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Energy Bills

Volume 578: debated on Thursday 3 April 2014

There are three main actions we are taking to help households with energy bills, including direct financial help, improving competition and energy efficiency. With direct financial help, the coalition introduced the warm home discount, which will take £140 off the energy bills of over 2 million of the poorest households this year. We permanently trebled cold weather payments, and we continue to spend over £2 billion a year on winter fuel payments. Last December, we reviewed Government policy costs, to take an average of £50 a year off a household’s bill.

Today, 3.4 million people pay their energy bills with their credit cards. Although some will do that to manage their finances efficiently, half report that they are doing it because of the rising costs of energy. Is it not about time we had a price freeze?

A bit of a non-sequitur there! We have made it very clear that we are doing everything we can to help the people on the lowest incomes, and we shall shortly be publishing our fuel poverty strategy, the first in more than a decade. It is interesting to note that when we considered how fuel poverty was measured under the previous Government, we found it was very inaccurate. We have therefore improved it so we can get to the people who are really struggling. The hon. Gentleman knows in his heart of hearts that the price freeze is a complete con. It will not help consumers, but it will undermine competition and prices will end up going up.

The over-75s are the most likely to live in the least energy-efficient homes and are most vulnerable to cold weather, yet they are the least likely to switch energy suppliers so they often pay more than they need to. Will the Secretary of State back Labour’s call for all over-75s to be put on to the lowest possible tariff?

That is what is happening through the retail market review. Later this year, any dead tariffs will go and energy companies will be required to put all their customers on the lowest tariff according to their payment preferences.

The Secretary of State mentioned going back to the 1970s. I hope he has seen the Office for National Statistics figures published yesterday on hourly pay rates, which showed that on average they are down 7.6%, and twice as much in construction. Why can the 36,000 households in my constituency that would benefit from a price freeze not enjoy the £120 they would have if he implemented such a freeze?

Because many of those constituents will benefit from the policies we are already implementing and many will be able to get much greater benefits in reduced bills by switching, using the increased competition this Government have made possible.

Since the Tories privatised the energy companies, things have got worse, with more than 6 million households now behind on their bills. When will the Government stop tweaking prices in the energy sector and take on the energy giants that are making billions at the expense of ordinary people in this country?

The hon. Gentleman really is suffering from amnesia. There was a 13-year period in which Labour could have done something about that and failed. In fact, Labour took price controls off. The leader of the hon. Gentleman’s party refused to refer the energy markets to the Competition Commission; this Government have done that.

Some of the highest fuel bills and worst fuel poverty are faced by people in rural areas who are off the gas grid and by the small but even more vulnerable group of people who do not even have mains electricity. Is my right hon. Friend going to introduce some targeted measures to help these vulnerable groups?

My right hon. Friend is absolutely right to point out that many households that are off the gas grid and the small number that are off the electricity grid suffer high energy bills. Interestingly, the new analysis we have done for our fuel poverty strategy shows much more clearly than the measures used under the previous policy that that is a key group of people we need to help. That is what we will be doing very soon when we produce our draft fuel poverty strategy, in which he will see a number of measures.

Further to the question asked by my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith), when will off-grid rural residents get a fair share of energy company obligation spending? Will the Secretary of State ensure that rule changes do not create another loophole by focusing on off-grid customers in general rather than off-grid rural customers in particular?

My hon. Friend is absolutely right. If he reads the consultation on the changes that we want to make to the energy company obligation, he will see that part of that would involve a much bigger part of the ECO going to off-gas grid households.

The private rented sector has the highest proportion of the most energy-inefficient homes, which leads to high energy bills and fuel poverty. Does the Secretary of State agree that we need a robust and enforceable minimum standard for all such homes, and will he explain the failure of the Government’s proposal to specify that that minimum standard should be at least an energy performance certificate band E for all homes?

I am grateful to the hon. Lady for that question. She will know that this Government brought in a power in the Energy Act 2011 that would allow us to introduce legislation and regulations for the private rented sector. We plan to consult on that soon and take the sort of measures I think she will support.

The most sustainable way to cut bills is to improve the energy efficiency of our homes. On 16 January the Minister of State, Department of Energy and Climate Change, the right hon. Member for Bexhill and Battle (Gregory Barker), told the House:

“we have extended the ECO out to 2017 and increased the number of people that it will help.”—[Official Report, 16 January 2014; Vol. 573, c. 987.]

Will the Secretary of State explain why the impact assessment published by his Department on 5 March says that 440,000 fewer households will get help with energy efficiency following the changes to the ECO?

My right hon. Friend the Minister of State is right. The reduced amount of solid wall insulation in the proposed changes to the ECO means that the money can go further and help more households.