HC Deb 06 May 1999 vol 330 cc1084-5
16. Ms Joan Ryan (Enfield, North)

What assessment he has made of the effect of current energy prices on the least affluent sections of society. [82376]

The Minister for Energy and Industry (Mr. John Battle)

Tackling fuel poverty is a key priority of the Government. Although energy markets are being opened up, we are keen to ensure that the highest price is not paid by the poorest. With the new tariff structures, we are taking measures to ensure that the fuel-poor are not priced out.

Ms Ryan

I thank my hon. Friend for his answer. While I fully accept our environmental obligations, I urge my hon. Friend and the Government to ensure that, in meeting those commitments, we do not hit hardest those least able to pay. Will my hon. Friend confirm that Labour's proposals are about a revenue-neutral energy tax levied on polluting businesses and are not, as was the case with the previous Government, about increasing VAT on domestic fuel and deliberately hitting hardest those on the lowest incomes?

Mr. Battle

I agree with my hon. Friend. The lowering of prices should be coupled with the reduction of VAT to 5 per cent. We said that we would do that and many people have benefited from it. It is fair to say that there has been a reduction of some 10 per cent. in the price of gas and electricity, but it has not been spread evenly among all consumers. Those on direct debits benefit more. We have told the regulator to look at a social action plan to examine tariff structures to ensure that the poorest do not pay the most. The market will work when all benefit, not just the better-off.

On the environmental question, it is important to ensure that we blend the reduction in prices with proper energy efficiency, including in people's homes, so that the energy that they buy does not go out through the gaps between the doors and windows. We are taking appropriate measures to insulate homes and make them energy efficient. We are doing that under other schemes, supported by the Department of the Environment, Transport and the Regions.