Advisory Group, which advises the Government—and has advised me—on this issue. It is difficult to reconcile those high figures with what I have been told. I have given the House figures that I believe to be reasonably accurate, and they are supported by experts in the field, including the Association for the Conservation of Energy, which estimates that raising two thirds of the properties concerned to band B would cost between £1,780 and £7,780 per property. The £4,780 figure per household is therefore reasonable. The hon. Gentleman has no way of crunching the figures, and nor do I, other than to take the advice of experts, and that is what I am doing.
That is part of our party’s policy, but this is a permissive Bill. It would allow the Secretary of State to take a view on how its objectives would be best achieved. I do not want to force everybody into the framework of my party’s policy. If there is a better approach, I will listen. It will be in the hands of the Government as to how to implement the Bill.
DECC was sent a paper yesterday by the Association for the Conservation of Energy, which is a report that it has compiled with the Centre for Sustainable Energy, on modelling the refurbishment scenarios. It concludes that a retrofit programme to bring 83 per cent. of fuel-poor households to a standard assessment procedure—SAP 71—rating, which is band C, by 2016 would cost around £21 billion to £24 billion. I understand that those figures have been presented to the hon. Gentleman, but they are clearly at odds with the ones that he has just quoted.
If the Minister looks at the figures, I believe she will find that the percentages are slightly different in that respect and that we are perhaps dealing with a different total. As I just said, the 2006 estimate was that 2.4 million households in England were in fuel poverty. The higher estimate—4 million—was made after the end of 2006 and reflects the increase in fuel prices. Clearly, estimates drawn up in different ways result in different figures. I think that that is where the hon. Lady’s confusion comes from.
I assure the hon. Gentleman that I am not confused. His Bill suggests that the counting must begin in 2008. He is well aware that the 2008 estimate exceeds 3.5 million. I have no doubt that the paper I quoted is accurate when it states that the cost of reaching 87 per cent. of those people by 2016 would be between £21 billion and £24 billion.
The hon. Lady uses estimates which I accept are probably accurate. What she has not mentioned is the fact that, with the larger figure, the estimated average cost per household falls to £4,780. We could argue figures for the rest of the day, but the Minister is committed to dealing with fuel poverty, is she not? We are talking about figures and costs which she and I, if we both have our way, will have to make meet in some way. That is the crucial point.
Has my hon. Friend assessed what effect the compromise position, if it were adopted, would have on the number of jobs directly created? I understand that the Bill would create 35,000 jobs a year: is that based on the compromise position, or on reaching the band B standard?
The original estimate was based on reaching band B, but I do not think that there would be a huge difference in the number of jobs created if we went for band C. Many of the hard-to-reach homes will still need the most work to bring them up to the band B standard; it is a question of what exactly the retrofit involves.
I have spoken for some time now, so let me conclude by running through the clauses. Clause 1, “Purpose”, is self-explanatory. Clause 2 makes clear the Secretary of State’s duty to eradicate fuel poverty—the duty that the House, until a few months ago, believed it had already enacted. The clause also contains provisions on energy performance certificate measurements, on which I have made it plain that I am happy to compromise with the Government, if that would be helpful.
Clause 3 deals with the key element: the fuel poverty strategy. Under that clause, the Government must produce their plans within six months of the Bill’s enactment. That is where I hope the Department’s current work will come to fruition, so that an effective strategy is developed. The most important element—the most important difference from previous legislation on this subject—is subsection (3)(a), which refers to
“policies to promote energy efficiency measures and the use of microgeneration installations and locally supplied sustainable energy in existing buildings”,
which refers to measures such as fuel pumps, which are not used enough at present and which have huge potential, particularly for harder-to-reach properties. I hope that the Government will take up such measures.
The fuel poverty annual report required under clause 4 is very much in line with what the Government are already doing, because of previous legislation. Clause 5 deals with changes to the number of properties involved and provides flexibility for the Government either to accelerate or to decelerate—I regard that as unlikely—the scheme to meet changing circumstances. Clause 6 acknowledges the fact that some properties are harder to treat than others. Let us be honest: some properties will not be brought up to standard even if the Bill is enacted, because some people simply will not be interested in treating their houses. Some people will never seek help or let anyone into their house, and we have to accept that.
Clause 7 is about prioritising, because one of the National Audit Office’s concerns about the present scheme is that it is not well targeted and seems to miss many fuel-poor people. Clause 8 allows for revision of the fuel poverty strategy and clause 9 imposes a duty to consult, which is always important before the Government publish any measures. Clause 10 deals with social tariffs, but in the form of energy assistance packages. The packages will go slightly wider than simply providing a social tariff and will, I hope, as a result of Government action, impose obligations on the energy suppliers.
Clause 11 is a safeguard: if the energy performance certificate scheme is changed, we will not need new primary legislation to effect those changes in definition. Clause 12 is the money clause and clause 13, “Interpretation”, sets out the definitions of the various terms used in the Bill. Clause 14 sets out the short title and the extent of the Bill’s effect. Most of the Bill will not cover Scotland and Wales, but I hope that the Scottish Government and the Welsh Assembly will follow its lead.
What are the arguments against the Bill? I accept that there are potential arguments based on cost. In response, I argue that we cannot afford not to take these measures. The Government are already committed to incurring substantial costs and need to be committed to much greater expenditure if they are to meet their targets. The second argument is that the time is not right, because of the High Court ruling. I have disposed of that argument: I do not believe that the Bill seeks to overturn that ruling or that it cuts across the Government’s current consultation. If the Government are going ahead, that is good news and is entirely compatible with the purposes of my Bill.
It seems to me that the Bill is urgent. There are always arguments why the time is not right, but, as my hon. Friend the Member for Chesterfield (Paul Holmes) said, we have been waiting for decades for action and good intentions are no longer enough. In addition, the measures in the Bill will create jobs at a time when it is necessary to make jobs, and will deal in part with the problems of climate change at a time when there is a desperate need to tackle climate change. Whether the Bill passes is a litmus test of how serious the Government are and of whether the Department of Energy and Climate Change is worthy of its name. Finally, the Bill is urgent because if we fail to take these measures, we fail the poor, the elderly and the disabled—we fail people who are living miserable existences, whom we can do something here and now to help.
The least satisfactory outcome of this morning’s debate would be hon. Members deciding to use procedural rules to talk the Bill out. I would prefer it if the House voted on Second Reading and I lost that vote because the Government had decided to oppose the Bill. Many people outside will not understand if underhand tactics are used. The Bill is very important. I hope that it will at least reach Committee, where we can have all the discussions that the Government and others want and we can make it a better Bill—one that secures consensus.
I congratulate the hon. Member for Somerton and Frome (Mr. Heath) on his good fortune in doing well in the ballot. I broadly support his Bill, because fuel poverty has dire effects on the health and the quality of life of the people who suffer from it. It is a curious irony that the badly-off, who live in badly insulated homes, are not only cold but pay energy companies more to be left cold than the well-off and well insulated pay to be kept warm. We therefore clearly need to address this problem.
Although I welcome the Bill—I am sure that other people will go through it in detail—I want to draw more attention to one of the reasons why there has been a rise in fuel poverty recently: the grotesque rise in the cost of fuel and power, and how the prices that are being charged to the fuel poor are stuffing the pockets of the fuel racketeers. The recent surge in oil prices—crude oil went up to $140 a barrel—did not reflect any shortage of oil. There was never any shortage of oil: the surge was entirely the result of speculation. A cargo of oil leaving one of the Gulf states would have been bought and sold a dozen times before it arrived at a refinery in Europe or north America, because the speculators were at work.
Even more unjustified is the surge in the price of natural gas. The price of natural gas, by what can only be described as a cartel subscribed to by most major Governments, as well as the producers, is tied automatically to the price of oil. There is no natural connection at all between the supply of natural gas and the supply of oil—just an agreed fix with the major producers and major-producer Governments that that is what will happen, so there was even less justification for the huge surge in the price of natural gas. I therefore believe very strongly that, among its myriad tasks when it meets, the G20 should, first, declare a determination to stamp out the activities of the fuel price speculators and racketeers.
Is the right hon. Gentleman aware of another unintended by-product of the extraordinary fluctuation in oil and gas prices? For Wales, at least, the Government have not obtained fuel poverty figures since 2004, so the figures are five years out of date. The changes in price that the right hon. Gentleman is talking about mean that we have a hidden exacerbation of the very problem that the Bill is seeking to solve.
We all have to recognise, though, that that will leave the Government bound by any decision that we take and subject to something over which, at the moment, they have no control: the variation in fuel prices. If we are really going to deal with the problem of fuel poverty, we need worldwide to do something about fuel prices. Fuel poverty here causes some deaths; fuel poverty in the third world causes hundreds of thousands of deaths. Hundreds of thousands more people have died as a result of the surge in the oil price worldwide, and that is an international disgrace. Indeed, it is even more disgraceful, in that it is a product of what is, in effect, a cartel between the Governments and the oil producers.
Let us consider the apparently reputable oil companies, of which I cite two examples: BP and Shell. Whoever is right about the figures, be it the hon. Member for Somerton and Frome or my hon. Friend the Minister, BP and Shell’s profits were so enormous in the last financial year that they are roughly equal to splitting the difference between the two estimates, and that is just in one year. So the cost of a programme that is intended over several years to deal with insulation in the whole of Britain is roughly equal to the outrageous profits of just BP and Shell in the last year for which figures are available. I sometimes feel that people lose a sense of the real scale of what is going on in the oil-producing industries.
The oil companies did not make these profits by producing more oil. In fact, sometimes they make more profit by producing less refined oil, because sometimes, that way they can bump up the price of refined oil. One of the biggest things that happened was a huge increase in the value of the oil companies’ stock assets, and so they made these extra profits. When the oil price soars, so does the value of their oil. Everyone in this country knows that, to say the least, they have not been slow in putting up the price to the consumer. They never seem anything like so swift in working to reduce prices when the reductions come. When it is time for the reductions, they say, “Well, there is a time lag,” but for some reason or other, when the oil price internationally goes up, there does not seem to be quite as big a time lag between that and the prices they charge to the consumer going up.
Of course, the same point applies to the gas and electricity companies, which were sold off by the Tories when they were public assets at roughly a third of their real value. So even people as stupid as those who ran the Royal Bank of Scotland, had they been investing in the gas and electricity utilities, could have run at a pretty steady profit.
Of course, the right hon. Gentleman is putting a case for the little guy. I invite him to comment on the irony that if any bank wants £25 billion, it gets it—“Here you go Lloyds, here you go RBS”; the people whom he has rightly been criticising for their mismanagement—but when it comes to doing up poor people’s homes so that they have proper energy efficiency, we are told that that is unaffordable. What does he say to that?
I am saying that it would be affordable, and if we introduced a windfall tax just on Shell and BP, we could pay for it. However, no doubt some of the people contributing to the Tory party—be they bankers or those in the energy industries—would be very upset and would say to the Leader of the Opposition, “Don’t do horrible things like that. That would be most unfair on our shareholders, and we might not be able to help in future.” Such discussions, I understand, do go on.
Somebody ought to tell Sid how we got it wrong when we sold those utilities off, but that is another matter. Does my right hon. Friend not agree that the situation is absolutely absurd? In the summer, we will be exporting North sea gas to the continent, where it will be stored in their gas facilities to export it back to us in winter—our own gas—at a much higher price. Surely we should be ensuring that these energy companies invest in storage capacity in the UK in order to keep gas prices down. Does my right hon. Friend agree that that would be a good way forward?
I am sure that that is the case. I can remember being mocked by the people then sitting on the Government Benches when I was shadow Energy Secretary when I said that the policies being pursued—the dash for gas, as I formulated it—meant that we would eventually become dependent on gas supplies from such utterly reliable sources as the then Soviet Union or Algeria. Lo and behold, that is just about where we are getting to.
My hon. Friend has almost anticipated my next point. We were told that it was wholly improper for the energy companies to remain in public ownership here. I can remember people being told, “In future, Londoners will be able to own London electricity.” Well, they do not, but it is nationalised. Electricité de France is a nationalised industry and is now supplying London with its electricity. It must be said that both the big German monopoly and the big French monopoly are charging higher prices here for the electricity that they supply than they are charging in either Germany or France, so there is further exploitation going on.
Until we get a grip on them, the energy industries are getting money for old rope at the expense of everybody, and they are forcing more people into fuel poverty among those who are already badly off. So I support the Bill, but it is only half of what is needed. We need a concerted effort by our Government and other Governments in the world at this point, when there may be an opportunity to get them to see sense—
I am grateful to my right hon. Friend both for giving way and for sharing with the House some of the things that went on behind the scenes. Do I detect from his comments that he is a supporter of a civil nuclear power programme as a component of energy supply?
We have a civil nuclear power programme. The biggest problem with a further civil nuclear power programme, if it is proposed, is that it will cost about 10 times as much as people say it will, and it will take 10 times as long to build. I give as an example Dungeness B nuclear power station which, 35 years later, may eventually produce the amount of electricity that it was supposed to produce, but it has not done so yet. I am not fundamentally opposed to nuclear power, but the idea that it will be either cheap or quick is crackers.
I did not intend to speak about nuclear power, because I have done so on many occasions. I fully support it and do not accept the scenario envisaged in the energy and planning legislation. We will get security of supply from nuclear, which will benefit this country. My right hon. Friend is making an important point about the coupling of gas to oil prices. Is he suggesting that the regulator should have more teeth, or that direct international Government intervention is needed to decouple the prices of those two fuels?
Only international intervention would decouple the relationship. Up to now, it seems to have suited the consumer countries and the producer countries to go along with the private sector in agreeing to a totally absurd arrangement. The biggest problem was probably the United States, which is usually seen as a consumer of oil and gas, but it is also a major producer, and it is somewhat ambivalent in these matters, to say the least. The previous presidential regime was, in effect, the political wing of the oil and gas industry so no common sense was likely to come about. It would be very difficult for an individual country to break the link. As with so many things these days, we need some sort of international agreement.
In short, I broadly support the Bill. There may be defects in the drafting, but every Bill that has ever been brought before the House has had something wrong with the drafting, including those that I introduced. We must accept that, and there should be no crowing by anybody about a few defects in the drafting of a private Member’s Bill. That is and always has been the case with all Government Bills as well. That is why we have Committee and Report stages and why the House of Lords gets a look at Bills. However, the proposals that we are discussing will not work unless we get a grip on the price that people have to pay for their fuel and power, and we are a long way short of doing that.
I congratulate the hon. Member for Somerton and Frome (Mr. Heath) on introducing the Bill and support its general tenor.
I shall make a few succinct points, which I hope the Minister will take into account. I have the honour to sit on the Environment, Food and Rural Affairs Committee which, as she knows, is concluding its inquiry on fuel poverty. We have heard evidence, both written and oral, from a wide range of sources. My plea to the Minister and my hope for the Bill is that it will inculcate and engender a greater sense of coherence and focus in the various and often laudable measures being taken by the Government to combat fuel poverty.
I am aware that in the Chamber today there may be a disproportionate number, at least among those who originally attended the debate, from rural constituencies, and I am one of that number. Representing a rural area, one cannot fail to become conscious of the great amount of the housing stock that does not fulfil any reasonable specification for energy efficiency. That, as other Members have commented, is because the houses are often old and rubble-built, with solid walls, and are often in remote and isolated places.
In representing my constituency, it has occasionally been my sadness to come across some extreme cases of fuel poverty, in which I have done my best, as any constituency MP would do, to resolve them. As the Minister knows, the main instrument of the Government’s targeting of those who are fuel poor is the excellent Warm Front initiative. She knows what I am about to say because she has heard it before while she appeared before the Select Committee. I do not know what is happening in urban areas, but there is a serious flaw in the Warm Front initiative, at least in relation to a proportion of those who take up the scheme.
In 2007-08 some 20,400 households, although they had advanced towards taking up the scheme, did not in the end take it up. More than 6,000 households withdrew from it, and nearly 15,000 households did not progress it. In its report last month, as the hon. Lady knows, the National Audit Office commented on those 20,000 households. It is important to compare that with the fact that 129,000 households did take up the scheme in 2007-08, but 20,000 households is a worrying proportion, as I hope she will agree. The National Audit Office suggested that among those households must be a sizeable proportion that did not take it up because of the top-up payments that the grant still requires.
The top-up payments seem to be disproportionately impacting people in rural areas largely because, if I may hazard a guess, people in rural areas are separated from the gas main and therefore have to install oil boilers. There is no doubt, and again the NAO commented on this subject, that when oil-fired heating is installed, eaga is at the higher end of the scale—that is, the least competitive end of the scale—for the installation of that kind of equipment. So in the rural part of Devonshire that I represent, Torridge and West Devon, people come from great distances to install the equipment, the equipment itself is at the higher end of the scale of competitive price for eaga, and households have to stump up large top-ups.
Mrs. Yvonne Smalldon in Buckland Brewer has waited longer than two years simply to be able to take a shower in her house in that village. She would visit her sister several miles away. She has shivered in the cold and sometimes in anxiety and fear at the prospect of another winter. Because a number of charities rallied round, including Torridge council, to help her with the top-up, she has, I am glad to say, been able to install her oil boiler. She is now able to run hot water, have a bath and feel warm in her home. That has been achieved only because of the charitable help and the extraordinary efforts of many people to scramble round and raise that top-up. Before those people could manage that, Mrs. Smalldon waited two and a half years in those uncivilised and primitive conditions.
It might be useful for me to respond at this point to the questions raised by the hon. and learned Gentleman. He is absolutely right: where people being connected are off the gas grid, a disproportionate level of top-up payments has been required. We are looking at that issue seriously; in fact, we are looking right across the piece.
It would be simple to raise the grant maxima so that we could reduce the top-up payments required by people wanting the treatments. However, before that decision is made—and it is under active consideration—we are determined to make sure that we are getting the best value for money from the existing contract, as the hon. and learned Gentleman would want. We want to see the thing in the round, and that is why there has been no urgent announcement on raising the grant maxima. However, I take seriously what the hon. and learned Gentleman said about his constituent. I am delighted that she now has what she needs, and I am only sorry that it took all this time.
I am grateful to the Minister for those assurances, but many voices have been warning the Government for a number of years about how a worryingly large percentage of people in a specific category are being denied access to this generally successful and laudable scheme. I am pleased that the Government are taking the issue forward, but I am going to make a number of other constructive criticisms of the fragmented approach taken towards the relief of fuel poverty.
I support the Bill because I hope that it will engender a clarity and coherence that we do not yet see in how the Government are taking forward their policy. I shall leave the Warm Front scheme, because the Minister has got the point: there is no doubt that the scheme has a flaw, and Members on both sides of the House have commented on it. I urge the Minister to allow the Bill to go through because it might considerably focus and sharpen attention across the House on that important problem.
Let me give the Minister another example of why I say to her that the root-and-branch review is so badly needed and that we have waited for coherence for far too long. Let us take winter fuel payments; I expect that the Minister also knows what I am going to say about them. Last year, winter fuel payments cost the Government £2.7 billion, yet only 12 per cent. of those to whom the payments were made were in fuel poverty. Why on earth should I, or any relatively affluent Member of the House—who had reached the requisite other qualification, I hasten to add—enjoy the benefit of a winter fuel payment? I am thinking particularly of people on higher-rate tax bands. It makes no sense. One thing that the Government could do quickly—and I urge them to do it—would be to remove winter fuel payments from those on higher tax bands. There would be no injustice in that, and it would free up about £250 million a year. That money could be applied to the very causes that the hon. Member for Somerton and Frome is bringing his Bill forward to promote.
I will be entirely frank. Yes, I would consider the removal of child benefit from those in the higher tax band. The measure would be simple; it seems to me that those on the higher tax band could do without child benefit. I say frankly to the hon. Gentleman that I—and I know others who feel the same—have felt embarrassed by the issue on occasions. I have had three children, for each of whom we received child benefit. As all Members are likely to be, I am in a state of relative affluence, and on occasions I felt embarrassed at receiving the payment. The approach could be widened, but let us concentrate on fuel poverty. We are considering how we target help better at those in fuel poverty, which is a serious problem, as I know the hon. Gentleman understands. Help, although a limited amount, could be given by targeting the winter fuel payment better.
Let us turn to the issue of cold weather payments, which are triggered when there have been five successive days at 0° C. As the Minister knows, because I have raised the issue with her before, the cold weather payment is not well targeted because it is measured from some bizarre stations. The problem particularly affects rural areas. For example, people in Princetown, a relatively deprived area in the high moorland of Dartmoor, do not get cold weather payments, even though they may have shivered at below 0° C for weeks. Why is that? It is because the temperature applied is measured in the centre of Plymouth, some 25 miles away, and the temperature in Plymouth is usually 3 or 4° C higher than in Princetown. That applies across rural areas, and not only in my constituency. There should be ways in which the Government can look more flexibly at the issue, so that the cold weather payments actually go to those who are so badly in need of them.
These may seem to be relatively minor criticisms, but I hope that they are constructive. I respectfully suggest to the Minister that cumulatively they demonstrate a sense of incoherence. That is why I urge the Government to allow passage to the Bill, which puts forward some worthy objectives and should be generally supported.
I shall now conclude, because I do not want to provide any further excuse for the Bill’s not passing through today. I make one other plea. It is that, as the hon. Member for Somerton and Frome said, in the consideration of energy efficiency we must not lose sight of the value of microgeneration. In certain of the more remote rural areas, microgeneration offers the prospect of alleviating fuel poverty and it should be included in any policy that the Government develop. For all those reasons, I support this important Bill.
I must apologise to the House; Herschel grammar school in my constituency is receiving an award later today, so I will not be able to remain for the whole debate.
I welcome the Bill, which is a sensible general approach through which we can win on a number of fronts. First, it will address poverty and how it is increased by fuel bills; secondly, it will contribute towards addressing issues of climate change; and thirdly, it will create employment in this credit crunch.
I wish to focus on the poverty aspect of the debate; that is what I know about and understand. I welcome any strategy to tackle poverty, and fuel is an important part of any poor household’s budget. It is estimated that more than 5 million households are in fuel poverty, more than half of which are made up of pensioners. When the Government first introduced the winter fuel allowance—a hugely popular, important strategy—the £200 covered more than a third of the average fuel bill. Now it covers less than a fifth of most people’s fuel bills. Therefore, although it still makes a real difference, it does not make as much as it did.
It is striking that, given the level of fuel bills at present, the average standing credit energy bill takes up almost a fifth of the income of a single pensioner receiving pension credit, despite the one-off increases to the winter fuel payment this year. Citizens Advice tells me that in 2008, 43 per cent. of its debt clients were in fuel poverty. I raised the issue in a debate on child poverty in Westminster Hall not long ago, because I am concerned about the fact that the poorest households pay a premium. I noticed that the Bill’s promoter, the hon. Member for Somerton and Frome (Mr. Heath), rather pooh-poohed a proposal that I have made consistently on prepayment meters. He pointed out that some people on prepayment meters—I believe it is a minority—lived in yuppie flats in London. If I am summarising unfairly I am sure he will intervene.
I should hate the hon. Lady to think that I pooh-poohed her suggestion. I did not. A lot of people are at a disadvantage because of the premium on prepayment meters. I was simply pointing out that there is no easy way of identifying those who have prepayment meters who are also in fuel poverty. The two are not identical. One is a subset of the other but not a perfect identity.
They are not identical, but there is a relatively easy fix and we should take it. That situation is a classic example of the poverty premium. I am furious about the fact that my poorest constituents are likely to pay three times as much for a washing machine as me, simply because of the way in which they have to get credit. I am furious about the fact that my constituents who are forced on to prepayment meters because of past debts pay more than I do for fuel. Indeed, some of them are further pushed into debt by fuel companies because the companies do not recalibrate the meters in time. I welcome the fact that Ofgem has taken action on that, but it has not taken action on the fundamental pricing issue.
The poorest people sometimes want a prepayment meter. As a client of Barnardo’s—a young mother in Wales—rather tellingly pointed out:
“I had the token meter put in because it’s easier and you know where you are. The only way to get a meter is to get in debt with the suppliers—otherwise you pay £80.”
People in debt, who find it hardest to pay, are overwhelmingly on prepayment meters. Not long ago, the charity National Energy Action produced figures showing that the number of prepayment meters installed in households by energy companies to recover debt has increased by 19 per cent. for electricity and by 6 per cent. for gas in the past year. According to Transact, which is a consortium of debt advice agencies, housing associations and credit unions, prepayment customers are charged on average £215—£215: let us compare that to the winter fuel payment—more for their energy than people paying by direct debit, as I do.
The problem is fixable now. It would not be hard for Ofgem to require all energy suppliers to set the prepayment meter tariff at their lowest tariff. I do not say what the tariff should be, but it should be the same as the supplier’s lowest tariff. It would cost them. One way they could recover the cost might be by creating new charging mechanisms for people who want to install prepayment meters in flats. Ofgem might be able to negotiate such a scheme with landlords who want to organise their flats in that way. In a country led by a Government who are committed to eradicating poverty and who have made real progress on child poverty, even though we are not likely to meet our target, I seriously think we should take that simple straightforward step to eliminate fuel poverty right now before the Bill comes in—if it is ever passed.
Secondly, I want to look at targets. As we know, the High Court has decided on duties and so on, but I am quite anxious about the way that we create for Governments legally binding duties that do not legally bind. I am concerned that the Bill might be following a tradition that I am quite prepared to say my Government are to some extent responsible for starting; it is good for Governments to do such things but they do not seem to be effective in reality. We need to address that issue, because if we set ourselves legally binding targets that turn out not to be legally binding, and if we create ambitions for Government with no mechanism to hold them properly to account—in the words of my hon. Friend the Member for Hendon (Mr. Dismore), to be properly justiciable—politics comes into disrepute. We are not really doing what it says on the tin. That is a potential risk in the structure of the Bill, and we should avoid it. As the Bill progresses, I should be interested in discussing more carefully how one can put legally binding duties on Governments and bring them into effect.
I want briefly to make a couple of other points. Like the hon. and learned Member for Torridge and West Devon (Mr. Cox), I am concerned about extreme cold weather payments, not because in Slough, which is a jolly small and rather condensed place, we have the problem he described of the temperature in one place being rather different from the temperature in the place where the measurement is made, but because of the attitude taken sometimes by the Pension Service.
One of my constituents told me that he believed that someone down the road had received a cold weather payment while he had not. My assistant phoned the Pension Service, which assured him in terms, “No, Slough hasn’t qualified this year.” I thought that that was extremely unlikely, as I told my constituent, and it turned out that Slough had qualified on three occasions. My suspicion is that a civil servant at the Pension Service simply could not be bothered to check properly. I might be wrong—I might have slipped—but the question is how much we care. Given the importance of that payment for so many of the families whom we are talking about, we really need to make sure that those responsible for administering it deliver the policy properly, as I know the Minister understands.
Finally, I want to praise Slough council for having a “photograph” that measures the energy emissions from every property in my constituency. We can go online and see how much of the air above our homes we are heating. In the middle of Slough, there is a combined heat and power station that shows up scarlet, because like any power station it inevitably emits huge amounts of energy, but it is possible to see the difference between houses in a road that have a high quality of insulation and those that do not. I have been able to use the site for people who say, “Oh, I don’t want eaga to come mess with me.” I can show them that the people next door are heating less of the air above their home, so I say, “Go for it; eaga will help”, even though they say, “But I won’t have any hot water for a day and a half.” The site can help to encourage people to take the steps that are available. We can also make sure that the rest of us, who are not facing fuel poverty, realise how energy-efficient our homes are. That kind of information is powerful in the hands of the consumer, and consumers can use it to insulate their homes, if they can afford to do so.
The strategy for reducing fuel poverty requires a number of different bits of action; I think that all of us accept that. The Bill emphasises work on homes, but before we get a complex fuel strategy, the first thing that we should do—I urge the Department of Energy and Climate Change to do this—is make sure that the regulator ensures that people on prepayment meters do not pay a premium for the terrible service that they receive, because that is very oppressive for them.
I welcome this important Fuel Poverty Bill. The Government have difficulties with the issue, but this is about their committing themselves to overcoming those difficulties. Of course, it is easy to say, “Let’s kill the Bill off on a Friday”, but that is not the way forward. If there are issues or problems, let us deal with them in the proper place—in Committee. I therefore welcome this important private Member’s Bill promoted by the hon. Member for Somerton and Frome (Mr. Heath).
The subject is dear to me and to Members right across the House, regardless of the political divide. We all have one aim, which is to help our constituents, including those in fuel poverty. That is why I was pleased when the Sunday People ran its crucial campaign highlighting the real issues of fuel poverty. Of course, as my hon. Friend the Member for Slough (Fiona Mactaggart) said, one issue is prepaid meters, and the fact that the people who buy prepayment cards are subsidising the rest of us and the energy that we use. Usually, people who are upwardly mobile, most able and wealthiest get the cheapest fuel. It is absolutely absurd that we penalise the poorest in the country. That is what we have allowed the energy companies to do.
We all have constituents whom we want to talk about. We can all mention cases. I want to talk about E.ON. A constituent of mine struggles to pay their energy bills but does not want a prepayment card, because they know the consequences. First, it will ensure that their energy costs more and, secondly, the cards always run out at the wrong time. People say, “They don’t run out in the middle of the night; don’t worry.” Yes, but next morning, at 8 o’clock, when people are trying to get the kids ready for school, and want a shower or whatever, there is no heating and no lighting. It is not a good way to operate. We are talking about people who struggle, but ensure that they always pay their standing order to E.ON. However, E.ON suddenly put another £100 a month on my constituent’s standing order without telling them. It was absolutely absurd; somebody who struggles to make sure that they pay their energy bills suddenly found that an extra £100 had gone. What happens then? Are the kids to go without their meals, or without the new clothes or the new pair of shoes that they need? That is the consequence of E.ON’s action.
E.ON should have said, “Look, the price of energy has gone up; you may need to consider that. How can we help you?” It does not do that, but it and other energy companies need to do that. They now need to act responsibly, and the Bill will ensure that we can make those companies do so. That is what is wrong with the prepayment cards.
We have rightly touched on storage. The energy companies have failed to create storage capacity in the UK. They have been allowed to find an artificial way of increasing prices in winter, and of creating price spikes due to demand for gas. They have happily been allowing Europe to store it. France and Germany have huge storage capacity, so they buy up our cheap gas in summer, and later export it back to us at a much higher price. That ensures that the energy companies, usually continental, make even more money. We have to deal with excessive profits and immoral wages. That is why I am more than happy for there to be a windfall tax.
The hon. Gentleman is making a very good speech. Does he feel, as I do, that there is something anomalous in requiring energy companies to make huge investment in meeting the carbon emissions reduction target, when the cost of that investment is transferred to the customer? That increases the customer’s fuel bill by £38 a year. Does he think that that is the way forward, although it further tops up the expensive energy bills of often poor consumers, or does he think that we should do things differently?
I believe that we have to get prices down for consumers. The price of energy needs to drop. I am concerned about fuel poverty, and the constituents whom I represent, but I am also concerned about business, which cannot afford energy prices either. Prices have gone through the roof, and there is no justification for it; prices should have dropped for everyone.
We have touched on properties, which are part of the issue. Properties need investment in measures such as double glazing and insulation. We have mentioned all the ways in which we believe that we can help people. The problem is that we have already done that work, in a lot of cases. On social housing estates, council properties and former council properties, councils have rightly taken advantage of all the grants available, and have put in double glazing and insulation, and installed modern boilers. The truth is, however, that people cannot afford to put on the boiler. After all that work has been done, they still cannot afford their energy bills. That is the real problem, and it is a dilemma. We have to look at that seriously, and we must seriously do something about it. The cost of energy is the problem.
The Government had an excellent track record on dealing with fuel poverty. We were on target, and were working very hard to reach that target, but two things happened. First, prices went through the roof, and that put many more people into fuel poverty. Secondly, as unemployment rises, more people are put into fuel poverty. That is why we have a dilemma. How do we deal with it? The long-term view taken is, quite rightly, that we must bring properties up to the right standard, to ensure that we can make it cheaper for people to access energy. However, the quick fix is to reduce the price of energy; that is what we really need to do.
Companies do not wish to reduce their prices, but we have a responsibility, and we have to take a hard line with them. Voluntary agreements are wonderful, but they do not quite work. I would say, “Get your act together, and get prices down quickly, especially for electricity, or we will do the one thing that you don’t want us to do: set up a windfall tax.” I believe that that is a way forward. There has to be use of the stick. We have tried the carrot; that does not seem to work.
People have rightly mentioned eaga. We all have horror stories to tell about eaga. In Lancashire, we had a good track record, but all of a sudden, we seem to have more and more problems with, and complaints about, eaga. It is a question of degree.
My hon. Friend refers to a matter of concern to all of us in Lancashire. I would like to put on record our thanks to the Under-Secretary of State for Energy and Climate Change, my hon. Friend the Member for Lewisham, Deptford (Joan Ruddock), for agreeing to look at the issue. One of our particular concerns—I should be interested to know whether colleagues have had similar problems—is the number of cases in which people are being told that the maximum grant is not sufficient to cover the work that they need done. I had a case recently in which an elderly woman had to pay an extra £600 to get the work that she needed done to her home.
I want to make a similar point to that made by my hon. Friend the Member for Rossendale and Darwen (Janet Anderson). The problem is particularly acute in London, where prices are, inevitably, higher across the board. Constituents have written to me saying, “We can’t afford the top-up,” so the work does not get done. I have recently heard an increasing number of complaints about the poor quality of the work done by eaga or its agents. We need to start looking into the contract. There is effectively a monopoly in place; we need to ask whether that is the right way to take forward the Warm Homes initiative.
I absolutely agree with my hon. Friend, and my hon. Friend the Member for Rossendale and Darwen (Janet Anderson). Something does not look quite right; something is beginning to smell fishy about the way in which eaga operates. What causes me concern is that eaga says, “Don’t worry; we tender, and we set out a price.” That all sounds very good, but what it does not say is that when it originally tendered that price, it was up against other companies. It seems strange that when my constituents get the work done—we are basically talking about one radiator and one boiler—they suddenly face a top-up bill of over £1,000. Nobody can understand why. There have been more and more top-ups, so the original price is different from the price that is being charged to the customer.
The fact that eaga gives the work to its own company, Iguana, also leads me to question what is really going on in the system. The company seemed to be a co-operative when it first came about, and now it is on the stock exchange. Who is it working for? I would say that it is working for the shareholders and the directors. Suddenly, those people have come from the energy companies that are causing the problems. They see the process as a gravy train, so they are ripping off not only our constituents, but the Government. That is why there is real concern, and we need to get in there and find out why there are all these complaints, why all these prices are going up so much and why there are so many rip-offs.
I find it absurd, because more often than not when people from the company come to check a boiler when someone has applied for a grant, that boiler is suddenly condemned. I might be doing those people an injustice and I believe that we should put safety first, but when that boiler has a nice gas fire on the front of it, in order to ensure that our constituents have to do something about it, they condemn the boiler, switch off the gas and even take the front off the gas fire and take it away. They have no right to do that, but the constituent is left with two options. If they want heating and hot water, they have to have the grant—or to top it up, because that is where the usual charge comes. That is the only way in which they can get the heating back on. They cannot do anything else. What right do those people have to leave behind the pots of a gas fire and a boiler? They do not take it out, renovate it or repair it. This is about the lack of quality of workmanship. If the gas fire front was left on, at least that would be something nice to look at. This is about the way that the company treats people because it has that monopoly. It thinks that it can treat our constituents any way it wants, but it cannot. We need to stand up to it.
Does my hon. Friend agree that one possible solution would be to allow our constituents, should they be given a quote by eaga that goes beyond the grant, to get an alternative quote from a local plumber or a heating engineer—properly qualified, of course? If that quote is less, they could ask that person to do the work and that person could be reimbursed under the scheme. That seems to me to be a good way of introducing some proper competition into the system.
Order. I am hesitant to interrupt these remarks, because they are broadly speaking within the context of the Bill, but I think that we ought perhaps to remind ourselves that we are talking about a specific measure.
Thank you, Mr. Deputy Speaker, for those guidelines.
The two issues are interrelated: fuel poverty and people’s ability to afford their energy bills mean that they need new boilers, and that is part of what has been hit. The fact is that we are putting those people into fuel poverty because they cannot afford the top-up and cannot replace the boiler. Someone who goes to the local CORGI-registered firm for an installation can pay half the price—or certainly a lot less—but people are not allowed to use those local firms because the contract has been given to eaga. That is why it needs to be looked at and why there ought to be flexibility in the system. Another problem is that people who are in fuel poverty end up replacing the boiler and are then sold insurance. Somehow, we need to look at this situation, because it is adding to the problems of fuel poverty.
I believe that the Bill is important. I wish it well in its progress, and I hope that in Committee we can reflect on the issues between the Government and the hon. Member for Somerton and Frome. That is where those issues can be overcome. We all want to do the best by our constituents, and that is why this Bill needs to go through to Committee so that we can overcome those issues. I know that the Ministers have sympathy with the aims of the Bill; they should let that sympathy work in Committee rather than block the Bill now. I see no reason for blocking the Bill.
As always, it is an honour to follow my hon. Friend the Member for Chorley (Mr. Hoyle). Normally when he speaks, metaphorical thunder and lightening echo around him, but I think I heard a roll of real thunder while he was speaking. I sincerely trust that it was not the aftershock from the underwater Tongan volcano. Knowing my hon. Friend as I do, nothing is impossible. I slightly demur from some of his comments about the eaga partnership. In my constituency, we have had a first-class service from the eaga partnership. Perhaps we are just fortunate; perhaps we are just Ealing—I do not know—but I have always found that its customer satisfaction levels have been high. There have been problems with some subcontractors, but overall eaga has been found to be extremely effective.
That brings us to the business of the day, which is the private Member’s Bill tabled by the hon. Member for Somerset and Frome. May I congratulate him while attempting to pronounce Frome correctly? A look of pain always fizzes across his face when I mispronounce it. [Hon. Members: “It is Somerton.”] Apparently, I have erred not once, but twice. It is not just mea culpa, but mea maxima culpa. I have mispronounced Somerton. Most of us of my generation associate Frome only with Colin Dredge, the late demon of Frome. I have to say that I think that the hon. Member for Somerton and Frome (Mr. Heath) is more decent and diligent than demonic. By way of tribute, if not of recognition, I shall try to pronounce the name of his constituency correctly. Those of us from places such as Ealing have no such problem; there is only one way to pronounce it.
The hon. Gentleman has done a massively valuable service to the House and the nation in promoting this Bill today. Whatever happens in the debate about fuel poverty in the future, the debate has been changed. It will be a different debate and that is in no small part due to his work. At the beginning of the debate, he said that he had been “religiously” applying every year for a private Member’s Bill. The thought of him on his knees praying in the Lobby is not one that immediately springs to mind, but many of us will pray that other Members who bring such Bills before the House do as much work and carry out as much due diligence beforehand. It is extremely helpful.
The Roman Catholic Church does not sell indulgences any more. However, I am always prepared to consider offers.
The hon. Member for Somerton and Frome has raised a vital subject. At the outset, I hope that he will accept—as would everybody—that no Government in the history of this nation have ever done more to combat fuel poverty than this Government. It is interesting to note that none of us disagrees with the main thrust of the Bill. Nobody is speaking up for fuel poverty, except perhaps for a few megalomaniac oligarchs somewhere in the outer reaches of the energy supply chain. We are all united. We simply slightly diverge on how best to achieve those ends.
As a graduate of the London School of Economics, I am always reluctant to use statistics, but the single most chilling statistic—“chilling” is an appropriate word—that one could come across can be found in the official Library figures for the estimated number of households in fuel poverty in the UK. The figure plunged from 6.5 million in 1996 to 2 million in 2003 and 2004 and then started to rise again to 3.5 million in 2006. The reason for that was simple. Energy prices are the main driver of fuel poverty and we know that domestic prices for fuel fell by 17 per cent. in real terms between 1996 and 2003, but increased by 39 per cent. between 2003 and 2006. So, whatever we achieve with the Bill, and whatever the Government’s policies work towards, there will always be the issue—the elephant in the rather chilly room—of fuel costs. They have already been mentioned, and we have to consider them.
My right hon. Friend the Member for Holborn and St. Pancras (Frank Dobson) takes a rather robust view of energy suppliers; I think it involves a measure of capital punishment. I cannot always disagree with him, although other people have suggested introducing windfall taxes. Whatever we do, we will have to consider the issue.
Let us look at what we can do and what we have done, and at how the hon. Gentleman’s Bill can help. Anyone who opposed the Bill would be in the same position as someone who had been photographed kicking a puppy. It is honestly meant, and it is here to help. Everyone is in favour of it; the question is merely how best we can achieve the aim. I do not wish to go into the costs involved, because I think that that subject will be ventilated elsewhere. We have discussed whether the figures involved related to the base figures, and we could discuss that for a long time. I think that there is an element of the Bill that remains uncosted.
The hon. Gentleman was quite right to say that the Bill was aspirational, as well as a permissive. It is extremely important that he pointed that out. When he won his place in the ballot, I was surprised that he chose this subject for his Bill. He is known for his interest in constitutional matters of great moment. However, when the House heard him speak today about the reality of fuel poverty, we recognised the passion that flows through his veins and understood why he had chosen to promote this issue.
The hon. Member for Somerton and Frome (Mr. Heath) calls the Bill aspirational and permissive, and I do not think that anyone would object if that were the case. The real problem is that it is not only aspirational and permissive; it is also mandatory. That is the issue that I tried to explore in an earlier intervention. The real difficulty would be that these measures would effectively have to take priority over all the Government’s other priorities, without taking into account all the other things that the Government have to do.
I am grateful to my hon. Friend for his intervention; he normally charges for his wise words on a fairly expensive scale. On this occasion, he has raised an important point that I was going to mention later.
What would happen if a Government target were not met? Would the Government have to resign? What would the sanction be? Would the chief executive be dismissed? Heaven fore fend! I think that the hon. Member for Somerton and Frome recognises that this is an issue. Targets are now—sadly, some would say—part of our culture and everyday life. They have a useful role in benchmarking.
The answer to my hon. Friend’s question is that, if the Government were not fulfilling their duty under the Bill, they would be taken to court. That has been attempted before, but under the Bill, it could be done successfully. If, for whatever reason, they were still unable to comply with the provisions, I suppose that, ultimately, the Secretary of State could be found guilty of contempt of court and locked up.
The thought of the Secretary of State being banged up might appeal to some Members, although it does not necessarily recommend itself to me. I realise that my right hon. Friend the Member for Holborn and St. Pancras would consider it far too moderate a sanction.
As someone who is in favour of getting votes in his constituency, I must rush to point out that I would not like to see the Secretary of State for the Environment, or whatever the post is called these days, banged up, because he is one of my constituents and I assume that he usually votes for me.
Order. I think that we are now straying a little way away from the Bill.
We heard earlier that the temperature in Dartmoor was rather chilly. I hope that the windows would have not only bars but double glazing.
In one of the many passages of great passion in the speech of the hon. Member for Somerton and Frome, he referred to the contrast between the Scandinavian countries and ours in relation to heat poverty. However, only some northern European and Baltic countries meet the standard to which he referred. The fact that they do so is a result of more than 100 years of building regulations and, in the case of Sweden, at least 100 years of building regulations and practices that include the use of extremely sound insulation. The situation in some of the Baltic countries that do not meet those standards—I will not even mention Kaliningrad—is quite the opposite, however. I refer to countries where great chunks of mastic are missing from the joints of building systems and constructions and where the gas fires and paraffin heaters can be seen pumping heat out into the air. There is a genuine issue there of building construction, to which I hope to return in a few moments.
As we know, the Government have spent more than £20 billion on fuel policies and programmes since 2000, and one of the most important is the winter fuel programme, which entered into our earlier discussion. I understand that winter fuel payments are contentious in one way: some people say that if winter fuel payments are increased, it simply increases the ability of the suppliers to ramp up the prices because they know they will be met. I shall not refer more than once to what I consider an extremely unfortunate statement from the Liberal Democrat Front-Bench team that the winter fuel payment was
“a gimmick of a policy, and we should look at how much it is costing in bureaucracy.”—[Official Report, 18 January 1999; Vol. 323, c. 648.]
I hope that the Liberal Democrats have resiled from that position and recognised that the winter fuel payment is not a gimmick; it is in many cases a lifesaver. More than 12 million people were kept warm last year by winter fuel payments. I entirely understand that some people who may be swimming in cash are actually receiving them, but the fact remains that an enormous number of people are heating their homes with the aid of the winter fuel payment.
What sort of homes are they heating? For many years, I was a housing officer in Camden, where I received constant communication from the MP representing that area. One of the points that he made, which I then had to deal with, was that even if people had completely adequate heating, they might not use it properly or they might not allow for an element of ventilation or they might use clothes dryers in the kitchen, pumping water into the building, resulting in damp, condensation and ultimately a dangerously cold place in which to live. That is a significant element of the problem.
Energy suppliers have also been mentioned. Negotiating with energy suppliers cannot be the easiest job in the world, but let us at least give the Government some credit for the fact that they have actually negotiated 800,000 social tariffs for individual customers. That means 800,000 people—double the number since March 2008—have had a social tariff negotiated on their behalf with the energy suppliers. These are voluntary agreements with the energy companies. I have a great deal of sympathy, as in all matters, with my hon. Friend the Member for Chorley, and there is something wonderfully simplistic about the idea of a windfall tax—it worked in 1997, and we saw the benefits of it. I think that everyone would agree, however, that if we could have a voluntary system backed up with the threat of a windfall tax, it would be extremely positive. I agree that the idea of forcing the energy suppliers without some form of sanction is a bit too hopeful, and I would not propose it.
Let us move on to the decent homes programme. Like every single MP, I have seen the advantages stemming from it. The programme addresses one of the core problems—the condition of our housing stock. Given that our country is relatively old as we had the industrial revolution before anyone else and we had larger cities before most other countries, we suffer from a residue of older housing—badly built, too close together, inadequately ventilated and with an absence of all the facilities we would now expect. The decent homes programme may not be able to create garden cities all over the place from Somerset to Ealing, but it does provide the basic underpinning of a modern home by providing a degree of insulation and energy efficiency. Again, I believe that the Government should be given some credit for introducing it. In addition, the carbon emissions reduction target allows households to access free or discounted insulation and other energy-efficient measures, and 40 per cent. of CERT money is specifically targeted at low-income households.
The hon. Member for Somerton and Frome is also well aware of the community energy saving programme, which by this autumn will have provided whole-house treatment to more than 90,000 households. The Warm Front scheme has assisted some 2 million households in England. We assisted 270,000 last year.
The point that I am trying to make is that, although no one could possibly disagree with the hon. Gentleman’s intentions, we are already doing the very things that he wants us to do. The Government are acting along precisely the lines that he recommends. We are all travelling in the same direction. We are doing what he says we should do, and we are doing it willingly. We are keen to do it. I am extremely grateful for the assistance and advice that he has provided, but why do we need the Bill to underpin the action already being taken by the Government?
The hon. Gentleman’s answer to that question is “belt and braces”, an approach with which I have a degree of sympathy. Trust in any Government does not come naturally to any true democrat. But is it really necessary to have a Bill of this size—and I would not add the word “complexity”; it is not a single-line Bill—when we are already working along precisely the lines that it proposes? I remain to be convinced either way. I have absolutely no intention of trying to obstruct the Bill. I may even have signed the early-day motion; I rather believe that I may have done so. I am in sympathy with the Bill’s proposals, but I think that we should ask ourselves a fundamental question: why, when we all agree on the same thing, do we need a separate Bill which could, in fact, slow down the delivery of what we are already undertaking?
As I said earlier, we use energy inefficiently in this country. We waste heat and power to an alarming extent. It is estimated that the average household in England wastes more than £300 a year simply through living in inefficient buildings and making inefficient use of them. Energy efficiency is a key part of the Bill. What it does not propose, however, is an educative programme to advise and assist people, as the Government are doing but presumably, according to the hon. Gentleman’s logic, should be doing more, faster and more accountably. We should be explaining more to people how they can make the most of what they have, and how they can avoid causing problems by using too much power and pumping too much energy into the atmosphere.
While we know that 47 per cent. of the United Kingdom’s carbon dioxide emissions result from heat generation, it is not widely known that, notwithstanding all the discussions that we have about airports and motorways, about a quarter of that is domestically generated. Our target is an 80 per cent. reduction in emissions by 2050. If we are to achieve it, we must virtually eliminate domestic heat waste. I mentioned targets earlier. This is a crucial target. We must direct everything that we are doing in government towards meeting it. As Members know, it is higher than the original target. It was raised so that it would become aspirational, and we all know what dire consequences will follow if we do not achieve it. The Minister has said that achieving it would require an energy revolution, and I do not resile from that, but is such a thing possible?
A range of actions can be taken. The Warm Front scheme enables 10-year-old boilers to be replaced. District heating is another option. There is an extraordinary scheme in, I believe, Aberdeen, where 4,500 flats and 59 multi-storey blocks now benefit from a district heating scheme. We should be working towards schemes of that kind, but we do not need a new Bill to tell us to do what we are doing already. We do not need new legislation to say that we should be moving in a direction in which we are already moving. We do not need more law when all of us are doing precisely what that law tells us to do. I am not arguing that the Bill is otiose, but I am arguing that it is almost superfluous.
That brings me to the one thing that the Government are doing that chimes exactly with the hon. Gentleman’s ambitions and intentions. I refer to the heat and energy-saving strategy. He will doubtless say that the strategy is not as ambitious and not as tightly timetabled as it should be, and it does not feature the interesting sanction of the Secretary of State voting for my right hon. Friend the Member for Holborn and St. Pancras from his prison cell. However, the strategy sets out short-term action, plus serious sustainable long-term proposals. It also contains targets, if targets we must have: by 2015 to deliver comprehensive whole-house solutions to 400,000 homes a year; by 2020 to save up to 50 million tonnes of CO2 a year, equivalent to 33 per cent. of 2006 emissions; by 2020 to have comprehensive whole-house solutions for 7 million homes; by 2030, as we arc on through the decades, to make available cost-effective, energy-efficient measures to—there is not a number—all households. As I said earlier, another target is to reduce our emissions by 80 per cent. by 2050 and to move as close as possible to the figure of zero. The heat and energy-saving strategy sets out a long-term vision and constitutes part of the energy revolution that the Minister has referred to.
We also have consultations on increasing carbon emissions reduction targets by 20 per cent. and on the community energy savings programme, which is set out in the short-term plan for households. Most important, we are aiming to have zero carbon for all new non-domestic buildings. That is entirely achievable. We understand that finance is a key issue and the problem was raised earlier about the individual costings of that. I do not want to be seen to be agreeing with almost everything that the hon. Member for Somerton and Frome said, but it would be hard not to. The idea that we can save energy, reduce the pain to individual constituents, yet finance new jobs and create the virtuous cycle whereby people get jobs, spend money and the economy grows cannot be anything other than immensely desirable. It is right that he has mentioned that in introducing the Bill.
Renewable heat is another key issue that has not been mentioned. We are particularly looking at the new renewable heat incentive to encourage more heat to be generated from renewable sources. However, the Government, being the Government, also have to consider the position of industry in the years before the renewable heat incentive comes into force.
There are parts of the market, however, that require additional attention and support. The Government are proposing stronger incentives to move to a low-carbon future, with which I cannot believe anyone would disagree, and to help people to change their behaviour and to take action. I would like to refer to the home energy audits and the joy of real-time displays. We have heard much about prepayment meters. I sadly come from a generation where tanners and two bobs were kept in cocoa tins on the mantelpiece, the meter would go at some stage and we would then put another two bob piece, or florin, into the meter. It was remarkably useful in many ways because we knew what we were spending; we did not have a bill and we were able to control our expenditure. The slight difficulties were that we paid more than anyone else and any passing ne’er-do-well knew damn well that most of the houses in the part of London where I was brought up had a row of cocoa tins on the mantelpiece stuffed full of two bob bits, which represented a fairly target rich environment, but there is a joy in real-time displays. The industry has responded on the issue of smart meters. It can centrally recalibrate meters, rather than individually calling at every home. Those are positive steps that have been achieved.
There is the proposal for what I originally read as a meat markets forum—it is in fact a heat markets forum—which includes regulatory arrangements for buying and selling heat. That would protect consumers who buy heat from district heating networks, a matter that has been raised on the Floor of the House many times. The issue of combined heat and power and surplus heat has been mentioned in passing. I think that virtually every major city in this country is now looking at combined heat and power.
All in all, I feel that the present list of the achievements of this Government should inspire, if not adoration, at least respect. We have recognised the problem, and we have addressed the key issue, and we continue to do so. We have done that through a combination of measures that bite now, in the medium term and the long term, in recognition of the fact that when we are talking about fuel poverty, we are also talking about energy efficiency and all the consequences that were so graphically illustrated in the Stern review.
We cannot afford not to address this problem on both a micro-level and a macro-level. In his speech, the hon. Member for Somerton and Frome spoke with dramatic passion about the individual constituent—whether, for instance, a pensioner or a person with disabilities—shivering and only being able to heat one room. That is the reality on the micro-level, and we cannot ignore it. I respectfully suggest that we are not ignoring it; we are addressing it, and are doing our level best to end the horror of, for instance, a person living in a single room in a two-bedroom house. All of us know of such situations as none of us is unaware of the realities of constituency life, and many of us have actually experienced them. On the macro-level, we clearly cannot continue to consume non-renewable resources and to heat up the planet in the way that we are. I therefore respectfully suggest that we already have a policy, and that it is attainable and costed.
The hon. Gentleman has done a great service by bringing much more new information before the House. He has had a series of meetings with a great number of actors in this area. In moments of weakness, I sometimes dream about a real Government of all the talents—in which, rather than bringing people in from the City, people are brought in even from the wilder reaches of Somerset, because we clearly need this sort of thinking and we are enjoying the benefits of it in this debate and in the Bill. I am still not entirely convinced that we need a separate Bill, however.
The hon. Gentleman blended pragmatism with passion in his presentation. He was pragmatic in that he talked about realities; he talked about the reduction from bands B and C to band C, amendments he could accept, and changes that he would be happy to consider if the Bill progressed. Underpinning everything he said, however, is his passion, and I respect and admire that. However, I would try to persuade him that that passion is not unique to the Liberal Democrats, as I think that almost all Members of this House are passionate about wanting to end fuel poverty, and none of us ever wants to have to face situations such as visiting a constituent who is wrapped in blankets and trying to keep warm in front of one bar of the electric fire. We have all had to face such situations, and we all know the realities of that, and none of us wants to see that continue, as it is wrong at every level. I hope that the hon. Gentleman’s fury for change and passion for the energy revolution, which the Minister referred to earlier, will energise every one of us and is inherent in the ambitions of us all.
The hon. Gentleman has distilled much of the thinking on this matter in what is a very good private Member’s Bill. I thank him for introducing it, and I hope that by the time this debate finishes—which may not be too far away—I will be convinced of the need to support him. In the meantime, I simply say that his passion, as much as his pragmatism, has won him even more admirers in this House than he had before.
I begin by joining other Members in paying tribute to the hon. Member for Somerton and Frome (Mr. Heath) both for being successful in the ballot and having his prayers answered this year, and for his choice of subject. This is without doubt an extraordinarily important issue. As the hon. Member for Ealing, North (Stephen Pound) has just said, the passion it generates is equally strong among Members in all parts of the House; Members in all parties are extremely concerned about fuel poverty and serious in their efforts to combat it. Rather than in any way denying that there is an issue to address, we are all looking for the best way to do so.
I echo the hon. Member for Somerton and Frome in paying tribute to the organisations that have worked with him and helped to introduce the Bill. He mentioned the Association for the Conservation of Energy. If it were appropriate to single out one individual, it would be Ron Bailey, who has done immense work not only on this Bill, but on others. He is a tireless campaigner on fuel poverty, and Members on both sides of the House owe him a tremendous debt of gratitude.
I greatly welcome the constructive approach taken by the hon. Member for Somerton and Frome. We welcome his willingness to say that we should look to achieve a band C level of energy efficiency rather than a band B level if that would make it easier for the Government to accept the Bill. We also welcome the Bill’s broad nature. It is extremely important that it addresses issues of microgeneration and does not just deal with energy efficiency and energy conservation. It is crucial for us, as a nation, to start to address all those issues with greater clarity and determination.
We all broadly welcome the Bill’s objectives, and I think we can also all agree that fuel poverty has generally been getting worse over recent years and that home energy efficiency in this country is nothing like good enough. The hon. Gentleman said that good intentions are not enough, and that is a key point. I listened to the speech made by the hon. Member for Ealing, North, and he seemed to feel that the Government were doing enough already—he said that the Bill was “superfluous”. In a way he was Shakespeare’s Brutus—he had come not to bury the Bill but to praise it, but listening to some of his words, one found that the intention was rather similar. I appreciate the passion and sincerity that he brought to the debate, but I remain concerned because it is generally recognised that we are not doing enough to address fuel poverty.
We are not on track to have secure energy supplies, low-carbon energy generation or affordable energy, and those three requirements matter very much to this House and to the country outside. The thinking behind this Bill is an attempt to address a couple of those particular challenges. The Government’s fuel poverty strategy has called for the eradication of fuel poverty in vulnerable households by 2010, and in all households by 2016 in England and a little later in Scotland. In an intervention, the Minister said that she was concerned that the Bill advanced an “absolutist position”, yet the Government’s target was to abolish all fuel poverty by 22 November 2016. One cannot get much more absolutist than that, although I know that she has not specified whether it is intended that that will happen before lunch or after lunch on that date.
In addition, when those targets were set they were never talked about in terms of being “as far as practicably possible”—those words have been cited subsequently in order to get the Government off a hook of their own making. We can clearly see that they are not going to meet the 2010 target because, as the hon. Member for Ealing, North said, the situation has been getting worse as the number in fuel poverty has been increasing.
May I just refer the hon. Gentleman to section 2(1) of the Warm Homes and Energy Conservation Act 2000? It clearly refers to
“measures to ensure the efficient use of energy, that as far as reasonably practicable persons do not live in fuel poverty.”
That is not something made up by the Government; it was legislated for, as a result of a similar Bill—a private Member’s Bill.
I am grateful for the Minister’s intervention, which gives me an opportunity to put on the record my genuine appreciation for the years of work that she has done and for her significant commitment to trying to tackle fuel poverty and deal with other energy issues. However, I think that it was the emphasis that was different; in the early years, the emphasis was always on the fact that fuel poverty was going to be eradicated and that that was the Government’s goal. It is only as that has appeared to become more difficult that the emphasis on whether it is practicably possible to achieve that has started to creep in.
The hon. Gentleman is right to pay tribute to the Minister. I hope that he will also mention the work done by the hon. Member for Southend, West (Mr. Amess), who introduced that earlier Bill and who has done a great deal of work over the years to overcome fuel poverty.
In the spirit of cross-party support and encouragement, I am more than happy to recognise the work of my hon. Friend the Member for Southend, West (Mr. Amess) in that regard and as a sponsor of the Bill. My hon. Friend the Member for Rochford and Southend, East (James Duddridge) from the other side of the town shakes his head, just in case we confuse him with my hon. Friend, although he has made equally important contributions on other aspects of tackling these issues.
The Government’s figures on fuel poverty only go as far as 2006, and they show that 3.5 million households were in fuel poverty then, compared with 1.8 million in 2005. The estimate is that 5.5 million households, or 9 million people, are now in fuel poverty. There are some 23,000 excess winter deaths, as they are unattractively called, each year as a result of fuel poverty, and the situation is becoming ever more challenging. The annual dual fuel bill is now £1,100, up from £572 in 2003. Every 1 per cent. increase in fuel bills pushes another 40,000 people into fuel poverty. We are all genuinely concerned that the reductions in people’s domestic energy bills have not happened anything like as quickly as the increases that we saw a while ago.
As the hon. Member for Somerton and Frome said, fuel poverty occurs across the country, in urban areas as well as rural, and affects the young, the old, single people and families. It is not easy to categorise and affects people of all backgrounds in all parts of the country. We must also address the situation of people who are off grid and do not have access to the same support mechanisms and regulation as we see elsewhere.
It is because of the price increases that we need a swift investigation by the Competition Commission into the relationship between the wholesale price of fuel and what the energy companies charge their customers. We must also recognise that the value of the winter fuel payment has decreased in real terms, while energy prices have risen.
The hon. Member for Chorley (Mr. Hoyle), in his impassioned contribution, put much of the blame on the energy companies. I do not agree that this is an opportunity to press the case for a windfall tax. One of the challenges that we face is the real risk that the lights in this country will go out within the decade, and we need to secure massive new investment in our energy plant. A third of the coal-fired stock will be out of commission by 2016 at the latest, and all bar one—Sizewell B —of our nuclear fleet by the early 2020s. If we have a windfall profit tax, the energy companies that we expect to invest in the new stock will simply look elsewhere in the world. The chief executive of E.ON has already made it clear that it does not see the UK as the most attractive place to invest.
Homes in this country have very poor energy efficiency. Only 40 per cent. of our homes are properly insulated. The average British home leaks twice as much heat and power as homes in Nordic countries. As the hon. Member for Somerton and Frome said, there are great opportunities to provide a badly needed economic stimulus at the same time as we make our homes more energy efficient. Figures that have been provided to us show that, when adjusted for climate, we have the second most inefficient homes in Europe. Even when the figures are not adjusted for climate, we are still worse than countries such as Sweden and Germany, which we would not expect.
We have heard about the role of Warm Front, which has been the Government’s chosen vehicle for addressing some of these issues. There is general agreement that it is not delivering as much as it should. To some extent, we can see why. We know in early 2008 the Government cut Warm Front’s grant by 25 per cent. That cut was partially reinstated, and £100 million was put back into the budget, but that still results in an overall deficit of £76 million in Warm Front’s spending for 2010-11, compared with 2007-08.
The Government say that the £100 million that they have put back in will mean that an additional 60,000 homes will be brought more up to date in energy efficiency and the installation of modern boilers. Using the same calculation, however, the £76 million still missing from the budget means that the Government are condemning a further 45,000-plus households to fuel poverty.
Warm Front grants are, as we know, often not sufficient to cover the total cost of insulation. Many of our constituents cannot afford to pay the top-up element that is required and so have to forgo the grant. Concerns have been expressed, too, about the contractors used. Too often, the contractor used is not the cheapest available and national contractors do not give the best possible price. Clear improvements are needed and the Bill represents a genuine effort to achieve them, although I point out that, a few weeks ago, the Conservatives set out some of our thoughts on how to achieve a low-carbon economy, and I believe that our approach is more comprehensive.
The Bill sets out the need for targets and a delivery plan. All too often, targets are set without a road map—without a delivery plan or solid methods of measuring progress towards the targets. One has to question the value of targets set in that way, so I welcome the fact that the Bill includes a delivery plan. I have a practical concern, however: how can the Secretary of State identify accurately all the houses involved? The challenge is to tackle poor insulation, so that houses have adequate energy conservation, but we have to recognise that residents come and go. Rented accommodation is a particular problem. There is often a significant turnover of tenants, some of whom are fuel poor, some not; none the less, at one moment in time the property will be categorised to determine whether it needs to be upgraded.
There is an important debate to be had on whose responsibility it is to tackle these issues. There is a clear link between the energy companies and energy efficiency. In a time of a developing energy gap, they have a clear interest and a clear responsibility to help their customers to use less electricity and gas, but the link between the energy companies and fuel poverty is less clear. Those who are fuel poor are often more generally poor. It is the Government who know best who those people are and where they live because the Government have all the relevant information—on income and benefit entitlements, for example—to identify them. There is a case for dealing with the two issues—energy efficiency and fuel poverty—separately.
Furthermore, although some people are locked into fuel poverty for the longer term, others come into and out of fuel poverty over shorter periods. Let us take, for example, a pensioner couple whose income from savings has declined dramatically in the past year, while energy prices generally have risen. Although they might not have been in fuel poverty a year ago, they may well be now or in a year’s time. Alternatively, let us take a family with two incomes, perhaps not well-paid but not currently in fuel poverty. If one or both partners lose their job, that family could easily fall into fuel poverty by next winter. What about someone who has a long-term but not chronic illness? They may be in fuel poverty for a substantial period, but there is every likelihood that it will not be permanent, and that must be our hope.
The difficulty is that the Bill is aimed at a moving target. Our approach is better, I think, because it focuses on poorly insulated houses generally. We would offer every household, whether in fuel poverty or not, an entitlement of up to £6,500-worth of approved energy efficiency improvements. Our figures have been developed in consultation with the best brains in the industry to make sure that they are comprehensive. We think that that is the right way forward because it would enable gas and electricity costs to be reduced immediately, and the costs to be recovered over time by the energy companies, which would have the duty to put the energy conservation measures in place.
That is the approach taken in the United States, where National Grid is a supplier as well as a distributor of electricity and is legally required to work with consumers to reduce their energy demand. We think that that is a model worth following. I believe that the Minister has been misinformed about our policy and how many homes would be included, but I emphasise that we want it to be rolled out across the entire country.
The Bill also includes energy assistance packages, which provide that, until their homes have been fuel poverty-proofed, the fuel poor must be offered the lowest tariff available—lower than any other tariff. However, that is hard to define because of the huge range of tariffs offered. One energy provider says it has 700 tariffs because it operates in four parts of the country supplying both gas and electricity and has single and dual tariffs and so on. As the hon. Member for Somerton and Frome said in introducing his Bill, this can therefore be an extremely complicated issue. Tariffs that might sound cheaper when first offered may end up not being cheaper when one looks at the consumer’s actual consumption pattern. They may be using more electricity at peak times simply because they are elderly and are at home when other people are at work.
There could be a potential conflict of objectives here. One of the reasons why we have supported smart metering so enthusiastically is that it would change people’s consumption patterns. They would use less electricity at peak times, which, in turn, would reduce the need for building new generating capacity. They would, for example, be encouraged to put their washing machines and dishwashers on overnight, and would find that a better way of using their electricity. However, the Bill would make it illegal for energy companies to offer to someone who commits to using their washing machine overnight a lower rate than to somebody in fuel poverty who chooses to run theirs during the day.
The longer-term goal of smart meters is to allow better demand management. People would be offered a better tariff if they allow their electricity supplier to switch off or reduce their power supply to their fridge or lighting at different times of the day when there is peak demand. However, the Bill potentially makes that illegal, because it says that the energy supplier must, at a minimum, offer a customer in fuel poverty a tariff lower than any other tariff available to its other customers. In its current form, the Bill also says that the supplier must not just offer that tariff, but supply it. So in the event that it was offered to somebody but they did not take it up, according to the way in which the Bill is phrased —I hope that we can work out such issues in Committee —it could be illegal if it was not actually supplied at that rate.
Therefore, what we need is an adaptable system. Tariffs need to adapt to changing circumstances. Somebody on a low wage who happens to lose their job and is therefore at home much more needs to be on a different tariff from the one they were on before. The danger, however, is that the company will have broken the law by not offering a revised tariff, even though it could not reasonably have expected to know that that person’s circumstances had changed. Nor do we yet know from the Bill what the penalties will be, although it does give an indication of the level of penalties and what would happen in such a case.
Again, I believe that our proposed solution is better, because we would require every energy company to offer social tariffs to vulnerable households. That would help to achieve the same objective, but it would not potentially criminalise companies for offering price incentives to customers to use their electricity in an environmentally sound way. We would require energy companies to provide information on their energy bills that clearly showed customers whether they are on the cheapest tariff offered by their company. If they are not, it would show exactly how much they would save if they switched to the cheapest tariff and how they could do so. This approach would be constantly up to date and would reflect consumption patterns. We would also ensure that people’s bills show how their household use compares with a similar household in their neighbourhood, so they could make comparisons and informed choices.
On top of that, we would reform the Post Office card account to enable people to pay their utility bills through direct debit-style payments, cutting the energy bills of up to 4 million people who currently do not have access to a bank account. We would certainly look to introduce smart meters, which in the longer term offer the potential to eliminate completely the charges for prepayment meters.
In conclusion, we are seeking to improve the Bill as it moves forward. Its aims are good, but it could lead to some less desirable unintended consequences. The thinking behind it has been very positive, and I again pay tribute to those who have encouraged the hon. Member for Somerton and Frome to introduce it. Our approach is I think significantly better, so although we cannot give a ringing endorsement to everything in the Bill at this stage, I hope that we will have the chance to explore these issues further in Committee.
I begin by congratulating the hon. Member for Somerton and Frome (Mr. Heath) on bringing in his Bill today. He has done the House a real service in doing so, thereby allowing us to debate some extremely important issues associated with fuel poverty. Nobody in the House today has argued to the contrary of the Bill’s general purpose. We can all agree with the purpose of the Bill as set out in clause 1—to eradicate fuel poverty.
My main concern lies in the detail of the Bill, especially the points that I put to the hon. Gentleman earlier. My hon. Friend the Member for Ealing, North (Stephen Pound) said that the Bill was aspirational. Indeed, but my concern is that it is also extremely prescriptive and, to quote the phrase used by the hon. Member for Wealden (Charles Hendry), that it will have unintended consequences.
My Committee, the Joint Committee on Human Rights, has done a lot of work recently on justiciability in the context of the Bill of Rights, and in particular in the context of social and economic rights. I suppose one could say that the hon. Member for Somerton and Frome is trying to introduce a social and economic right—the right not to be in fuel poverty. However, I am not convinced that that is what he is doing. He is bringing in a social and economic duty rather than a right, and there is a significant difference between the two.
A duty on the Secretary of State to do something is one thing. A right on the part of an individual citizen as against the state is something else. There is nothing in the Bill that gives the citizen the right to have the measures taken to deal with fuel poverty. It is simply the other side of the coin. That approaches the issue from the wrong direction. On the one hand, there is the duty on the Secretary of State. On the other hand, where is the liberty of the individual?
What, for example, if someone does not want to have those measures taken? It is unlikely, but it is possible that some old lady might say, “I don’t want to have the work done. It’s too disruptive. I’d rather pay the bigger bills. I know they are big bills and I don’t like them, but I can’t face the idea of workmen coming in.” But it may well be that the only way the Secretary of State could meet the duty under clause 2(1) as drafted is by forcing that individual to have the work done. That cannot be right.
Under article 8 of the European convention on human rights,
“ Everyone has the right to respect for his private and family life, his home and his correspondence.”
That right is qualified by paragraph 2 of article 8, which says that the state can interfere if it is for
“the economic well-being of the country”.
I would hate to think that the Secretary of State would have to rely on that to meet the duty. That cannot be right, but it is one of the unintended consequences of the way the Bill is phrased.
I am not a lawyer but I support the principles of the Bill. I desperately want to see fuel poverty eradicated. Are these not things that could be dealt with in Committee—changing the wording to make sure that it meets my hon. Friend’s concerns?
Obviously, I share my hon. Friend’s concerns about fuel poverty and I am glad to see him in his place today. I had hoped that these matters could be resolved in Committee. However, I put the point to the hon. Member for Somerton and Frome earlier, but he was adamant that he wanted to see the absolute duty in the Bill. Therefore the inference must be that he would not be prepared to make concessions on the matter in Committee.
Yes, I do believe there should be an overall duty. However, if the hon. Gentleman recalls, I pointed out in my speech that there would be properties where the individuals concerned did not want the work done. I entirely accept that there may be a need for an amendment in Committee to make provision for those circumstances. I am grateful to the hon. Gentleman for pointing out the issue. With respect to the overall duty, I see a strong parallel between the overall duty in the Bill and the duty that the Government have not only encouraged but extolled around the world in the Climate Change Act 2008—a duty that also falls on the Secretary of State and with which, I understand, colleagues have no problems.
I am grateful to the hon. Gentleman for that intervention. I referred to one of the unintended consequences. We could potentially put it right, but he stands by his bull point, which is the duty in clause 2 as currently specified. That is why I must take issue with him.
We heard earlier about the judicial review in the High Court of the Warm Homes and Energy Conservation Act 2000. The judge, Mr. Justice McCombe, said:
“I am quite satisfied that, in this case . . . Parliament would have taken as axiomatic that the pressures on budgets are intense and that government would have to take the necessary steps in the context of other pressing needs for funds. I cannot conceive that Parliament can be taken to have intended that, whatever the expense, so long as not disproportionate to the benefit, the government should be obliged to expend whatever funds might be necessary to eliminate fuel poverty”.
That is a correct interpretation of what Parliament decided when it enacted that Bill. I participated in the debates and supported the Bill, and that interpretation is entirely in keeping with what I thought we were voting for.
One of the unintended consequences of the absolute duty is this. Let us suppose that the costs involved with the provision escalate dramatically because rising fuel prices mean that more people come within the definition of fuel poverty, because the cost of the work has gone up or because the Government’s resources decline. Which hon. Member will want to say that the hospital promised for their constituency should not be built because the Secretary of State has to meet that duty, or that the primary school in their constituency should not get the new boiler that it needs because the priority is ensuring that homes are warm? Which hon. Members would vote for such things, which would be a consequence of the duty as it is phrased in the Bill? Those things would be the consequence, although unintended, of making the duty override all other demands on Government spending. As the Minister said earlier, the previous Bill was phrased precisely to overcome that barrier; furthermore, the judge whom I mentioned interpreted the law accordingly. That was the correct way to approach the issue.
As I said, my Committee has done a lot of work on social and economic rights and their justiciability. We debated at great length whether there should be social and economic rights in the Bill of Rights proposed as part of our constitution and, if so, the extent to which they should be enforceable through direct justiciability. We came to the conclusion that such enforceability could be extremely dangerous. It is not even required by the UN convention on these matters. That requires the progressive realisation, as resources permit, of all the great objectives of health, education and eliminating poverty; it does not impose absolute duties. The position now adopted by the Government, and which they are at great guns to achieve, matches that duty. The consequence of justiciability is not just that Friends of the Earth can bring a case against the Government, but that any individual or busybody could do so. There is a better approach than through extreme justiciability, and it is the system that we advocated in our report on a UK Bill of Rights and Freedoms; I recommend it to the hon. Member for Somerton and Frome.
The fact that that approach is better is partly reflected by clause 4, to which I shall come in a minute. We said in the report that the best way was to give the judges an interpretive power, so that they interpreted the common law, Acts of Parliament regulations or whatever in a way that gave maximum effect to the duty. The duty itself would not be directly enforced, but the courts would do their best to give effect to it in how they approached it. That is a halfway house that fits much better within our overall constitutional settlement than what the Bill proposes. There should, of course, also be an absolute bottom line below which nobody should be expected to fall and which the courts could also enforce.
In the end, clause 2 risks the separation of powers. There is a clear separation of powers—although not as clear as some of us would like—between the legislature, the Executive and the judiciary. The Executive’s job is to run the country, the legislature’s job is to pass the laws and the judges’ job is to interpret them and make sure that the courts are doing their job properly. The problem is that clause 2 would blur the distinctions. Effectively, the judges would be making decisions on the allocation of resources. The judge would decide that the Government had not met the very precise duty under clause 2(1), therefore they must spend more money on it, therefore something else would have to give. Judges have the luxury of not having to say where the money will have to be cut—whether from the housing, schools or health budgets or elsewhere. Judges do not have to make that decision. All the judge has to do is to tell the Government that they are not spending enough money on the target and they have to spend more. The Government do not have that luxury, but the judiciary would have that power as a consequence of clause 2.
I am not saying that, because the policy would be set out in the Bill and the Government would bring it forward. I shall say more about that later. The issue is not the policy but the duty.
Clause 2(1) is absolutely prescriptive: by 31 December 2016 a given number of households must be taken out of fuel poverty. If by 2014 it looks as though that target will not be met, somebody will no doubt go to court and demand that the Government divert their last penny to achieve it. Judges could order the Government to do that, no matter what the social consequences elsewhere. Indeed, not only could judges do that, they would have to do it, because that is the absolute interpretation of the law—to the letter. They would have no choice, irrespective of the consequences, even to court budgets. Judges might have to be made redundant to give effect to the policy. Some people might think that a good idea, but it could be one of the unintended consequences of the way in which that absolute duty is phrased in the Bill, which is why when the Human Rights Committee looked at such things in great detail we came to the conclusion that there could be no direct justiciability for what are in effect social and economic rights. It would be too dangerous to give such power to the courts, and it would significantly change the constitutional settlement of the UK. I am sorry to be so heavy on the Bill in that respect, but it could be the thin end of a large wedge.
If judges ordered Ministers to spend all their budget on ensuring that we reach the target and Ministers said no, can my hon. Friend tell the House what would happen?
As I said earlier in response to an intervention by my hon. Friend the Member for Ealing, North, I suppose that if the High Court passed a mandatory order requiring a Minister to do X, Y and Z and the Minister refused or failed to do so, it would technically be contempt of court. The Secretary of State would be in breach of an order of the High Court and would be subject to the punitive sanctions that follow from contempt of court, which could ultimately mean imprisonment. That is an absolutely ludicrous consequence, but it is possible.
The interpretation under the Climate Change Act would be much more in line with what Mr. Justice McCombe said about previous legislation. We have yet to see the text for the Bill on child poverty, but although I suspect that it will be framed in aspirational terms I should be very surprised indeed if it included such an overriding duty as set out in clause 2(1). If that were so, every last penny of the Government’s resources would have to be diverted to deal with child poverty.
We could have several such duties, all possibly in conflict and all demanding their share in the allocation of Government resources. The Committee looked at the South African experience, which produced some peculiar consequences. Luckily, the judges there are being sensible and allowing time to adopt the measures, but politicians say that if they had realised what they were doing when they passed social and economic rights they might have done so rather differently, without allowing full justiciability. Such a duty could take from elected politicians our proper role, which is to decide on the allocation of resources and priorities for the country and stand or fall by those decisions at the next election, and put that right into the hands of unelected judges, who are unaccountable and do not face the same pressures as us when we try to make decisions.
I understand my hon. Friend’s point, but it is clear that previous fuel poverty targets and the best practicable means to achieve them have not been successful, so is it not important that when Governments set a target they at least put a reasonable amount of resources into achieving it? Could we not have a fuel poverty Bill that at least ensures that there is some likelihood of achieving the target? I certainly hope that the Government will want to do just that in the child poverty legislation. I also hope it will not take all the Government’s resources to alleviate child poverty.
My hon. Friend has not been present for most of the debate, but earlier we heard about the efforts that the Government have made, and the billions of pounds that have been spent on dealing with fuel poverty. I think that the figure for what has been spent so far is in the region of £20 billion, although I stand to be corrected. That is not peanuts; that is a significant amount of money to spend on eliminating fuel poverty, yet we still have not achieved the target. That is because of the issues that have come out in this debate, and because it is a moving target. That is the real difficulty with clause 2(1); it sets an absolute target, which does not reflect the fact that fuel poverty is a moving target. One of the issues that we will face when we come to consider the child poverty Bill is how child poverty is defined in it, because child poverty is potentially a moving target, if we define it in relative terms, rather than in absolute terms. We will have to wait and see what is in the Bill.
The problem with fuel poverty is that it is a relative, not an absolute, target. That is inevitable when there are different factors in play that affect who is, and is not, in fuel poverty. I do not quibble with the definition in the Bill, which I think is reasonable: it is when 10 per cent. of disposable income has to be spent on fuel if the temperature thresholds are to be reached. The problem is that people’s disposable income changes. As my hon. Friend the Member for Chorley (Mr. Hoyle) said, what happens if somebody loses their job? Their disposable income plummets, so someone who is not in fuel poverty one day falls into fuel poverty the next. On the other hand, as we discussed, if the price of fuel rockets, people who are low-paid, but who are not in fuel poverty because their income is sufficient to ensure that they do not come within that 10 per cent. bracket, may be pushed over into fuel poverty. When fuel prices come down, they come out of fuel poverty again. The same is true of someone who gets back into work. It becomes a moveable feast.
If we set an absolutely definite, specific target in clause 2(1), it will fail to reflect the fact that the target is moving and changing. The reason why the number of people in fuel poverty has gone up in the last couple of years has nothing to do with the Government not making an effort or commitment, or not spending on the issue. It is to do with the fact that fuel prices have gone up, as my hon. Friend said. That is the real reason why more people have fallen into fuel poverty in the past couple of years, although there are still fewer people in fuel poverty than 10 years ago. No doubt, as fuel prices come down, people who are currently in fuel poverty will cease to be so. Prices are coming down, albeit not as fast as my hon. Friend and I would like. Earlier, we discussed what the remedies for that might be. At the same time, other people may enter fuel poverty because of the rise in unemployment.
That makes if very difficult not only to meet the target set out in clause 2(1), but to identify the target that we are aiming at in the first place. It is like asking somebody to do archery blindfolded when the target is moving from left to right every day of the week. How on earth is one supposed to hit the bull’s-eye in those circumstances?
My hon. Friend is, of course, much more expert in matters of the law than I am, but is he saying that one of the principal problems with the Bill is that it does not set out a way of identifying fuel-poor households, and that we therefore cannot achieve the target?
I think that the Bill does identify fuel-poor households. I certainly do not quibble with the definition in clause 13(d), as I said earlier; it is a perfectly acceptable definition. The problem is that the numbers change daily, partly because of the Government’s initiatives, but also because of all the other factors. There are subjective factors affecting individual households over which the Government simply do not have control. Of course, the Government have some control over macro-economic policy, but not over whether an individual loses their job. They may have overall control over energy policy, but not over the day-to-day spot market prices that companies pay for gas. They cannot possibly have control over those things, so the target is moveable, which is why it becomes so difficult to have an absolute duty. If we were talking about a duty to achieve the target “so far as is reasonably practicable”—that is the duty that we currently have—or “so far as is practicable”, that would be a realistic way of approaching the matter.
Is not any duty on the Government restrained, inevitably, by the resources available? As the hon. Gentleman says, it is right that prices will change from time to time and therefore the extent to which any group of people can be taken out of fuel poverty will change from year to year. The Government cannot control that. None the less, the Treasury controls the amount of resources that can be put behind any particular objective. There is presumably a budget and a cap on that budget, and that will constrain what can be done.
The hon. Gentleman is right as far as the law stands. That is exactly what the High Court said in the previous case and I would not object to that. It is a sensible approach to adopt. The Government have a duty to do that, balanced out against all the other obligations and duties that the Government have to meet. That is what the judge said. I cannot conceive that that point could be taken to entail that whatever the expense, so long as it was not disproportionate, the Government should be obliged to expend whatever it takes. I agree with the hon. Gentleman, but the trouble is that the hon. Member for Somerton and Frome does not. He says that it has to be an absolute duty. Fuel poverty is an overriding priority and so what the hon. Member for Orpington (Mr. Horam) says would not apply if the hon. Member for Somerton and Frome gets his way with the Bill as phrased. That is his bull point—from his point of view, it is the absolute priority of the Bill. That is what I have to take exception to, because I think that it is unrealistic. It is a Trotskyite transitional demand. It is superficially designed to please and to be attractive, but it is not a practical proposition for any Government to accept or, in my view, for any Parliament to pass. The fact remains that it is unrealistic and the hon. Member for Somerton and Frome must accept that.
We would all love to be able to say that the Government had a duty to ensure that we eliminate entirely illiteracy, waiting lists and people having to hang around in accident and emergency, but that cannot be done in those terms. We can have the aspiration to do so, which is why I agree with clause 1, or the duty to do it, as in the definition set out by Mr. Justice McCombe, which is the right way of setting priorities and the right relationship between the legislature, the Executive and the judiciary. Or we can have it the hon. Gentleman’s way, where he does not give a monkey’s about health or education so long as he gets his way on this point.
My bull point of concern—where I really fall out with the hon. Gentleman—is that issue. That is not the end of the Bill, of course. There are other practical problems. We have to achieve this by 2016 in absolute terms, but that might be unrealistic depending on how the world changes. The hon. Gentleman has already conceded that clause 2(3)(a) will have to go. When he drafted the Bill, he did not realise that only 30,000 properties in the whole country would meet that criteria and that the cost of that would be £50 billion plus. Even to do what he is talking about in clause 2(3)(b) at present prices will cost an extra £20 billion on top of the £20 billion we have already spent.
The hon. Gentleman is on to something with clause 3, which concerns the fuel poverty strategy. I do not disagree that it would be a good idea to set a fuel poverty strategy and for it to deal with all the points to which he refers. It would be helpful to have a strategy set out as a way of benchmarking Government performance. That is one way in which we can do that much more effectively. A benchmarking system whereby we have a strategy that links in to the fuel poverty annual report required by clause 4 would be very effective. I hope that it would mean that every year we would have a debate in Parliament on the strategy and on how far we had got in achieving it, and we could hold the Government to account in the legislature for their performance. That is the right way of holding the Government to account—not in the courts, but by asking the Minister to come to the House, stand at the Dispatch Box and say what they have done or have not done, as well as answering questions and facing challenges from hon. Members on both sides of the House. That is the correct democratic way of dealing with the issue.
The hon. Gentleman is absolutely right to require the fuel poverty strategy to be set out and I do not think that I would take issue with any of the points that he has set out that should be required in the strategy. I particularly agree that it would be useful to include provisions about microgeneration installations. I have no difficulty with that. I do, however, have difficulty with the hon. Gentleman’s references to the time scale for the fuel poverty strategy. I do not think that he has considered the correlation between clause 3(1), which sets out a time scale of six months, and clause 9, which deals with consultation. I agree that it is good practice for any Government to consult interested parties and organisations—in this instance, Friends of the Earth, Age Concern and the other organisations that the hon. Gentleman mentioned earlier—and to try to reach agreement with them about what should go into a strategy. However, the Government are always being criticised for having sham consultations, for not allowing enough time for consultations and for not taking into account anything that anyone says. They are criticised for just going through the motions.
My concern is that the Bill would make it a duty to produce the strategy within six months, because clause 3(1) states:
“The Secretary of State must, not later than six months…publish a document”.
Bearing in mind the length of time it takes to write Government documents, proof-read them and print them, I am worried that clause 3(1) and clause 9 would be mutually exclusive, in that it would be very difficult to have a proper and effective consultation involving consideration of, and reaching agreement on, all the suggestions, as well as publishing the document, all in the space of six months. That is not realistic. I hope that that matter will be corrected in Committee, but I wanted to draw it to the hon. Gentleman’s attention now. I agree with the aims of both clauses, but there is a significant difficulty there.
Clause 3(5) states that the Secretary of State
“shall take such steps as are necessary to implement the Fuel Poverty Strategy.”
I shall not repeat my previous argument, but this provision is draconian and probably unachievable in its present form.
Clause 10 is welcome. It puts pressure on the suppliers to introduce energy assistance packages, and it is quite right that the energy companies should play their full role in helping to deal with the problem. I am worried, however, that the hon. Gentleman seems to want to let them off the hook, because clause 10(3) states that the lower tariffs should be available to customers only
“until such time as their homes have been made fuel poverty proof.”
Those people are probably on the lower tariff in the first place because they do not have very much money. I would like to see that final provision removed from the clause in Committee, because we ought to be aiming for lower tariffs to be more generally available throughout the fuel companies’ charging structures. This picks up on points that were made earlier.
Clause 12 relates to expenses, and states:
“There shall be paid out of money provided by Parliament…any expenditure incurred”
as a consequence of the legislation. As I said earlier, the hon. Gentleman has not put a price tag on this. Indeed, I am not sure that he has one. The best estimate from the Government is that it would cost £20 billion to meet the band C requirement set out in clause 2. This raises the question of whether we would need additional taxation to finance these provisions. I am not sure what £20 billion translates as income tax, but it could be 4p or 5p in the pound; or would we need to cut other things in order to pay for this?
Of course I do. I said at the beginning of the debate that I agree with the thrust of what the hon. Gentleman is trying to do. I also agree with a lot of his Bill. The only proposal of substance that I have taken issue with is clause 2. As far as the rest is concerned, I have pretty well agreed with him. I have not commented on some of the other clauses because I am broadly happy with them.
However, we need to be careful that we scrutinise Bills properly. When the hon. Gentleman introduced the Bill this morning, he didn’t half skate over the details. He basically just read out the title of each clause. Our job in Parliament is to scrutinise Bills and to pass Bills that are practical and that will achieve things. Most private Members’ Bills, if they are to succeed, have to do some good, which this one tries to do. However, they also have to be modest in their objectives and not cost very much. His Bill is neither modest nor cheap, and he must reflect on that fact. If he gets it through, he will have achieved an extremely rare feat, given the way in which it is phrased.
I have made my point about the expenses and the costs, and the hon. Gentleman will no doubt respond to it when he closes the debate. I certainly do not intend to try to talk the Bill out. It is trying to achieve a worthwhile objective, and I would like to see it in Committee. However, I give notice to the hon. Gentleman that, if it comes back to the House with clause 2(1) remaining as it is at present, I shall table an amendment to make the phraseology more realistic, to reflect the true balance between Parliament, the judiciary and the Executive.
I am happy to follow the hon. Member for Hendon (Mr. Dismore) and to discover such broad support around the House for the Bill’s objectives, even though, of course, points have been made that can be properly taken up in Committee.
Throughout my youth, it was customary just before midnight on new year’s eve for someone—usually the darkest person—to go outside the door of our home and to come back in with coal, bread and a coin. Those were the three things that every household was thought to be in need of. They symbolised prosperity and a satisfactory life—and the coal was not irrelevant.
If the hon. Gentleman will forgive me, I will be brief, as the Minister and possibly other colleagues are still to speak. As I was saying, coal was one of the three, because energy and the ability to keep warm was fundamental to everyone’s happy existence.
I warmly congratulate my hon. Friend the Member for Somerton and Frome (Mr. Heath) on introducing his private Member’s Bill, which he said would be good for the vulnerable, good for health within the UK, good for our environment and good for the economy. It rises to the four great challenges of our age: we need a more equal society, to which the Minister and the Government are committed; we need to protect our environment, to which the Minister has shown a lifelong commitment; we need to rescue our economy from its difficult times; and we need to give maximum employment to people—and there is no more obvious contribution to getting us out of a recession than expanding the construction industry. The Bill’s objectives will allow us to save carbon, save money, save jobs and, most importantly as my hon. Friend said, save lives.
Members have put the situation we face on the record. Dealing with inadequately heated homes—fuel poverty is the technical term, but I am never very comfortable with it, because it is not the sort of phrase people use on the Old Kent road—has been a challenge for decades. As my hon. Friend the Member for Chesterfield (Paul Holmes) said, it was that problem that brought him and people like him into politics in the ’80s.
There is the old phrase that “An Englishman’s home is his castle”—it applies in Scotland, too, and to a lesser extent in Wales—but castles were often draughty. Although most Englishmen and women do not live in castles, the reality is that most of their homes are still draughty and not well insulated. After an exchange at Question Time on 20 January, the Minister for Housing wrote to me, confirming that only 1 per cent. of current housing stock in the country reaches the rating of 81 on the standard assessment procedure, which is recognised as the best way to assess what counts as a satisfactory energy-efficiency rating. Thus only 1 per cent. of our housing stock is adequately insulated and 25,000 people or thereabouts die every year unnecessarily—and we should not pass over such figures lightly. Many more people are ill and are looked after at huge cost to the NHS. We must not forget to put the costs of the current position on one side of the balance.
Furthermore, figures are available showing how many people are in fuel poverty in every single constituency in the country. I looked at the figures for London and found that 15 out of 100 homes in the Minister’s Lewisham, Deptford constituency are in fuel poverty. The figures for the two other constituencies in my borough—15 in Dulwich and West Norwood and nearly 15 in Camberwell and Peckham—are about the same. Most amazingly, although there is an explanation for it, my constituency with 13 out of 100 has the least fuel poverty in London. I think that the explanation is that we have the largest amount of council housing stock. If anyone ever wanted an argument that council housing has been good for people, there it is, as it is much better heated than privately rented or owner-occupied property. The figures are there for all to see.
To any colleagues in the House who are nervous about the Bill, perhaps including the hon. Member for Ealing, North (Stephen Pound) and the hon. Member for Hendon, I would say that where there is a will, there is a way. We have to take this Bill and turn it into legislation that can deliver what we want, which is a job for a Committee, not for proceedings here. I endorse what the hon. and learned Member for Torridge and West Devon (Mr. Cox) and the hon. Member for Wealden (Charles Hendry) said about the inadequacy of the present system. My hon. Friend the Member for Somerton and Frome is seeking to deal with a system that is not just piecemeal but confusing.
There are three failures. There is the problem that although some people are being targeted who should be targeted, others are being targeted when they should not be. Apparently, more than 100,000 households with a combined income of more than £100,000 a year receive the winter fuel allowance every year. Members of the House of Lords have told me that they receive it because they are pensioners, but clearly they do not need it. That is a nonsense of a system.
Secondly, the explanation of the tariff options is very confusing. I looked at the Consumer Focus website, which customers are supposed to consult. With the best will in the world, I do not think that people should require a table that takes up an entire page. The eventual figures depend on whether people are low, medium or high users, on whether they use gas, electricity or dual fuel, and on who supplies their fuel. Then there is the small print. If any of us tried to read all that, we would be lost for accurate answers.
The third failure—the hon. Member for Slough (Fiona Mactaggart) made this point very tellingly—is the prepayment meter system, under which in many instances the poorest and those who use least will pay more.
We live in a country that provides us with huge amounts of our own fuel—gas, oil and coal—along with the potential for renewables. We also face a huge challenge in dealing with carbon emissions, 27 per cent. of which emanate from domestic households. What should we do now? The hon. Member for Southend, West (Mr. Amess) introduced a similar Bill in 2000, and my hon. Friend the Member for Hazel Grove (Andrew Stunell) introduced another in 2004. The Bill presented today by my hon. Friend the Member for Somerton and Frome seeks to pick up where the law appears to have left off after last year’s High Court judgment—which, I should point out to the hon. Member for Hendon, is currently on appeal. We do not know what the final judicial decision will be.
As other Members on both sides of the House have observed, this is exactly the sort of Bill that gives credibility to Parliament. These are the issues that matter to our constituents. The Bill is central to what we should be doing. It is in the great tradition of the social legislation that gave us pensions, national insurance and the national health service. We have a job to do in dealing with the social issues of the day, and the Bill gives us an opportunity to do that job now.
My hon. Friend the Member for Somerton and Frome referred to the huge amount of support that he had received. I echo the tributes paid to Ron Bailey and others. The fuel poverty charter movement involved a range of supportive non-governmental organisations. Members in pretty well every corner of the House have signed the relevant early-day motion: many Labour colleagues, Conservative colleagues, Plaid Cymru colleagues, Democratic Unionist colleagues, Scottish National party and Social Democratic and Labour party colleagues, and independent colleagues, as well as a large number of my Liberal Democrat colleagues.
I commend the local press—many local papers have taken up the issue—and the national press, particularly Nigel Nelson and the Sunday People. As soon as my right hon. Friend the Member for Sheffield, Hallam (Mr. Clegg) became leader of our party, he chose this as the first subject on which to challenge the Prime Minister at Prime Minister’s Question Time. We have published our proposals, which, like those of the hon. Member for Wealden (Charles Hendry), include a national programme to ensure that not a single household would not benefit from the scheme, except those that did not wish to do so. The finance can be raised by the utility companies, and the system would save money as it proceeds.
Finally, let me point out to the hon. Member for Hendon and others who are worried about the duty in this Bill that the Climate Change Act 2008 clearly imposes a duty on Government. If we are determined together to implement the Government’s policy, we must set ourselves a duty. The wording may need to be changed, but I hope that today we will have the conviction—
No, I will not.
I hope that today we will have the conviction to give the Bill a Second Reading and send it into Committee. I am sure that our constituents will want that to happen. I hope that the Bill will receive positive encouragement from the Minister so that it can move to its next stage, and my hon. Friend’s aspirations can be fulfilled this very afternoon.
I congratulate the hon. Member for Somerton and Frome (Mr. Heath) on his Bill, which deals with a very important subject. It is, I believe, far too important to be discussed along with four or five others.
I am reminded of something that one of my favourite comedians, Woody Allen, once said. He was looking at the back of one of the American comics, featuring X-ray specs, Charles Atlas and so forth, when he spotted an advertisement for a speed-reading programme. He decided to go for it. Lo and behold, within four weeks he could read “War and Peace” in four hours. When someone asked him what it was about, he said “I think it concerns Russia.” I feel a bit like that now. How is it possible to compress such an important subject as fuel poverty into four and half hours?
I would like, with your indulgence, Mr. Deputy Speaker, to comment on the attendance today. I was going to say that there is only one person from Her Majesty's official Opposition here, but there now appears to be three—that is three times as many as they have in Scotland. Obviously, there are quite a few Lib Dems present, who for the most part I have never knowingly understood, but I am glad to see them. They are obviously here to support their colleague the hon. Member for Somerton and Frome.
As I mentioned earlier, the Scottish National party claims to stand up for Scotland. However, not only does it fail to stand up for Scotland, but it fails to turn up for Scotland—there is not one SNP Member here. That should be on the record.
I welcome the debate. It is an important issue for all of us and all our constituents. I am pleased that the Government have maintained their commitment to tackle fuel poverty. They have a statutory target to end fuel poverty, so far as is reasonable, for all households across the UK by 2016. The three impacts on fuel poverty are household income, energy prices and the energy efficiency of the home. We have tackled all those elements in different ways.
First, on income, the Government introduced the winter fuel payment in 1997 specifically to help older people who are particularly vulnerable to the effects of cold weather with their winter fuel bills. Earlier this year, millions of vulnerable people and pensioners received the highest ever cold weather payment, which has been trebled by the Government this year from £8.50 to £25 a week. The latest payments mean that the Government had paid more than £100 million to pensioners and vulnerable people to help with fuel bills as the cold snap hit Britain this winter.
That was not the only extra help announced by the Government for vulnerable people and pensioners this winter. There was an extra £575 million spent on winter fuel payments this year, with £250 for those in households with someone 60 or over and £400 for those with someone 80 and above. There has also been the biggest increase in the state pension since 2001 and the biggest increase in pension credit since it was introduced. In 1997, the poorest pensioners had to live on just £69 a week but now, thanks to pension credit, no pensioner need live on less than £124 a week, and that will rise to £130 in April.
Secondly, while prices were on their way down and incomes were rising, fuel poverty declined. Prices started to rise recently, and that has been the biggest problem in our efforts to tackle fuel poverty. People need to be confident that the prices that they pay are fair. It is wrong that people face unfair prices because of where they live or the method that they use to pay.
The recent Office of Gas and Electricity Markets investigation of retail gas and electricity markets identifies several unfair pricing practices. Ofgem was right when it called on the energy companies to end those unfair practices, and the supply companies have partly responded by addressing excessive premiums charged to some groups of customers. However, there is more to be done. It is also essential that changes are made to ensure that customers, particularly the vulnerable, are not discriminated against. We need to ensure that pricing remains fair, so I support Ofgem’s work to establish licence conditions for suppliers to achieve that. The changes that it proposed in January to the licences of suppliers will change the law to ensure that such unfair practice does not happen again. If that approach fails, I agree that the Government will need to act.
I was pleased that the Government managed to get voluntary agreement for social tariffs from companies. The Bill suggests giving the power to the Secretary of State to mandate social tariffs. That is a serious step and I hope that the Government are examining it in their fuel poverty review. I also welcome the agreement with energy suppliers to increase how much they are spending on their social programmes in the next three years. Already 800,000 customer accounts are benefiting from social tariffs—almost double the number in March 2008. This is the first year of our voluntary agreement with energy companies to spend more on social programmes and that spending will increase further over the next three years.
Despite that positive news, we must not forget that there are still unfair practices from energy companies with regard to prepayment meters. Some companies have backdated bills to customers on prepayment meters. Debts have built up on the old-style meters, often through no fault of the customer after the company failed to update the token meters with price changes that must be done manually. The amount owing has come to light only when the old token meter has been upgraded to a more modern version and customers have then received backdated bills, in some cases for four years. That is unacceptable and I am pleased the Secretary of State is keen for energy companies to do right by their customers in these difficult times by not backdating their bills for months and years and by making efforts to replace the meters.
Energy efficiency is crucial in tackling fuel poverty. The Warm Front scheme has helped 1.8 million householders with new heating and insulation measures, but there are improvements to be made and I am glad that the Government will be working hard to ensure that the result is a fair, efficient and effective programme. A recent National Audit Office report makes a valuable contribution. It is right that the Government are taking steps to improve the scheme and I welcome the hiring of an independent troubleshooter to review the contract. I welcome, too, the increased funding of £174 million since September. I also think that there is a strong case for raising the current grant levels, and I would like to hear the thoughts of my hon. Friend the Minister on that.
Let us be in no doubt, however: the Opposition’s plans to cut the Department of Energy and Climate Change budget would put Warm Front funding under threat for thousands of families. A 1 per cent. cut in the Department’s budget would mean a cut of £80 million in Warm Front funding. That would mean 32,000 fewer of the most vulnerable households getting the help that they need to heat and insulate their homes. Labour increased the money for Warm Front by £100 million in the pre-Budget report, which the Opposition opposed. If the Opposition were to have their way, that would mean another 40,000 vulnerable households not getting the help that they need.
The Government also have a serious and ambitious programme for energy efficiency. They are launching an ambitious package that aims for nothing less than a fundamental shift in our approach and the way we use and save energy at home and at work—an energy revolution. The plan has three elements: first, a street-by-street, house-by-house approach with offers of comprehensive advice, or in other words an “energy audit”; secondly, a financial package that will support whole-house and in some places whole-area makeovers, where payback is linked to the house not the individual, with people better off from day one; and thirdly, a commitment to ensure fairness in what we deliver and the way we deliver it. A community-based approach will often be the way to ensure that we deliver those measures fairly.
We need an energy revolution to keep energy affordable and secure and to make it low-carbon. Labour offers real help now for people to cut their energy bills and reduce their carbon footprint, but preparing for the long term—a low-carbon future—requires a radical shift in the energy efficiency of our homes and buildings, and decarbonising our heat supply. Labour’s ambition is to support and help people make their homes part of that future. People will be offered home energy advice, and the chance to have whole-house treatments, which could be paid for through a financial package, and which should mean overall savings on their energy bills from day one.
We cannot leave fairness to chance. The Government will ensure that the vulnerable get the extra help that they need, working closely with community organisations and local authorities. We cannot leave tackling climate change to chance and to the enthusiasts. All of us can gain by doing our bit. Our ambition is for 7 million homes to get whole-house treatments, including insulation and low-carbon heating supplies, by 2020.
The Government’s flagship tool, the carbon emissions reduction target, is the largest domestic energy efficiency obligation in the EU. Does my hon. Friend think that the Government could do more to encourage our European friends and neighbours to try to match the commitment we have shown in this country?
I agree entirely. “Global” has become something of a buzz word recently, but what we in the UK are trying to achieve should be not only a Europe-wide but a global aspiration.
As I was saying, our ambition is to achieve that whole-house treatment target by 2020, be it privately owned, privately rented or social housing leading the way, with Government support. The heat and energy saving strategy is an ambitious package that aims for nothing less than a fundamental shift in our approach to using and saving energy at home and at work—an energy revolution. It sets out short-term action to help consumers save energy and save money, but it also sets out options for a longer-term strategy to support and encourage everyone to work together and make the changes we need in the fairest way possible.
Success means moving beyond relatively inexpensive and easy energy efficiency measures to more radical ways of saving energy and decarbonising the supply of heat. I am pleased that the Government are making sure that there is comprehensive support for those who need it most. We are doing that by looking at new delivery models to provide house-by-house and street-by-street approaches, targeted particularly at the poorest communities. We are looking, too, at the idea of linking finance to the property, rather than the householder, and at new measures to stimulate community-scale generation. The options that the Government have put forward are of a scale that is different and more ambitious than anything we have considered before.
Our aim is that all the houses for which it is feasible will have cavity wall and loft insulation by 2015. That, in itself, is a very significant task, but we must go much further. By 2020, to cut emissions by a third, the Government will have offered 7 million homes a whole-house refurbishment—not just basic energy efficiency measures, but more radical approaches such as solid wall insulation and new technologies to generate heat and power for the home. By 2030, we will need to have gone even further, with cost-effective energy efficiency measures available to all households, and by 2050, every home will have to be near zero-carbon.
So this cannot be about energy companies helping a few million houses; we have to think bigger than that. That is why the Great British refurb is based on a plan that, over time, will cover every area and every house in every area. We have serious plans to tackle fuel poverty and carbon emissions through energy efficiency measures that would be entirely cut across by this Bill. I doubt the commitment of the Conservative party, which has opposed our measures, including the winter fuel payment. The hon. Member for Havant (Mr. Willetts), the then shadow Social Security Secretary, said the following when opposing it:
“Will the Secretary of State confirm that most of the money has gone not into the minimum income guarantee or the basic pension, but into complicated and indiscriminate special payments such as the winter fuel payment? Does he not realise that pensioners find these allowances patronising and intrusive? They would far rather have that money as part of their guaranteed weekly income, and that is what we offer them.”—[Official Report, 9 November 2000; Vol. 356, c. 457.]
The situation in Scotland is concerning. I have already mentioned the fact that the party that claims to stand up for Scotland is conspicuous in its absence here today. Rural fuel poverty is a particular issue in Scotland, and I am concerned that fuel poverty continues to grow. A recent Government review concluded that fuel poverty is more prevalent in Scotland than in England, that fuel poverty is likely to increase further, and that the energy efficiency measures currently in place are not enough. Most damaging of all, it stated that existing fuel poverty programmes in Scotland are not focused on the fuel poor. Surely the SNP-led Scottish Executive have to accept some responsibility for the situation
I am pleased that the Government are reviewing their policies, and I welcome the fact that the review will examine all three causes of fuel poverty—prices, energy efficiency and income—which I have discussed today. I am pleased that the Government are not dragging their feet and are still committed to their 2016 targets. This Bill is designed to set the Government up to fail, rather than to achieve its stated goal. Co-operating with the Government’s plans would be a much better way for people to achieve their goals, if they wanted to. Uncosted and unrealistic, this Bill, sadly, has to fail.
The Deputy Speaker declared that the Question was not decided in the affirmative because fewer than 100 Members voted in the majority in support of the motion (Standing Order No. 37).
May I begin by apologising for not being able to be here earlier today? I had a surgery in my constituency at the Golden Lane campus, a new school that was opened yesterday by Princess Anne.
Some of the people who came to see me at my surgery wanted to talk about this particularly important issue. I do not know whether one woman who came—she lives at Quaker court—would fall under the definition of being in fuel poverty; certainly, she feels that she does. Hers is a very good example of how complex the fuel poverty issue can be. Her problem is that she is in a three-bedroomed flat in Quaker court, shares a bed with her four-year-old son, has two other sons in another bedroom and a teenager in the third bedroom, and their water-heating system is not big enough for them all to have a shower. She contacted the energy companies and asked for some assistance, and was told that if she wanted to get a new combi boiler, it would cost £3,000. She simply does not have the money to ensure that she has enough hot water to keep her children clean.
Of course, an associated problem is that that person’s household is simply too large for the flat into which she has been put. As some in the House may know, Quaker court overlooks the site of what used to be a school, but which unfortunately my local authority recently sold off. Instead of its building larger homes for people such as her, there will be yet more student accommodation.
This person, this victim of fuel poverty, seemed to me a very good example of how the causes of fuel poverty can be very complex and varied. Fuel poverty is an issue of huge importance to my constituents, particularly after the very difficult winter that we have all been through in the south of England. Many of them have been contacting me about fuel poverty and—again as a result of the weather—about the huge amount of flooding that has occurred and the dampness of flats.
All of us agree that people should not continue to suffer from fuel poverty in this day and age. I feel very strongly about this issue. When I was a child, we lived in a very large house. My mother was on benefits and we had a great shed next door where we used to keep our coal—until it ran out. However, we did have 2 ft of coal dust, and my mother used to try to keep the fire going with it. She was always worried that we would run out of coal dust before the winter finished. We used to keep our coats on in the house, and ice used to form on the inside of the windows. In the end, our problem was solved for us: the bailiffs turned up and chucked us out, so we went into social housing—a smaller house that, thankfully, had a better heating system. The issue of children in fuel poverty is one that I feel very strongly about.
As my hon. Friend the Member for Ealing, North (Stephen Pound) pointed out, this debate is about not just fuel poverty, but what we are going to do about it. It is not an issue on which it is of any assistance to any of my constituents for us simply to grandstand. We need to know what it is that we can actually do, and we need to be involved in real politics to make real change for people and to ask what the best ways are of tackling fuel poverty.
The common way of approaching the problem is to think of the three forces that drive it: low incomes, high prices and poor energy efficiency. The hon. Member for North Southwark and Bermondsey (Simon Hughes) talked about social housing as a possible solution to the problem in itself, but I am afraid that my experience shows that that is not necessarily the case. A couple of women came to see me who are in social housing in 67 Graham street—in new build built by the Notting Hill Housing Trust. I wrote to the trust asking why they had such huge bills, and was told that the properties passed the decent homes test and other tests relating to the thermal comfort criteria within the decent homes standard.
Nevertheless, the women came to speak to me about their huge bills and those of their neighbours. For example, a woman in a one-bedroomed flat is paying £40 a week for her heating. Another woman in a four-bedroomed flat is paying £50 a week for her heating. She says that she has turned off her heating, yet her weekly electricity bill is still £50. People in those flats are switching off their heating so that they are able to pay their electricity bills. The problem with the heating in those flats is that they have what is called a ceiling heater. The heat hits the top of the flats but does not percolate down to the people at the bottom.
That means that people in that block have bills of, for example, £40 a week, or £50 a week not including the heating. One resident pays £40 to £50 a week and says:
“We have switched the heating off. We only use the cooker.”
Another, who has a bill of £25 a week for a one-bedroomed flat, says
“but we’re not using the heater.”
Another resident pays £50 a week and says that that does not include heating. In another flat in the same block, the resident pays £40 a week and comments:
“Can’t heat up the flat. Only do it on Saturdays.”
In a one-bedroomed flat where only one heater is on at a time, the weekly electricity bill is £55 a week. In other one-bedroomed flats, people are paying £25 or £30 a week for electricity but, again, that does not include heating. It seems that despite the snow and the temperatures over the past winter, people in an entire block have not been switching on their heating, yet they continue to get huge bills.
I wholeheartedly support the Bill’s definition of fuel poverty, which is:
“A ‘household in fuel poverty’ is a household that would need to spend at least 10 per cent of its disposable income on all fuel use in order to achieve a temperature of 21ºC”.
The people in the new build social housing that I have described must spend a great deal more than that, which tends to show that the problem is more complex.
I am grateful to the hon. Gentleman. Let me refer him to the case of another individual who contacted me. He is a leaseholder, and I know that the issue is close to the hon. Gentleman’s heart. That gentleman bought his council accommodation believing that that was the best thing to do in the 1980s and thought that it would be a way of investing for the future.
The decent homes standard and its implementation is one of the great achievements of this Government and one that I support wholeheartedly, but what disturbs me hugely is that when residents of a block are told that it is to be put into the decent home standard, it is a matter of dread for a substantial minority living in that block because they are so worried about the major works bills.
The gentleman contacted me to make it clear that he could not afford to pay the bills that the council had sent out for doing up the block, and went into some detail about the costs that he had to meet in order to survive. The paragraph relevant to today’s debate is this:
“I become overdrawn practically every month due to all the payments that I have to make. The pension credit and disability living allowance is just not enough for a couple to survive on when all these payments are due. The DWP gave a winter heating allowance of £200, this was much appreciated but when you consider that the total for our gas and electricity bill for the final quarter of the year was in excess of £360, the allowance doesn’t actually cover it. Surely the government need to make sure the allowance matches the huge price hike put forward by companies such as British Gas.”
People have bought their council flats but cannot afford to meet the cost of a major works programme. On top of that, their heating costs too much—much more than it ought to, and much more than their incomes. That is why, for all of us, particularly for those of us who represent poor and deprived communities, it is such a major issue. We are extremely concerned about what will happen. With climate change and the unpredictability of the weather, constituencies such as mine in the south of England will be hit by colder weather than we have ever experienced before.
We have to ensure that our homes are sound and warm, and that we address the problem of fuel poverty. The question is whether this private Member’s Bill is a practical way to address that problem. I have a number of concerns about the Bill. I have been able to hear some of the debate, and I found it informative. I am concerned about some of the questions raised this morning, but I welcome the fact that the Government are reviewing the issue of fuel poverty and I will look to see what they can do to ensure that we address the problem properly. The ladies from 67 Graham street, the leaseholder whom I mentioned and the woman who came to see me in my surgery today all depend on the Government to address the problem properly and find a solution. I suspect, however, that the solution cannot be found in the Bill.
It is a great pleasure to follow my hon. Friend the Member for Islington, South and Finsbury (Emily Thornberry), who made some telling points in an excellent speech. She always has her constituents’ welfare very much at heart, and I appreciate her coming here following her surgery today. I congratulate the hon. Member for Somerton and Frome (Mr. Heath) on his perseverance, on his success in gaining a place in the ballot and on how he has presented his Bill. I am grateful to him for acknowledging the work being done by the Government and for allowing us to have this important debate.
I have always valued private Members’ Bills, not least because I have successfully piloted two such Bills of my own, under Conservative and Labour Governments. I also pay tribute to Ron Bailey, with whom I worked closely on my Bills, although he has not been so engaged with us on this one. Both my Bills were environmental Bills and both presented the Governments with challenges. But the secret of a private Member’s Bill’s success is the choice of something additional to what the Government are already doing and something that can be complementary to an established policy direction.
Unhappily, this Bill is designed in such a way as to cut across everything that the Government have been doing on fuel poverty and, even more importantly, across the detailed work being done on the strategy in the light of changing circumstances. It also cuts across the consultations already in the public domain on future Government policies on heat saving and energy saving in this country.
The hon. Member for Somerton and Frome suggested that what he was presenting was compatible with our plans, but I am sorry to say that it is certainly not. My hon. Friend the Member for Ealing, North (Stephen Pound) suggested that the Bill was just aspirational or permissive. It is neither.
This is a crucial part of the argument between us. The Minister says that the Bill is incompatible with her plans. I should like her to say why. Presumably, she intends to have a strategy at some point. If so, will she tell me the time scale that she envisages for getting it in place, so that I can amend my Bill to make it compatible with her plans? As I have said all along, I am keen to work with the Government on this issue, not against them.
I appreciate the hon. Gentleman’s willingness to work with the Government. Unfortunately, I think that he has been poorly advised. As I will go on to say, the point central to his Bill and how it is framed, as he acknowledged today, is that there is an absolute duty. The other issues are to do with the consultations being conducted, which cannot be prejudged in respect of our adopting a new and different fuel poverty strategy from that which exists under current legislation.
Fuel poverty and energy efficiency are huge and complex subjects of which we now have considerable experience. When I became a Minister at the Department of Energy and Climate Change, I was delighted to have the portfolio because it is an important part of the Government’s progressive agenda for people and the environment. It quickly became apparent that the huge rises in fuel prices had driven the achieving of our targets off course.
I share the concern of all those both inside and outside the House for people whose lives are blighted by living in the cold. As the hon. Member for Somerton and Frome said so passionately in his opening remarks, it cannot be right. I share the genuine sentiments expressed by Members on both Opposition Benches and I thank them for their compliments. It is because we are deeply concerned that we have had, and continue to have, a raft of measures in place and have increased funding in the current spending round.
Understandably, however, non-governmental organisations with an interest in the field have spoken up on behalf of their constituents. That is their job and we respect them for it, but the Government have to take decisions for the whole country and the whole economy. That is why when the Warm Homes and Energy Conservation Act 2000 came into force, it set targets that the Government had to reach
“as far as reasonably practicable”.
That is all any Government could commit to do in primary legislation.
The Bill would remove that consideration from the duty on Government and I am extremely grateful to my hon. Friend the Member for Hendon (Mr. Dismore) for so clearly setting out why the Bill would not work. Under existing legislation, a person is defined as living in fuel poverty if they are a member of a household living on a lower income and in a home that cannot be kept warm at reasonable cost. The Government’s fuel poverty strategy sets out that being fuel poor means spending more than 10 per cent. of income on fuel to maintain a satisfactory heating regime, generally defined as 21° C in the living room and 18° C in the bedroom.
Fuel poverty is not just about income, however; it is a complex interaction between fuel costs, household income and household energy efficiency. All three factors are variable, in that households can go into and out of fuel poverty, as the hon. Member for Wealden (Charles Hendry) effectively outlined in his speech. A person on a low income with an unclaimed benefit entitlement can be taken out of fuel poverty simply by making a successful claim and, as he suggested, a person who is not in fuel poverty could become so on the loss of their job.
Critically, if fuel prices rise dramatically, as they have done in recent years, large numbers of people will become fuel poor regardless of all other circumstances. My right hon. Friend the Member for Holborn and St. Pancras (Frank Dobson) made a powerful speech on the subject of fuel prices. My right hon. Friend the Prime Minister has used his very best efforts for an international agreement to put controls on the steep rises in the price of the energy we all require. Furthermore, we now face unprecedented times of global recession.
Our first and overwhelming objection to the Bill is its attempt to impose an absolute duty on Government. Clearly, that is a response to the recent High Court judgment, to which my hon. Friend the Member for Hendon referred.
In the remainder of her speech will the Minister make clear to the House her and the Government’s intentions? These matters, especially the issue she has just raised, can be addressed in Committee by amendment and debate, and a different Bill could emerge. Is it her intention to speak at such length so as to avoid giving the House the opportunity to divide on the Bill?
The hon. Gentleman may have noticed that it was the will of the House that I have only just begun my speech, because so many Members wanted to contribute to the debate. I have an enormous number of questions to which to respond and, in addition, I want to make clear to the House what the Government are doing. Some—if not all—of the remarks that have been made today appear to be suggesting that we have not put our backs into the issue and that we are not determined to reach our goal of ending fuel poverty for all by 2016. I need time to explain those matters to the House.
In response to the hon. Gentleman’s point about amendment in Committee, we have made it clear to those who sponsored the Bill and advised on it that the duty was a key point. The promoter is very much aware of that. The provision was in the draft Bill, and when it was published—only at the end of last week—it was still there.
I think that my hon. Friend the Member for Somerton and Frome (Mr. Heath) would be willing to consider applying the sort of principle that is used in the Climate Change Act 2008, which was passed by the Government only in November. That Act imposes an absolute duty, but has a qualification in case external circumstances change. However, I have not negotiated that with him. Let me say, from the Front Bench, that if the Minister has the good faith that I know she has long shown on environmental issues, and given the wisdom, commitment and good faith of my hon. Friend, we could come up with a measure in Committee with which the Government and my hon. Friend would be satisfied.
May I explain why I find it difficult to accept that? The opportunity was there in the Bill. We have considered very carefully what the motivation might be behind introducing the Bill. I believe—in fact it has, I think, been confirmed—that it is a response to the recent High Court judgment, which I know is on appeal. The judgment was in favour of the Government on the issue of our fuel poverty strategy. We interpret the Bill—I refer once again to the remarks made by my hon. Friend the Member for Hendon—to mean that in future, no matter what the factors outside the Government’s control, the Government would be held to an absolute duty. Taken to its logical conclusion, that suggests that if the matter were tested in court, the expectation is that the Government would be ordered to comply with the duty to the exclusion of everything else.
In support of what I am saying, may I bring to bear the comments of the Association for the Conservation of Energy? ACE, which I understand is the drafter of the Bill, described the High Court ruling as having made the targets
“in effect discretionary, not absolute.”
It goes on to say that that was “a bitter blow”, and it says that the Bill would
“reinstate the duty to end fuel poverty.”
That is an absolutist position, and it cannot be acceptable to any Government. Let me be absolutely clear: the current legislation has not been overturned. The strategy remains in place, as do the policies that go with it as well as our commitment to meeting the 2016 target of ending fuel poverty as far as is reasonably practicable.
My hon. Friend the Member for Chorley (Mr. Hoyle) referred to the number of people who have gone out of fuel poverty. Between 1996 and 2004, the number of households in fuel poverty fell from 6.5 million to around 2 million. Those were times of low energy prices, and the figures clearly demonstrate the impact of price factors and rises in income levels over that period. It is worthy of note that if energy prices were to fall back to 2003 levels for a sustained period, the number of fuel poor would be likely to fall below the number recorded in 2003, as a result of the rise in average incomes and in household efficiency since that time. So it is a moving target.
As I said earlier, the number of households in fuel poverty and the identity of the householder do not remain static. Around two thirds of fuel-poor households are found in the lowest income decile. Research shows that over half of all fuel-poor households contain at least one person over the age of 60, and 40 per cent. of fuel-poor households contain somebody with a long-term illness or disability. As regards the energy efficiency of properties occupied by the fuel poor, 40 per cent. had a standard assessment procedure rating of less than 30, and so were within band F. The average figure in England is 50, which is within band E. Just 1 per cent. of those in fuel poverty lived in a property with a rating of more than 65.
The latest available figures for the number of those in fuel poverty, which have been quoted today, were for 2006, but we have made estimates for increases since then that suggest that, last year, the figure in England probably went beyond 3.5 million people.
The Bill takes a radically different approach towards addressing fuel poverty from that of the existing strategy, despite the fact that that strategy was the subject of extensive consultation with the same organisations and non-governmental organisations as those consulted by the hon. Member for Somerton and Frome, and was probably supported by all those who seek to promote the Bill. Our strategy aims to tackle, as far as reasonably practicable, the three determining factors that contribute to fuel poverty.
Let me take prices first. As I have said, the Government have little influence over global trends. However, we are tasking Ofgem with providing more advice and action on prices. We know from its first returns that retail costs peaked in December 2008, a few months after the peak in wholesale prices. We have repeatedly called for energy suppliers to pass on the reductions and now all the major household energy suppliers have cut at least some of their tariffs. Ministerial colleagues and I have made it abundantly clear that we believe that more could be done.
We have also welcomed the Ofgem probe that identified several matters of cause for concern. Such concerns have been frequently highlighted in this Chamber, and they were highlighted passionately today by my hon. Friend the Member for Slough (Fiona Mactaggart). According to Ofgem’s analysis, standard credit customers and some high-consumption prepayment meter customers were paying a higher premium in comparison with direct debit customers than could be justified by the cost differential associated with those payment methods. Furthermore, some online direct debit tariffs were at least initially below cost.
Suppliers have already changed some of their pricing in response to Ofgem’s findings and they have responded to pressure from the Government and Ofgem in recent months, with more than £300 million being taken off the premiums paid by customers, including prepayment meter users. They have indicated that further savings of £200 million will be made for those off the gas grid. It is important that consumers can have confidence that pricing will be fair in the future, too. Ofgem has just consulted on a range of potential remedies to ensure that and they include requiring the prices charged for different payment methods to be cost reflective and prohibiting unfair price discrimination or cross-subsidisation between gas and electricity customers. I expect Ofgem to announce the outcome of its consultation shortly as well as to set out how it will take work forward to ensure that customers get a fairer deal.
We expect suppliers to co-operate with Ofgem and agree to the necessary changes to licences. However, the Government have made it clear that should that agreement not be forthcoming, we will not hesitate to act to ensure that the necessary protections are put in place. The most recent statistics show that in England about 18 per cent. of the fuel poor use prepayment meters for electricity and 12 per cent. use them for gas. As my hon. Friend the Member for Slough told us, some customers on token prepayment meters, many of whom are struggling to make ends meet, can suddenly find themselves in debt after their supplier has backdated price increases when meters are reset or replaced. I would therefore urge suppliers, in the light of their social obligations, to treat those facing payment difficulties as sensitively as possible during the process of replacing token meters. Of course, I am happy to look at my hon. Friend’s suggestions.
My hon. Friend the Member for Chorley described how sharp rises in direct debits are an unwelcome shock to households. These rises can be justified, but suppliers must explain changes clearly and exercise the kind of care that my hon. Friend seeks. I am sure that Members will welcome the fact that the Secretary of State for Energy and Climate Change has written to E.ON to ask that vulnerable prepayment customers are not given large backdated bills.
Ofgem has identified as a key problem the inadequate explanations from suppliers about their rationale for changing direct debits and the methodology for setting them. It is consulting on new rules to enable consumers properly to assess whether new rates are appropriate. We look forward to seeing the results from that consultation. The Bill would not remedy those problems, but we are determined to do so. Unfair pricing must end, as my hon. Friend the Member for Dundee, West (Mr. McGovern) said. It is our intention to take action if Ofgem does not achieve the changes that we believe to be necessary.
This brings me to the direct financial support that the Government have given to tackle fuel poverty. Since 2000, we have spent more than £20 billion on payments and services. The winter fuel payment was introduced for pensioners in an attempt to help those in fuel poverty and to reassure those who were afraid to turn up their heating in cold weather. Its value has increased from just £20 in 1997-98 to £250 this year for all pensioners, and £400 for the over-80s. There was an interesting exchange between the hon. and learned Member for Torridge and West Devon (Mr. Cox) and my hon. Friend the Member for Ealing, North about the value of means-testing and universal benefits. This is a live debate, but, as I have said, the winter fuel payment was introduced not only to tackle fuel poverty but to give reassurance to a wider group of pensioners. Winter fuel bills account for 60 per cent. of the year’s total fuel bill, and the payments make a substantial contribution to meeting them.
Cold weather payments have also featured in the debate. Fortuitously, the payments were increased this year from £8.50 a week to £25 a week. Owing to the winter being excessively cold, we have so far paid an estimated 8.3 million cold weather payments, based on the temperature criterion for Great Britain being met up to 15 March. That is more than 1 million more payments than the previous highest level, and more than the combined total for the past seven years. An estimated £209 million has been paid, which is more than three times the previous highest level, and more than the combined total for the past 15 years. I regret the circumstances described by my hon. Friend the Member for Slough, and I hope that the point she made about her pensioner constituents failing to receive such payments will have been heard by my colleagues at the Department for Work and Pensions.
I was also asked about weather stations. The scheme links groups of postcode areas to weather stations that report to the Met Office on a daily basis. Each postcode area is assigned to a station with the most similar mean weather temperature. It is not necessarily assigned to the nearest station. I appreciate that some hon. Members might not find that satisfactory, but that is the explanation. We also attempt to provide a further income boost by including benefit checks in some of our specific fuel poverty delivery programmes.
After prices and incomes, the third, vital factor influencing fuel poverty is, of course, the energy efficiency of homes. That is the basis of the Bill before us today. I acknowledge that the UK’s housing stock falls far behind that of most of our continental neighbours, and that all Governments—and, indeed, the building and construction industry, and householders—have been slow to insulate our houses. This is undoubtedly a legacy of earlier cheap energy.
That is why obligations have been placed on energy companies to deliver energy efficiency measures to households. Building on a previous obligation, we have introduced the carbon emissions reduction target, which runs until 2011. Forty per cent. of that programme of insulation must be directed at a priority group—including the most vulnerable people. Through the CERT, the energy suppliers are required to deliver carbon savings, which are provided through the installation of energy efficiency measures, and we are now consulting on increasing the target for 2008 to 2011 by some 20 per cent. It is estimated that that would drive about £560 million of energy supplier investment into households across Britain, £300 million of which is expected to be in the priority group of households. In total, we expect energy suppliers to need to invest about £1.9 billion in energy efficiency and low-carbon measures into priority group households across Britain between 2008 and 2011.
Overall, those vulnerable customers are more likely than the average householder to be in danger of falling into fuel poverty, and vulnerability to fuel poverty increases with age. Among householders aged 70 or more who do not claim benefit, the average fuel poverty level is around 50 per cent. higher than in the overall population. That is why we have expanded the priority group to include not just low-income customers, but all elderly customers aged 70 and over.
Through the CERT, a range of traditional energy efficiency measures are installed, and there is also an incentive to encourage the insulation of more costly measures appropriate for hard-to-treat homes, which was raised by several hon. Members today. We believe that this is an important step, which has already resulted in some 40,000 homes benefiting from solid-wall insulation in the past three years. By 2011, it is estimated that the CERT will have contributed to around 6 million households to realise significant energy bill savings.
Another area of major activity on energy efficiency, benefiting many poor households, is, of course, the decent homes programme, which has already been referred to in the debate. In the social housing sector, the decent homes programme has helped to transform the standards of many homes; the work completed or planned will have had such an impact by 2010 that we expect 95 per cent. of social housing to have met or exceed the standards set, including the provision of a reasonable degree of thermal comfort.
When we came to power in 1997, we faced a backlog of repairs with a value of £19 billion. Some 2 million homes were failing to meet the basic decency standards and it is only through the sustained and long-term commitment that we have set out, and our ensuring that it is delivered, that we can hope to transform that vital part of the housing stock. We set a target in 2001 to make all social housing decent by 2010. As I have indicated, more than £29 billion has been invested since 1997 and the number of non-decent social homes has been reduced by more than a million. Between 2001 and 2008, we put in more than 1 million new central heating systems into council homes. From my own constituency experience, I recall that I used to have many people coming to see me year after year to complain that their council houses were bitterly cold in the winter, but, recently, no one has come to see me with that particular complaint.
A total of more than £40 million will have been invested by the end of 2010 and work will have been completed on 3.6 million homes, with improvements for 8 million people in total, including 2.5 million children. I can thus echo the sentiment expressed by the hon. Member for North Southwark and Bermondsey (Simon Hughes) about the significant contribution made by council housing to energy efficiency.
All those are important considerations, but the Warm Front scheme remains the Government’s main programme for tackling fuel poverty in the private sector, having developed from the original home energy efficiency scheme. Warm Front has assisted almost 2 million households since its inception in June 2000. Last year alone, we assisted almost 270,000 households, and this included the provision of insulation for more than 58,000 lofts, filling more than 30,000 cavity walls, installing 20,000 new central heating systems and providing 74,000 new boilers. Since 2000, the Government have provided more than £1.8 billion of funding for Warm Front, which is unprecedented in the level of investment and commitment to delivering energy efficiency measures to vulnerable households.
Warm Front has been a real success, but the Minister will have heard the various concerns expressed about it in the debate, particularly the lack of competition and what appears to be a tendency to over-pricing and poor workmanship. Will she comment on that?
I will, as it is absolutely my intention to respond to the debate, which I will do in just a few minutes’ time.
I wanted just to remind everyone that we have increased funding to more £950 million in the current spending round until March 2011, including an increase of £74 million announced in September and a further increase of £100 million in the pre-Budget report. We are also providing £50 million to ensure that people receive the help that they need sooner rather than later.
As was pointed out by my hon. Friend the Member for Dundee, West, it appears to be Conservative party policy to cut the budget of the Department of Energy and Climate Change. That would put these programmes at risk, although I took what was said by the hon. Member for Wealden as a plea for us to put even more money into the Warm Front scheme.
My point was that although the Government might have put £100 million back into the scheme, there is still £76 million less than there was before they took out £100-odd million. The Government may make big noises about how much they are putting back, but the fact remains that the original amount has been cut.
We are putting £350 million into a new community energy-saving programme. Adjustments are being made. We know that we need to make changes. However, we are making a huge investment.
Members have raised issues relating to Warm Front, eaga and contracts. We are very alive to the issues that have been raised with us, both today and in letters to the Department and to me. We are examining the existing contract in depth to ensure that it provides value for money and is being run as it should be. Indeed, we are examining all aspects of the Warm Front scheme, because the contract ends in 2010. We want all the benefits that we think we can obtain from the scheme to be in place during the forthcoming financial year, and we want to improve the scheme wherever that is possible.
In the longer term, we will look at delivery models. We understand the point that has been made on the subject. Companies directly related to eaga were set up at one point because there were problems with finding sufficient installers, and there was a capacity problem. Whether the same model is appropriate for the future is an issue that we are happy to hear debated.
As we review all aspects of our fuel poverty programme and examine the Warm Front scheme in depth, we are keen to tackle some of the problems that have been raised in relation to targeting, the contributions that people must make, and better technologies. For instance, we are considering the introduction of low-carbon alternative technologies. We are in the process of installing 125 solar thermal units to establish whether the fuel savings are as expected, and to assess their suitability for use by vulnerable households. We are also developing a pilot for the inclusion of air source heat pumps to be fitted under the Warm Front scheme.
As well as providing installations and insulation under the scheme, we carry out benefit checks. Previously such checks were offered only to applicants who were not eligible for a Warm Front grant, but in 2007 we announced that the service would be widened to all Warm Front applicants. That has made a tremendous difference. Since April 2008, over 65,000 benefit entitlement checks have been completed. A new or additional benefit eligibility has been identified in 45 per cent. of cases, which has resulted in an average weekly increase in household income of £31 per applicant, or £1,600 per year.
The National Audit Office has raised a number of issues, as has the Select Committee, and we are responding to those representations. I pay tribute to my hon. Friends the Member for Chorley, for Hendon and for Rossendale and Darwen (Janet Anderson) for raising with me specific cases on behalf of their constituents. I assure them that in-depth consideration is being given to all of them.
What are we achieving through Government investment and the actions of energy companies? We are making steady progress in improving the energy efficiency of homes, while acknowledging that there is still a long way to go. The question is: does the Bill offer the best way of securing greater progress in the tackling of fuel poverty? It is not obvious that it does. One of the serious matters of debate for all of us who are concerned about fuel poverty is how to target programmes effectively, but the Bill offers no means of targeting households; rather it tackles buildings.
The Minister will be aware that we have six minutes left. The Conservative Front-Bench team, my hon. Friend the Member for Somerton and Frome (Mr. Heath), and the Liberal Democrat Front-Bench team have said that they are willing to collaborate to produce an acceptable Bill. Given that the Minister has now spoken for longer than anyone else, apart from my hon. Friend, would she be willing to consider taking her arguments into Committee, rather than continue them past 2.30, when the House will not have a chance to decide on the Bill today?
I thank my hon. Friend for that intervention. I want to get to the crucial part of the debate, which is the issue of whether it is appropriate to put all the targets into the energy efficiency programmes and the particular bands that the Bill provides for. It is a perfectly legitimate approach, but the Government are already considering many more comprehensive programmes of energy efficiency. As it stands, the Bill proposes using standard assessment procedure ratings, and requiring all fuel-poor households, except those defined as hard to treat, to be upgraded to a SAP 81 rating by 2016. That ignores the diversity of the UK housing stock, more than 40 per cent. of which has a SAP rating of between 39 and 54, and ignores the diversity of the people in them. Coupled with an absolute duty, that is an extraordinary commitment to seek to bind any Government to.
Hon. Members seem sometimes to forget that there are only two ways of providing finance for such programmes. Either the obligation falls on the energy companies and they recoup the costs by loading them on to everyone else's bills, or the obligation falls on the taxpayer. While the principles behind the Bill—improving energy efficiency in a bid to prevent fuel poverty—are sound, the targets are uncosted, unrealistic and not thought through.
The Bill proposes that existing homes with fuel-poor inhabitants should be upgraded to a SAP 81 rating—that is, a band B grade—or a band C rating if they are hard-to-treat homes. As the hon. Member for Somerton and Frome has said, he is prepared to reduce that level, but it is currently estimated that only 1 million-odd homes in Britain today have been brought to the band C standard. Indeed only 30,000 properties in England are at the band B standard. The average SAP rating of all homes is only 50 at the moment. Therefore, even with the proposals that he might make, we think that this is an unrealistic target.
The hon. Lady knows perfectly well that I have already said that this is a matter that we can discuss in Committee. She is clearly determined to talk the Bill out today. I want her to address one issue. She has returned time and again to the legal duty, which she says is so abhorrent. I have a quotation from the hon. Member for Oldham, East and Saddleworth (Mr. Woolas), a former Minister in the Department. He said on 27 November 2007, only a couple of years ago,
“I can assure you all that we remain committed to our legal duty under the Warm Homes Act to ending fuel poverty by 2010.”
There were no caveats then. When did the Government change their minds on whether they should have a legal duty? Was it the Treasury, or was it simply because they are failing in their targets?
The hon. Gentleman has completely ignored the points that have been made consistently from the Labour Benches. It is in the original legislation that was passed by the House—it is about what is reasonably practicable. We have not changed our mind. I have said repeatedly that we remain committed to our target.
The estimated cost of bringing a property up to the band C rating would be between £10,000 and £20,000, depending on the type of property. We think that to bring all properties currently occupied by fuel-poor households to at least SAP 81 rating, or indeed SAP 69 rating for hard-to-treat homes, would cost in the region of £50 billion. Although the technology is improving all the time, we cannot be sure at this stage that the technology will exist to bring all existing homes up to the required standard, by the time proposed in the Bill. Regrettably, therefore, we cannot accept these proposals as the right way forward, but that does not mean that we do not accept the imperative to make a step change in domestic energy efficiency to meet both our climate change and fuel poverty agendas.
Since my Department was formed just six months ago—
The debate stood adjourned (Standing Order No. 11(2)).
Ordered, That the debate be resumed on Friday 12 June.