FUEL COSTS (ASSISTANCE) (Hansard, 22 October 1979)

§ The Secretary of State for Social Services (Mr. Patrick Jenkin)
With permission, Mr. Speaker, I wish to give the House details of the steps that the Government propose to take to help poor families with their fuel bills this winter.
When we came into office we found that no provision had been made by our predecessors in public expenditure plans for any help in the coming winter. So we have given careful consideration to what might be done against the background, on the one hand, of the difficult economic situation and, on the other, of a year in which disposable income from employment and benefits is keeping pace with the overall rise in fuel costs. We recognise that fuel bills can be a real worry for the poorest families, particularly the elderly poor and families with young children.
We therefore propose to concentrate our help this winter on elderly people and families getting supplementary benefit and family income supplement. With the agreement of the Supplementary Benefits Commission, we propose that from 12 November all supplementary benefit householders with a child under 5 and all supplementary pensioner householders who are over 75, or who have a dependant who is over 75, should automatically receive the basic rate of heating addition of 95p a week. Many of the pensioners will already be getting such an addition, but for those who are not, it will mean extra benefit, over a full year, of nearly £50. We estimate that about 110,000 pensioners and about 150,000 beneficiaries with young children will receive this increase. It will not be possible to implement the increase from 12 November but arrears will be paid from that date as adjustments are made.
Second, we wish to give extra help to poor families in work where there are children. Accordingly, we are today laying regulations which, subject to parliamentary approval, will result in all families in receipt of family income supplement getting an additional £1 per week from the uprating due in November, on top of the increases already agreed by the House. Wider coverage is appropriate for FIS because, unlike supplementary benefit, the scheme has no other special 36 provision for extra help with fuel bills. If approved by the House, the extra £1 each week will benefit about 85,000 working families.
Over the 12 months from November 1979, these proposals will give about £5 million to supplementary pensioners, about £6½ million to those on supplementary benefit with young children, and about £5 million to FIS beneficiaries. Costs falling in the current year will be charged to the Contingency Reserve for 1979–80.
We are living in an era of high-cost energy and we cannot shield the whole population from that even if we wanted to. The Government are, however, aware of the need to take the cost of energy into account in developing their social policies, and we will keep under review the range of help available to assist poor consumers with fuel bills.
The measures that I have announced will concentrate worthwhile help this winter where it is most needed. I feel confident that hon. Members on both sides of the House will welcome them.

§ Mr. Orme
The Secretary of State for Social Services has again failed to fight his corner in the Cabinet on behalf of those whom he is supposed to represent—the poor, the sick, the elderly and the unemployed. Under his proposals 345,000 families will benefit, as opposed to 5 million families under Labour's previous proposals. The cost of the scheme—£16½ million—is very different from the bill that the previous Government met last winter, of £45 million. The increased electricity charges—18.9 per cent, in June this year—will mean that the average quarterly bill will go up by at least £5. In view of that increase what will happen to elderly persons aged between 65 and 75? What about the pensioners whom we helped over the difficult period? What happens now to the people on rent and rate rebates? I presume that the Minister will tell them not to turn up at the post offices with their books, as there will be no money for them this winter.
What will happen if there is a bad winter, when people will feel rising costs—those rising costs having been deliberately created by the Government to help higher-rate taxpayers? The poor and the sick must meet the costs. Are there 37 any emergency proposals in case there is a bad winter?
Is the sum of £16½ million, to which the Minister referred, all new money? What will he do about the code of practice? Will he ensure that that is carried out?
The Minister stated that the previous Government made no provision for this winter. Over the past three years the Government made increasing sums available. When he was at the Department of Energy, my right hon. Friend the Member for Bristol, South-East (Mr. Benn) brought forward £35 million. A decision had been taken by the Government to continue the scheme this winter.

§ Mr. Jenkin
With respect, the right hon. Gentleman is confused about the Government to which he is referring. I understand his points.
The previous Government made no provision in their expenditure plans. As the right hon. Member for Bristol, South-East (Mr. Benn) will recognise, that Government were exceedingly careful to give no commitment in public about continuing their scheme. Therefore, they are hardly able now to criticise what we have done. On the contrary, we are concentrating help on the families where the need is the greatest, and giving worthwhile help to them.
How does the Labour Party seek to defend a scheme that puts £5 into the pockets of school leavers who are on supplementary benefit and living at home? How can it defend a scheme that puts £5 into the pockets of elderly people living in part III accommodation when there is no obligation for them to hand the money over to those paying the bills?
The previous Government's electricity discount scheme was widely criticised, not least by those seeking to defend the interests of the poor. We aim to provide worthwhile help for people in the greatest need.
The amount of £16½ million is new money, which is being found from the Contingency Reserve.
The code of practice is a matter for my right hon. Friend the Secretary of State for Energy. That is being kept under review. It is regarded as an important part of the protection of poor consumers.
38 As to the question of a bad winter, I said that as a general part of our social policy we would continue to keep under review the question of help with fuel bills for the poor.

§ Rev. Ian Paisley
The Minister said—

§ Dr. Owen
On a point of order, Mr. Speaker. It appears from what the Secretary of State said that the electricity discount scheme, which has been in operation since 1976 under the responsibility of the Secretary of State for Energy, is not to continue. No reference was made to this in the statement. Are we to understand that the electricity discount scheme is to be discontinued? Is that the way in which to treat the House?

§ Mr. Speaker
The right hon. Gentleman knows that that is not a point of order for me. He has managed to jump the queue by asking a question.

§ Rev. Ian Paisley
Will the Secretary of State say what conversations he has had with his opposite number in Northern Ireland, bearing in mind that the price of gas in Northern Ireland is three times greater than in the rest of the United Kingdom, as we were not given a supply of natural gas? Electricity is more costly in Northern Ireland. What arrangements will be made for the poor, the sick and the unemployed in Northern Ireland?

§ Mr. Jenkin
My right hon. Friend the Secretary of State for Northern Ireland has been fully associated with all the work that has been done on this subject. The Northern Ireland scheme is not the same as that in the rest of the United Kingdom. It follows the Great Britain measures but in addition provides for a £15 lump sum payment to those on supplementary benefits, family income supplement and housing allowances. The hon. Gentleman rightly gave the reason why there must be a more generous scheme in Northern Ireland. Domestic fuels cost a great deal more in the Province than in Great Britain.

§ Mr. Benn
Would it not be more honest for the right hon. Gentleman to tell the House that the electricity discount scheme operated over the past three winters, which gave real help to a group of people hard pressed by increasing fuel prices, is being abolished—in a year when 39 oil prices went up three times, when electricity prices are going up as a result, when the rate of inflation is going up in parallel, and in its place is being substituted a scheme that is worth about a quarter as much, in cash terms? The sum of £45 million, updated for inflation, would be about four times the amount announced today. Is the Minister aware that the Government announced today that they have chosen a group of people, many of whom are locked into all-electric flats and have no alternative fuel supply, who are on rent and rate rebates, and who are to be driven into real poverty and hardship this winter? Is that not a reflection of a state of priorities of which any Government should be absolutely ashamed?

§ Mr. Jenkin
I defend entirely the priorities in the scheme that I announced, namely, for those over 75 on supplementary benefit and for families on supplementary benefit with children under 5 years of age. That is where the top priority goes.
The right hon. Gentleman would be on stronger ground in criticising what the Government are doing if he had given any indication that money was to be provided under the public expenditure White Paper or if he had given any public commitment to introduce it. As it is, the previous Government did neither. They are not entitled to criticise.

§ Mr. Benn
Is the right hon. Gentleman aware that on the record over three years running, in each year, never promising for the future, we renewed and expanded the schemes, and that this year it would have been the priority of any Cabinet with human concern not just to continue but to expand the scheme and to prevent people from being driven to destitution by the increase in electricity prices that they must pay this winter? What has been done is a disgrace.

§ Mr. Brocklebank-Fowler
On a point of order, Mr. Speaker. Does membership of the Front Bench extend to the third row of the Opposition?

§ Mr. Speaker
Order. It is a matter within my discretion. I know that from time to time hon. Members are irritated when they see that happening on the other side of the House, but it works both ways. If the hon. Gentleman will wait 40 I am sure that the same will happen on the Government side before Christmas.

§ Mr. Viggers
Is the Minister aware that when the electricity discount scheme was introduced it was taken up by only 70 per cent, of those eligible, and that the administrative cost was 10 per cent, of the scheme? This means, by simple arithmetic, that only 60 per cent, of the money available was reaching the target. Does he not recognise that this is squandermania, even by the usual Socialist standards, and that his proposals will reach the target of helping those in real need?

§ Mr. Jenkin
My hon. Friend is quite right. In the first year—the only year for which there were any figures—the take-up of the electricity discount scheme was probably a little over 60 per cent. No one knows what it was later on. The administrative costs of the previous Government's scheme amounted to no less than £4 million. We estimate that the administrative costs of our scheme will be one-tenth of that figure—£400,000.

§ Mr. Beith
Does the Minister recognise that it would be quite a sensible change of policy to make the benefit system the main vehicle for help with fuel bills, if it were being done on a scale comparable to what has gone before and if the main categories of people who ought to be receiving benefit were all within reach of the scheme?
Does the Minister also realise that unless his Government maintain a much stronger commitment to fuel conservation measures through their housing programmes, there will be many people for whom this benefit will be derisory, because it will not meet the real additional energy costs that they are having to face?

§ Mr. Jenkin
I am grateful that the hon. Gentleman, as the Liberal spokesman, welcomes the fact that this is seen as a matter of income support and is not designed to enable the Secretary of State for Energy to show himself as a champion of the poor. It is to be seen primarily in a social security context, and that is how the Government are judging it. Questions on home insulation are for my right hon. Friend the Secretary of State for the Environment, but we are maintaining the programmes that we inherited from our predecessors.

§ Mr. Gordon Wilson
Does the Secretary of State realise that in my part of the world the electricity discount scheme was very well received by many pensioners and others who benefited from it? There will be tremendous anger that it is being dismantled in this summary fashion. Does the Minister accept that there will be discomfort and perhaps even death by hypothermia as the result of lack of adequate finance for electricity costs? The Minister must realise that in certain parts of the country, in a cold winter, this will bite hard into the heating standards of our folk. Is the Minister prepared, and are the Government prepared, to accept the consequences of their skinflint action?

§ Mr. Jenkin
I do not accept for a moment that this has been decided in a summary fashion. On the contrary, it has been under very careful study by my right hon. Friends and myself over several months. I recognise that there will be disappointment on the part of those who received help in previous years and who will not be helped under this scheme. I do not need to remind the House that we are in a period of very considerable stringency on public spending. We found ourselves with public spending programmes that predicated a rate of economic growth that simply is not there, and have had to cut our coat according to our cloth. The fact that we are making available roughly £17 million to help the families who are in the greatest need is a measure of the Government's concern for the poor.

Several Hon. Members
rose—

§ Mr. Speaker
Order. I had intended to call those hon. Members who have risen. I will adhere to that and call them. Mr. Emery.

§ Mr. Emery
Will the Secretary of State make quite clear that the scheme that he is now introducing is automatic and that the help will go automatically to all the people in the categories that he has announced? Will it not be the case that the supplementary benefit officers will still be able, in the categories between the ages of 65 and 75—or in the case of anybody else who would qualify for supplementary benefit—to ensure that people are able to draw the full allowance of 95p a week if there is need for it? Will he agree, there-fore, 42 that the concept that we are being hard-hearted or casting people out is absolutely incorrect?

§ Mr. Jenkin
I am extremely grateful to my hon. Friend. He is absolutely right. As I said in my statement, many pensioners are already getting the heating allowance. From next month the rates will be 95p at the lowest level, £1 .90 at the medium level, and £2 .85 at the top level. Those are substantial helps for those who need them, whether they are living in houses that are abnormally difficult to heat or for any other reason.

§ Mr. Tilley
Will the Secretary of State recognise that the major difference between his proposals and those of the Labour Government is in the sphere of the lump-sum payment? Many poor families find it very difficult to meet the electricity bill when it arrives. It is very difficult for them to put money aside out of weekly income. In my constituency and in other areas of inner London, over 25 per cent, of people were receiving help in the form of lump-sum payments. Given that many families on supplementary benefit are left out, as well as many pensioners on supplementary benefit, will the Minister acknowledge that, whatever sort of winter we have, many poor families will either have to do without electricity—and we know, from what is to happen later in the week, that they will no longer be able to afford paraffin—or to face having their electricity cut off at a time when they are in most desperate need of warmth, and fuel for cooking?

§ Mr. Jenkin
The Government recognise that big winter fuel bills can cause problems for the poorer families. The hon. Gentleman will know that the gas and electricity industries operate a wide range of schemes to help people to spread their bills over the year. We are certainly concerned to see that these schemes are made as widely available as possible. My right hon. Friend the Secretary of State for Energy is encouraging the industries to consider extending the schemes and making new schemes available, because the concentration of bills in the winter quarter can cause considerable difficulties. The hon. Gentleman has made a perfectly clear point, but it is for the fuel industries to help the majority of people to overcome this difficulty.

§ Mr. Canavan
Is not the Minister aware that an increasing number of families—especially those living in council houses with electrical heating—simply cannot afford to use the heating and that, especially with old people, there is a real risk of hypothermia? Will the Minister therefore reconsider his callous decision to scrap the previous Labour Government's generous fuel discount scheme, or is he trying to surpass his 1974 effor by telling people to brush their teeth in the cold as well as in the dark?

§ Mr. Jenkin
I do not know whether the hon. Gentleman has recognised that the average payment overall under the last Government's scheme—spread, as it was, across a range of people, some of whom could by no stretch of the imagination be said to be in need of it—was about £7.50. The average payment to be made to the groups that we have selected for help under the scheme will be about £50. Surely it is better to give really worthwhile help to the people who stand in the greatest need than try to spread the butter too thinly across a much larger number.

§ Mr. Thomas Cox
Is the Minister aware that the biggest single problem that elderly people face is in meeting heating costs? This evening there will be utter disbelief throughout the country when elderly people understand what the Minister has told the House. He seems to be in some confusion. The electricity discount scheme and the heating allowances were totally separate schemes, and there was no restriction on them. Now there is a restriction to the age of 75. Will the Minister spell out to the House and to pensioners what kind of provision there will be for pensioners well below the age of 75 who will most certainly have very great difficulty in paying their electricity and other heating bills this coming winter?

§ Mr. Jenkin
The hon. Gentleman does not seem to have borne in mind that next month there will be an increase in the pension and in other long-term benefits of about 19½ per cent., which includes an amount to make up for the shortfall in the increase last year given by the previous Government. For the period over which the forecast had to be made, the level of fuel prices has risen less than that. I made this point in my statement. 44 It is not correct to say that pensioners will face even tougher fuel bills this winter. As for the future, I have given an undertaking that we shall keep our policies under review, but concerning the past year the hon. Member's general point is not correct.

§ Mr. Winnick
What kind of Tory justice is it that can give so much to the rich in the Budget and take away the electricity discount scheme, which has provided assistance for so many in the community? How many will be sent to hospital? How many elderly, aged and poor people will die this winter because of the right hon. Gentleman's statement?

§ Mr. Jenkin
The hon. Gentleman will no doubt enjoy his exaggerations. However, they bear no relation to reality, and he knows it.

§ Mr. Allen McKay
Is the right hon Gentleman aware that his decision will lead people in my constituency to choose between paying the electricity bill and being warm and paying the rent? If they do not pay the rent, they will be turned out and be homeless; if they do not pay the electricity bill, they will be in danger of suffering from hypothermia. My constituents will be not disappointed; they will be disgusted and dismayed that yet again the Government have chosen to take from the poor to give to the rich.

§ Mr. Jenkin
There is nothing in my statement about giving anything to the rich. Is the hon. Gentleman seriously telling the House that in a year when incomes from employment have gone up and when incomes from benefits will have gone up by at least 17½ per cent., or 19½ per cent, in the case of long-term benefits, an annual payment of about £7.50 will make the difference between starving or paying the rent? The hon. Gentleman should get a little sense of proportion into the matter.

§ Mr. Hooley
Is the Secretary of State aware that the special scheme that he has just announced will help less than 2 per cent, of all retired people? What does he suppose the other 98 per cent, will do?

§ Mr. Jenkin
We aim to concentrate the help on the very old, where it is widely recognised that the problems of cold are more seriously felt.

§ Mr. Field
rose—

§ Mr. Speaker
Order. I do not think that the hon. Member for Birkenhead (Mr. Field) was standing when I said that I would call those hon. Members who had been rising. It would be unfair to the House if I extended the list, unless, as it is the first day back, the House were generous.

§ Mr. Field
Does the Minister agree that the poor are again on the receiving end of his cruel logic, which is that under the guise of concentrating help on those in greatest need, those who receive help, whose numbers are fewer than under the previous schemes, will receive less help individually both in real and in money terms?

§ Mr. Jenkin
No doubt we shall have an opportunity later in the Session to explore these matters. The fact is that under my right hon. and learned Friend's Budget last June, with the tax changes that were made and the benefits increases that were announced, the great majority of people will actually be a little better off.

§ Mr. Cormack
rose—

§ Mr. Speaker
Order. I think that it will hold the balance if I call the hon. Gentleman.

§ Mr. Cormack
Is it not nauseating to listen to some Opposition statements bearing in mind that, according to many statements made at the Labour Party conference and elsewhere, the poor suffered far more in the five years of the Labour Government than in any previous period? [Interruption.]

§ Mr. Jenkin
My hon. Friend is quite right. The basic truth remains that the amount of help that we can afford to give to people at the bottom of the income scale—the standard of living of the poorest in this country—depends overwhelmingly more on the ability of the country to create resources than on tinkering about with the redistribution of wealth.

§ Mr. Orme
rose—

§ Mr. Speaker
Order. Before I call the Opposition Front Bench spokesman, I thought I heard someone say "You are lying". It is not my habit to lie, and it 46 is an unparliamentary expression, which should not have been used.

§ Mr. Orme
Does the right hon. Gentleman agree that the basis of his statement means that there will be a reduction in support, for people who need it, from £45 million to £16½ million? I assure him that we shall return to this matter time and time again.

§ Mr. Jenkin
I think that that merely shows the sterility of the right hon. Gentleman's mind.