Fuel Poverty (Hansard, 6 July 2000)

§ Lord Whitty
My Lords, the Government have acted on the main causes of fuel poverty—poor energy efficiency and low income—by: cutting VAT on fuel and energy efficiency improvements; introducing the £150 winter fuel payment; acting to reduce domestic energy prices; allocating an additional £3.9 billion to social housing repair and improvement; introducing the affordable warmth programme and the New Home Energy Efficiency Scheme. The regulator has also 1598 extended the energy efficiency standards of performance schemes to include gas as well as electricity and has taken steps to ensure that most assistance is directed at low income households. An inter-ministerial group is reviewing the progress being made, the remaining scale of the problem and further measures that may be needed. The Government will then publish their fuel poverty strategy in the autumn.

§ Lord Hardy of Wath
My Lords, that Answer is rather commendable. Does it not suggest that the longterm disadvantage faced by many children as a result of living in very cold homes will be markedly reduced? Furthermore, are we not now on the verge of seeing an end to the incidence of hypothermia among the aged? In view of those improvements, is it not clear that this Government do make a difference?

§ Lord Whitty
My Lords, I agree absolutely with my noble friend on his final point. We have intensified our efforts in this area and have targeted a number of programmes, including the New HEES which is directed particularly at the elderly and families living in poverty. That will enable us more effectively to tackle the problems faced by those who are most vulnerable. We have made a substantial start and we shall ensure that the full strategy is built up so that it can make a significant contribution to the elimination of fuel poverty in this country.

§ Baroness Gardner of Parkes
My Lords, is it not a fact that many elderly people who suffer from hypothermia become ill not because they cannot afford adequate heating but because they feel they cannot, or they are worried about running out of money? When I served on the London Electricity Board, a scheme was put in place whereby we ensured that, for vulnerable people, one room was always kept warm, in whatever type of dwelling. Are similar schemes still available?

§ Lord Whitty
My Lords, the New HEES provides full heating, insulation and ventilation systems for vulnerable families, in particular pensioner families. It is quite true that a psychological element can play a part in this problem. However, the wide availability of such schemes helps to reassure older people that they can apply for assistance. We believe that at least half a million people could be taken out of fuel poverty by these means.

§ Lord Ezra
My Lords, while recognising the considerable efforts made by the Government to identify and deal with the problem of fuel poverty, I ask the Government whether they accept the recommendation made in the latest report of the Royal Commission on Environmental Pollution. It states that there is a, pressing need for further expansion of government programmes for raising energy efficiency and increasing warmth in low income homes". 1599 Furthermore, in the light of the consideration of the Utilities Bill, are the Government giving serious attention to some innovative schemes being introduced by various enterprises to reduce energy prices for low-income households?

§ Lord Whitty
My Lords, I can confirm that the Government recognise the need to tackle fuel efficiency in housing generally, because it forms a part of the climate change programme being examined by the Royal Commission. We also feel that a part of that priority should be to address first the problems faced by those who are most vulnerable to fuel poverty. Such cases form our highest priority. The programmes to which I referred earlier aim to tackle the priority areas first and will make a significant contribution both to the social need and the environmental issues here.

§ Lord Clark of Kempston
My Lords, does the Minister agree that the high fuel tax on petrol is causing considerable hardship—verging on poverty—for people living in rural areas? Have the Government any intention to reduce the fuel tax, in view of the promise given by the Government that taxes would not be raised in this Parliament?

§ Lord Whitty
My Lords, I believe that the noble Lord has mis-stated the taxation policy of this Government. We gave a clear commitment in relation to income tax. We also gave a commitment to ensure that our taxation system would be environmentally sensitive. The taxation structure put in place in relation to fuels aims to meet that objective. We have built on the fuel duty escalator put in place by the previous government. But when it began to bear too heavily on road users, the Chancellor in his Budget ended it. However, since that was done, international oil prices have risen sharply. The proportion of tax as an element of the price of fuel is in fact slightly lower than it was when the Government first came to power. Furthermore, up to that point, the real cost of motoring had not risen significantly for a period of 20 years. For those reasons, we do not regard this as an area for immediate government action, although we shall continue to bear in mind the implications as regards rural policies.

§ Baroness Gale
My Lords, can the Minister tell the House whether the inter-ministerial group on fuel poverty has completed its deliberations on a possible definition of fuel-poor households?

§ Lord Whitty
My Lords, in preparation for drawing up the strategy, which we hope to issue in the autumn, the inter-ministerial group has carefully considered the definition. However, I should point out to my noble friend that the definitions will apply to England. The commonly applied definition of a fuel-poor household is of one which needs to spend 10 per cent or more of its total income on fuel. However, queries have been raised as regards whether fuel for non-heating purposes should be excluded and whether some allowance should be made for housing costs when 1600 calculating household incomes. The inter-ministerial group feels that it should retain the previous definition. However, it also believes that some merit may be gained by indicating the effects of allowing for those other costs through housing benefit or income support for mortgage interest, which are currently excluded. That would show the varying effects of different definitions. However, for prime policy purposes, we shall retain the existing definition.