Before we start the debate, I have a brief announcement. A digital debate has taken place ahead of today’s debate on fuel poverty. Mr Speaker has granted a derogation to allow the use of electronic devices in the Public Gallery for the duration of the debate—although there do not seem to be many people in the Public Gallery. Devices should be silent and photos must not be taken.
I beg to move,
That this House has considered fuel poverty.
It is a pleasure to serve under your chairmanship, Mr Hamilton. The independent charity National Energy Action estimates that two thirds of working parents will not meet their energy costs. Alarmingly, it has discovered that 67% of people with disabilities are already signalling struggles. Tomorrow, the Chancellor will set out Government proposals for spending and there is an opportunity to take action on poverty. There are large opportunities—big things that can be done—and other straightforward measures that the UK Government can take forward to support those under pressure and to reduce costs.
Fuel poverty is a thief. It creeps into homes virtually unnoticed. It steals into people’s lives, begins taking people’s health, starts stripping them of their dignity and forces them to make choices that none of us would want to face. It makes its mark over years and months, often with the victim unaware of its progress in the first instance until the bills start hitting the mat.
People expect to be able to switch on the lights. If we find our house is getting cold, we want that cold vanquished. People should not be living in uncomfortable houses but, at first, they try to get by. They see whether they can cope. They make do. They make changes to the way they run things, and they make choices. They might turn the heating down or use it a little less; they might put on some more clothes. They will do more with their household budget to try to do what they can. They basically try to manage the impossible, but that becomes harder as next month rolls around and they have to go again, so they make choices about what groceries they buy, what they get for their children and what clothes they wear. Another bill hits the mat, and the worry starts to bed in and the sleepless nights take effect, and then the dreaded red bills start arriving and dignity starts to be stripped away.
The cycle of mental and physical deterioration caused by fuel poverty starts to work on people’s health. Children in the cold have issues with concentration; it affects their homework and, of course, their future chances in life. Children are also at risk of respiratory problems. Many hon. Members present will have knocked on doors during the election campaign to speak to people who are fighting fuel poverty in damp houses and who complain about their children being unwell, but it affects adolescents, too. Many mental health problems, once the contributing factors are stripped out, can be accounted for by fuel poverty. I was surprised by a statistic from National Energy Action that fuel poverty is a bigger killer than road accidents, alcohol and drug misuse combined.
The nations of the UK are split into 14 electricity regions, but in the highlands in my constituency of Inverness, Nairn, Badenoch and Strathspey, and across other nearby constituencies, our consumers are having to face electricity tariff charges of 2p to 6p a unit more than people elsewhere. There are parts of the highlands where fuel poverty has hit 70%. Electricity is charged at a premium in the coldest and darkest places. We are told that the cost of transmitting power makes electricity more expensive for people in the highlands, which is a terrible irony in a place with great renewable energy resource and a history of energy expertise. Of course, there is enormous renewable energy potential not only throughout Scotland but throughout the UK and Europe.
My hon. Friend is making a valid point. Would it not be better to address fuel poverty by having a strategic overview of the electricity system? That would mean a fairer transmission charging system in the national grid that allows further renewable energy in the area about which he is talking. Does he share my concern that electricity poverty can only get worse following the deal to sign the Hinkley Point C agreement with a £92.50 per megawatt-hour strike rate, which is twice the market rate, with Government plans for more nuclear power stations to come?
I agree with my hon. Friend that that is a clear problem. Later, I will outline more measures that I believe could be taken in addition to the ones he rightly points out.
The highlands and islands pay more to produce electricity because of the way in which the system is currently set up, and residents pay more to use electricity, which is hardly a great story; it is definitely not a plan for people. The UK Government have spoken warm words about fuel poverty, yet families still sit freezing at home. The inaction is cold comfort to those facing such difficulties. As my hon. Friend mentioned, we need a new national pricing structure that is fair to people across those areas where the hardest conditions are faced. That solution must be based not on robbing Peter to pay Paul but on something that is fair across the piece. We need to consider something that does not just shift the problem from one place to another. The issue should be addressed.
Fuel poverty is not unique to the highlands and islands, and the constituents of many hon. Members in Scotland and across the rest of the UK face similar issues. National Energy Action, which I quoted earlier, estimates that 4.5 million people are facing fuel poverty. The austerity agenda being pushed forward by the UK Government will further hit people on low incomes, which will have the combined effect of ensuring that those struggling the most with poverty and fuel poverty face the coldest cuts. The proposed cuts to tax credits and the changes to social security have the potential to drive fuel poverty to catastrophic levels. Of the people who are already struggling, and nearly half have been struggling for more than a year, only 12%—there is a big communication job to be done—have told their energy supplier and only 5% have sought advice from a supporting organisation.
Does my hon. Friend agree that the Government’s policy of encouraging customers to switch is completely useless for many of my constituents, as it is for many of his constituents? In some parts of my constituency 80% of local tenants are on dynamically teleswitched all-electric systems, which can be provided by only one fuel supplier. That, coupled with the 2p per kilowatt-hour surcharge, demonstrates that we need a real and practical solution for those in fuel poverty in rural areas of Scotland.
I completely agree with my hon. Friend that we need a more equitable solution that takes people out of situations in which they have limited choice, or no choice at all. Later, I hope to propose at least a partial solution for the future, but we need action now, too. That must be taken on board. As I said, fuel poverty is not unique to people in the highlands and islands. In the past year, a third of those who are already struggling have skipped a meal to try to afford their bills; 20% are suffering from stress or mental health issues because of fuel poverty; and 40% are struggling with other essential bills.
As the Chair mentioned, I took part in an openDemocracy forum yesterday with MoneySavingExpert.com. The issues raised in that forum, and in subsequent emails to me, were common with those of my constituents in many cases. Highlanders are mostly off the gas grid, which they have in common with some 4 million households across the UK. If people are unable to gain access to the grid, they have to rely on alternative energy sources, including heating oil, liquefied petroleum gas, electricity and solid fuels. The average cost of heating a three-bedroom house with heating oil is circa 50% higher than the UK average; those using LPG pay 100% more on average than those with mains gas. There is limited opportunity to switch to other alternatives. In Scotland, people living off the gas grid are more than twice as likely to be living in fuel poverty as those with mains gas.
The Scottish Government have put in £0.5 billion since 2009 to introduce a raft of fuel poverty and energy efficiency programmes. Uniquely, they have brought into being the Scottish rural taskforce, with which I recently had the pleasure to interact, to find ways of making it easier and more affordable for people in rural and remote areas of Scotland to heat their homes. In 2015-16, an unprecedented £119 million has been allocated to fuel poverty and energy efficiency measures, split between advice and support services for householders through the “home energy Scotland” network and a variety of home energy efficiency programmes—HEEPs. Since 2008, nearly one in three of all households has had energy efficiency measures put in place. The Scottish Government have done more to help than the UK Government and other devolved Administrations, with Energy Action Scotland’s report from 2013-14 showing that the average energy savings are £36.48 in Scotland, £31.31 in Wales, £27.55 in Northern Ireland, and £3.52 in England.
There are some issues that could be addressed. For a start, the off-grid energy sector is not covered by Ofgem or the energy ombudsman, which is a deficit that could very easily be rectified. As my hon. Friends have mentioned, there should be a fairer pricing structure across the UK that removes the inequality and prevents people from being charged more in the coldest and darkest areas.
Measures could be taken on prepayment meters, which routinely charge people more than other billing methods. The forthcoming roll-out of smart meters offers an opportunity to give homeowners and constituents meaningful advice about how to use them, and the UK Government should also consider ensuring people can switch seamlessly from one supplier to another through the smart meter, without having to make an application. It should happen automatically to give people the lowest possible tariff. Wholesale prices should be passed on immediately by the energy companies to consumers as fuel savings. There should not be a delay.
A ComRes poll to be published tomorrow for the No Cold Homes campaign showed that 81% of people think that the UK Government should do more on fuel poverty, and 82% of people surveyed believe that the energy sector should do more. Tomorrow, the Chancellor will have an opportunity to take measures to increase household incomes by abandoning tax credit cuts. Austerity is not working for people. The cost of poverty through austerity is more misery. The solution to poverty is not to push those closest to the edge into further crisis. It is time to dump the failed dogma of austerity and turn to a path that focuses on the outcome of a fairer and healthier society.
It is a pleasure to speak in this debate, Mr Hamilton. I congratulate the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) on securing it. He has four places to represent; I just have the one.
I apologise for having to leave. I have something else to go to, so I will not be here to hear the Minister, the hon. Member for South Northamptonshire (Andrea Leadsom), reply. She and I have a strong relationship in the House; she spoke at a party meeting and dinner of mine back home when she was a lowly Back Bencher. We have participated in many debates in this House, and it is always good to come along to another. I would love to hear her reply, but I will read it in Hansard tomorrow. I know that it will be positive and responsive to what we are saying and asking for.
I am concerned that in this day and age, people across our United Kingdom of Great Britain and Northern Ireland, the fifth largest economy in the world, are unable to heat their homes, as the hon. Member for Inverness, Nairn, Badenoch and Strathspey said in his introduction. I hope that all hon. Members present—and those who wanted to attend but could not, or have had to go and could not share their concerns—look forward to identifying the best way forward. The hon. Gentleman concluded his introduction with some ideas about how we can do that better. It is important that we have not just complaints but solutions; it is always good, and much more constructive, to have a solution when bringing forward a problem.
Despite the fact that it has been an issue for a number of years now, fuel poverty continues to grow across our nation. The population in my constituency, and indeed across the whole United Kingdom, is ageing. Inaction on this issue will only allow the negative trend to continue. The time for action is now. We can all talk about protecting the most vulnerable in our society—and we should, because it is important—but we need action as well as words. The proof of any pudding is in the eating. Clearly, given that fuel poverty is rising across this country, it has been all talk and not enough action.
The time for action is now, and I hope that it starts today. Average electricity costs in Northern Ireland are 15% higher than on the mainland, so we know only too well the consequences of fuel poverty. We have the highest levels of fuel poverty in the United Kingdom; the Office of the First Minister and Deputy First Minister estimates that up to 42% of Northern Irish households—believe it or not, those are the figures—experience fuel poverty. It is a massive issue. No matter how hard we try, this debate will not adequately reflect that 42%, a rate 13% higher than in Wales and a further 27% than in England.
Of course, regional circumstances go some way towards explaining the disparity, such as the electricity prices that I mentioned earlier and a higher dependence on oil for heating due to an underdeveloped natural gas network. There have been some good steps forward on the natural gas network. I supported the announcement in the summertime by one of the gas companies that there would be gas in Ballygowan, Saintfield and Ballynahinch in my constituency. That is good news. It has not been for want of asking—people have been asking for it for five, six and even seven years—but it is good that the gas network is at least advancing through my constituency, to give people another option. As the hon. Member for Inverness, Nairn, Badenoch and Strathspey said in his speech, options are not available, because there is no competition. We need that as well.
As I have said, regional circumstances across the country will dictate people’s fuel situation. That is just one. Measures such as the winter fuel allowance and payments to alleviate fuel poverty are well and good—we have used such methods in Northern Ireland to help those in need, and it has been a positive factor—but the fact remains that although they might help people get through the winter, they do not address the problem. We must address it in the long term.
Competition in electricity supplies has brought the price down for some who are able to switch, but for some people it is not as simple as having an alternative. Changing sometimes involves a cost factor that many cannot make. They cannot absorb that financial cost to move over to a different rate. I would be interested to hear, if not directly then by reading it tomorrow, what the Minister thinks can be done to enable those on low incomes to transfer from one energy source to another.
We need investment in the appropriate infrastructure so that regional disparities are reduced and the costs for those in more expensive regions are reduced. Action in Northern Ireland on fuel poverty has focused primarily on improving energy efficiency in homes and enhancing the quality of insulation and heating systems. Just last Thursday, I had the opportunity to ask the Minister during questions what was being done to help those in park homes, for instance, who need help on efficiency. She answered my question, and was helpful in her response, but many people in park homes are in the 55 to 80 age bracket. They are people who need heat more.
Maybe something could be targeted specifically at those in park homes, so they could take advantage of it to improve their energy efficiency. Quality insulation could be installed in many homes, and heating systems upgraded. Boiler systems have been done in Northern Ireland, and I am sure they could be done elsewhere. I know that similar approaches have been used here on the mainland. We should continue to pursue such approaches where they work, but fuel poverty is still increasing across the country, even after the drop in oil prices, and the population is ageing. Those are the factors that we must consider.
We need to step up more than we have in the past. I am not being critical of anyone, Mr Hamilton; you know that that is not my way of doing things. However, I am keen to hear how the Minister and her Department can help the people who most need it right now. I thank the hon. Member for Inverness, Nairn, Badenoch and Strathspey for giving me the chance to participate this debate and to highlight the issues in Northern Ireland.
Order. Before I call the next speaker, let me repeat an announcement that I made before those in the Public Gallery arrived; it is directed towards them. A digital debate has taken place ahead of this debate, and Mr Speaker has granted a derogation to allow the use of electronic devices in the Public Gallery for the duration of this debate. Devices should be silent, and photos must not be taken.
It is a pleasure to serve under your chairmanship, Mr Hamilton, and to take part in this debate. I commend the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry)—I think that I have pronounced his constituency correctly—on securing it and on bringing a human element to the discussion. That is what we are all interested in: making a positive difference and improving the human condition. That is, I hope, the primary objective of Members on all sides of this Chamber. It is also very much at the heart, and in the spirit, of what the hon. Member for Inverness, Nairn, Badenoch and Strathspey said in his opening remarks. It is a pleasure, as always, to follow the hon. Member for Strangford (Jim Shannon), who picked up on that theme and focused the debate firmly on the need to look after our most vulnerable constituents.
In the last Parliament, we had debates on fuel poverty but we often got bogged down in definitions, which was sometimes helpful but sometimes unhelpful. There has been some difference historically across the United Kingdom, between the devolved Administrations and the UK Government, on how fuel poverty is defined. Generally, it is when more than 10% of someone’s income is spent on an adequate heating regime, but there has been some concern about how to define a “heating regime”. I believe that has led to a more complex formula, based on the Hills review, which will now be put in place generally to define what is meant by fuel poverty.
So far in this debate, we have not got bogged down in the exact definition of fuel poverty—if we had been, it would have detracted from the point because we are talking about the living conditions and the social circumstances of some of our most vulnerable constituents: people with mental illness, pensioners on fixed incomes and, very often, people who are unemployed. We are also talking about people who live in what is often some of the most challenging housing, in that it lacks good insulation and good home energy efficiency measures. Much of that is in the private rented sector; the housing of many people living in fuel poverty is from the private rented sector. I hope that my hon. Friend the Minister will address that issue in her remarks.
However, it is worth highlighting that we have made some progress in addressing fuel poverty. The figures that I will cite are for England. As of 2013, the huge number of 2.35 million households in England were regarded as being in fuel poverty. Nevertheless, that is a fall from the number for 2010, which was 2.49 million. So progress has been made in reducing the number of households in fuel poverty, and that progress is welcome.
Commendable improvements have been put in place thanks to Government initiatives to improve energy efficiency across the country, with 3.8 million lofts and 2.1 million cavities being insulated through Government schemes since March 2010. The Government have a right to be proud of that record, but clearly there is still a lot more to do. In that context, we should recognise that there are 6 million households with a low income that have an energy efficiency of band D or lower, but as of July 2015 only 1.6 million energy efficiency measures had been installed in about 1.3 million of those homes. There are still many more homes in fuel poverty that we need to help, and many more people in those homes who need help to reduce their energy bills and to ensure that they can make ends meet.
I will touch briefly on the green deal, because the concept was a good one. However, the green deal was difficult to understand and often difficult to communicate. In helping people to tackle high energy bills, perhaps one of the issues—there may be lessons to be learned from Scotland in this regard—was that local authorities were not as proactively engaged in the process of delivering the green deal as they were in the delivery of more successful schemes, nor as proactive as local authorities in Scotland were in the delivery of the green deal. Perhaps we should reflect on that when we consider how we can support measures for households in fuel poverty in the future. Nevertheless, the concept behind the green deal was good.
Where are we now? A commendable initiative has been put in place. I believe that by 2018 rented homes will need to have energy performance certificates of band E or better, which will place a strong requirement on landlords to improve the energy efficiency of their properties and help to improve some of the least well insulated homes. Of course, that will also help the people living in those homes to reduce their home energy bills.
There is clearly a requirement on Ministers in the Department for Communities and Local Government to work collaboratively with the Minister who is here today and support her in ensuring that this important initiative, which will help to better insulate some of the worst insulated homes, is enforced, and so that DCLG puts pressure on local councils, which I believe can keep the income from any fines imposed as a result of the initiative, to enforce fines on landlords who do not comply with this requirement. This initiative can make a real difference to some of the most fuel-poor homes in the country.
We also have to encourage a more active engagement, perhaps through citizens advice bureaux and other organisations, from energy consumers who live in poorer homes. Notwithstanding the good point of information made about some of the challenges in highland and island homes, we know that the consumers who are more engaged with energy switching on the internet, often more affluent than other consumers, have often benefited from the energy market. However, there has been a challenge in ensuring that market competition reaches and benefits some of the people in fuel-poor homes and some of the most vulnerable consumers.
I wonder what the Minister’s thoughts are about addressing that issue, and whether there may be some initiatives that her Department is considering to support and work with the CAB or other organisations to take this process forward. The energy market can work and deliver lower bills for consumers, but we know that it has not worked effectively and efficiently for the most vulnerable consumers. I am sure that we would all like to see that situation change and that there are mechanisms to achieve that change. Partnership with local authorities, as well as with the CAB and other voluntary organisations, may well be a way of better engaging consumers and helping to deliver the benefits of the energy market to the most vulnerable in our society.
Finally, I will speak briefly on the issue of rural communities, which was outlined very articulately in earlier contributions about highland and island communities—some of the most rural communities in the United Kingdom. However, there are also many constituencies from Cornwall to Suffolk to Lincolnshire—indeed, throughout the United Kingdom—that have remote rural energy consumers. Those consumers are often off the gas grid and reliant on other mechanisms to heat their homes.
In particular, there is a challenge for those consumers who rely on oil; I believe that 8% of consumers in rural areas use oil to heat their homes. The price of kerosene has dropped recently, which has been beneficial for those consumers, but we know that there are huge fluctuations in the cost of heating homes through oil and kerosene. I would be grateful to hear my hon. Friend the Minister’s comments about how we can support those consumers who rely on oil and off-grid consumers in general. Perhaps we could examine the issue of biofuels and consider how its use can be better supported in the years ahead.
There are some positive things: fewer households in England were suffering fuel poverty in 2013 compared with 2010. However, there are still a number of issues to consider, which are related to how we can better engage and better support vulnerable consumers, particularly in rural and remote areas. I look forward to hearing my hon. Friend the Minister’s response to the debate.
It is a pleasure to serve under your chairmanship, Mr Hamilton.
I thank my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), which is the neighbouring constituency to mine, for securing this important debate. It is important, as other hon. Members have said, with millions of households around the United Kingdom being affected by fuel poverty. As I look around Westminster Hall on the day when the Scottish National party has its Supply day and a number of SNP Members are heavily engaged in the main Chamber, I am glad to say that there are seven SNP MPs here out of a total of 12 MPs. One has to ask the question, “Where is the Labour party?” It is missing from the debate in Scotland, having let the people of Scotland down, and its MPs cannot even be bothered to discuss this important subject, which affects constituents throughout the rest of the UK. It is no wonder that the people of Scotland have fallen out of love with the Labour party in our country.
I will deal specifically with fuel poverty in the highlands and islands. I am grateful to Changeworks, which has estimated the percentage of households in fuel poverty in that region. It bands each locality in the highlands into groups, and by its calculations there is no district in my constituency that has less than 47.9% of households in fuel poverty. In a number of districts, fuel poverty is evident in at least 73.5% of households. The Highland Council states that the context is that
“the Highlands and Islands of Scotland experience the harshest climatic conditions in the UK and record levels of fuel poverty”—
levels that are unprecedented. It goes on to say that
“there is far greater, area-wide dependence on the use of electricity for heating as well as lighting but the standard unit price charged is 2p a kw/hr more than in most other parts of the UK and 6p and more for the various ‘economy’ tariffs on offer”—
a point that my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey made earlier. The council continues:
“On top of all this there is also a far greater reliance in off-gas areas on using domestic heating oil and solid fuel which pushes up household heating costs further still.”
As someone who lives in a rural area, I can say that it is one thing to rely on electricity coming through the grid, but having to check the oil tank frequently and ensure that there are adequate supplies of solid fuel is a different matter. According to the council:
“As a result, domestic energy bills in off-gas areas are, on average, around £1000 more per annum than the £1369 pa dual fuel national average (2014)”—
that is the cost of living in many of our rural areas, and wage levels in rural areas are often considerably lower than in more affluent parts of the country. It continues:
“To cap it all, customers on prepayment meters (often the least well off) not only have to pay additional standing charges but also discover that their notional right to change to a cheaper electricity supplier has become impracticable.”
Those statistics should shame us all.
Let us put the highlands and islands in context with the rest of Scotland. The fuel poverty level in Scotland in 2013 was 39% of households. A key driver for the rate of fuel poverty has been the rise in fuel prices. The fuel poverty rate for 2013 would have been only about 11% if fuel prices had risen in line with inflation between 2002 and 2013.
One of the most fundamental questions that we must ask the Minister is: why do we have to accept that there are 14 regional energy markets in the UK, with consumers in the highlands and islands, who are some of the greatest users of energy in this country, paying that premium of 2p per kilowatt-hour? We must have a universal market throughout the UK. If it is good enough for postage stamps, we should have one for electricity distribution too, and that is in the gift of the current Government. I asked the Secretary of State a written question to that effect not so long ago, and I was amazed that the response was that consumers in other parts of the country would have to pay more. The point that that answer seems to ignore is that such a market would introduce fairness, and no more would consumers in the highlands and islands be discriminated against by a Government who want to penalise them for living there.
That is not acceptable, and it must end—it should end tomorrow. Why do folk in my constituency have to accept higher rates of fuel poverty? The Government can act, must act and should act, and they should do it now. Why do the Government not invest in greater measures to deliver effective insulation and ensure that we can cut energy bills and fuel poverty? We can find the money for Trident, but not to allow folk to live in properly insulated, warm, fuel-efficient homes.
My hon. Friend makes an excellent point. We all came out of the Trident debate this afternoon disappointed by the vote. Home efficiency is a serious matter. Home efficiency measures bring people out of fuel poverty, but they have the added effect of wider benefits, because less energy usage drives down the market cost. Does my hon. Friend agree that the Government should rethink their strategy regarding the £12 billion subsidy they are creating for the right to buy? That money would be better invested directly in new build housing and home efficiency schemes for existing owners, which would also help our constituents by driving down market costs, and the Barnet consequential would allow the Scottish Government to continue their excellent work.
My hon. Friend makes a good point. I must contrast the Government’s performance and behaviour with that of the Scottish Government on house building and home insulation over the past few years. It really is about time that the Government in Westminster stepped up to the plate. In light of the upcoming climate change talks, we have a responsibility to cut our energy consumption as far as possible, and we can do that if we invest more in insulation.
Research by Turn2us graphically shows the kind of challenges that those in fuel poverty face. The research found that one in two low-income households struggle to afford their energy costs, despite being in work. Those are people who will be disadvantaged by the cuts to tax credits that my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey mentioned. Turn2us states:
“Amongst the hardest hit are people with disabilities, with over two in three (67%) reporting their struggles, and families, with almost two-thirds of working parents (65%) unable to meet these costs. Worryingly, of those households who are struggling with energy costs, nearly half (48%) have done so for more than a year”—
this is a long-term, not a short-term, problem. Turn2us continues:
“The knock-on effect is severe, with a third (33%) forced to skip meals and over a fifth (21%) experiencing stress and other mental health problems.”
Is it a price that we as a civilised society are prepared to pay, that people in this country have to make the choice between food and fuel? There is something wrong with our country if that is the case.
Some of the comments made by people who participated in the Turn2us survey are stark. They include, “The bills are killing me, sometimes I have to contemplate paying all the rent or heating my home”; “There are many pensioners like myself who don’t qualify for any help but still have to decide whether to eat or heat”; “We have stress, debt, arguments and a low mood at home”; “Starve or freeze? Either way you get ill and can’t work, eat or pay any bills”; “No lights, only candles, only hoover once a week, only use washing machine once a week, no heating, meals that cook quickly.” Those are the consequences of the high levels of fuel poverty we suffer from in this country.
The Scottish Government have used their powers to intervene to mitigate some of the effects of rising energy costs, but it has been the failure of Westminster, and of the regulator, to properly protect consumers that has led to marked deterioration in the level of fuel poverty. The Scottish Government are committed to tackling fuel poverty head on and ensuring that everyone in Scotland lives in a home that is warm and affordable to heat. However, those measures are undermined by austerity made in Westminster and delivered by a Conservative Government who are having such a huge impact on low and medium-income earners. That goes to the heart of the issue. There is evidence that families have to make the choice between heating and feeding.
There is not just a moral and ethical impact of that but a cost to society, with increased health costs as a consequence of the mental health issues that arise. Also, children are being sent to school in less than ideal circumstances because of family pressures, and our young people are not flourishing to the extent they should, which increases the burden to close the attainment gap. That is the social cost of fuel poverty, and the Government in Westminster have to accept responsibility for it. The proposed cuts to tax credits and other welfare cuts have caused concern that low-income, hard-working households’ finances could be harder hit. The Government must change tack in the autumn statement tomorrow.
I am afraid that we have no time for other contributions from Back Benchers. May I ask the Scottish National party spokesperson and the Opposition spokesperson to keep their remarks to about five minutes, so that the Minister can have the remaining 10 minutes?
On behalf of all the speakers, I thank you, Mr Hamilton, for your excellent chairmanship.
I thank my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) for securing this debate on such a critical issue. I also thank other hon. Members for their excellent contributions. My hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown) reminded us about the long-term high strike price of nuclear for Hinkley Point—twice the current price of electricity—and its impact on those in and on the cusp of fuel poverty. My hon. Friend the Member for West Aberdeenshire and Kincardine (Stuart Blair Donaldson) highlighted particular issues for rural communities.
The hon. Member for Strangford (Jim Shannon), who is no longer in his place, talked about finding fuel poverty solutions. I completely agree with his call for less talk and more action on this critical issue, especially in relation to competition. I thank the hon. Member for Central Suffolk and North Ipswich (Dr Poulter), particularly for his reminder of our humanitarian obligations to address the issue. He urged us not to get bogged down in the associated definitions and technicalities. He focused on England and the green deal, which is an excellent initiative. He reminded us that high rural charges apply in England as well as in Scotland, Northern Ireland and Wales.
I thank my hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford) for his excellent contribution. He reminded us of the importance of this debate and commended the attendance of all, especially the high number of SNP Members who are here. Shockingly, there is no community in his constituency where fewer than 50% of people are affected by fuel poverty. I pause to let that point strike home. He also made key points about the smaller supplier choice in the remotest areas of Britain, on the blatant discrimination that exists and on the stark choice between eating and heat.
As I have stated in other debates, recent stats show that about 40% of households in Scotland are considered to be living in fuel poverty. I am sure all Members agree that that is unacceptable. The statistics for the highlands are shocking, and I thank my hon. Friend for bringing them to my attention. The statistics for Lochaber in particular are dreadful. We have also seen the impact of fuel poverty across the rest of the UK. That is nothing to be proud of, and in this decade of austerity, it will only get worse.
Fuel poverty means more than simply not being able to keep the heating on. Adolescents living in cold homes are five times more likely to have multiple mental health problems than adolescents living in warm homes. In addition, children living in cold homes are more than twice as likely to have respiratory problems as those living in warm homes. Critically, fuel poverty has a negative impact on the educational attainment and emotional wellbeing of children. It means that household income, which could otherwise be used to purchase healthy, nutritious food, goes on energy bills. The combination of mental and physical health problems, poor diet, emotional turmoil and diminished educational attainment caused by fuel poverty is a recipe for condemning people to the dreadful cycle of poverty. In essence, they are poor and paying for it. Some 40% of households in Scotland face the consequences of fuel poverty every winter, and winters are particularly harsh in Scotland.
Fuel poverty is the result of a combination of low household income, fuel costs and the poor energy efficiency of homes. Several of my colleagues and other Members have mentioned that. The contributing factors can be addressed in a number of practical ways, and that in turn will help to prevent fuel poverty. Low household income can be tackled through a number of measures. A living wage for everyone in work, not those just over the age of 25, would allow young individuals and families to afford the rising costs of fuel. Unfortunately, the cuts to working tax credit and child tax credit recently announced by the Conservative Government—so many households rely upon those credits to be able to pay for basic necessities—will only further punish lower-income households and put even more at risk of fuel poverty. We must provide a fair deal for hard-working individuals and families and not force them to bear the cost of letting large corporations and the financial sector skip taxes. Notably, the tariffs for pay-as-you-go phones, which are used most by those in fuel poverty, are some of the highest on the market. We need to address that, because the market certainly is not and has no intention of doing so.
The energy market is dominated by the big six, and the days of standing by while they address their needs over those of consumers and make massive profits while so many suffer from fuel poverty must be brought to an end. As the hon. Member for Strangford said, it is about less talk and more action. The Competition and Markets Authority recently found that energy consumers were collectively being overcharged by £1.2 billion a year. Following that finding, I asked the Secretary of State for Energy and Climate Change what steps would be taken to amend policy in response to the overpayment. The Government’s response was that no action would be taken until December 2015, well into winter and months after the finding was published. Meanwhile, ScottishPower quadrupled its profits last year—
I thank you for the reminder, Mr Hamilton. I will bring my remarks swiftly to a close.
Finally, there is huge scope for the Government to assist in making homes more energy-efficient, but we have yet to see that come to fruition. The green deal has already been stopped, and the reduction in the budget of the Department of Energy and Climate Change means that programmes such as the green deal home improvement fund, solar power subsidies and feed-in tariffs will be cut.
I welcome all the contributions made in today’s debate. The need to tackle fuel poverty robustly is self-evident and compelling to everyone in the Chamber. I am delighted to hear Members from all parts of the House agreeing with that. There are real people behind the fuel poverty statistics, and that must not be forgotten. They have to make the difficult decision between buying food and heating their homes, and in a modern, developed society, the fact that 40% of Scots face that dilemma every winter is a disgrace. Swift, meaningful action must be taken.
It is a pleasure to make my debut appearance as a Front Bencher in a Westminster Hall debate under your enlightened chairmanship, Mr Hamilton. I congratulate the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) on securing this important debate. I am sure this will be the first of many such debates with the Minister, and I look forward to the many more to come.
Today’s discussion has been detailed, impassioned and generally of an excellent standard. Going through some of the points made by Members, someone—I cannot remember who—mentioned that fuel poverty is like a thief in the night, which is dramatic, but spot on. Another Member mentioned that fuel poverty is a bigger killer than all road traffic accidents and drug abuse combined, which is a startling fact. The hon. Member for Central Suffolk and North Ipswich (Dr Poulter) talked about the human component, which is something I want to come on to in my brief speech. The hon. Member for Strangford (Jim Shannon), who is no longer in his place, spoke of how his constituents are struggling in Northern Ireland. The hon. Member for Ross, Skye and Lochaber (Ian Blackford) made some good points. He spoke about how 73% of households in some communities are experiencing some form of fuel poverty. He also touched on some things that I will not have a chance to talk about in my speech, such as the impact that energy companies across the UK are having on fuel poverty and how we begin to tackle that. I will press on, because time is brief.
In preparing for today’s debate and listening to the detail of Members’ contributions, I have been struck by just how easy it is to get sucked into the statistics and detail of fuel poverty. Other Members have touched on that. The detail is an essential component of understanding not only the scale of the problem, and ultimately the sheer depth of Government failure on the issue, but critically the resources required to turn the problem around. Before we get into the stats, however, I remind the Chamber that behind every percentile, every missed target figure and every set of depressingly high numbers, there is a fellow human being. Perhaps they are one of the 25,000 people expected to die this winter as a result of living in a cold home. Perhaps they are one of the over-65s, an age group from which one person is expected to die every seven minutes this winter because of fuel poverty. Perhaps they are someone who is disabled and unable to get out of the house, reduced to living in one or perhaps two rooms for the duration of the winter because of the fear of racking up excessively high heating bills. Perhaps they are one of the 1.5 million children across the UK living in fuel poverty. Maybe they are one of David Cameron’s strivers, working as hard as they can but still struggling to heat their home. We know that more than half of the 2 million households living in fuel poverty have someone in work. This is the reality behind the statistics, and they are the people who this winter will pay a heavy price for the Government’s failure to tackle the issue in any meaningful way.
Let us look at these statistics that are a badge of shame for any Government who claim to look out for the interests of all our citizens, poor or affluent. We know that up to a third of excess winter mortality, the figures for which come out tomorrow, are the result of people living in fuel poverty. Last year’s rates saw excess winter mortality at 31,000 in England and Wales, up 29% from the previous year. We should absorb that figure—up 29%. Figures for Scotland are up by 4.1% to 19,908. In Northern Ireland the raw numbers were low, but the increase was large: a rise of 12.7%. That equates to 559 people who are no longer here with us because of fuel poverty.
Yet after five years of being in government, can the Minister tell us, hand on heart, that tomorrow’s figures will go down and not up, and that their fuel poverty strategy is at last beginning to make progress? I look forward to hearing the Minister’s response when she addresses the debate shortly. However, I am afraid that, whatever is said, the statistics and the facts will speak for themselves.
In the Department of Energy and Climate Change annual statistics report, the number of households in fuel poverty in England was estimated in 2013 at 2.35 million, or—in other words—one in 10 homes where there was a choice between heating or eating. And it is not set to improve any time soon. In fact, by DECC’s own measure, the next set of figures is expected to show an increase in fuel-poor households. Nowhere is this better demonstrated than in the abject failure to get to grips with the plight of those in private sector rented accommodation. Compared with other housing sectors, the private rented sector has the highest proportion, at 9.1%, of the most energy inefficient homes—those in bands F and G.
We know the Government’s stated goal in tackling this was that as many private rented homes as is “reasonably practicable” will be rated band C for energy efficiency by 2030. But between 2010 and 2013, this was achieved for only 70,000 fuel-poor households, leaving 95% still to be improved. It does not take a genius to work out that, at that rate of progress, the Department will miss its target by some 100 years.
I will. You have just destroyed my punchline, but it is fine, Mr Hamilton.
The Department will miss its target by some 100 years, which is not quite in the territory of Buck Rogers, who I believe woke up in the 23rd century, but, alas, not that far off either—sometime in the 22nd century.
So why such dramatic Government failure? Why the lack of vision and ambition in tacking this critical issue? Why are 6 million low-income families still living in badly insulated homes? Why has funding for energy efficiency for the fuel poor been cut in real terms by 20% and the installation of energy efficiency measures dropped by 65%? Perhaps some of those answers can be found in the debris and wreckage of the Government’s sorry excuse for a fuel poverty strategy: one that has shifted, chopped, changed and staggered on like a weary foot soldier in Napoleon’s winter retreat from Moscow.
First, there was the Warm Front—or, as it later became known, hot air—a Government-funded scheme that ended in 2013. Then came the green deal, hailed as “transformational”, but which was scrapped with nothing to replace it. The zero-carbon homes plan, introduced by the previous Labour Government in 2006, was scrapped with nothing to replace it. The warm home discount, providing automatic electricity bill support to low-income households, is due to expire next year with no sign of renewal. The energy company obligation or ECO—a Government scheme to encourage and obligate larger suppliers to deliver energy efficiency measures—will finish next year with nothing to replace it.
Here is the irony: not content with scrapping any semblance of a coherent fuel poverty policy, the Government have also lowered the bar and reduced the ambition of their schemes. Dithering, inconsistency, U-turns and failure are the trademarks of this Government. I look forward to hearing the Minister tackle this issue.
I congratulate the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) on securing a debate on such an important topic. I can absolutely assure him that, as my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) explained, we are all here to try to make a positive difference, and my heart is absolutely in this debate.
As we all appreciate in this Chamber, the fight against fuel poverty is a significant challenge. Some 2.35 million households in England were fuel poor according to the latest statistics. In Scotland, as so many Members have mentioned, fuel poverty affects nearly 40% of the population. In Wales, 400,000 households are affected. In Northern Ireland, the figure is nearly 300,000. We all use different measures of poverty, but it is a very serious issue, and the Government are determined to make sure that the price people pay for energy is as low as possible, which is why we have been acting to ensure that the impact on bills of paying for clean energy is controlled, limited and, where we can, lowered. We are also committed to making sure the market works effectively for consumers, including through our commitment to implementing as fast as possible the final recommendations of the Competition and Markets Authority, once those are achieved.
As the hon. Member for Inverness, Nairn, Badenoch and Strathspey knows, action on fuel poverty is devolved. I am sure he and his hon. Friends will be raising their suggestions for action on fuel poverty with the SNP Government in Scotland, as well as with me. I am absolutely committed to the responsibility that we have in the UK to tackle fuel poverty, but I note that alongside different measures of fuel poverty, different approaches are being taken by our nations to tackling the issue.
So there are GB-wide schemes that are designed to tackle the underlying causes of fuel poverty: inefficient housing through the energy companies obligation, and low household income through the warm home discount. We are working with both the Scottish and Welsh Governments on how these policies can be effectively amended to tackle the root causes of fuel poverty in all nations.
The devolved nature of fuel poverty enables different nations to take the action that is appropriate for them. Each of our nations has policies tailored to address fuel poverty at the local level, such as Nest and Arbed in Wales, the central heating fund in England or the home energy efficiency programmes for Scotland.
I am sorry; I cannot give way.
I can assure hon. Members that we are working closely with the Scottish Government to set up a process and methodology for evaluating the impacts of schemes implemented in Scotland, on their own and in conjunction with schemes implemented in England and Wales, on the GB energy market, alongside other relevant UK obligations.
Hon. Members have mentioned energy prices for their constituents, particularly in Scotland. Our top priority is to keep bills down. This year, £57 million has been spent to protect bill payers in the north of Scotland from the high costs of distributing electricity. This represents a benefit of around £40 a year for each household in the north of Scotland.
Any move towards a single national network charge would produce winners and losers, a point highlighted in Ofgem’s recent report. For Scotland specifically, 1.8 million households would face higher bills and 700,000 would see reductions. It is not a simple question, but I can assure hon. Members that I am committed to launching a public consultation around the end of the year to review the most appropriate level of support for electricity distribution charges in the north of the country.
I want to turn briefly to the action this Government have taken to tackle fuel poverty. More than 1.2 million households are seeing lower bills due to energy efficiency improvements through the ECO. We are committed to ensuring that a million more get the same benefits by the end of this Parliament. But as the Secretary of State for Energy and Climate Change, my right hon. Friend the Member for Hastings and Rye (Amber Rudd), said last week, we are determined that the support available will be focused on those who need it most.
Our policies are having an impact. Since April 2010, Government policies have supported the insulation of 3.8 million lofts and 2.1 million cavities, and in 2013 we saw a fall in both the absolute number of households in fuel poverty, and in the fuel poverty gap. We are also determined to help households that, as hon. Members have mentioned, are off the mains gas grid and more likely to face higher energy costs, as well as more than twice as likely to be in fuel poverty. Off-gas-grid homes will have a focus in the central heating fund, specifically on dealing with the off-gas grid.
Finally, the hon. Member for Strangford (Jim Shannon) and my hon. Friend the Member for Central Suffolk and North Ipswich—
Fabian Hamilton (in the Chair); Order
Motion lapsed, and sitting adjourned without Question put (Standing Order No. 10(14)).