Delegated Legislation Committee
Draft Barnsley, Doncaster, Rotherham and Sheffield Combined Authority (Election of Mayor) Order 2016
The Committee consisted of the following Members:
Chair: Mr James Gray
† Argar, Edward (Charnwood) (Con)
† Borwick, Victoria (Kensington) (Con)
† Campbell, Mr Alan (Tynemouth) (Lab)
† Champion, Sarah (Rotherham) (Lab)
† Cleverly, James (Braintree) (Con)
† Davies, Glyn (Montgomeryshire) (Con)
† Doyle-Price, Jackie (Thurrock) (Con)
Dugher, Michael (Barnsley East) (Lab)
† Furniss, Gill (Sheffield, Brightside and Hillsborough) (Lab)
† Hammond, Stephen (Wimbledon) (Con)
† Huddleston, Nigel (Mid Worcestershire) (Con)
† Mak, Mr Alan (Havant) (Con)
† Morris, Grahame M. (Easington) (Lab)
† Percy, Andrew (Parliamentary Under-Secretary of State for Communities and Local Government)
† Smith, Angela (Penistone and Stocksbridge) (Lab)
† Wood, Mike (Dudley South) (Con)
Glenn McKee, Committee Clerk
† attended the Committee
Fifth Delegated Legislation Committee
Tuesday 19 July 2016
[Mr James Gray in the Chair]
Draft Barnsley, Doncaster, Rotherham and Sheffield Combined Authority (Election of Mayor) Order 2016
I beg to move,
That the Committee has considered the draft Barnsley, Doncaster, Rotherham and Sheffield Combined Authority (Election of Mayor) Order 2016.
It is a pleasure to serve under your chairmanship, Mr Gray, for my first draft order as a Minister. The order was laid before the House on 27 June 2016 and will, if approved, create the position of mayor for the Barnsley, Doncaster, Rotherham and Sheffield combined authority, also known as the Sheffield city region combined authority, with the first election to be held in May 2017. It will set the first mayoral term for a duration of three years, with the next election in May 2020 and subsequent four-year terms. As a proud Yorkshireman, it is very nice for one of my first acts in this role to be that of devolving power and some funding away from Westminster and up to Yorkshire, where it will be better dealt with.
Order. Will the hon. Gentlemen who are not yet properly dressed please leave the room, get properly dressed and return?
Yes, you do, and your tie—[Interruption.] And you will not complain about the Chair’s order either. I am so sorry to interrupt, Minister.
The Government committed in their manifesto to
“devolve far-reaching powers over economic development, transport and social care to large cities which choose to have elected mayors.”
To give effect to that commitment, the Government passed the Cities and Local Government Devolution Act 2016. As set out to the House during the passage of that enabling legislation, the Government have introduced clauses to allow directly elected mayors for combined authorities. It is considered necessary that where major powers and budgets are being devolved, local people know who is responsible for decisions. Mayoral governance is one way of delivering that.
The order is a milestone in the implementation of the devolution deal agreed between the Government and local leaders in the Sheffield city region. I welcome the positive response to the proposal from many in the region. The order follows the establishment of the combined authority on 1 April 2014, from which time the combined authority has been serving the Sheffield city region, bringing together across the area the closely inter- connected issues of transport, economic development and regeneration. As a neighbouring MP to the South Yorkshire region—including Doncaster, which I am very fond of—it is good to know that these great Yorkshire cities and towns are working together for the good of their people.
On 2 October 2015, the Government and the combined authority announced a devolution agreement that provided an offer of powers and budgets from Government on the basis that the area will deliver certain reforms and measures, including adopting a directly elected mayor covering the whole of the combined authority area. The agreement included that the mayor of Sheffield city region will be responsible for a consolidated, devolved transport settlement. There is a good history in South Yorkshire of local authorities working together on local transport matters.
Following the introduction of the necessary primary legislation, the mayor will be responsible for the franchised bus services, which in turn will support the combined authority’s delivery of smart and integrated ticketing across the constituent councils. She or he will take on responsibility for an identified key route network of local authority roads and for strategic planning, including the responsibility for creating a spatial framework for the city region. In turn, the combined authority will take on the devolved funding of £30 million a year over 30 years to Sheffield city region. The combined authority will also have control of the devolved 19-plus skills funding.
This is gain share funding, so it will be a mixture of capital and revenue devolved from central Government. There are opportunities for other funding to be devolved in future, whether through the bus service operators grant or other areas of budget.
As well as control of the devolved 19-plus skills funding, the combined authority will also have joint responsibility with the Government to co-design employment support for harder-to-help-claimants. I know that will be welcomed in the region. We also want to see a devolved approach to business support from 2017 to be developed in partnership with Government. In addition, the Government have agreed to a pilot scheme in the Sheffield city region combined authority that will allow the area to retain 100% of any business rate growth beyond that forecast.
In delivering the full range of commitments in the devolution deal the Secretary of State intends, subject to statutory requirements and parliamentary approval, to make further orders to implement the deal. Subsequent orders will include the transfer of budgets and powers in planning, transport, education and skills.
As a Sheffield MP, it is only right that I pay tribute to the council leader, Julie Dore, who secured a very good deal for Sheffield through very hard-headed negotiations. I would like to ask the Minister about the €200 million European structural funding. Since the Brexit vote the other week, things are very uncertain. Can the Minister guarantee that the replacement of such funding will be in place if European funding is withdrawn?
I thank the hon. Lady and welcome her to the House. As we give effect to the will of the people of Sheffield—indeed the whole of South Yorkshire voted quite heavily for Brexit—it will be for the new Prime Minister to trigger article 50 at the appropriate time and begin those negotiations. Working with colleagues across Government, we are very keen to get that certainty about what happens to structural funding—the European regional development fund—in future. We are working on that and hope to be able to give guarantees at some point in the future. This is UK taxpayers’ funding, which goes to the European Union and comes back and is a portion of what we receive.
Order. I am sorry to interrupt the Minister. We are drifting very far from the statutory instrument we are discussing today. Perhaps the Minister can turn to the SI itself.
But not at this Committee.
But not at this Committee, I accept. But we will seek to get those guarantees.
The draft order establishes a mayor for the city region, sets the dates of elections and the first and subsequent term lengths. As required, all the constituent councils have consented to the order being made and the Government have laid the draft order, having had consideration of the statutory requirements. As required, we are now seeking Parliament’s approval before making the order.
Let me make a couple of points about the role of the mayor, although I do not wish to detain the Committee much longer. The order is about delivering devolution and empowering local authorities to set their own policy agendas. Before becoming a Minister somewhat surprisingly at the weekend—I was no more surprised than some of my colleagues—I always tried to champion more devolution to our regions. Other members of the Committee have also played an important role in that, so I welcome the creation of this new role in the combined authority.
It is important to emphasise the mayor will work closely alongside local council leaders. The hon. Member for Sheffield, Brightside and Hillsborough mentioned an excellent leader in Sheffield. They will sit together on the combined authority board and drive forward the economic opportunities presented by devolution for South Yorkshire, with the mayor acting as chairman of the combined authority and providing a single voice for the area that can be prominent nationally and help to drive the devolution agenda.
There has been a robust debate about the role of mayors, not just in South Yorkshire but elsewhere in the country. It is important to note that no one area has been required to adopt the mayoral model. The Government’s position is that if an area is to have a mayor, it will be because that area, through its democratically elected representatives, has chosen to have one. It is important to stress that devolution deals are a two-way process.
I congratulate the hon. Member on becoming a Minister and hope that he enjoys his new role. Surely the devolution deal on the table was available only if we accepted an elected mayor, so it was not exactly a choice. We had to have a mayor before we could have the money.
I take the hon. Lady’s point. As I have said, we have made it clear that this is a two-way deal. As such, the Government’s view is that the accountability offered by a mayor is desirable and this forms part of the devolution deal. It is right that a mayor forms part of the deal—as I say, it is a two-way process—but nobody is forced to accept that. If the local authorities had decided not to adopt this devolution deal, they would not have required a mayor, but I take the hon. Lady’s point.
In conclusion, if the draft order is approved, it will open the way for the full implementation of a devolution deal for the Sheffield city region across South Yorkshire. It is therefore a significant milestone on the devolution journey, which we hope will lead to greater prosperity, a more balanced economy and economic success across the Sheffield city region and the country. As a Yorkshire MP, I welcome the transfer and devolution of powers to South Yorkshire. I hope this is the start of a continuing process of more powers and more funding for our region.
We are committed as a Government to this journey, because there is a real opportunity for areas to assume powers and budgets that will help places achieve their full potential, hopefully take control of their growth and, importantly, have a positive impact on the lives of local citizens, in this case across the whole of South Yorkshire. I commend this draft order to the Committee.
It is a pleasure to serve under your chairmanship, Mr Gray. I welcome the new Minister to his post. We were both elected at the same time in 2010 and served together on the Select Committee on Health, so we are old adversaries. With the inside knowledge that he is a first responder in his spare time, there could not be a more appropriate subject for his first response than devolution to the regions.
I know this is a narrow order, Mr Gray, so I am not going to test your patience or that of the Committee by straying beyond its very narrow focus, which, as the Minister has indicated, relates specifically to the elected mayor for the Sheffield city region and the date of the election. There are, however, some questions I want to put to the Minister and a couple of points relevant to the order in relation to resources and securing European funding for the period when the mayor is in office. I do think that this is relevant.
The hon. Gentlemen will have to be very ingenious to get that in, but he can try.
I have been called many things, Mr Gray, but rarely that. However, I am grateful for the advice.
The names of the regions in these devolution packages are often a misnomer. The Sheffield city region covers diverse areas, all with unique identities. This very narrow order will affect nine areas: Barnsley, Bassetlaw, Bolsover, Chesterfield, the Derbyshire Dales, Doncaster, North East Derbyshire, Rotherham and Sheffield. I understand those named on the order are currently full members of the combined authority, with the other five as associate members that will not participate in the election of the mayor. I ask for some clarification on that point. I appreciate that the Minister is brand-new in post, so if he cannot give the answer now, perhaps he can clarify by letter.
I am advised that Chesterfield and Bassetlaw are seeking full membership of the combined authority. Will the Minister outline the implications of today’s order? If these two areas become part of the combined authority, would they automatically form part of the electorate for the mayoralty?
The Sheffield combined area is home to more than 1.8 million people, with 55,000 businesses employing some 700,000 people and an economic output of more than £30 billion a year. The Opposition welcome any investment from the Government to our regions—including the Sheffield city region—and that includes the £30 million a year as part of this devolution deal. However, as my hon. Friends the Members for Rotherham, for Sheffield, Brightside and Hillsborough and for Penistone and Stocksbridge have indicated, our concern is that this is new and additional money, and not simply a rebadging of existing resources.
Returning to the issue of resources, this must be put into context as regards directed cuts to the councils that make up the new city region. Local authorities in the area have had to deal with around £635 million of cuts. I am confident the Sheffield city region will use the new powers over education, skills, business support, transport and planning that the Minister outlined to boost economic activity in the region. However, there are serious difficulties with politically empowering a directly elected mayor while financially impoverishing local government.
The Minister’s predecessor coined a phrase—or we discussed it in Committee on the last statutory instrument on these matters—that this is a process rather than an event. However, if the mayor, who according to the order is due to take up office in 2017 for a three-year term, is not empowered financially and the local authorities he is working with in the combined authority are not, that will cause huge problems. This is only the start and I know that local Members of Parliament and the Sheffield city region are eager to go further and faster when it comes to devolution. I hope that further devolution, along with the finances to give it real substance, can be achieved in the not too distant future.
I do not want to sound like a broken record, but I think that it is important to point out for the record that I, on behalf of my party, must restate my opposition to the imposition of mayors in return for devolution deals. The public have had the opportunity to express their views on directly elected mayors. I point out to the Minister that in 2012 the Government held a referendum in Sheffield on this issue and 65% rejected the idea. However, I also acknowledge that on the same day Doncaster held a referendum on whether to retain its directly elected mayor and 61.7% supported that proposition. The Opposition neither oppose nor support directly elected mayors; we believe that, as we have seen from previous referendums, local communities are best placed to organise and arrange the systems of governance that are most suited to their needs. I have discovered from 16 years in local government that if you try to be prescriptive and, in particular, to apply models that work in the metropolitan areas in London to the regions, they do not necessarily work. We have to have the local flexibility to apply models that work in particular areas.
Does my hon. Friend agree that the deal on the table is very much like the ones that my schools are being presented with: they either become an academy or we will make them an academy? The sweeteners seem to be real, but when it comes to the detail it is not new money at all.
In the context of this SI.
That is a very real concern, which I hope the Minister will address. It is a feature of this specific SI and the resource period that we are dealing with, given the elected mayor’s term of office from May 2017 to 2020.
In conclusion, will the Minister explain why the Government chose to consult the electorate on mayors in 2012, but will now insist on them as a precondition of these devolution deals? I believe the Minister should trust the electorate and if he believes in elected mayors so passionately, he should make the case to the public rather than reaching agreements with the exclusion of the public.
It is a delight to have the hon. Member for Easington as my shadow Minister today. We did, as he said, serve on the Health Committee together. I think we got on all right. I will not sully his career any further by saying that we agreed on things. I am not sure that would be welcome in today’s Labour party, but we did get on very well and it is a pleasure to see him across the room today.
I will not deal with the issue of EU funding again; that would be straying, Mr Gray. I think I was quite clear on that. We are still a member of the European Union and until we leave, nothing has changed. In terms of the consultation, we have been quite clear that it is for local authorities themselves to determine how they engage with the public on these devolution deals. They are the democratically elected representatives of their areas. If they wish to adopt a devolution deal on this model, including an elected mayor, that is for the local authorities to determine.
I spent 10 years as a councillor on Hull City Council in Yorkshire. One problem with accountability and responsibility as a city councillor is that we did not have anybody speaking for our city as a single voice, and there was a weakness in that. I take the point that not every model necessarily works everywhere, but I want to see regional faces more involved in policy making down here and in policy development. Our traditional local authority structure sometimes makes that difficult. Leaders come and leaders go; they do not always speak for the whole of their council and authority. Having somebody who is a name with specific powers can be positive although, of course, there are always arguments on both sides. The more we can get people whom the public can see are clearly accountable, the better. That is something I always believed when I was a councillor.
I also welcome the shadow Minister’s tacit support for more devolution.
May I clarify? It is not tacit support. For more years than I care to remember, I have been an enthusiastic proponent and supporter of devolution, but it needs to be real devolution. On the issue of a precondition of an elected mayor, I know the Minister is honest and sincere, but the truth is that that has been a gun held to the heads of local government leaders: if they want this deal, they must accept an elected mayor. I think that is fundamentally wrong.
I have dealt with the mayoral issue as best I can. On devolution, having served as a local authority councillor for 10 years, I think the Government are doing a great deal more than previous ones to devolve powers. I sat in a local authority where we were constantly told what to do by central Government. We were repeatedly told we were being given powers and some funding. Occasionally that funding would appear for two or three years and then disappear. We would take on all the responsibilities and get none of the resources.
This Government have gone much further than any in recent history to reinvigorate local government and communities through this devolution package, which local authorities are free to accept or decline as they see fit for their area.
We will not stray into local authority funding today but the budgets have been broadly flat. Many local authorities in this particular area receive a lot more per head than those in other areas, including mine. On expansion, I can confirm to the shadow Minister that there is a consultation out at the moment to expand the area, including Chesterfield, Bassetlaw and other councils in Derbyshire and Nottinghamshire. I spoke to my parliamentary neighbour the hon. Member for Bassetlaw (John Mann), one of the shadow Minister’s colleagues, last night. He is a big supporter of this, as are many people in the region. We would have to table an order to extend the area and we would expect that to happen later this year. Those areas will be included if they choose to join the mayoral model before the elections. Their electors will then take part in the mayoral elections next year. It would be wrong to include them after that, in my view.
I think I have dealt with the shadow Minister’s points. I welcome his enthusiastic—not tacit—support for devolution. I commend the order as the start of an exciting process for South Yorkshire, north Nottinghamshire and north Derbyshire.
Question put and agreed to.
Draft Warm Home Discount (Miscellaneous amendments) Regulations 2016
The Committee consisted of the following Members:
Chair: Sir Alan Meale
† Berger, Luciana (Liverpool, Wavertree) (Lab/Co-op)
† Berry, James (Kingston and Surbiton) (Con)
† Churchill, Jo (Bury St Edmunds) (Con)
Cunningham, Alex (Stockton North) (Lab)
† Donelan, Michelle (Chippenham) (Con)
† Double, Steve (St Austell and Newquay) (Con)
† Gardiner, Barry (Brent North) (Lab)
† Hurd, Mr Nick (Minister of State, Department for Business, Energy and Industrial Strategy)
† Jayawardena, Mr Ranil (North East Hampshire) (Con)
† Lynch, Holly (Halifax) (Lab)
† McCaig, Callum (Aberdeen South) (SNP)
† Pennycook, Matthew (Greenwich and Woolwich) (Lab)
† Pincher, Christopher (Tamworth) (Con)
† Reed, Mr Steve (Croydon North) (Lab)
† Robinson, Mary (Cheadle) (Con)
† Thompson, Owen (Midlothian) (SNP)
† Tracey, Craig (North Warwickshire) (Con)
† Wragg, William (Hazel Grove) (Con)
Gavin O'Leary, Committee Clerk
† attended the Committee
Sixth Delegated Legislation Committee
Tuesday 19 July 2016
[Sir Alan Meale in the Chair]
Draft Warm Home Discount (Miscellaneous Amendments) Regulations 2016
I beg to move,
That the Committee has considered the draft Warm Home Discount (Miscellaneous Amendments) Regulations 2016.
It is a great pleasure to serve under your chairmanship, Sir Alan, and to open this debate opposite the shadow Secretary of State for Energy and Climate Change, the hon. Member for Brent North, who is an old friend. I have worked with him for a long time and have the greatest respect for him.
Order. Before you proceed, Minister, if I could just take a moment of your time, I should say that if any Member wants to remove their jacket, that will be okay.
Thank you for that advice, Sir Alan, for which I am sure male Members will be grateful. It is ironic that we are debating these warm home discount regulations on the warmest day of the year.
The Committee may be aware that, in April, the Government consulted on the proposed extension of the warm home discount scheme. We proposed to make some relatively small changes to improve its effectiveness and make it simpler and more accessible. It is those proposed changes to the regulations and the extension of the scheme that we are debating, so that the scheme can continue.
It would be helpful if I gave the Committee some context by talking about fuel poverty and explaining the warm home discount itself. The Government remain firmly committed to tackling the problem of fuel poverty and to helping people, especially those in low-income, vulnerable households, to heat their homes. I am sure that all Committee members will be well aware from constituency cases of the pressures on low-income households that have arisen in recent years because of higher energy bills.
The warm home discount is one of a range of policies that aims to address the contributory factors of fuel poverty by either increasing income or reducing the cost of energy. Introduced in 2011, the scheme requires electricity suppliers with more than 250,000 domestic customer accounts to provide financial support to their vulnerable customers in respect of energy costs. The existing regulations for the scheme ended in March 2016. Although winter may feel a long time away, we need to make the new regulations now. The measure before us will ensure that more than 2 million low-income and vulnerable households receive support through a rebate of £140 on their energy bills.
The warm home discount scheme is made up of three parts. The first applies to eligible pensioners who are customers of participating electricity suppliers. They are described in the regulations as the “core group customers”. Under the core group, eligible pensioners receive a bill rebate of £140 from their supplier. The second part of the scheme relates to other low-income and vulnerable customers, who are described as “broader group customers”. Customers who fall into the broader group, such as low-income families and those with long-term disabilities, can apply for rebates through their supplier. The third part of the scheme allows customers to benefit from the industry initiatives element of the scheme, whereby suppliers provide a range of support measures, including debt assistance, benefit entitlement checks and energy advice, for domestic customers in or at risk of fuel poverty.
Since the scheme was launched, around 2 million households in or at risk of living in fuel poverty have benefited from lower energy bills each year. A total of £1.4 billion of direct assistance has been provided to low-income and fuel-poor households over the first five years of the scheme. More than 1.3 million of the poorest pensioners received £140 off their electricity bill in the winter of 2015-16, more than 1.2 million of whom received it automatically, without their having to apply—it was hassle free. More than 700,000 additional low-income and vulnerable households, including families, received £140 off their electricity bill in the winter of 2015-16.
As a result of that success, the Government have committed to extending the warm home discount to 2020-21, with expected spending of £323 million in 2016-17 rising with inflation each year. In the next five years we want to simplify how the scheme is delivered, targeting it more accurately at those households who need it most. To allow that to happen, the Government have introduced the Digital Economy Bill, which includes powers that allow wider sharing of data across Departments and with obligated energy suppliers for the purposes of delivering the warm home discount.
Should those wider data sharing powers be implemented, we could see more of the warm home discount provided using automatic data matching from 2017-18. That would not only improve the targeting of the scheme but mean that vulnerable families who currently have to apply for a rebate would not miss out. In addition, that would reduce the administrative costs for suppliers to participate in the scheme. However, at this point in time we are not certain if and when such powers will be in place or what changes will be possible and desirable from 2017-18. Therefore, the regulations before the Committee establish the warm home discount for the next two scheme years. Should we be in a position to make substantive changes from 2017, including on wider data sharing, we intend to consult later this year. For the short term, and for this coming scheme year, the Government consulted on the proposed extension of the scheme in April. Respondents to the consultation were supportive of extending the scheme and the Government’s response has been published.
I shall now briefly try to explain the main changes to the warm home discount, which will be implemented by the regulations. I stress that the core group and broader group will remain unchanged. Low-income pensioners receiving state pension guaranteed credit will continue to receive a £140 rebate automatically, and low-income households will still be able to apply to their suppliers for the broader group rebate.
We do, however, propose to make a small number of changes to improve the industry initiative elements of the scheme. We propose placing a cap on suppliers’ total spending on debt write-off of no more than 50% of their industry initiative allowable spend in the next scheme year. While we understand the help that debt write-off can provide to the small number of households who benefit, we would like to encourage greater diversity of industry initiatives that are more aligned to our fuel poverty strategy.
We also want to achieve that by providing an option for suppliers to achieve part of their industry initiative spending through contributions to centrally pre-approved schemes, rather than through initiatives they have set up themselves. We envisage that under these provisions, local authorities or charities could submit proposals for fuel poverty schemes. Those could, for example, offer support to people with specific health conditions that make them more susceptible living in a cold home. Subject to Government approval, such schemes could receive industry initiatives funding from suppliers. We believe that that could lead to more innovation, targeted local delivery and a reduced administrative burden on suppliers.
We also propose to make a small number of operational improvements to the scheme. First, following feedback from warm home discount recipients, we are providing suppliers with the option to pay the rebate on the gas bill if requested by the customer. We want to encourage participating suppliers to pay the rebate on the gas bill where the customer has a dual fuel account with them. That will enable households with gas heating to use their rebate directly to achieve a warmer home.
Secondly, we will require energy suppliers to report to the scheme administrator Ofgem exactly how many prepayment meter customers have benefited from the rebate. There are situations where prepayment meter customers do not claim the voucher they receive. The proposed change would mean that suppliers report on such instances, with their spending target the following year adjusted upwards accordingly.
Finally, the regulations will set the end of the next scheme year for May 2017, allowing suppliers longer to meet their obligations given the later start this year. While avoiding overlapping scheme years, our intention is eventually to return to scheme years starting in April and ending in March. As with the consultation proposal in general, most respondents agreed with those operational changes.
In conclusion, these amendments to the warm home discount regulations are necessary to help another 2 million households this winter. The changes that we propose to make will mean that suppliers provide assistance to a greater number of low-income families, making the scheme simpler and improving its operation.
It is a great pleasure, as always, to serve under your chairmanship, Sir Alan. You are one of the most experienced and knowledgeable Chairs that we have in Parliament, given all your years of service.
Of course, I am very grateful to the Minister for his kind remarks, which I entirely reciprocate. I said yesterday and I will reiterate today in this Delegated Legislation Committee that the new team at the Department of Business, Energy and Industrial Strategy is one of the most thoughtful sets of Ministers, and that has been evidenced in what the Minister has already said to us today, because some of the old shibboleths are being cast aside—we will get to that.
It would be incredible if Opposition Members were to oppose the delivery of this scheme and of course that is not our intention at all; we will not be moving to a vote. However, there are aspects of the scheme that the Minister has alluded to that we need to probe and seek further reassurances from him about.
As of 2014, the latest year for which we have official fuel poverty statistics, 2.38 million households in England were in fuel poverty, which is, of course, more than 10% of all households in England. The old Department, as we must now term it, of Energy and Climate Change estimated that across the UK, using the 10% methodology—whereby a household is in fuel poverty if it spends more than 10% of its income on fuel—an estimated 4.5 million low-income households could not adequately heat or power their homes, and that figure has grown by 500,000 over the last five years. The last recorded figures—also for 2014—show that there were 43,900 excess winter deaths in England and Wales. So the problem that we are discussing today materially affects millions of our fellow citizens and can be fatal for many, many thousands of them. I think the recent “Panorama” report on those 43,900 excess winter deaths said that 9,000 were directly related to a failure to heat homes adequately.
These figures show the huge importance of this scheme and other measures to support the vulnerable. Of course, when my party was in government we legislated to make the initial voluntary scheme compulsory. It was our intention then, when the voluntary agreement came to an end in 2011, to continue the discounts through compulsory support from companies. The amount spent was to be increased, which it was, and the most vulnerable consumers were to be targeted. However, that is where I and my party believe that this scheme is failing, and it would appear from what the Minister has said that he is of like mind.
There are 1.3 million lower-income pensioners targeted in the core group of beneficiaries of the scheme and 800,000 low-income families are in the broader group. By my reckoning, that makes 2.1 million households and, as I have said previously, as of 2014, 2.38 million households were in fuel poverty in England and Wales, as counted using the Government’s main methodology. It might seem, therefore, that the scheme is doing well, with 2.1 million out of 2.38 million households served. However, that would be to belie the facts.
The previous Minister in DECC, the right hon. Member for South Northamptonshire (Andrea Leadsom), acknowledged in a written answer to a parliamentary question that we posed on 25 April that only 15% of those 2.38 million households receiving the discount were in fuel poverty. That was a quite startling revelation. Of course, what it shows is that the targeting of this scheme has been absolutely abysmal. We found out in April that DECC tried to redress that. In an exchange between the then Secretary of State, whose constituency I have entirely forgotten, and the Chancellor, the Treasury said that it was
“unconvinced of the need to change a system that works”
and that it
“can’t approve changes to a successful scheme without having a clear idea of how many losers this will create and who those losers will be”.
If one knows that 85% of the scheme is delivering to the wrong people only to express concern about the losers—it is of course right that there is clarity, but it would appear that the Treasury was more concerned with the political impact of getting the scheme right than the health impact of targeting it correctly. That was an error and one that I am delighted to see from the Minister’s remarks that the Government are now looking to overcome.
The previous Minister also stated that the Government may consult later this year on better targeting but in a written answer she said that was
“subject to positive progress on data sharing legislation”.
The Minister went slightly further than that in his remarks, but we need real assurances that this is now a project for his Department, in liaison with his counterpart at the Department for Work and Pensions. For the scheme to address fuel poverty to benefit only 15% is unsustainable. The Minister has said today that he believes that it can be targeted more accurately through data sharing, and that certainly needs to be done.
The Government are also letting energy companies off the hook and I would be grateful if the Minister would look at the situation. Even though the Competition and Markets Authority said that customers were being overcharged by £1.7 billion a year over the past five years, incredibly it would appear that the Government have acquiesced in putting the blame back on to the consumer, saying that people should just shop around and switch more often, and in that way save this money.
There must be a much greater burden put on the energy companies; it should not always be left to the consumer. Yet again, it is the fuel poor, such as pensioners who perhaps do not have internet access and cannot go on switching websites, who have least capacity to redress their situation in the way the Government suggest on the back of the CMA report.
Will the Minister explain why the data on current recipients of cold weather payments are not shared, so that those recipients could also receive the warm home discount? Does the Minister agree that powers should be extended through legislation to enable that? These are families with children under five and people with disabilities. The data on those people should be shared with Ofgem to facilitate these schemes. Households may not even be aware at the moment that they are entitled to these rebates.
The data protection issues that are often cited as the reason sharing does not happen could be overcome by a simple clause authorising data sharing being incorporated into all the benefit application forms. Will the Minister undertake to meet his counterpart at DWP to try to agree that co-operation—whatever is necessary—to ensure that this scheme does not reach just 15% but 100% of those who need it?
Just to be helpful, the former Secretary of State to whom the hon. Gentleman might have been referring is the right hon. Member for Hastings and Rye (Amber Rudd).
I thank the hon. Member for Brent North for his typically thoughtful and constructive response. He is quite right to remind the Committee about the scale and importance of the underlying issue here: far too many people, far too many of our constituents, are still struggling to heat their homes in the right way and to pay their bills. It is a big and very important issue which touches a lot of people’s lives. He is also right to point to the challenge of targeting these schemes in the most appropriate and effective way. I think I made it clear that my instinct on day one in the new job is that there is a lot more to be done to target these schemes at those who most need them.
Of course, we must not fall into the trap of just looking at this issue through the prism of the warm home discount scheme; we need to look at the effect of other schemes, such as the energy company obligation, ECO; the work that the Government are doing to increase competition and to encourage people to reduce their bills by switching, which remains a very valid message; and the bigger picture of what the Government are doing to build a strong economy and reduce taxes on the poorest in society. There are many dimensions to tackling these problems, but better targeting of this scheme and the ECO scheme, focusing on the challenge of fuel poverty, must be part of the future. As the hon. Gentleman indicated—I close by giving him the reassurance that he seeks—the key to that is making the sharing of data easier, so that we get a more accurate picture of where the need is. The lack of that has undermined progress in the past.
As I said, the appropriate Act of Parliament, the Digital Economy Bill, was introduced on 5 July, so it has started its passage through Parliament. It is a Bill that matters a lot to us at the Department, since it will enable greater sharing of data. The hon. Gentleman, as an experienced Member of Parliament, will know, as will all members of the Committee, that there will be a lot of debate about the Bill, because Members will quite rightly be concerned about securing privacy for their constituents, so we cannot be entirely sure about the outcome. That is, in part, why we have tabled these regulations to last for two years. That is the key to facilitating and enabling the next stage we would like to see, which is much more effective targeting of this scheme and ECO at the most vulnerable, so that this assistance is directed at those most in need.
Question put and agreed to.