I beg to move,
That this House has considered fuel poverty.
I hope that no Members will leave the Chamber during such an important debate. I have just spilt a glass of water over the Secretary of State for Environment, Food and Rural Affairs and I apologise. [Interruption.] Yes, it is not the worst thing that has happened to Members today from what I have heard.
Fuel poverty is debated annually in the House. Let me give some background to that. Our 2015 fuel poverty strategy for England committed us to ensuring appropriate parliamentary scrutiny as we take action to tackle fuel poverty. That commitment to transparency is why we created the Committee on Fuel Poverty and why we hold the annual debates.
The problem of fuel poverty crosses party lines and needs action from many different stakeholders. I welcome all contributions today and the positive way in which I know they will be made. I am looking at the shadow spokesman when saying that and pleading with her to show her usual grace and dignity in opposing me.
I am afraid that the Minister cannot expect quite so much grace and dignity from me—I apologise. To be serious, there is good reason to be deeply concerned about the fuel poverty statistics because we have just heard from the Office for National Statistics that last winter, the figure for premature winter deaths exceeded 50,000— the highest for more than 40 years. With respect, the Government are not doing anything near enough on fuel poverty, and I want to put that on the record at the beginning of the debate.
I would ascribe grace and dignity to the hon. Lady’s usual contributions. This is a serious matter. The hon. Lady is right that last winter’s severely cold weather included wind-chill factors of minus 10° C and I accept what she says about the statistics. However, I do not accept her assertion that the Government have done nothing about that. If she will bear with me for the rest of my contribution, I will answer her point, and if I do not, I am sure that she will intervene.
I hope that the Minister will say something about rural areas. Fuel poverty is one of the biggest problems for rural areas because of the nature of the properties, which are often older, with older people living in them, but also because the schemes do not reach them. In particular, the energy company obligation—ECO—has completely failed and I hope that the Minister will say something about that. It is a tragedy that people in rural areas are more likely to die early because of fuel poverty.
I will indeed mention that. Various groups have lobbied all Members of Parliament to contribute to the debate and I agree with the basis of what they say.
It is also fair to say that fuel poverty is a devolved matter and that the debate originates from the fuel poverty strategy for England.
Will the Minister give way?
If the hon. Lady gives me a second, I hope that I will mention the point that she was about to make. Fuel poverty is a problem across the United Kingdom. I am sure that we all have constituents who struggle to keep their homes warm during the winter. The weather has no borders and does not understand devolved legislation. I am sure that the hon. Lady will confirm that.
The Minister has said that measures to tackle fuel poverty have been devolved. The real drivers of fuel poverty are the high cost of fuel—the tax on which is reserved, as he knows—and, of course, people simply not having enough money. We know about the hardship that universal credit is causing, so I would say that the real and fundamental causes of fuel poverty are very much in the power of this Government to tackle, beyond energy efficiency measures.
I agree with the hon. Lady. The Government have many different strategies, and energy efficiency measures are one of them. The importance of working together with the devolved authorities on this issue was never in more evidence than during last winter’s beast from the east—I see the hon. Member for Bolsover (Mr Skinner) is not in his seat. As temperatures plunged, many households throughout the UK faced broken boilers and frozen pipes. The sustained cold weather made it even more difficult for those on the lowest incomes and in the worst properties to be able to heat their home.
As has been mentioned, last month the Office for National Statistics reported there were 50,000 excess winter deaths last winter. The figure was said by the ONS to be unusually high because of multiple causes, including the virulent strain of flu, the relative ineffectiveness of the influenza vaccine and the colder than average winter temperatures. However, old, inefficient and cold homes, combined with occupants who are vulnerable to the impact of living in a cold home, certainly have been a factor.
The fabric of our building stock cannot continue to be a source of ill health. We have put in place an ambitious framework to tackle this issue, based on energy efficiency being the best long-term solution to tackle fuel poverty.
I do not know how the Minister can say he has put in place something that is so ambitious when no public funds are going into domestic fuel poverty and energy efficiency, for the first time in years. In the past we had Warm Front and other schemes, but right now the Government are putting no taxpayers’ money into these schemes.
I respectfully disagree with the hon. Lady, and I will outline the £3 billion-worth of Government help.
Our 2017 clean growth strategy sets an ambition of improving as many homes as possible to energy performance certificate band C by 2035, wherever practical, cost-effective and affordable, but the truth is that the most vulnerable must be helped first. We are committed to improving the homes of the fuel poor to band C five years earlier, by 2030, and we have set interim milestones to keep us on track. As many fuel-poor homes as reasonably practical will be improved to band E by 2020, and to band D by 2025.
A key way in which we are delivering energy efficiency measures to meet that ambition is through the energy company obligation, which has led to energy efficiency upgrades to at least 2 million homes across England, Scotland and Wales since 2013. Recognising the need to support low-income and vulnerable households first, we have taken action to ensure that ECO is targeted at those who need it most.
When the scheme was first introduced in 2013, 30% of ECO spending was focused on addressing fuel poverty, and by 2015 it had been increased to 70%. Today 100% of the energy company obligation is focused directly on low-income and vulnerable households, and we have introduced a new innovative element that will bring down the long-term cost of low-carbon measures.
The ECO programme has been very successful indeed, but does my hon. Friend agree that it is not just the barrier technologies of insulation in roofs and better windows, doors and floors that makes a difference but the introduction of clean tech in homes? Clean tech can often deliver significant savings, too, so I hope that, as a result of the recent consultation, things like smart thermostats will now be included in the ECO catalogue.
As usual, my hon. Friend is well informed and well spoken on this subject. I share his hope, and he makes a significant point. I hope he will see this come to pass.
We are also clear that landlords should play a role in upgrading the energy efficiency of the properties they rent out. The private sector regulations will require landlords to improve the energy efficiency of band F and band G properties so that their tenants will be living in properties rated band E or above by 2020. We expect that these regulations, which require landlords to invest up to £3,500 on their property, will enable all privately rented F and G properties to receive support, and about half of these homes will be improved to an energy performance level of band E. This action to tackle the worst homes first—those rated F or G—is consistent with the approach set out in our fuel poverty strategy, but we will be consulting on options to ensure rental properties are improved to the band C target level by 2030. The private rental sector has to make its contribution as well.
We recognise that long-term sustainable solutions such as the ones I have mentioned are little comfort to those who are cold now. It is important to complement this approach with more immediate support, which is why we extended the warm home discount to 2021, so that it can continue to provide more than 2 million low-income and vulnerable households with a £140 rebate off their energy bill each winter.
The Minister is talking about taking immediate action. It is some time now since the Dieter Helm review came out with a number of recommendations to sort out the chaos of the subsidies going into the alternative energy business, which would take the cost pressure off the most vulnerable households. The Minister does not look as though he has read it. Its approach would take the pressure off the most vulnerable households, so why do the Government not respond and implement those recommendations?
I will make one small change to what the hon. Gentleman said, in that I have read that report and I have met Dieter Helm. I will happily send the hon. Gentleman a copy of the recent energy speech that my right hon. Friend the Secretary of State made. If the hon. Gentleman does not have a copy, I will send it to him with my compliments—I might even get the Secretary of State to sign it for him for Christmas.
We extended the warm home discount to 2021, so that it can continue to provide more than 2 million low-income and vulnerable households with a £140 rebate off their energy bill each winter. In addition, the winter fuel payments provide all pension households—people of pension age in the households—with additional financial support worth up to £300. Cold weather payments also provide relief to the elderly, the vulnerable and those who need extra support with their fuel bills during spells of cold weather. Last year, that alone provided an estimated £98 million in cold weather payments to keep people warm in vulnerable households.
The Minister, or at least the Treasury, will know who receives cold weather payments. Is any measure taken of the energy-efficiency of the homes in which those recipients live and therefore of whether, rather than just spending money every time the weather is cold, we might improve the energy-efficiency of those properties and so reduce the requirement for those payments to be received in the future?
If it is acceptable to my hon. Friend, I will write to him on that subject, because I need to speak to the Treasury about its analysis, which is what his question is about.
We are providing all consumers, including the fuel poor, with more control over their bills. The smart meter programme will mean millions of customers will be in control of their energy use, helping them to save money. A new safeguard tariff coming into effect on 1 January will protect 11 million consumers from high bills. On average, households will save £76 a year, with some saving a lot more. Significantly, as a result of these measures, the average fuel poverty gap has decreased from £379 in 2011 to £326 in 2016. Over that five-year period, the total fuel poverty gap has decreased by £88 million in real terms. Although it is important to recognise that progress is being made, we acknowledge that we still have a long way to go. The clean growth strategy included an ambitious set of policies for homes, the extension of energy-efficiency support through to 2028 and at least £640 million per year. We will be reviewing what the best form of support this will be in 2022, and I would welcome the views on this topic of hon. Members here today.
We will update the fuel poverty strategy for England in 2019, and we look forward to receiving good ideas on how we can make further progress. The new strategy will align our work on fuel poverty with our clean growth strategy and industrial strategy. We had always planned for the fuel poverty strategy to be a living, evolving document, because changing technology and innovation will mean that what worked in the past will not necessarily be the best plan for the future.
Will the Minister explain to the House why, as smart meters are rolled out in the north of England, we are not getting the most up-to-date and best smart meters, which people in Watford are getting? Why is the north being discriminated against?
I thank the hon. Gentleman for saying that my constituents in Watford are doing well out of smart meters, and they are, but the pace of the expansion is under continual review with the suppliers. The Secretary of State’s powers were extended in the recent Smart Meters Act 2018 and will be used to encourage take-up of smart meters, which is gathering momentum. I accept the hon. Gentleman’s point, though, because it is patchy in different parts of the country.
The main point is that for the first time we have an opportunity to ensure that our fuel poverty strategy is joined up with our holistic plan to improve energy efficiency throughout Britain. The new strategy will focus on better ways of identifying those in fuel poverty and targeting our assistance to them directly. It will help us to identify the most cost-effective means of achieving our target in 2020, 2025 and 2030.
Let me bring the focus back to our main goal, which is to improve the lives of those in fuel poverty. No one deserves to live in a cold home. We have the opportunity next year to set out a refreshed fuel poverty strategy that will lay out an updated plan for meeting the 2030 target. I would welcome hon. Members’ views based on their experience of fuel poverty, so that we can work together to set out a new, ambitious plan. This issue transcends party lines and affects us all. I look forward to hearing hon. Members’ questions and contributions on this topic.
Order. The House will be aware that this is a necessarily short debate. I hope that we will manage without a formal time limit, but I advise Members who wish to take part to prepare around five minutes of speaking notes, and no more.
As we enter another winter, I welcome the opportunity to stand opposite the Minister in what will hopefully be a collegiate debate. I regret, though, the urgent necessity once again to debate fuel poverty in this Chamber.
Fuel poverty epitomises what a UN statement recently described as the “great misery” that has been “inflicted unnecessarily” on the UK’s poor, and in particular on the millions of children locked into a cycle of poverty. The UK is one of the world’s largest and wealthiest economies, with all the means at its disposal to eliminate fuel poverty, and yet it is not being eliminated. The latest data shows there were more households living in fuel poverty in England in 2016 than in 2015. The figures were higher in 2015 than in 2014, when in turn they were higher than in 2013. It is not just the extent of fuel poverty that is on the rise, but the depth of fuel poverty—that is, the difference between households’ energy bills and what they can afford to pay. Fuel poverty is not only persisting, but getting worse. Members should be in no doubt that this is not an unavoidable fact of life. It is a political choice.
According to the Office for National Statistics, the number of excess winter deaths throughout England and Wales last winter exceeded 50,000. As we have already heard, that is the highest recorded number for more than 40 years. The figures were described by the charity National Energy Action as “preventable and shameful”. According to that same group, at least 10,000 of those premature deaths were due to vulnerable people being unable to heat their homes adequately. I would like Members to reflect on the people behind those numbers. It means somebody’s neighbour, somebody’s parent, and somebody’s child—10,000 people dying before their time just because they could not keep warm.
The terrible impact extends beyond preventable deaths. I have previously mentioned the impact on health. We know that children living in fuel poverty are twice as likely to suffer from respiratory problems, such as asthma and bronchitis, and that fuel poverty is associated with low weight gains in infants and higher levels of hospital admissions in the first three years of life. Adolescents living in cold homes are at five times the risk of having multiple mental health problems. On top of that, there are the negative effects on educational performance, emotional resilience and wellbeing. When combined with the fact that fuel poverty is not evenly distributed throughout the country, but concentrated in pockets of urban and rural poverty, we have the makings of what can only be described as a social crisis. In some parts of my constituency, fuel poverty affects one quarter of all households, and over one quarter of single-parent households. We know that it is a problem locally because, between April 2017 and March 2018, of those people who came to citizens advice bureau in Salford and Eccles about energy issues, the most common was dealing with fuel debt repayments.
In last year’s debate, I stated that 22% of households in Salford have prepayment meters compared with the national average of 15%, so I was particularly troubled by a report this year by Citizens Advice on the phenomenon of self-disconnection by those using prepayment meters. The report found that around 140,000 households in Great Britain could not afford to top up their meter in the past 12 months and that 88% of those households contained a child or someone with a long-term health issue. Half of those surveyed said that keeping their meter topped up was a daily concern, which is particularly shocking when we consider that more than 4 million households currently use prepayment meters.
Fuel poverty is not just an issue for those on prepayment meters. Following an unprecedented number of energy price hikes by suppliers rushing to increase prices in advance of the price cap, about which I will say more later, household energy debt has surged over the past year by 24%. It is often said that fuel poverty is due to the confluence of three factors that we have heard about very briefly already: low income, high fuel prices, and poor energy efficiency. I wish to say a few words about each.
After a decade of austerity and lost growth, annual wages are still £760 lower than they were in 2008. Is it any surprise therefore that 47% of all fuel-poor households in England are in full or part-time work? For those out of work, the benefits freeze has deepened fuel poverty as families, already struggling on very little, have experienced a real-terms income cut. The industry body, the Energy and Utilities Alliance, has noted that the introduction of universal credit, which leaves households without an income during the five-week changeover, is pushing more people towards making the decision not to heat their home and to face the dilemma of heating or eating. Raising the national minimum wage to £10 an hour, ending the welfare freeze, and reversing cuts to people with disabilities would go a long way to tackling absolute poverty, which is at the root of so much fuel poverty.
On the cost of energy, last month Ofgem finally confirmed that an energy price cap will come into force in January 2019. That is almost two years after the Prime Minister first announced a price cap as Conservative policy, and it is set at a level that is hundreds of pounds higher than the cheapest tariffs available. In the intervening period, the big six energy suppliers have hiked their tariffs, some on multiple occasions. Ofgem has announced that the cap is likely to be revised upwards within months of being introduced.
In addition, wholesale prices are rising, I feel obliged to mention research published just yesterday by the UK Energy Research Centre, which finds that a no-deal or hard Brexit could increase electricity generation costs by £270 million a year. That is another reason, if we needed one, to redouble our efforts in this House to avoid no deal or a bad Brexit deal.
Labour’s 2017 manifesto pledged an immediate emergency price cap to ensure that the average dual fuel household energy bill remained below £1,000 per year. Had that cap been introduced in July 2017, it would have saved households £2.85 billion between July 2017 and November 2018.
I know the hon. Lady does a lot of reading into energy policy, so she will know that a price cap can only be a temporary correction to the market. What is her longer-term plan for delivering a fairer energy price?
The hon. Gentleman is very learned on the topic of fuel poverty, and I agree with what he said. The Labour party has persistently stated that an energy price cap is a sticking plaster while the wider energy market is reformed, because it is not currently working in the interest of consumers. It forms part of the wider plan of Labour’s energy policy portfolio completely to reform the energy system as we know it.
Network costs represent over one quarter of the cost of a gas and electricity bill, but customers have been getting a bad deal. Citizens Advice estimates that network companies will make £7.5 billion in unjustified profits over an eight-year period. A recent report by the Energy and Climate Intelligence Unit found even more excessive returns captured by distribution network operators than Citizens Advice had predicted, with the six distribution network operator parent companies posting an average profit margin of 30.4%. By bringing energy networks back into public ownership, Labour would reinvest and pass on to customers the money currently paid out in dividends.
Will the hon. Lady give way?
I will make some progress before taking an intervention from the hon. Gentleman.
I turn to energy efficiency. A well-insulated home saves households money, makes homes naturally warmer and more pleasant places to live, and cuts energy use, helping to tackle climate change. At least £1 for every £4 spent heating UK homes is wasted due to poor insulation. Improving the energy efficiency of the UK’s housing stock, which is among the oldest and least efficient in Europe, really should be a no-brainer, so how are we currently faring?
According to the Committee on Climate Change, insulation rates have fallen by 90% since 2012. The energy company obligation—known as ECO—which is funded by a levy on bills, is the only remaining domestic energy efficiency delivery mechanism in England. It has also been cut from £1.2 billion a year when it was first introduced in 2013 to £720 million per annum in its second phase, and has been reduced still further to £640 million—effectively a 50% cut. It is therefore no surprise that the Government are off track to meet their targets.
In their 2015 fuel poverty strategy, the Government set a target of ensuring that fuel-poor homes are upgraded to an energy efficiency rating of EPC band C by 2030. But according to the Institute for Public Policy Research think-tank, the Government will not meet their target for upgrading fuel-poor homes until at least 2091. That is why, as a policy suggestion to the Minister, the Labour party proposed investing £2.3 billion a year to provide financial support for households to insulate their homes, and for local authorities to drive take-up and delivery of insulation schemes, in order to bring 4 million homes up to EPC band C by the end of one parliamentary term.
Labour’s plans included fully covering the cost of insulation for low-income homeowners and all social housing, which will particularly benefit older people living in fuel poverty and pensioners on low income struggling to cover the cost of sky-rocketing energy bills. This would have delivered savings of at least £270 a year to affected households. As well as this investment, Labour was also committed to tightening the regulation of privately rented homes, blocking poorly insulated homes from being rented out.
I have tried to set out just some of the measures that will tackle the causes of fuel poverty: low incomes, high fuel costs and poor energy efficiency. I am not seeking to make party political points, but rather to indicate the level of commitment needed if we are truly to address the problem, because what is the alternative? Are we really willing to accept preventable and shameful winter mortality at current levels? Are we really willing to accept that we live in a country where some people go to bed early to stay warm, leave the curtains drawn and even paper over their windows? Is it acceptable that people, often vulnerable people, have to seek out a library, a café or even an A&E department just to stay warm?
I do not believe that anybody in this House wants to see that, but wanting to end fuel poverty is simply not enough; rather, we must be willing to deploy the resources available to us to bring an end to what remains an avoidable indignity for millions.
I am afraid that I was over-optimistic about the five minutes. We will need to have a time limit, and it has to be three minutes.
I will rattle through what I have to say very quickly, then, Madam Deputy Speaker.
As both Front Benchers have said, the key to solving fuel poverty is twofold: on the one hand, we reduce the price of energy; and on the other, we help consumers to use less energy. In the two minutes and 30 seconds remaining, I will very quickly whizz through some of the things that we could do that are relatively low-hanging fruit for the Government. First, the costs of running the energy system are growing too much, and we have a number of very comfortable, monopolistic companies that perhaps we could screw down on a little in order to see whether the growth in system costs could be curbed.
Secondly, while the price cap is a useful temporary measure, there is a huge opportunity for market reform in order to take advantage of the very cheap renewable energy that can now be generated, and the flexibility that now exists within the system that can make use of those renewables without the need for quite so much in the way of back-up generation.
We can also make some really good progress on allowing energy and heat as a service to come through as a proposition to consumers. I would like Ofgem to do more to work with the companies that are likely to provide those services so that we can put in place a regulatory construct that will allow consumers to start to take advantage of this sort of initiative very quickly. I know that the Government are leading on the changes to the feed-in tariff, but we must start to look at how we encourage people to generate behind the meter for their consumption behind the meter, because that will reduce their energy costs, too.
But generation is just half of the story—using less is very important, too. Many of the measures I have mentioned, particularly things like heat and energy as a service, will naturally lend themselves to greater energy efficiency, particularly as the companies that are delivering those services are quite likely to want to install the energy efficiency measures within a home or business because they make a greater margin by being able to do that in the most efficient way possible. Lots of companies out there are innovating all the time in terms of what can be put in walls, rooms, doors, windows and floors in order to let less heat escape from a business or a home.
Does the hon. Gentleman agree that we need to prioritise the properties that have never been on the gas grid, because they lose out whichever way? I am sure that he has some properties like that in Wells, as I have in Stroud.
Not only do I have lots of them in my constituency—I have just bought one and am in the process of renovating it. The hon. Gentleman is absolutely right. In rural areas, the deadly combination of solid walls and not being on the gas grid can often mean that fuel poverty is at its most acute in areas that look relatively affluent. Tackling that can and should be a priority, but it is monstrously expensive. When someone is going through the process of renovating a home, they are making lots of decisions, and the energy efficiency measures are by far the least glamorous of those that they choose when the alternatives are things like decorating, carpets and all the other stuff.
Those who live in fuel poverty are having to make choices that we really should not be asking them to make when the technology exists out there for us to help them to use less energy through what we put in their walls, roofs and floors, but also through the tech that we put in their homes that can help them to manage their demand in a really helpful way. I know that the Minister is very focused on this and that the Housing and Planning Minister also recognises the enormous value in setting higher standards so that those who live in social housing have better energy efficiency.
I will rush through my notes because other Members want to speak, but we need more time for this kind of debate in the House, not the curtailed version we have tonight.
Far too many people are suffering cold and damp, in fuel poverty, and they should not be doing so. As my hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) pointed out, two of the most important drivers for fixing fuel poverty are reserved to this place: low incomes and fuel prices. Austerity has been one of the key drivers of fuel poverty for people across the nations of the UK. The UN special rapporteur has been mentioned tonight, so I will not cover that ground again, but he said that the
“manifestations are clear for all to see.”
Westminster austerity increases winter austerity for people.
What my hon. Friend is saying is very important. I grew up in a household where the heating was never put on, and I remember trying to do schoolwork with my freezing hands trying to hold a pen. He has talked about the factors that drive fuel poverty. Does he agree that the high cost of nuclear will do nothing but exacerbate the high cost of energy, with the extortionate price rates involved hitting poorer families hard?
Indeed. I can only agree with my hon. Friend, and I will come back to that.
The key thing is that universal credit is driving the problems that people face in their houses. They have a genuine problem and have to endure pain in choosing whether to eat or put on the heating. That is not a cliché. It is a fact of life for people living in fuel poverty. Over the past five years and more, we have seen it in my constituency, with people suffering from the pilot of universal credit to its roll-out today.
The worst fuel poverty comes in areas of low income and, typically, rural areas. Unemployment levels are almost irrelevant when it comes to universal credit. The measures that the Chancellor introduced in his Budget do nothing for those already struggling on universal credit. They do nothing to reverse the cuts and nothing for those who are caught by the odious rape clause. Indeed, they do nothing to address the benefits freeze—even the transition funding will not come into place until next year. The Resolution Foundation has pointed out that the benefits freeze will cost low-income families £210 in 2019-20. Those are poor people, women, ethnic minorities, children, single parents and those with disabilities.
Measures can be introduced to reduce fuel poverty—for example, on insulation. The UK Government cut grants in 2015, and as a result, new insulation dropped by 90%. The new ECO programme is cautiously welcomed, but as green think-tank E3G pointed out,
“At least twice as much support is needed for low income households who struggle with their energy bills.”
It went on to say that the Government of Scotland grasped the importance of energy efficiency and that, including ECO support, they
“invest four times and twice as much per capita respectively in low income household energy efficiency as is invested in England.”
Low-income households need energy efficiency, and they need that to be invested in.
The Scottish Government’s green homes network has helped thousands of people to stay warm and save energy. It is clear to everyone except the UK Government that new industries such as carbon capture and storage and hydrogen need to be invested in. After the betrayal of Peterhead, with that £1 billion project withdrawn, it will not cut it for the UK Government to replace that with 10% of the investment promised. These new technologies need proper investment.
The Energy Saving Trust said that Scotland is not only “leading the way” in energy efficiency but
“regularly outperforms the rest of the UK when it comes to slashing carbon emissions.”
On public and community ownership, Local Energy Scotland, the Scottish Government’s arm, is going forward with local energy projects and community and renewable schemes through the community and renewable energy scheme—CARES. However, Ofgem’s consultation seems targeted to hit homes and businesses that generate their own electricity. The aim, it says, is to shift the burden to others; those who use more will pay less, and those who use less will pay more. That disproportionately hits those in areas of high fuel poverty.
We need fair pricing. People who are living off the grid need to be treated fairly. We need an off-grid regulator, and we need to bring forward payments for off-grid people. In 2012, my former colleague Mike Weir MP introduced a private Member’s Bill, the Winter Fuel Allowance Payments (Off Gas Grid Claimants) Bill, to help bring forward the timing of winter fuel payments to enable people to purchase fuel at a time of year when prices were likely to be lower. Yet this is not regulated.
Ofgem seems more interested in protecting the energy companies. It has also refused to do anything about the differential that households, particularly those in Highland and other rural areas, pay in energy unit prices. In Highland, it costs 4p a unit more for people to pay for their energy than in other parts of the UK. An Ofgem spokesman recently said to The Press and Journal:
“Network companies face different costs for serving customers in GB regions, for both gas and electricity. Licenced network operators recover their allowed revenues, set by Ofgem under the”—
RIIO, or “revenue = incentives + innovation + outputs”—
“price control arrangements, from customers located within their licensed areas... This is a reasonable way to allocate these costs between customers. Ultimately it would be for Government to decide if changes should be made to these existing arrangements. Typical network costs are around 25 per cent (about £250) of overall energy bills.”
Ofgem is more interested in looking after the energy companies than those consumers who are actually struggling. We need a fair redistribution of these costs, which does not mean costs rising for other people, but actually brings down the level for those who are suffering in rural areas. There is poor value and there are poor services.
In Scotland, despite benefiting from its energy wealth, Westminster has left an energy system in which consumers are struggling to pay their bills. Despite the huge renewable resources—25% of Europe’s offshore wind—and oil and gas tax revenues of £350 billion since the 1970s, investment has been in failing and failed nuclear power. Wylfa, for example, is rumoured to be benefiting from £6 billion in equity and £9 billion in debt funding from this Government. It has a strike price deal that, at £77.50, is way above a fair rate—it is, indeed, below Hinkley’s eye-watering £92.50, but way above offshore wind’s £57.50—and who pays? The consumer—those in fuel poverty.
The Scottish Government are bringing forward their publicly owned energy company, and we look forward to seeing the benefits of that. I will wind up soon, Madam Deputy Speaker, but you must understand that there is a lot of ground to cover in this debate, and we have been given very little time for everybody to do so. We look forward to bringing forward a publicly owned energy company to reduce bills for people in Scotland and to help them out of the poverty trap of fuel poverty, low wages and the crippling application of universal credit and austerity to people in their homes and across our communities. It is time that the UK Government took some responsibility for this and took action to alleviate the pain that people suffer on fuel poverty.
I cannot thank the hon. Gentleman who has just spoken by mentioning his constituency because that would use up all of my time.
There are two things that I think are important for the people of Willenhall and Bloxwich who may be suffering from fuel poverty. The first is that, even if they have to insulate their lofts themselves, the cost of that for a three-bedroom property is approximately £300, and Which? estimates that the payback would be in two years. That is a saving of £225 per year on their fuel bills, so it is definitely worth the investment. The second is that people do not switch energy provider. To me, it is heartbreaking that 60% of people surveyed a year ago had not switched their energy provider. Doing so would afford them a great opportunity to save money. I would like to say to the people of my constituency, “Please get your loft insulated, and please make sure that you are getting the best deal from your energy provider”.
I would like to talk briefly about my time with the YMCA. When I started working at the YMCA, it had a 72-bed direct access hostel for people who had previously been rough sleepers. It was a revelation to go to that building, which was 60 years old. Originally, it served as a home for men who had come to work in Birmingham and needed somewhere to live. As I have said, it was then used to provide accommodation for former rough sleepers.
The YMCA did not have much cash, so when I got there it still had the original Robin Hood Beeston boiler. The boiler was over 50 years old; it had originally started life as a coal-powered boiler before being converted to run on oil and subsequently on gas. It was probably the most inefficient heating system in the UK, heating a 72-bed hostel, with very poor control—absolutely crazy. I would frequently get there during the summer to find the heating on and the building so hot that the windows were open, because it did not have a sophisticated system.
However, along came Homes England with a grant of £2.6 million. The YMCA was able to raise £700,000 itself and has now introduced a much more efficient heating system. The building has been completely clad to improve the U-values and has had new windows fitted. As a result, the cost of heating the building has dropped dramatically, and when we are talking about people with very low funds contributing through a service charge to heat the building, that is an essential improvement. That is what this Government have done to help.
If ever we needed an example of how the Brexit omnishambles is squeezing out time for important debates on issues that matter to our constituents, this is a perfect case in point. There is so much to say. As the chair of the all-party parliamentary group on fuel poverty and energy efficiency, I wish we had more time.
For example, a report published by the Institute for Public Policy Research in June showed that the Government are set to miss their fuel poverty targets by 60 years. It is not that the Government do not know how to reverse the situation—indeed, they have even set a goal to do so, in both their manifesto and their recent clean growth strategy. The tragedy is that in recent years the Government have scrapped, reversed or shelved many of the measures that could actually have helped. It is truly shocking that, for example, we are in the absurd situation where the UK Government are not investing any public funds in improving domestic energy efficiency through insulation, particularly in England. In 2018, in one of the wealthiest countries in the world, that is nothing short of a moral failure.
The frustration is that many of us know that tackling fuel poverty by investing in energy efficiency could be a real win-win, bringing people’s fuel bills down, tackling climate change and creating jobs. Despite clear evidence of that win-win-win, the funding for energy efficiency in this year’s Budget was zilch. Quite why the Government can find £30 billion to fix potholes and improve roads but not to keep people warm is beyond me.
Many of us had hoped that the Government would use their response to the national infrastructure assessment to make progress on this issue. They did not. Published quietly alongside this year’s Budget, it did not even make reference to the Government’s statutory fuel poverty targets, let alone commit to the additional investment needed to meet them. The impact of the Government’s complacency will be felt long beyond the effects of fuel poverty today. As we know, a few months ago the Intergovernmental Panel on Climate Change released its latest report, saying that we have just 12 years to halve global emissions if there is to be any chance of meeting the 1.5° threshold.
The Committee on Climate Change has repeatedly made it clear that improving energy efficiency through better insulating our homes is crucial to our existing climate targets. We need those policies now, well before the long-term targets of the Climate Change Act 2008 are amended in line with the latest IPCC report and the Paris climate agreement. The withdrawal of incentives has cut home insulation installations to 5% of 2012 levels. That is a shameful failure, and it has to change. We need a massive programme of home insulation if we are to make a meaningful contribution to the global project of protecting our planet and our children’s future. We also need to have not just the big six energy companies, which are profiting from this situation; we should have 60,000 energy companies and more, as they do in Germany. We should have real community energy, not as a “nice to have” but as a genuine, essential measure.
A few weeks ago I had the privilege of chairing a roundtable organised by the all-party parliamentary carbon monoxide group. The roundtable looked at the link between fuel poverty and carbon monoxide poisoning—perhaps not the most obvious link, but one that the various stakeholders around the table, from National Energy Action to the London fire brigade, identified as a real concern, partly because people were bringing in barbecues as secondary heating. We may have heard about that problem with barbecues, but we do not realise that people are relying on them for heating. We also heard about the use of secondary heating options in homes, such as gas fires that are often unserviced. Last year, only 40% of gas fires were reported by households as having been serviced over the previous 12 years, with a key reason being cost. Sadly, too few people are aware of the gas priority services register. I intend to make people in my constituency more aware of it, as well as the warm home discount scheme.
We have to question how we can have got to that position. The fact is that many people in my constituency are suffering because they do not have enough money. Some are on universal credit. They have disabilities, and their benefits have changed. They have choices to make about whether they heat their home or buy food. Some of our local food banks report that people are asking for food that does not have to be heated but can be eaten straight from the can or the packet, because they cannot afford to cook. In an area like mine, where many people suffer from lung conditions, people should not have to choose between heating and eating—it’s not on.
Energy costs are currently very high. The default tariff cap might be useful, but it still does not resolve the issue of people not having the facilities or the skill to work their way around the energy supply market for the cheapest deal. According to the Committee on Climate Change, progress on energy consumption has stalled. As we have heard, insulation rates have fallen since 2012. Current resources are not sufficient to meet fuel poverty commitments or wider energy efficiency targets set out in the clean growth strategy.
As other hon. Members including the Minister have said, winter deaths exceeded 50,000 last year, many of which were due to fuel poverty. Areas like mine in the north-east have been the hardest hit and have the highest percentage of households in fuel poverty in the country. The spikes in winter deaths due to fuel poverty are both preventable and shameful. The responsibility lies with the Government. They must address fuel poverty and energy efficiency in the comprehensive spending review.
It is damning for all of us in this House that the Benches are empty as we debate one of the greatest scandals of our time, fuel poverty.
I first spoke about fuel poverty in January 2011. It was my very first speech in Westminster Hall. That day, I chided the Government for 25,995 winter deaths. Within eight years, that has nearly doubled to 50,100. I know that Ministers like to blame the previous Labour Government, but there is nothing they can say about that—it is on their watch. They are the ones responsible for excess winter deaths and they have a duty to do something about it.
The second time I spoke about fuel poverty was in relation to terminal illnesses. In my constituency, like in many former industrial heartlands, we see large numbers of people with chest and respiratory diseases—chronic obstructive pulmonary disease and so on—which mean that they have to turn up their thermostat because they feel the cold more than anybody else. Further to that, I was shocked to discover that many people who have been diagnosed with cancer or other terminal illnesses, such as motor neurone disease, find themselves in abject poverty. Not only can they not afford to pay their food bills, they are struggling to pay their energy bills.
In that second debate, I specifically asked the Government to consider giving people with terminal illnesses an entitlement to a winter fuel payment during the time they are ill, or even, in the case of motor neurone disease, to the end of their life. The Minister at the time said he would look into that. Unfortunately, here we are seven years later and cancer patients and those with terminal illnesses are still suffering. For them and their families I call on the Government today to make it a priority to give people with terminal illnesses some comfort in their final harsh days.
A quarter of Scottish households are living in fuel poverty. It is clear that that is down to low income and the high cost of fuel. Alongside that, the high cost of nuclear, with the extortionate strike prices involved, is grotesque. Scotland boasts huge renewable resources, including 25% of Europe’s offshore wind resources.
I grew up in a freezing cold household, and I remember, when I was doing my school work, trying to hold a pen with freezing cold hands. The Minister will appreciate that in this day and age, no child and no family should have to live like that. It is time that fuel poverty was tackled in a meaningful way, so that people can enjoy a minimum level of comfort in their homes. That is why what the Scottish Government are doing on defining fuel poverty—we are one of the first European countries to do so—is so important. They have set a target to cut fuel poverty to 5% by 2040. The UK Government must use their powers to do what they can to deal with this fundamental social blight that looms over too many households in the cold, dark months.
In a speech on the same topic early in 2017, I said:
“We are in a cold homes crisis”.—[Official Report, 21 March 2017; Vol. 623, c. 822.]
Regrettably, that message remains. A large number of people in our society are living in fuel poverty, unable to live in a warm, dry home, tragically often resulting in excess winter deaths. Living in fuel poverty is miserable, for both the young and old. It increases anxieties and stresses and puts pressure on the already stretched NHS. According to the NHS, the current scale of the problems in England alone costs the health service approximately £3.6 million a day and results in 50,000 unnecessary deaths. The Government have a duty to ensure that everybody in the UK is living in a warm, dry home, and I am grateful for this opportunity to hold them to account on the progress—or lack of it—on tackling fuel poverty.
A year since the last debate, little progress has been made and the Government continue to miss the targets that they set. How did we get to the tragic point where, weeks before Christmas, millions of people will be vulnerable to having a cold, damp home? Under the Tories, we have seen a low-wage, low-productivity economy, with precarious working hours for millions of people, leaving them vulnerable. Coupled with that, we have seen a disastrous universal credit roll-out, forcing millions into food banks. Shamelessly, Tory Ministers have used opening a food bank as a photo opportunity recently, as though the increase in food banks were to be commended.
In my constituency, 41% of children are living in poverty, and the number of food bank parcels given out has increased exponentially. While many cannot rely on a decent pay packet, they are none the less met with increasing living costs. Under a Labour Government in 2007, we saw 2.5 million energy efficiency measures implemented in a single year. That number has fallen off a cliff. This Tory Government are failing those in fuel poverty, and they are failing the people of Britain.
I agree wholeheartedly with the points made about our not having long enough to debate this issue. There were some very interesting suggestions from Members right across the House, including about the personal commitment from the hon. Member for Blaydon (Liz Twist) and a very interesting point made by the hon. Member for Islwyn (Chris Evans) about targeting winter fuel payments, which have historically been a universal benefit.
However, someone listening to this debate would think that there had been no progress whatsoever. If I may, let me push back against what I think was a creative, yet factually incorrect, attempt by the Opposition to conflate all sorts of things. In the last full year of the Labour Government, the proportion of households in fuel poverty in this country was 11.9%. That is now 7% lower, and the median fuel poverty gap has dropped by 16% over that time—[Interruption.] Those are the facts. The facts are that we know we have more to do—[Interruption.] Yes, of course it has been re-based, but let us just focus on what has been delivered in policy terms.
We have halved the number of fuel-poor households living in F and G-rated properties since 2010. I have taken personal responsibility for reforming the energy company obligation, which was only 30% focused on fuel poverty just a few years ago and is now 100% focused on fuel poverty. That means £6 billion of spending over the next decade. It is being focused on rural poverty and is more focused on those who actually need it. We have included disability benefits and allowed for more innovation. As my hon. Friend the Member for Wells (James Heappey) said, solid wall insulation is not the way to improve fuel efficiency in many homes. With cross-party support, we introduced the Domestic Gas and Electricity (Tariff Cap) Act 2018 to save millions of people money on their energy bills. Of course there is more to do, but I hope that one day we can reach a cross-party consensus on something as important as solving fuel poverty, on which no Government, including the last Labour Government, have a good track record.
Motion lapsed (Standing Order No. 9(3)).