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Fuel Inefficiency

Volume 503: debated on Thursday 7 January 2010

Fuel poverty is caused by three factors: incomes, prices and household energy efficiency. We are acting on all three, including through higher winter fuel and cold weather payments this winter, and through compulsory help with bills for the most vulnerable, which is being legislated for in the current Energy Bill. In the pre-Budget report, an extra £150 million was provided for the Warm Front programme next year, building on the 2 million households helped in the last decade.

I am grateful to the Secretary of State for that answer, but he will know that, especially in cold spells such as the recent one, it is those in the most energy-inefficient homes, which tend to be the hardest to treat, and those who use expensive sources of heating off the gas grid such as heating oil and liquefied petroleum gas, who suffer most. Despite the warm words about such homes and about the people who use those energy sources, precious little has been done to warm them up. They tend to come at the end of the queue. What can the right hon. Gentleman say to assure me that in future, people in hard-to-treat homes off the gas grid will come at the front of the queue?

I recognise that that is an issue to consider throughout the country, including in the hon. Gentleman’s constituency, and I shall try to explain our strategy to him. First, we have said that social price support will be focused on electricity bills, to ensure that everyone gets the benefit of it, not just those on the gas grid. Secondly, we have recently increased the amount that poor households off the gas grid can get under Warm Front to a £6,000 maximum grant for oil-based or renewable heating systems. Thirdly, the renewable heat incentive is being introduced, precisely to encourage the take-up of different forms of heating by those who are not on the gas grid, and fourthly, the community energy-saving programme will work in rural areas to see what can be done to provide whole-house efficiency. There is more that we can do, but we are trying to make a difference to the households that are difficult to reach.

Will my right hon. Friend say something about the current Warm Front funding, and how long it is taking individual households, particularly those that do not have central heating or whose boilers have been condemned, to get action? There seems to be some concern that it is taking up to six months. In this weather, that is six months too long.

My hon. Friend asks an important question. The amount of money allocated to the Warm Front programme was due to fall next year. Thanks to the Chancellor—in tough times—making the decision to allocate another £150 million to it, the amount of Warm Front money will be significantly enhanced next year. That should help with some of the queuing issues to which my hon. Friend refers. Warm Front is a very popular programme—lots of households want to take advantage of it—and it is good that the Chancellor recognises both its importance and its success, and has provided more resources for it.

Now that we have reached the 13th, and coldest, winter of this Labour Government, what excuse is there for the fact that according to Government figures, only one in 100 British households is properly insulated, when lack of insulation is the biggest contributor to fuel poverty in this country?

It is characteristic of the Liberal Democrats to blame the Government for the weather. On the hon. Gentleman’s serious question about energy efficiency and insulation, there is more to do, but it is important to point out that under our programmes, 1.5 million homes a year are being insulated and getting the help they need. The Warm Front programme, which did not exist before, has helped 2 million homes since its inception. There is more to do. That is why we are planning a decade-long improvement in energy efficiency, including a pay-as-you-save mechanism, to make it possible to do more.

The Secretary of State has given us a piecemeal answer to a much bigger question. Before his Government are frozen out by the electorate, is he willing to commit himself today to a national 10-year warm home programme and to support the amendment to the Energy Bill that my hon. Friends and I have tabled, which would mean that the programme could start this year?

I will look at the amendment—but the last Bill that came forward from the Liberal Democrats was an uncosted shopping list, with no basis for paying for it. That is a luxury of opposition but not a luxury of government. We are planning, and I can commit to, a national energy programme over the next 10 years. We are consulting on it, and will have more to say about it in the coming weeks.

Ofgem, the regulator, has a very important role in reducing fuel poverty, but the Public Bill Committee on the Energy Bill has just heard evidence that it does not necessarily have the confidence to know legally when it can intervene to force companies to do more. Will my right hon. Friend comment on that, and say how the Energy Bill will help to make it clear to Ofgem what responsibilities it has to help people?

I look forward to reading the report of proceedings in the Energy Bill Committee—it sounds as if many interesting things were said. One purpose of the Bill is precisely to strengthen Ofgem’s powers in a number of respects and to make it a more proactive regulator—a regulator that not only relies on competition to help consumers, but realises that it has a duty to be proactive on their behalf. It has done more of that in the past year, including taking action on prepayment meters and other issues, but I am sure there is more to do.

Has the Secretary of State read the report on fuel poverty published in 2008 by the Select Committee on Business and Enterprise? It said that to keep fuel affordable, increasing gas storage

“is now an issue of national importance and should be a high priority in domestic energy policy.”

What increase in storage capacity has there been since then?

More gas storage is coming on line, including the Aldbrough gas storage project, which recently completed its first phase. The hon. Gentleman is going around saying that gas storage is a big problem for the UK and citing figures, but National Grid is quoted in the papers this morning as saying that his figures are meaningless, because they ignore the role of the North sea, which provides 50 per cent. of our gas storage, and the role of UK import capacity.

The Secretary of State should listen to the Select Committee and note that North sea production is in decline, and he should listen to Lord Hunt of Kings Heath, his junior Minister, who said that the new storage capacity opened in the past year has been the equivalent of five hours’ worth—which is about as much time as it takes the Secretary of State to decide whether or not to back the Prime Minister. Gas storage helps to offset fuel poverty by allowing us to buy supplies when they are cheap in the summer, to be used in the winter. Is he aware that if we had had just half of France’s storage capacity, British consumers could be paying £1 billion less for their gas this winter? What is his policy on how much gas storage is needed?

We need more gas storage, and there are more projects planned. The hon. Gentleman has cited figures for gas storage, but The Independent this morning says that

“the National Grid dismissed the calculation as a ‘meaningless number’ because it ignored both the amount of gas imported and that nearly half of UK demand is met by North Sea production.”

We do need more gas storage, but it is worth saying that at the beginning of this week gas storage was 80 per cent. full in the UK. The hon. Gentleman claims that gas storage is somehow an issue in this cold weather, but he knows that that is complete nonsense.

Is it not clear that when fuel poverty is soaring, we have too little gas storage capacity, and the Government have said that they expect power cuts by 2017, they are—in this winter of discontent with, and within, the Government—taking us back, with every day that goes by, to a world that we thought we had left behind in the 1970s?

I do not know whether that was a question, a statement or something that the hon. Gentleman prepared in front of the mirror this morning. Frankly, he will have to do better. Playing politics with energy security and gas storage, and alarming people, is the wrong thing to do.