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Fuel Poverty

Volume 735: debated on Thursday 16 February 2012


Asked by

To ask Her Majesty’s Government whether they have further measures in mind to deal with fuel poverty.

My Lords, the coalition is committed to helping people, especially in low-income vulnerable households, to heat their homes more affordably. The Government commissioned Professor John Hills to carry out an independent review of the fuel poverty target and definition in the context of ensuring that available resources are focused where they will be most effective in tackling the problems underlying fuel poverty. Professor Hills published his interim report on 19 October, and a final report will be published shortly.

My Lords, bearing in mind that some 5 million homes, over 20 per cent of all the homes in Britain, are in fuel poverty as presently defined, can the Minister indicate the annual rate at which homes are currently being taken out of fuel poverty? Secondly, do the Government remain committed to the objective of eliminating fuel poverty by all reasonably practical means by 2016, as laid down in the Warm Homes and Energy Conservation Act 2000?

It is very good to see the noble Lord in his place. Of course, his position on this is very well recognised, having been what I was brought up to know as “King Coal”. I am grateful that he should ask such important questions.

Clearly, since 2005, fuel poverty in the UK has gone up from 2.5 million homes to 5 million now. This is a very serious problem with which all of us wish to grapple, particularly in these times of economic difficulty. The Government are committed to that. I do not want to pre-judge Professor Hills’ report, but we initiated it and we look forward to it.

On the noble Lord’s second point, of course we are committed to reducing fuel poverty to nothing. In an ideal world, we would be doing it now. We have reworked the definition, which I think is fundamental. However, until we get the report we will not be able to comment much further on that.

My Lords, what is the Government’s response to the “End the Big 6 Energy Fix” campaign launched last week by Compass—I declare an interest as the chair of its management committee—and the Independent for a ring-fenced levy on the big six energy companies that could be used to tackle fuel poverty through making homes more energy efficient?

It is difficult to attack the big six. EDF, which announced its results today, makes no margin at all on delivering domestic supply to homes. We must be very careful when we attack these companies, which are genuinely trying to supply and are, of course, struggling with major increases in global oil and gas prices outside their control.

Of course, the Government have a load of initiatives for improving things. Reducing demand at home is absolutely fundamental, as the noble Baroness will know better than I do. The Green Deal will be fundamental to that. These various initiatives will try to protect the consumer. Believe you me, the consumer is at the heart of all our policy-making and, at this time, needs to be.

My Lords, perhaps I may be of assistance to my noble friend by suggesting to him a way in which he could reduce fuel poverty at a stroke—abolishing the whole raft of measures, from the carbon floor price to the renewables obligation and massive subsidies for wind power, all of which are designed to push up energy costs at the expense of fuel poverty, British industry and the British economy, to no effect in the absence of a global decarbonisation agreement, which the Minister knows perfectly well is not on the cards.

I am pleased that the noble Lord felt he was being of assistance. I am not entirely sure that it quite fits with my dictionary’s definition of “assistance”, but I take on board what he said. He is bowling a straight military medium over and we are quite used to it. I shall consider the word “assistance”.

My Lords, some of the people who I most worry will not be able to afford the heating they need are those on pre-payment meters. The noble Baroness, Lady Stowell, told me in a Written Answer on 19 February that pre-payment meter customers now pay on average £20 less than standard credit customers for gas and electricity. However, Charles Hendry, the Minister in the other place, told MPs that in 2011 pre-payment meter customers would pay on average £90 more than direct debit customers and a maximum of £170 more. Therefore, pre-payment meter customers pay more. Will the Minister explain why pre-payment meter customers pay less for their energy but so much more for their bills, and what can be done to ensure that those who have the least are not paying the most?

I will not get into the crossfire of the detail on that because I do not have the facts in front of me. However, we all know that energy bills have gone up. They will obviously affect pre-payment meters because you have to put more in to supply the energy bills. The big point that I am making here is that we are completely focused on reducing energy bills, which is why we have a raft of measures. The warm home discount is worth £1.1 billion. The core group rebate of £120 goes to 600,000 pensioners. There is the winter fuel allowance of £200. Cold weather payments worth £93 million have already been paid this winter, and £100 million has been paid under Warm Front. A huge number of initiatives are in place to protect the consumer and we are very committed to doing so.

My Lords, in his first Answer my noble friend mentioned the Green Deal. Not least of the Green Deal’s attractions was that the up-front costs of insulating homes and other energy-saving measures are met by the private sector providers. Can the Minister reassure the House that, in working out the Green Deal, there will be enough providers to make enough money available to achieve the Government’s targets?

The Green Deal is a very important private sector initiative, of which the Government have been the enabler. I am very grateful, incidentally, for the commitment from Peers on all sides of the House to ensuring that the Green Deal passed through legislation in such a well thought-out and well devised way. The Green Deal is an enabler and a marvellous opportunity for the private sector to provide energy to homes. It is for the Government to enable it further and pump-prime it to make sure that it happens.

It is a point that the noble Lord has made before. He has great knowledge of it. It is a point that several noble Lords have made to Professor Hills. I do not want to prejudge what he will say but I am very grateful to those Peers who have involved themselves in dialogue with him and made a number of such points.