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Cost of Energy: Dalmarnock

Volume 738: debated on Tuesday 24 October 2023

Motion made, and Question proposed, That this House do now adjourn.—(Gagan Mohindra.)

For those unfamiliar with the Dalmarnock neighbourhood in my constituency, it is located in the east end of Glasgow, between the River Clyde and Celtic Park. People there are generous, kind and welcoming. It has been an absolute pleasure to represent them, first, as a councillor and now as an MP for the past 16 years. Dalmarnock has seen a lot of change over the years, as heavy industry has declined and the population has moved away to the new towns. In more recent years, it has seen significant regeneration from the Clyde Gateway—I draw Members’ attention to my entry in the Register of Members’ Financial Interests, as the unpaid chair of Clyde Gateway—and it was host to the world as the site of the Commonwealth games village.

I will speak first to the wider picture that people face. Over the past two years, families right across Glasgow and Scotland have struggled with soaring energy prices. While France implemented a price tariff shield on electricity and gas, the UK Government took more limited measures, which have left many people struggling to keep their homes warm and pay their bills. Inflation related to Brexit and the disastrous mini-Budget also increased the cost of food on our shelves. The energy price cap brought in by the UK Government was welcome, but prices remain significantly higher than they were prior to the war in Ukraine.

Last year’s energy bill support scheme, which, again, we in the Scottish National party welcomed, was supposed to give every household a £400 discount on their energy bills from winter 2022 to March 2023. I recall very well the Prime Minister and the Chancellor of the time not understanding exactly how a prepayment meter worked. That speaks to some of the issues that have happened with the scheme. There were many people whom it did not reach. We feel that the crisis has not gone away. We are calling for a further round of an energy bill support scheme with a £400 rebate this winter, because the crisis has not gone away and people are still struggling.

On some of the issues we faced in administering the scheme through the casework I had in my office, these things ought to be addressed in any future scheme to ensure that everyone gets what they are entitled to. In many cases, people did not even realise they had received the vouchers, because they had been automatically applied to their smart meter and the cost had gone up so dramatically that they did not feel the difference. It was so hard to do the various checks and to go back to people and explain that they just were not entitled to any further support. To make matters worse, it was estimated that more than 13,000 energy bill support scheme vouchers went unclaimed in Glasgow Central, including for residents in Dalmarnock. The vouchers for constituents with prepayment meters were so important because, disproportionately, they are both on lower incomes and charged higher prices for the energy that they consume.

The energy support schemes of the future should be targeted at those who need it most. A flat scheme across the board, regardless of need, is not progressive in any way and does not support those with larger families or people with disabilities who need the heating on for longer periods. I am concerned that so many people did not receive the support to which they were entitled, which raises serious questions about the efficacy of the scheme. That money should have been in the meters of my constituents, not the coffers of the UK Treasury. I would like to ask the Minister how energy firms are being held to account for the vouchers that did not reach their customers, because in many cases they know exactly who those customers are. What review are the UK Government doing of the effectiveness of the scheme that they created and forced on companies at short notice? From speaking to the companies, I know that they found the scheme difficult to administer at times. It is clear that there are complexities in our energy system. Complexity of supply and market failure is resulting in limited choice, and very varied and poorly insulated housing stock, in the UK as a whole and even in individual neighbourhoods such as Dalmarnock.

People in Dalmarnock have been affected more acutely by the cost of living crisis than the general population of Glasgow, or than people more widely in Scotland. Dalmarnock is exactly the sort of community that the UK Government should have in mind when constructing an energy support scheme. As Understanding Glasgow’s Glasgow Indicators Project stated:

“Estimates of male and female life expectancy in Parkhead and Dalmarnock are lower than the Glasgow average. Single parent households make up 61% of all households with dependent children. The rate of claiming unemployment and disability related benefits is higher than the Glasgow average. Levels of deprivation and child poverty are also significantly higher than average. Thirty-two per cent of the population are limited by a disability.”

If the scheme does not work for Dalmarnock, it does not work anywhere.

Dalmarnock also contains a real mix of housing types, from the traditional sandstone tenements we think of when we think of Glasgow, to interwar tenements, four-in-a-block homes, terraces, houses built in the 1980s and the 1990s, the Commonwealth games Athletes’ Village, and brand new flats built to Passivhaus standard. Dalmarnock is also home to a significant population of Showpeople, whose chalets and caravans come in all shapes and sizes. The energy supply is just as varied; it ranges from traditional gas boiler and storage heaters, to a district heating scheme and rooftop solar in the games village, and a communal boiler in the new Riverside Dalmarnock development.

I was aware from my casework of the many challenges my constituents faced with their energy costs, so I went out to conduct a survey in Dalmarnock to get a better picture of what was going on and what additional support might be required. The results were heartbreaking. Where my team and I have been able to assist people, we have done so, yet much more is required on a UK structural level to tackle the issues my constituents face. The survey was conducted in the period after the energy bills support scheme closed. We surveyed over 1,000 people in the Dalmarnock area, and received a response rate of around 10%. Respondents were from right across different housing types, so results showed the breadth of people’s experience with this issue. Replies are still coming in.

We asked about housing type and tenure, energy supplier, the proportion of income people were spending on their bills, and how much that had gone up in the past year. We also asked people about dampness and condensation in their home. Many reported regularly running out of credit on their prepayment meters, and having had prepayment meters forced on them because they were in debt.

I thank my hon. Friend for taking my intervention. I wanted to come in earlier on prepayment meters, but I was very keen to listen to what else she was saying. Despite the fact that Ofgem has, for the moment, stopped energy companies from being able to force prepayment meters on people, and despite the fact that the Courts and Tribunals Service stopped that happening in England and Wales, Scottish Power applied, I think in the last week, for over 100 such meters to be installed, and got the warrants. Does she agree that it can be doing that for only one reason, which is to intimidate people who are struggling to pay their bills?

I thank my hon. Friend for that intervention, and for all the work she has done to highlight the issues facing people on prepayment meters. That is an absolutely brutal way to go about your business: forcing your way into people’s homes, forcing people to take prepayment meters, and then clawing back money off them that they could have used to heat their house, rather than to service a debt caused by soaring energy prices. The energy companies have made significant profits out of these people—profits that really have not been earned through anything that the companies have done, but that have resulted from global circumstances. People in our constituencies in Glasgow are paying the real price for that, living in cold, dark flats through the depths of winter.

A woman wrote to me who lives in a new-build flat. She is in debt now. She works full time, but has had to ask for payment holidays on her credit cards and other loans. She is not the type of person who gets into this situation. She said:

“I have had to cut my food shop. I live now on soup and sandwiches. I don’t put my heating on unless it’s freezing. I don’t have any disposable income now and I’m contemplating giving up my car”.

The impact of these high bills on whether people can afford to eat properly is stark. Another woman reported:

“I can’t cook during the day on weekdays. I can only cook at night or weekends in order to save energy and money. I can’t cook my local or native food because it takes longer to cook. We eat more junk foods which is not healthy for us.”

People recognise that this is causing them harm, but there is really nothing that they can do about it. A gentleman who has diabetes reported to me that he goes to bed early, he feels cold all the time, and his diet is not good owing to money concerns. Another woman told us:

“I was worried about accidentally running hot water as it would cost so much. I refused to have friends or family around because I was embarrassed to be living like that.”

Even those in new-build houses are struggling, with one constituent reporting that the house ventilation system in her new home cost 15p a day in 2015, and now costs £1 a day, which is a 600% increase. As a result, she opts to use it only when the condensation starts to build up, and after mould has appeared on the windowsills. That is no way for people to live, but they simply do not have the money to make ends meet. Another constituent reported that the price of her gas and electricity had risen from £72 to £184 a month. The family are supported through universal credit, and there is no means of getting extra money in. I do not understand how this Government expect people to live.

The survey asked people who were not comfortable putting the heating on what alternative methods they used to get warm. Some said that they would not even boil the kettle for a cup of tea, while others, including a pensioner couple, reported going to bed early to stay warm. Many respondents said that the cost of energy bills had caused them stress or other adverse mental health issues. Some had physical health issues such as fibromyalgia, anaemia or even cancer, which they felt could be alleviated by a warm environment in their homes. It is even more worrying that so many—including the constituent whom I mentioned earlier—reported damp and mould in their home, which is a risk factor for future respiratory problems. One said that they had to paint rooms twice over the last year, to cover up damp patches.

I am aware that housing associations in the area are worried about the impact on their tenants and housing stock in the long term. Although they had some money to distribute to their tenants through the Scottish Government’s social housing fuel support fund, that does not fix the systemic issues, which are reserved to Westminster. One of those systemic issues is the regulation of heat networks—an issue that has affected people in the Riverside Dalmarnock development. In January this year, those residents, whose heating is supplied by a communal boiler system operated by the company Switch2, received a notice informing them that the price of a kilowatt-hour of gas was increasing from 12p to 33p. That has had a serious impact on many residents, a number of whom have disabilities, because the development was sold to them on the basis that it was accessible and affordable. One resident reported no longer using gas and washing in cold water; electricity was okay, but Switch2 had increased the cost of heating to unrealistic levels, and the resident could not afford hot water. The price of gas had risen from between £40 and £55 to £160 for the same usage.

In the post-covid “working from home” environment, some people are weighting up the cost of transport versus the cost of energy. One of my constituents said:

“If I work from home my home bills go up and my employer saves. But if I commute to work I need a car and fuel costs a lot too. I don’t have a choice and just have to foot the bill. I can’t default as it will affect my job.”

These constituents do not have alternative options for heating. The homes in that development are not equipped with traditional boilers, and cannot be supplied with heating in any way other than via the communal heat network. Switch2, for its part, purchases direct from energy providers and passes the cost on to its customers. The issue with the lack of regulation and support is not really of its making.

For those on communal and district heating, the energy bill relief scheme failed to provide the support that other energy customers across the UK managed to get, and the energy price guarantee does not apply to homes on heat networks. The regulation of heat networks remains forthcoming; plans for that were set out in the Government’s Energy Bill, but those plans are unlikely to be implemented before the winter. These constituents cannot wait. They cannot live in fear of prices going up still further. They need real support with their energy bills now, not after the situation has worsened. Can the Minister confirm the date on which those regulations will be put in place? May I also ask her what assurances can be given to those who are on heat networks? At what rate will the price be fixed when the regulations come into force? Will it be the rate that customers pay now, or the rate that they will be paying at that time? The prices may have gone up again by then. What information will they receive about the implications of these new regulations?

I would like to make a few points about business customers, because there is a relevance to them, too. A large employer in the east end came to me despairing that they could not cope with the price increase that they faced; they worried that they would not be able to keep their staff. They strained every sinew to keep their loyal staff during the pandemic, and they want to do right by them now. They felt thoroughly unsupported by the Government and, like many businesses, they are now marooned on a very high tariff, which they will be stuck with until it comes up for renegotiation. What more is the Minister doing, in conjunction with the regulator and suppliers, to tackle the patent unfairness of some businesses being stuck on a high tariff and struggling to pay their staff, while other businesses have a much better deal? There has also been scant support from the UK Government for the third sector. It should be a real source of shame that the churches and community centres that provide some of the most valuable support for vulnerable people also face these kinds of contracts, and have had to consider closing their doors because of the price of energy.

There is a further complexity for a particular group of business customers in my constituency—those who operate the Showpeople’s yards that I mentioned earlier. One of my constituents operates several yards and cannot get an explanation from his supplier, Scottish Power, as to why he is on different rates for different yards in the same street. He has had to pass the costs on to the tenants, and they too are struggling to understand the disparity. His costs have also gone up dramatically, as everyone else’s have. For example, he is paying three times as much for gas and electricity, which has gone from 17p per kW and a 28p standing charge to 56p per kW and an 81p standard charge. He has also struggled to get support, in common with others known as park home residents.

I received an email this week, by coincidence, from an organisation called Charis, which is administrating a warm home discount scheme for park home residents, but as it is benefit-dependent and targeted towards a group of people who traditionally do not claim benefits and are self-employed, I would question whether this scheme will really reach those who desperately need it right now. They have already waited a considerable time for this help to come. I ask the Minister to consider what more can be done for this group of people. On a technical point, how she will monitor the uptake of schemes such as this?

Temperatures in Scotland have already started to drop. It was 0° with frost on the ground in Glasgow on Monday morning this week, and there is the prospect of further chills. The Minister cannot wait—and my constituents cannot wait—for the freezing temperatures to hit the south-east of England before she takes further action on this. In Scotland, we are doing what we can in a grim situation. The Scottish Government have invested in social housing, and they introduced the energy efficiency standard for social housing in 2014. As a result, homes in the social rented sector are now some of the most energy-efficient in Scotland, with 85% achieving level D or above on their energy performance certificate. We are working hard to tackle fuel poverty, but responsibility for the structural issues and the cost of energy, which affect our constituents, does not lie with us; it lies in this place, and it is for this Government to try to fix them.

Today’s Joseph Rowntree Foundation figures on destitution in the UK make for utterly grim reading, but they find that the actions the Scottish Government are taking, such as the Scottish child payment, mean that

“Scotland has improved its position to lie below the GB average, having experienced by far the lowest increase since 2019.”

But these are just a few glimmers of light when energy and food prices are driving 3.8 million people across the UK into destitution.

It is beyond comprehension to me that people can be shivering this winter in energy-rich Scotland. It does not have to be this way. Independent Ireland will invest some of its budget surplus into energy support to see people through the winter. I urge the Minister, who I know is very keen to help, to do what she can to support people in Dalmarnock, in Glasgow and in the rest of Scotland with their energy costs. We face particular challenges. It is colder and people need that support. We need to reform the market to make it fair for the customers, not the shareholders. The will to change does not come from Westminster; it will come from an independent Scotland.

Let me begin by thanking the hon. Member for Glasgow Central (Alison Thewliss) for tabling this incredibly important debate on the cost of energy in Dalmarnock. She makes a strong case for her constituents and, as the Minister for affordability, I am mindful of the issues that she raises. That is why the Government spent nearly £40 billion protecting households and businesses from spiralling energy bills last winter. That included robust support for households, covering around half of a typical energy bill last winter through the combined support since October 2022 of the energy price guarantee and the energy bills support scheme, with a typical household saving around £1,500 by the end of June 2023. The energy price guarantee subsidised the per unit cost that a household could be charged for its gas and electricity usage. The typical household was therefore paying £2,500 a year for its energy when prices were at their highest, between October 2022 and June 2023.

To put that in context, the Ofgem price cap reached £4,279 for quarter 1 of 2023, which is what a typical household would have paid for its energy had the Government not intervened. Alongside the EPG, the energy bills support scheme delivered a £400 non-repayable Government discount on electricity bills to help 28 million households in Great Britain.

The hon. Lady mentioned the difficulties some people in her constituency faced in accessing energy support last winter, particularly those who were unable to be reached automatically. The EBSS alternative funding was available to over 900,000 households in Great Britain that did not have a domestic electricity supply and were not eligible to receive support automatically through EBSS, providing them with £400 to support them with their energy bills. I note the comments from the survey, and I am very interested, as we discussed before, to see the results of that survey.

The scheme remained open for three months from 27 February to 31 May, and the Government used a range of methods to ensure that as many eligible households as possible knew that they could apply. That included press notices to highlight the scheme in national and regional media, and a request for local authorities to write to care homes and park homes in their area.

The alternative fuel payment scheme delivered £200 to households that use alternative fuels such as heating oil, liquefied petroleum gas, coal or biomass, helping around 2 million off-gas-grid households to meet their energy costs last winter. The scheme particularly supported households in areas that are not connected to the gas grid, and support was doubled to £200 in the autumn statement to reflect the price rises experienced by people using alternative fuels to heat their home.

Only last week, my Department published figures showing that over £24 million had been spent on EBSS and AFP support in Glasgow Central, where the district of Dalmarnock is located. That is just two schemes and does not include the significant support provided through the EPG. In total, the Government spent around £1.2 billion to support households in Scotland.

The Government have welcomed recent reductions in household energy bills. The energy price cap for quarter 4 of this year has been set at £1,834, which is significantly down from the £4,279 at the start of the year. The energy price guarantee will remain in place until March 2024, providing a safety net for consumers should energy prices spike unexpectedly by limiting the amount that suppliers can charge per unit of gas or electricity.

Additional support has been delivered through the welfare system for the most vulnerable households, with eligible households receiving a £900 cost of living payment during 2023-24. This is an increase from the £650 such households received the previous year. The Government will continue to provide targeted support for the most vulnerable, with 3 million households across Great Britain expected to benefit from the £150 warm home discount this winter. Eligible households will also receive the winter fuel payment, worth between £250 and £600, and the cold weather payment that provides £25 during very cold weather.

As I am sure the hon. Lady knows, fuel poverty is a devolved policy. We have responsibility for England, but it is right that we note the work that the Scottish Government are doing in this space and the lessons learned. Multiple schemes have been set up, including the winter heating payment, the home heating support fund and the child winter heating assistance scheme, to help reduce fuel poverty specifically in Scotland. As set out in the autumn statement, we are exploring the best approach to consumer protection as part of wider retail market reforms.

We welcome Ofgem’s new rules for energy suppliers, which will ensure that all energy customers get the good service they deserve. Suppliers will now be required to prioritise vulnerable customers when they request help, offer timely repayment plans for those struggling with bills, and make customer ratings easy to find on their websites.

In the longer term, improving energy efficiency will be key to tackling fuel poverty, contributing to the long-term reduction of energy bills, and reaching net zero. In addition to the £6.6 billion allocated in this Parliament, £6 billion of new funding will be made available from 2025 to 2028.

The Government have also extended the energy company obligation—ECO—from 2022 to 2026 and expanded it to a total of £4 billion to accelerate efforts to improve homes and meet fuel poverty targets, and £1 billion has been committed through the Great British insulation scheme, which will improve more than 300,000 of Great Britain’s least energy-efficient homes.

The Government’s vision for the energy retail market is one that works better for consumers, is more resilient and investable, and supports the transformation of our energy system. Much remains to be done to deliver our vision. That is why we are pursuing further targeted reforms, which will set us on a path to unlocking competition, investment and innovation, and helping the energy market to achieve net zero while protecting the most vulnerable.

The hon. Member mentioned talking to suppliers. I assure her that I talk to suppliers and other stakeholders, such as Citizens Advice, on an ongoing basis. It is important to have those conversations.

We are also looking to provide protection to those using heat networks, including people in Dalmarnock. Subject to the passage of the Energy Bill, heat network customers in Scotland will be protected by UK-wide consumer protection legislation, as well as the regulatory framework established by the Heat Networks (Scotland) Act 2021.

The Government will closely monitor energy prices and keep energy support schemes under review, as well as provide longer-term support to keep energy bills more affordable for all. One of the schemes that we are considering is the “It All Adds Up” campaign, which I encourage the hon. Member to support. We are trying to encourage households to look at where they can make further savings.

I am planning to visit Scotland in the near future, and I welcome the opportunity to engage more closely on this issue.

I sincerely thank the hon. Member for introducing this important debate and for all her efforts to ensure that her constituents are fully supported.

Question put and agreed to.

House adjourned.