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Energy: Fuel Poverty

Volume 729: debated on Wednesday 13 July 2011

Question

Asked by

To ask Her Majesty’s Government what progress has been made in carrying out their “full-scale review of fuel poverty and its implementation”, with special regard to energy companies adopting a rising block tariff system of charging.

My Lords, the Secretary of State announced on 14 March 2011 that Professor John Hills would undertake an independent review of fuel poverty. He has been asked to consider fuel poverty from first principles—what causes it, its effects and how best to measure it—with interim findings expected in the autumn and a final report in early 2012. The review is independent. Its conclusions will be evidence-based and have not been and will not be pre-judged or pre-agreed with the Government.

My Lords, I thank my noble friend for that encouraging reply. It is good that Professor Hills will carry out that work. The problem is that energy companies recover their fixed costs from the first few hundred units they charge each customer, and the more energy used the lower the charge per unit. This seems topsy-turvy to me and does nothing to encourage us to use less energy. It is no wonder that there are millions of households in fuel poverty. With energy prices set to surge, surely the first few hundred units consumed should be relatively cheap and then the charging should get progressively more expensive per unit.

I am very grateful to my noble friend. This is a subject that we have discussed on many occasions. Indeed, our officials have offered to meet him to discuss it, which I am delighted to say they will in September. I can also inform my noble friend that I have written to Professor Hills and suggested that he might like to talk to noble Lords and hear their views, bearing in mind that his is an independent review so I am not allowed to insist upon that. I am delighted that he has offered a date in August, which is probably not that convenient to noble Lords, so he has agreed to see your Lordships in September. I hope that the input from my noble friend will then be extremely invaluable.

My Lords, can the Minister ask Professor Hills and his officials to refer back to a series of amendments that I moved on previous energy Bills as they went through this House, which set out in detail the structure for a rising block tariff scheme? Those amendments were supported by a number of lobbies outside the House and they met precisely the objectives set by the noble Earl, Lord Cathcart, in his question.

Well, the noble Lord knows that my knowledge of ancient history is less than my knowledge of science, so I am afraid that I am not familiar with his expertise or his amendments to Bills that were taken through the House. However, the problem with the rising tariff is that the people who use the most energy are those in the poorest homes, which require the most heating. It is not as simple as waving a magic wand. It is therefore imperative that we progress with things such as the Green Deal and drive in the efficiency measures that we are setting out through it before we revisit this excellent point, which we are very sympathetic and open to, later on when that Green Deal is in action.

My Lords, has the Minister seen the statistic that some 200,000 pensioners would be taken out of fuel poverty if the kind of tariff system recommended by the noble Earl, Lord Cathcart, was implemented? On the theme of fuel poverty and energy conservation, can the Minister report progress under the Energy Bill on the measure to prevent private landlords re-letting properties that fail every test of energy performance after 2016?

The noble Lord is obviously very knowledgeable about the private rented sector, and he knows as well as I do that we are very committed to trying to use every possible commercial measure to ensure that the private rented sector takes its homes out of the F and G categories. We are going to review that in 2016 and we are still open to considering it, but it is very much an imperative, a fundamental step, in getting these people out of fuel poverty—which incidentally is now reaching an horrendous figure. I am looking at my notes, which I do not often do; in 2004, 1.2 million people in the UK were in fuel poverty, and 4.5 million are now in fuel poverty. This is a serious task that the Government have to set about solving. All of us in this room want to see it solved and satisfied, and I am very grateful for the support that I get from all sides of the House to come up with a solution.

My Lords, I am very pleased to hear the Minister’s reply, but it will be some time before the report on fuel poverty is published. In the mean time, are the Government considering making social tariffs for energy compulsory as a way of reducing costs for those in fuel poverty? If they are not, what else are they thinking about in the short term to try to deal with this severe crisis? The Minister has just given us the very bad figures.

I re-emphasise that we are going to have an interim report in the summer and a final report in the early part of next year. That is very quick. It would be wrong for us to start putting up tariffs or making incentives while we are waiting for the eminent professor to come up with his conclusions, having consulted across the piece. Forgive me if I do not agree to the noble Baroness’s suggestion; it is obviously a good one, but we need to wait for the professor to deliver.

My Lords, fuel poverty has stepped up a gear with the latest announcement of 18 per cent price increases. The Government have to understand that more and more people who have never previously worried about their bills or thought of themselves as being in fuel poverty will do so when they get their winter bills next year. The disgrace of the energy companies is that those who have the least could end up paying the most, with higher prices for pre-paid meters and those who do not pay directly from their bank also having to pay more. I note that the Minister said he cannot instruct Professor Hills, but he could make suggestions. Can he suggest to Professor Hills that he examine this in his review to ensure that this perverse pricing is ended once and for all?

I am afraid, as I said earlier, that I cannot agree with the noble Baroness; I normally do, but I cannot on this occasion. It is not for me to instruct Professor Hills; Professor Hills is coming up with an independent review. I am delighted if the noble Baroness herself wants to make suggestions to him. That is the point of the consultation that he is offering in September, and I am sure that he will greatly benefit from her views.

As for energy prices, these are very regrettable, and this is the price that we are currently paying for no investment in the infrastructure of the energy and electricity in this country. We have to invest £110 billion—

Noble Lords: No.

Noble Lords can say no, but come on, they know as well as I do. Some £110 billion has to be invested in the infrastructure. We have failed the consumer in creating energy security by being reliant on fossil fuels.