FUEL POVERTY

HC Deb 10 May 2002 vol 385 cc409-18

'After section 5 of the Home Energy Conservation Act 1995 (c.10) there is inserted— 5A Fuel poverty An energy conservation authority in England and Wales shall, so far as reasonably practicable, perform its functions under section 2A in a way which, in the opinion of the authority, will contribute to achieving the objectives for the time being specified under, or mentioned in, section 2(2) of the Warm Homes and Energy Conservation Act 2000 by the dates so specified".'.—[Dr. Desmond Turner.] Brought up, and read the First time.

9.34 am

Dr. Desmond Turner (Brighton, Kemptown)

I beg to move, That the clause be read a Second time.

Mr. Speaker

With this it will be convenient to discuss Government amendments Nos. 5 and 6.

Dr. Turner

It is a pleasure to speak to the new clause, which reflects a certain amount of difficulty that we encountered in Committee. I am grateful to my right hon. Friend the Minister for the Environment for agreeing to the tabling of the new clause; he and I had to resolve the difficulty by what is perhaps best described as a simultaneous withdrawal, in order to avoid a difficult confrontation.

I am happy to report to the House that the new clause does exactly the same with regard to fuel poverty as the equivalent amendment that I withdrew in Committee, as it seeks to make the work of local authorities in addressing fuel poverty a statutory duty. That is its intended effect. As far as I am concerned—and as I hope all hon. Members agree—that is a satisfactory outcome. The new clause returns to the Bill one of its three fundamental strands. The Bill is a package containing three interdependent and very strongly related elements. The intended effects of part 2 will be in place, assuming that the new clause is acceptable. I warmly commend it to the House.

The Minister for the Environment (Mr. Michael Meacher)

I am very pleased to confirm what my hon. Friend the Member for Brighton, Kemptown (Dr. Turner) has said. We have had extensive discussions on this proposal and others—most notably amendment No. 11. My hon. Friend's remarks were quite correct.

I am pleased to speak to the new clause, which would require authorities, once targets have been set, to undertake their functions in relation to domestic energy conservation in such a way as would help achieve the national objectives of the Government's fuel poverty strategy. The main cause of fuel poverty in the UK is a combination of poor energy efficiency in homes, and low incomes. Other factors can also contribute, such as the size of properties in comparison with the number of people living in them and the cost of fuel. Estimates show that while the number of fuel poor was estimated to have fallen by 2000, some 4 million households in the UK were still believed to be in fuel poverty.

Local authorities have a pivotal role to play if the objective of the Government and the devolved Administrations to seek an end to the problem of fuel poverty is to be achieved. Our first target, however, is to end the blight of fuel poverty by 2010 for vulnerable households. In 1999, there were 3 million such households, accounting for about 70 per cent. of all the fuel poor in the UK. Once progress has been made on the priority vulnerable groups, the focus will be widened to include healthy adult householders in fuel poverty.

The health implications of fuel poverty can be extremely serious. A cold home can significantly increase the likelihood of ill health. Illnesses such as influenza, heart disease and strokes are all exacerbated by the cold. Cold homes can also promote the growth of fungi and house dust mites, and the latter have been linked to conditions such as asthma. Ill health can lead to enforced absences from work, and certain types of illness such as respiratory disease may restrict employment choices for people without work.

The need to spend a large portion of income on fuel means that fuel-poor households have to make difficult decisions about other household essentials, which can lead to poor diets and/or withdrawal from the community. For people in vulnerable groups, those problems are exacerbated by the fact that they are likely to be at home for more—and possibly all—of the day, so heating is needed for more time than in other households.

Cold can cause other discomforts for older people—for example, worsening arthritic pains. It can also contribute to a general feeling of illness. Research suggests that domestic accidents, including fatalities, are more common in cold homes in winter. Periods of prolonged immobility can result, making it even more difficult for older people to keep warm. People may need to go into residential care because of their injuries or because they can no longer live in a cold home.

The cost of fuel poverty can be counted in more than the misery caused to the affected individuals. Increased illness adds to the pressure on health and social care services. That is especially true in the case of the disabled and the long-term sick. Fuel poverty is likely to exacerbate their problems and lengthen their recovery time. Cold homes may also make it more difficult for carers to look after acutely or chronically sick people, more of whom will have to go into hospital needlessly or go into a nursing home permanently. The amendment would require local authorities, when implementing their functions in relation to energy conservation, to contribute to the targets and wider objectives set out in the UK fuel poverty strategy. The strategy, published last November, sets out the range of programmes and measures that were put in place to address the main causes of fuel poverty. They include programmes to improve the energy efficiency of fuel poor households; continuing action to maintain the downward pressure on fuel bills; and action to tackle poverty and social exclusion. Those issues are wide ranging, and require a variety of approaches.

In England, our key mechanism for tackling fuel poverty in the private sector, where most of the fuel poor are, is the home energy efficiency scheme, which is now marketed, as hon. Members know, as the warm front team. The scheme gives grants of up to £2,500, and provides insulation and heating measures depending on the needs of the householder and the property type. Such action can have a direct impact on quality of life.

We have a target for warm front to assist 800,000 homes by 2004. I am glad to say that it is on target to deliver, with some 350,000 households already assisted and more than 30,000 new central heating systems installed. Difficult issues remain, and hon. Members have written to me about them. I readily acknowledge that there have been delays in the installation and repair of central heating systems, largely due to a shortage of qualified gas heating engineers. To help tackle that, my Department has funded training courses to help provide additional qualified engineers to work under the scheme. Consequently, the number of installations per month trebled last year.

For social housing, the Government objective is to bring all such properties up to a decent standard by 2010.

Mr. Geoffrey Clifton-Brown (Cotswold)

Does the right hon. Gentleman agree that the design of some houses in the public sector is so poor that they need demolishing? For example, when I served on what was then the Select Committee on the Environment, I met someone in Glasgow who paid electricity bills of £20 a week, but whose home was colder than it was outside. The number of public sector houses being built is the lowest for seven years. Homeless people are increasing and the number of those in bed-and-breakfast accommodation with no home has soared by 150 per cent. since the last election. How will the Government square that circle?

Mr. Meacher

The hon. Gentleman is perfectly entitled to raise the public sector, and the points that he made are correct. However, most of the fuel poor are in the private sector. I was addressing my remarks to that because the fuel poverty strategy deals mainly with that sector. However, there are many dwellings in the public and private sectors that simply do not have a life expectancy as decent homes. They can only be demolished. That forms part of local authorities' programmes. It is for them to decide what cannot be made into a decent home and should therefore be demolished and replaced. I agree with the hon. Gentleman that build must increase; that is the Government's intention. The Government have set a target to provide decent homes to all social sector tenants by 2010, and to reduce the number of social tenants living in homes that are not decent by one third by April 2004, with most of the reduction in deprived areas.

9.45 am

The energy efficiency commitment is another major programme, which will help fulfil the Government's fuel poverty targets. It came into force on 1 April, only a month ago. It provides an opportunity to take an important step forward in promoting domestic energy efficiency in Great Britain. It places an obligation on electricity and gas suppliers to make improvements in energy efficiency. That is not simply a matter of providing more electricity and gas units per household, hopefully at lower prices, but of the efficiency with which the existing units are contained in the house. It will do that by encouraging and assisting domestic consumers to adopt energy efficiency measures.

The energy efficiency commitment will have three important benefits. First, we estimate that it will cut greenhouse gas emissions by approximately 0.4 million tonnes of carbon a year. Secondly, by helping electricity and gas consumers to save energy, it will reduce their fuel bills, or they may choose to enjoy greater comfort by living in better-heated homes without increased costs. Thirdly, it will give specific help to lower-income consumers, who spend a larger proportion of their income on energy. That will contribute to the eradication of fuel poverty.

The energy efficiency commitment sets an overall obligation on all electricity and gas suppliers of 62 fuel-standardised TWh of energy savings. That phrase may not convey a great deal to hon. Members, but, as suppliers will confirm, it is a testing target for the overall improvement of energy efficiency. We believe that it is challenging and achievable, and represents a significant increase in activity over the programmes that have been running successfully since 1994. I believe that it will provide a clear stimulus to the sustainable development of domestic energy efficiency.

As I said, special help will be given to lower-income consumers, who are almost certainly in the worst category of fuel poverty, by a requirement on suppliers to achieve at least 50 per cent. of their energy savings from householders in receipt of income or disability benefit or working families or disabled persons tax credit.

The energy efficiency commitment is expected to produce total energy benefits worth approximately £275 million. The average annual benefit for consumers taking up measures under the commitment will be around El 1. For those in the priority group of lower-income consumers, it should be more than £15.

Local authorities are important strategic partners. Only last month, five local councils were awarded beacon status for their work in tackling fuel poverty. The beacon scheme aims to identify centres of excellence in local government from which others can learn. That is an important element of our local government modernisation agenda.

The warm zone initiative is another example of strategic co-ordination on the ground. It channels existing programmes in a local area. To enable that to happen, warm zones have formed partnerships between the energy utilities, health authorities, community and voluntary sectors, the Government and, again, local authorities. A pilot programme was launched last year with five zones across the country based in Northumberland, Stockton, Hull, Sandwell and Newham. The aim of warm zones is to deal with fuel poverty in a locality in three years. They are working on the basis of reaching all households in an area, providing assistance through available grant schemes.

I shall draw my remarks to a close, because this is rather a lengthy opening statement. Energy efficiency is a real win-win strategy, as all hon. Members will acknowledge. It takes people out of fuel poverty, creates jobs, cuts greenhouse gas emissions and reduces the burdens on the NHS and social services. One of the biggest difficulties, of course, is finding those in need. Schemes such as warm front can be helped by local community workers—doctors, nurses, social workers, voluntary groups and local authority officers—identifying and persuading vulnerable householders, particularly pensioners, to come forward.

There are other, often more difficult, issues that we need to consider: people whose homes are off the mains gas network; homes whose construction makes them difficult to heat; tackling fuel poverty among the healthy adult fuel poor in the private sector; and under-occupation. These are all challenging issues, and I would be the first to recognise that they still constitute a difficult problem for us. I believe, however, that the new clause will help to focus action at a local level, and, at the same time, ensure that a range of schemes and programmes remains to tackle the needs of the various groups in fuel poverty. I commend the new clause to the House.

Mr. Jonathan Sayeed (Mid-Bedfordshire)

The Government have repeatedly pledged to eradicate cold-related diseases by 2010, yet current statistics show that up to 50,000 elderly people may be dying of cold in Britain every winter. Commenting on the apparently laudable intentions of the Government's 10-year fuel poverty plan, the Minister described himself as declaring war on fuel poverty". When the fuel poverty strategy was announced, the Minister admitted—as he did again today—that the targets were challenging, but said that the strategy was an important element of our programme to tackle poverty and social exclusion.

I acknowledge that the Minister has addressed some of our concerns about fuel poverty in new clause 1, but he could have done so much more. If he had used the eight months since the Bill was published to devise and propose fundamental improvements, he would have earned the gratitude not only of all in this place but, even more important, of those in greatest need. If he had used that time to tackle energy inefficiency and reduce energy consumption, we all would have applauded. If he had used the time to reverse the farce whereby, under the Government's own plans for housing, the certified standard assessment procedure rating scheme for social housing is considerably lower than that set as part of building regulations for private housing, we would all have helped him.

That means—shorn of its jargon, so that all hon. Members can understand it—that local authority homes for poor people are being built to be less energy efficient than those of the better off. In consequence, those who are in local authority and housing association accommodation—often the poorest people in society—are likely to be those who will remain in fuel poverty the longest. When the Minister talked about declaring war on fuel poverty", what he should have been doing was ensuring that local authority and social housing was at least of the same energy efficiency standard as private sector housing. If we add to that the absurdity that, under current plans for energy efficiency and fuel poverty, the poor pay more and the rich pay less to achieve the same degree of warmth, we have a very clear indication of how the Minister could usefully have spent the last eight months of his time.

This is a Government who continue to congratulate themselves on their commitment to lifting people—most prominently, children—out of poverty. I wish they would. But the figures show that if they think that they are achieving that, it is just another example of Labour's social delusion. [Interruption.] Just wait for it! At the last general election, the Chancellor asserted that Labour had lifted 1.2 million children out of poverty. Recently released Government figures show that the true figure was not 1.2 million but 500,000, which simply takes the poverty rate back to roughly where it was in 1994–95.

Another deception on the part of the Government has involved the definition of fuel poverty. The long-standing definition of someone in fuel poverty is someone who would need to spend more than 10 per cent. of their disposable income on the fuel required to heat their home to a reasonable level of warmth, disposable income being the money that people have left over after paying for housing costs. By sleight of hand, the Government changed the definition from 10 per cent. of disposable income to 10 per cent. of total income.

In other words, if a pensioner received £130 a week, paid £30 rent and had fuel bills of £12.50 a week, under the old definition they were fuel poor, because they were paying 12.5 per cent. of their £100 disposable income on fuel. However, once the UK fuel poverty strategy was introduced by this Labour Government—the same strategy that the Minister has been lauding today—that pensioner was suddenly no longer fuel poor, because their fuel bills were less than 10 per cent. of their £130 income. Of course they were not actually any warmer; they had just been defined out of fuel poverty. That is no doubt the reason why the Government now tell us that the number of households classified as being in fuel poverty has been reduced by about 1.5 million across the United Kingdom. That just shows how changing the definition has helped the Government to massage their figures.

We can give a muted cheer to new clause 1, so far as it goes, but, by George, the Minister could have used the eight months since this Bill was published much more profitably.

Mr. Huw Edwards (Monmouth)

I am delighted to be able to contribute to the debate on new clause 1. The hon. Member for Mid-Bedfordshire (Mr. Sayeed) has just said that he gives it a "muted cheer". In Committee, he gave more enthusiastic support to the strategy to combat fuel poverty, and I am slightly disappointed to hear his slight change of tone, now that we are discussing it on the Floor of the House. As a member of the Committee, I give my great support to the hon. Member for Brighton, Kemptown (Dr. Turner). He has worked immensely hard on this Bill, and I am delighted that the compromises and discussions that have taken place between him and the Government have now resulted in new clause 1, which we can all support.

My interest in fuel poverty goes back some 20 years, to when I first studied a book written by my hon. Friend the Member for Croydon, North (Malcolm Wicks), now the Under-Secretary of State for Work and Pensions. He wrote several books, but his seminal work on this subject was called "Old and Cold: A Study of Hypothermia", which dealt with the problems of fuel poverty, especially among the elderly in this country. The hon. Member for Mid-Bedfordshire referred to the debate about the definition of fuel poverty. I understand that that definition is up for consultation, and I hope that an agreement will soon be reached.

I was the only member of the Committee from a Welsh constituency, and I would like to address my comments to the position in Wales. There is no direct estimate of the number of fuel-poor households in Wales, but there are some indications. The 1997–98 Welsh house condition survey estimated that 220,000 households were deemed eligible for help under the energy efficiency scheme in Wales, in that they lacked basic insulation and/or heating, and could potentially suffer from the problems of fuel poverty. One hundred and fifteen thousand people live in social housing, 84,000 in owner-occupied housing, and 23,000 in the private rented sector.

According to Age Concern Wales, 20 per cent. of the Welsh population are classified as pensioners, and, as my right hon. Friend the Minister has pointed out, the problem of fuel poverty is most serious among the elderly. A Shelter Cymru report estimates that a quarter of a million households in Wales are unable to adequately heat their homes and are at risk from serious health problems or death from the effects of cold housing. 10 am

Fuel poverty in Wales does not just affect densely populated areas; it is also a significant problem in rural areas. That was discussed at the rural fuel poverty conference in May 2001, when it was noted that Wales suffers from an underdeveloped infrastructure, particularly in accessing affordable fuels such as mains gas. My constituency, which is very rural, contains a socially isolated community in Llanelly Hill, near Blaenavon. The area has no mains gas, and, being in a particularly cold part of Monmouthshire, it would benefit from a commitment by local authorities to provide the gas that it needs.

Help the Aged has contacted me about fuel poverty among the elderly, and the link with winter deaths. It estimates that, nationally, between 20,000 and 50,000 people die as a result of inadequate heating.

I commend the new clause, which is part of the Government's commitment to eradicating social exclusion. I also commend the efforts of my hon. Friend the Member for Brighton, Kemptown.

Sue Doughty (Guildford)

I pay tribute to all who have worked so hard over the past few months to bring the Bill to this stage. It has taken a tremendous amount of hard work and negotiation. Sadly, we are not out of the woods yet. On day one, we were presented with what appeared to be a practical solution to the problems of local authorities—what they were expected to do and how they would meet their targets while conforming to the Government's strategy for the eradication of fuel poverty and delivering on other environmental targets—but we are not much further down the line. Clauses go into the Bill and out again, and we still have the same worries about the Government's commitment not just to ending fuel poverty, but to meeting the environmental targets that the Bill supports so strongly.

The Bill goes some way towards dealing with fuel poverty. I am sure that we are all committed to dealing with that problem. It cannot be right for one of the most prosperous countries to suffer the scourge of fuel poverty nowadays. Its rapid elimination is essential as a matter of social justice. We must, however, give local government the tools with which to do the job. It is ridiculous that, while local government chases one Government target after another, measures that would make a real difference are inserted in the Bill and then taken out again. Now we are having to debate them yet again.

A fortnight ago, I visited a council house in my constituency. I was shown crumbling windows where people had put newspapers in the cracks to keep the warmth inside. Students line roof vents with newspaper, which causes a huge fire hazard. These people are among the poorest.

I asked the council's chief executive why the council was planning to have the windows painted. As they were falling apart, it would simply be throwing good money after bad. What, I asked, had happened to the window replacement scheme, which would have been of real benefit? The chief executive said, "We were going to do that, but we had to think again because the Government gave us a different set of targets." Eminently sensible schemes have been junked. The council will paint the crumbling windows, and people will go on lining them with newspaper. The newspaper may be painted at the same time for all I know.

Mr. Chris Bryant (Rhondda)

So far, the hon. Lady has talked exclusively about local government housing. My constituency is in a former mining area and is very poor. It falls between two stools in that it is not quite rural and not quite metropolitan. Eighty-six per cent. of my constituents are home owners, and they suffer from exactly the same problems of fuel poverty. Is not the best way of helping people to rescue themselves from fuel poverty ensuring that they have more money in their pockets?

Sue Doughty

That is certainly fundamental to ending the problem, but housing standards must be improved so that the money that people have in their pockets can be used wisely.

If we are to deal with fuel poverty, we must give local government the tools that it needs. The inhabitants of houses in multiple occupation are often among the poorest people in society. They are the least able to deal with the properties that they occupy, especially when those properties are rented, because they cannot afford to do so. Someone must work on their behalf, and part 3 of the Bill is essential in that regard. The Bill's structure is strong. Its purpose is the elimination of fuel poverty, the measurement of targets along the way, and the identification of households that should qualify for the energy conservation scheme. I pay tribute to the Government for the warm homes scheme, and the work of the Energy Saving Trust. I have attended meetings held by the trust in Surrey, which have brought together HECA officers—HECA stands for Home Energy Conservation Act—community health workers and a range of other people to share ideas, suggest innovations and consider the different ways of ending fuel poverty. The experience has been exciting and rewarding, but all those people still say the same thing: if they are to be empowered, they must be empowered by Government.

We are suffering some desperate disappointments. We are trying to support the sensible measures in the Bill, but the rug keeps sliding from under our feet. How do we know when we will meet our targets? We must pinpoint the failures and introduce measures to ensure that we meet the targets. Otherwise, in 2010 or 2020 we shall be saying, "We will not quite meet this or that environmental target", and claiming that the figures, or other factors, have changed.

We must take positive action. We cannot just tell people, "Do this; we do not mind how you do it". If we are to hold up our heads when we visit places such as Johannesburg, ostensibly leading the way on environmental issues, we must deliver on our own doorstep, and we cannot do that unless we enact the Bill in its original form.

Mr. Meacher

Let me say something about amendments Nos. 5 and 6. Amendment No. 5 removes the existing fuel poverty clause from the Bill. I have worked closely with my hon. Friend the Member for Brighton, Kemptown (Dr. Turner) on a new fuel poverty clause that better meets our joint aims of ending fuel poverty. Amendment No. 6 would establish a commencement date for the fuel poverty clause—12 months after the passing of the Act—bringing it into line with the deadline for the energy-efficiency provisions.

I never cease to be stunned by the brass neck of the Tory party, and especially by that of the hon. Member for Mid-Bedfordshire (Mr. Sayeed). As I said in Committee, poverty, and fuel poverty, trebled during the 18 years of Conservative government. In 1997 we inherited a situation in which, depending on the definition used, there were between 4 million and 5 million fuel poor. I will take no lessons from him or the Tory party about dealing with fuel poverty because the Tories massively exacerbated it. We are addressing it, reducing it and seeking to eliminate it by 2010.

The hon. Gentleman said that we could have used our time better. I do not think that we could have used it better than by the implementation of the home energy efficiency scheme, the warm front scheme and the energy efficiency commitment. Those three massive programmes require a huge amount of Government funding together with a significant upgrading of local authority stock to decent standards. We all want the Bill to succeed, and if it does, its success will overwhelmingly be due to existing components of the Government's programme.

The hon. Gentleman also said that we could have done better in promoting energy efficiency. He is probably unaware that the energy efficiency best practice programme operated by my Department reckons that it saves several hundred million pounds a year primarily at the industrial level, but also at the domestic level. We constantly promote energy efficiency to the fullest possible extent.

Finally, the hon. Gentleman suggested that we had somehow massaged the figures by changing the definitions. He completely misses the point that I have made repeatedly: whichever definition we use, whether it is based on gross or net income, we will achieve our target in respect of the main categories of fuel poverty—elderly people who are fuel poor, the long-term sick and disabled and low-income families with children—by taking them out of fuel poverty by 2010.

The hon. Gentleman's remarks are not only grudging and curmudgeonly, but unreasonable. I am glad to support this important Bill. It builds on the foundation of Government policy which is overwhelmingly driving in that direction, contrary to the record of the previous Government.

Dr. Desmond Turner

This morning is about private Members' legislation, where traditionally the party divides are a little less obvious, so I shall not get involved in the spat across the Front Benches. It is all too easy to get bogged down in statistics and lose sight of the basic truths. However, there are two simple truths: first, whatever statistical definition is used, we all agree that there are still too many people in fuel poverty; secondly, the Government are working hard to address fuel poverty and investing heavily to that end. The new clause helps to focus that investment at a local level to make sure that it delivers most effectively. In that respect local authorities can do a more effective job than a national organisation. They know their areas, they know where the people with the greatest problems are and they can point strategy in the right direction. We all want to end fuel poverty, and the new clause expresses the original intentions of the Bill by requiring local authorities to play their role in doing so.

10.15 am

I point out to the hon. Member for Guildford (Sue Doughty) that we are building on the provisions of the Warm Homes and Energy Conservation Act 2000, because the fuel poverty strategy was a requirement of that Act. The Government have delivered the fuel poverty strategy, but it needs to be implemented physically. Unfortunately, that Act, which was an excellent private Member's Bill, did not have any statutory teeth in respect of local authorities and placed no statutory burden on them. This Bill does and new clause I sets it firmly in the centre of the Bill. It may not be all that everybody wants and I do not pretend that it is, but it represents a considerable and significant advance. On the basis of moving towards the achievement of an aim for which we are all striving, I commend the new clause to the House.

Question put and agreed to.

Clause read a Second time, and added to the Bill.