A reformed domestic supplier obligation—ECO, or energy company obligation—from April 2017, which will run for five years, will upgrade the energy efficiency of more than 200,000 homes per year, tackling the root cause of fuel poverty. Our extension of the warm home discount to 2020-21 at current levels of £320 million per annum will also help vulnerable households with their energy bills. We intend to focus our efforts through ECO and the warm home discount more effectively on the fuel poor, and will be consulting on our future approach this spring.
I thank the Minister for her answer. Fuel poverty is a sign of inequality. New research by the national charity Turn2us has found that one in two low-income households are struggling to afford their energy costs, despite being in work. Many of these households rely on in-work social assistance. Has she or her Cabinet colleagues made an assessment of the effect of welfare reform on low-income households judged to be in fuel poverty?
I thank the hon. Lady for her question. My Department works closely with the Department for Work and Pensions to ensure that the support we give goes to the most vulnerable. Energy costs are always at the centre of our minds in this Government, in order to make sure we put as little pressure as possible on hard-pushed households, and that will remain so.
When Hastings, Motherwell and the rest of the United Kingdom vote to leave the European Union in the referendum, we will be able to abolish the 5% VAT on domestic fuel bills, which will really help those suffering from fuel poverty. Would my right hon. Friend welcome that?
My hon. Friend will be aware that this Government are always focused on ensuring that bills are kept down for householders in all constituencies. I would tactfully suggest that my right hon. Friend the Chancellor might have something to say about reducing VAT income on such a service.
Evidence has suggested that rural communities are disproportionately adversely affected by fuel poverty. One way of combating that is through the development of domestic energy syndicates and the collective purchasing of oil. What proactively could and should the Department be doing to support such initiatives?
The hon. Gentleman is right in what he says, and we do ensure that there is a focus, through ECO, on rural areas, which often face the largest problem with fuel poverty. My Department works closely with various community energy schemes to ensure that we assist them, be that in group buying or in setting up their own renewable energy schemes, and we will continue to do so.
I do not share my hon. Friend’s view. I think it is essential that energy supplies are a mix, and that means a combination of fossil fuels, for now, and renewable energy. Investing in renewable energy is an essential part of energy security, as well as of decarbonising and meeting those targets.