§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Maude.]
11.36 pm§ Mr. Geraint Howells (Ceredigion and Pembroke, North)When the unnaturally cold spell hit us in November, many thousands of householders up and down the country were alarmed, for they saw ahead of them yet another long, dreary winter following on a cold and wet summer, with the ever-rising fuel bills that this means. This thought is depressing enough for the moderately affluent among us, but for those on the poverty line, or beneath it, it spells disaster and, for many, the inevitable cutting off of supplies because of the lack of ability to pay.
The Electricity Consumers Council recently issued disconnection figures up to 30 September of this year which show that the number of disconnections in England and Wales is now running at nearly 100,000 a year. The Liberal party commission on poverty in 1982 pointed out that one quarter of all local authority tenants are the victims of fuel poverty, while a further quarter are potential victims.
Age Concern tells us that seven years ago it was estimated that 90 per cent. of elderly people were unable to heat their homes up to the required 70 deg F to keep themselves warm and healthy in the winter months, and there is very little evidence that the position is improving. The consequences of inadequate heating for the elderly are often illness and, in some cases, death. We are all familiar with the sad stories of old people shivering in their poorly heated houses, terrified of the financial consequences of turning up the heat. Fuel costs have risen steeply in the last decade, and although prices have levelled off somewhat during the last two or three years the overall rise in the cost of fuel and light in real terms during the decade was 37.4 per cent., far outstripping other items in the household budget.
The people who have suffered most from the increase in fuel costs are inevitably the poor. They tend to live in bad housing, with inadequate insulation, often with the additional problems of dampness and condensation. They are seldom able to choose the kind of heating that they want and often end up with expensive and inefficient heating systems. This leads to a ridiculous situation, where those who can afford it least have to pay the most to keep themselves moderately warm. It is no wonder, therefore, that this leads to a failure to pay bills and to consequent misery.
We believe, as do the charities, that the White Paper that was published today will do little to help. Indeed, we feel that the difficulties will be even greater, both for the low paid who cannot heat their homes and for those charities that are involved in insulating several thousand homes in Britain.
The abolition of additional payments, including heating allowances for supplementary benefit claimants, will have serious consequences. The replacement of supplementary benefit by a system of income support containing a theoretical heating component may sound reasonable, but in practice it will lead to some very unpleasant choices for many households where budgets are strained to the limit. It could well be a stark choice between eating and keeping warm, with disastrous results for vulnerable groups, particularly the elderly.
132 I am also extremely alarmed that all other heating benefits to households, with special problems—those with young children or with ill, disabled or elderly people—will be abolished merely as an administrative convenience. It is also obvious that the abolition of single payments will jeopardise the future of insulation projects run by charities such as Neighbourhood Energy Action. In fact, the "Right to Fuel" campaign has said that DHSS single payments account for 80 per cent. of all insulation work carried out by the NEA.
Since 1981, this excellent group has carried out 120,000 jobs and has helped the elderly and disadvantaged to get the benefit of home insulation. At the same time, it has created about 2,500 jobs under the Government's community programme. Furthermore, it has opened up a new and thriving market for insulation projects. Will that work now be put at risk?
I believe that the present Administration, in their unseemly scramble to save money wherever they can at any cost, are in danger of reinforcing their public image as an uncaring, unsympathetic Government who are so intent on introducing tax cuts before the next election that they are careless of the needs of the most vulnerable in our society.
The White Paper represents a lost opportunity. It should have made an attempt to tackle the problem of fuel poverty, and it should have recognised the crucial role that single payments play in keeping the poor warm. The Government should take positive steps to make resources available for a special fund, as recommended by the Neighbourhood Energy Action movement, to provide a comprehensive and cost-effective approach to the insulation needs of the poor.
On a wider scale, greater efforts should be made to improve the housing stock and to ensure that building improvements and renovations are not subject to a crippling tax. Age Concern, a leading charity in the care of the elderly, has made many useful recommendations that the Government could well take on board and which would prove beneficial to all impoverished sections of society. It recommends that there should be mandatory payments for special circumstances, such as higher fuel bills in exceptionally severe weather. There should also be payments for draught proofing materials and insulation, repairs to heating appliances and so on.
I also believe that there should be a uniform and humane policy throughout Britain on disconnection procedures and repayment facilities, and that special payments should be made for reconnection. Fuel bills should be paid when disconnection may cause serious risk.
Will the Minister reassure the House that the Government are conscious of the need to modify their policies to fit the realities of life? After all, even the poorest among us are entitled to the basic requirements, including adequate heating. It is wrong that so many in this affluent society must face a miserable existence, and in this season of good will I hope that it will be possible for the Government to show just the smallest glimmer of compassion.
§ Mr. Malcolm Bruce (Gordon)rose—
§ Mr. Deputy Speaker (Mr. Harold Walker)Order. Does the hon. Member for Gordon (Mr. Bruce) have the 133 consent of the Minister and of the hon. Member for Ceredigion and Pembroke, North (Mr. Howells) to take part in the debate?
§ Mr. BruceYes, Mr. Deputy Speaker. I am grateful to my hon. Friend the Member for Ceredigion and Pembroke, North (Mr. Howells) for giving me the chance to speak in this important debate.
I and others are grateful that the unfair trigger mechanism that was highlighted last year has been phased out, but I hope that the Minister will recognise that there is still a feeling particularly in northern parts of the country, that the system is unfair, because those in the northern parts—particularly the poorer members of the community—who have, by definition, higher heating costs, need additional help which is not yet available. The Government should try to ensure that such help is given.
The fact that a trigger mechanism could even be contemplated is indicative of the bias that exists against the northern areas. The temperature did not have to sink to freezing point in Penzance for people there to secure a benefit, but in my constituency, the temperature had to sink to 2.7 deg. below freezing—and that was on the coast. Temperatures inland were 10 deg. C. lower, but people still did not qualify for benefit. Getting rid of that system is one step, but we need another step to ensure help for those in colder parts of the country.
No doubt the Minister will say that the Government's contribution to fuel allowances has increased from £100 million to £400 million a year since they came to power. That is creditable, because it shows that the Government are willing to make a contribution to fuel costs, but we have not made the logical link of trying to help those on low incomes to reduce fuel costs. After all, some do not qualify for help, but still face high costs.
My hon. Friend the Member for Ceredigion and Pembroke, North mentioned the neighbourhood energy action schemes, which have been welcome. I was recently pleased to launch a scheme in my constituency. It took 13 people off the long-term unemployment register and gave poorer members of the community the opportunity to insulate their homes, so that they had lower fuel bills and higher temperatures. The risks of hypothermia were reduced and everyone was happy. It is important that such assistance, which we welcome, should be boosted and extended and not cut.
Many elderly people and those on low incomes are worried about standing charges on fuel bills. I was disappointed that the opportunity to abolish standing charges was not taken in the Gas Bill. Worse than that, when the Bill came before the House, the Secretary of State said that the best that he could write into the Bill was that the British Gas Corporation should use its best endeavours to keep the increases in standing charges in line with, or lower than, the rate of inflation. That is not good enough. We want to get rid of those charges and ensure that people on low incomes have help to meet fuel costs, help to be warmer and more comfortable and help to insulate their homes. I hope that the Minister will take up those points with his colleagues in the Department of Energy. They are linked.
§ The Parliamentary Under-Secretary of State for Health and Social Security (Mr. John Major)I listened with interest to the hon. Members for Ceredigion and 134 Pembroke, North (Mr. Howells) and for Gordon (Mr. Bruce). I understand and share many of the concerns which they have expressed and congratulate them on the way in which they have expressed them.
The issues raised by the hon. Member for Ceredigion and Pembroke, North ranged wide and covered both fuel policy and the alleviation of poverty. He spread the net even wider by referring to draught proofing, housing and a variety of allied matters. I propose to refer briefly to energy prices, although strictly speaking they are for my right hon. Friend the Secretary of State for Energy. I propose to devote most of my remarks to the help given to the less well-off through the social security system, but I shall attempt to touch upon the specific issues raised by the hon. Members for Ceredigion and Pembroke, North and for Gordon.
Both hon. Members mentioned the projects that have been undertaken by various neighbourhood energy action groups. There is not a great deal that I can say about them this evening, save that I recognise the good work that has been done by the groups. Decisions have yet to be taken on how they will be funded in future. That is a matter that we are considering. I hope that it will be understood thal I can go no further than that this evening.
The hon. Member for Gordon referred to some of the absurdities of the exceptionally severe weather payments and the disapproval last year which that method of making payments received in Scotland. The hon. Gentleman will know that the chief adjudicating officer issued fresh guidance about the payments only recently. We are considering the guidance and the future of that form of assistance with heating bills. The hon. Gentleman will know that last year the payments amounted to only £1.7 million, while administrative costs were £1 million. I mention those figures, not to denigrate the help that was given, but to put them in the context of the £400 million worth of heating addition payments to which the hon. Gentleman referred.
The hon. Member for Ceredigion and Pembroke, North illustrated the extent to which the cost of fuel is relevant to those on low incomes. I accept that view. It is an important view, and I accept what he had to say on that score. Fuel is clearly a basic necessity, especially for the elderly and the sick. I recognise the concern that is felt by many on low incomes when it comes to paying for fuel. I shall come to what has been done, what is being done and what will be done under our new proposals to try to alleviate that concern.
Reluctant though I am to do so, I must take issue with the hon. Member for Ceredigion and Pembroke, North about the term "fuel poverty". It is a phrase which is often used these days, and upon examination it is a rather curious concept. The general idea of poverty itself is far from straightforward. We can recognise it, but it is not always easy to define it. The hon. Gentleman will know that the standard rate of supplementary benefit for adults has more than doubled in real terms since 1948 and that this benefit is the primary means of alleviating poverty, and has been so under successive Governments for some years. Yet the hon. Gentleman talks of fuel poverty. We do not hear a great deal about clothes poverty, or food poverty, but fuel poverty appears in a rather curious fashion to have developed a life of its own. Fuel, like clothes, food and all the other necessities for rich or poor alike is paid for out of people's normal income.
135 I recognise that individual need for expenditure on fuel can vary, but that is true of other necessities. I do not wish to make too much of what may seem to be a matter of semantics, but it is often misleading to talk about fuel poverty as if it were some special breed of poverty that necessarily requires different measures from those that are generally used to support the less well-off. An effective attack on poverty, which we all wish to see, comes in many guises—for example, benefit rates, control of price increases, economic stability and economic growth. Energy prices are a part of that tapestry, but only a part.
Although the general financial framework within which the gas and electricity industries operate is agreed with the Government, price increases remain a matter for the industries themselves. The Government do not set prices and do not have the power to so. Tariffs must reflect the industries' costs and provide a proper return on the substantial capital resources that they employ. They are not a means of indirect taxation. I call in evidence to support my proposition the relatively low level of price rises in recent years, which the hon. Member for Ceredigion and Pembroke, North acknowledged. They have been below the rate of inflation in the past two years and charges have therefore fallen in real terms. After allowing for inflation, the price of gas to the home is roughly what it was in 1970.
The hon. Member for Gordon addressed himself to standing charges. I know that these charges have been a cause of deep concern to many for many years, especially to the elderly. The charges reflect the necessary cost of keeping a supply available to the consumer in his own home for 24 hours a day. They cover the maintenance of the connection, meter reading, accounting, billing and emergency services. The costs arise no matter how much or how little gas or electricity is consumed by the individual householder.
The abolition of standing charges, although self-evidently attractive in some ways, is not an easy option. It would cost the gas and electricity industries more than £1.1 billion a year in lost revenue. Abolition for pensioners alone—if we could determine which pensioners should have abolition, whether it should affect people living on their own and all the other details that must be decided—would cost about £300 million. That lost revenue would have to be recovered by substantial increases in unit prices, which would penalise many of those who, through age, sickness, infirmity or some other reason, need more heat, even though they may be among the least well off.
That raises the question, which may have flashed through the mind of the hon. Member for Ceredigion and Pembroke, North, whether there should be special tariffs or free allowances for people on low incomes. That has been considered in the past, but successive Governments have concluded that it would be an expensive, ill-directed and probably ineffective means of helping those most in need. In 1976, the Labour Government announced that they had reviewed possible help through concessionary or restricted tariffs or free allowances of gas and electricity. Their conclusion—I quote from the report's foreword which was written by the right hon. Member for Chesterfield (Mr. Benn)—was that these did not offer
a satisfactory way of helping poor consumers with their fuel bills".136 I am sure that the right hon. Member was right, and I suspect that the Liberal party thought so too, because, as far as I am aware, it expressed no contrary view at the time. Successive Governments have therefore taken the view that help is best given through the social security system. That help is considerable.More than £40 billion is spent on social security—about a third of all Government spending. We have kept the major benefit rates ahead of the rise in prices during the lifetime of the Government and, because of the increases in benefit last month in line with inflation, we increased our spending by a further £2 billion a year. The main help for the less well off with their day-to-day living expenses, including fuel costs, is through the standard weekly rates of supplementary benefit. Those rates increased by 6 per cent. in real terms between November 1978 and November 1984 and were increased again last month in line with inflation. They have doubled in real terms since 1948, and I think that every hon. Member welcomes that.
On top of those benefit rates, we provide extra weekly help for those with special needs. The hon. Member for Ceredigion and Pembroke, North mentioned people with special needs—the elderly, the very young, the sick and the disabled. Each is entitled to heating additions. Last year we spent more than £400 million on those heating additions, which is £140 million more in real terms than any previous Government have spent at any time. Since 1979, we have extended the help available. In November 1979 we introduced a basic rate of heating addition for pensioner householders over 75. Over the years, we have extended the age range so that this now takes in pensioner householder over 65. We have introduced a similar addition for the under-fives. Last November, we introduced a new higher rate of heating addition, worth well over £200 a year—a considerable sum—payable automatically to householders over 85. We have also assisted disabled people. Since 1980, we have paid a higher rate of heating addition automatically to severely disabled people people on supplementary benefit who receive attendance or mobility allowance or its equivalent. Last month, we introduced a further measure—automatic entitlement to a basic rate heating addition for sick and disabled householder claimants on the long-term rate of supplementary benefit. As a result of these changes, we estimate that 60 per cent. of all people on supplementary benefit and 90 per cent. of supplementary benefit pensioners now receive a heating addition. That is a dramatic improvement on the position before 1979 and represents a considerable attack on what the hon. Member for Ceredigion and Pembroke, North referred to as "fuel poverty".
The hon. Member for Ceredigion and Pembroke, North referred to the White Paper proposals. I should like to explain why we felt it right to move forward and reform these arrangements, as announced in the White Paper which was published today. The answer is that heating additions are merely a means of giving more help to certain groups of claimants who may have extra heating needs. The additions are better, in our view, than tariff adjustments and certainly better than nothing, but they are not the only, or necessarily the best, form of assistance.
Heating additions are a rather curious mixture. Many are paid automatically on grounds such as age, but others involve detailed questioning on matters such as the claimant's health. There is a complex array of rates, rules 137 and regulations. I am sorry that the hon. Member for Ceredigion and Pembroke, North did not feel that the White Paper would be an improvement on the present rather muddled situation. He asked me whether I was conscious of the need to modify policy to match reality. That is what we believe the White Paper is doing. I hope that, upon reflection, it will be shown that we are right, although I acknowledge that it is a controversial issue at present. In the White Paper we are proposing an income support scheme to replace the current weekly supplementary benefit. Income support will continue to provide set allowances for normal living expenses, including fuel costs. There will also be premium payments for families, pensioners, sick and disabled people and lone parents to help with the extra expenses that those groups tend to have—including extra heating costs. That will mean a system that is simpler than the present one. It will be easier for the public and staff to understand. It will cut out much of the intrusive questioning that now takes place—I think that everyone will welcome that—and it will also effectively direct extra help to groups of people who are likely to face extra expenses.
As I said in the House only a couple of weeks ago, the fact that we shall not call the premiums "heating additions" does not mean that they do not exist, that the cash is not in the claimant's pocket and that it cannot be used towards fuel costs. We believe that income support will, in future, be a better means of delivering that help and we intend that the money spent on heating additions will be included in the resources available for the new scheme. Nor are we alone in that view. The Social Security Advisory 138 Committee commented similarly on the Green Paper in June. The committee welcomed the idea of premium payments in income support for different groups. Moreover, the Select Committee on Social Services said that it
broadly accepted the principle of premiums reflecting the additional needs of individual client groups".Therefore, I think that a substantial amount has been done, is being done and will continue to be done to meet the needs of people who face difficulties with fuel poverty through poor or low incomes. I hope that the hon. Member for Ceredigion and Pembroke, North will accept that we are sincere in our intention to help those people meet the difficulties that they face.I also hope that on reflection the hon. Gentleman will see the wisdom of the approach that we set before the House in the White Paper today and that we shall seek to carry through in a Bill early in the new year. I am confident that when the House debates the Bill, it will take that view. I hope that it will carry the hon. Gentleman and his colleagues with it at that time.
I appreciate the hon. Gentleman's concern that people should be able to afford adequate heating. We share that concern and we shall continue to offer substantial assistance to that end, but we shall do so in a way that we regard as simpler and more effective than the current system. We believe that our proposals will meet those criteria and I hope that in due course they will be endorsed by the House and the hon. Member for Ceredigion and Pembroke, North who raised the subject.
§ Question put and agreed to.
§ Adjourned accordingly at three minutes past Twelve o'clock.