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Housing: Oil

Volume 708: debated on Wednesday 4 March 2009


Asked by

To ask Her Majesty's Government what is their assessment of the financial situation of rural households which, because they have no access to a gas supply, have to pay large sums of money for bulk deliveries of oil; and what action they will take to address this issue. [HL1349]

The most recently published fuel poverty figures show that in 2006 around 2.7 million households in England were not connected to the mains gas network, with around 20 per cent of them estimated to be in fuel poverty. Around 900,000 households rely on heating oil as their main fuel for central heating and just under a quarter of these were fuel poor in 2006.

Warm Front is the Government's flagship scheme for tackling fuel poverty in the private sector in England for vulnerable householders. The scheme currently provides grants for specified insulation and heating measures up to the value of £2,700. or £4,000 for oil central heating (including properties with no access to the gas network).

The Government recognise the specific challenge of assisting properties in rural communities. The Warm Front Scheme Management Board considers on a regular basis whether to approve appropriate alternative technologies on to the scheme, where they might prove cost-effective. One example is through Warm Front and National Energy Action where we are currently carrying out a pilot using solar thermal technology together with electric heating.

In addition, Warm Front has a networking team which operates in rural areas to help bring assistance to vulnerable households in rural communities. Proactively engaging with local organisations and area-based schemes, the team helps to increase the take-up of grants and energy efficiency advice in rural areas.

The carbon emissions reduction target (CERT) is the Government's principal policy for driving up household energy efficiency by 2011. Under CERT the major energy suppliers have an obligation to direct at least 40 per cent of carbon savings at priority group households. This includes important measures for hard-to-treat homes such as solid wall insulation and central heating. Suppliers installed around 80,000 heating measures through fuel switching in the previous three-year obligation period to March 2008 (the second energy efficiency commitment, EEC2). The Government recognise there is a high up-front cost for these measures and therefore under CERT we have introduced specific incentives to help improve the financial viability of fuel switching, with a particular focus on homes which are off the gas grid.

The principal barrier to providing new gas connections to communities and households beyond the mains gas network is the cost to the customer. Ofgem recognises the benefits that access to gas offers low-income households, and has incentivised the large gas networks to connect deprived communities under the 2008-13 gas distribution price control. This packages a range of existing funding sources and uses independent gas transporters with an aim of ensuring the maximum number of vulnerable and fuel poor households should be connected to the gas network at least cost. Those households who will be assisted under the scheme qualify because they reside within the 20 per cent most deprived areas according to the index of multiple deprivation, qualify for assistance under Warm Front (or similar schemes in the devolved nations) or fall within the priority group under CERT.