Energy Social Tariffs

Before I call Marion Fellows to move the motion, I remind Members that if they wish to take part in the debate, they must bob.

I beg to move,

That this House has considered energy social tariffs.

It is a pleasure to serve under your chairmanship, Sir George, in this debate on the introduction of an energy social tariff to support disabled people with the cost of living crisis. I thank the Backbench Business Committee for originally timetabling it and the Chairman of Ways and Means for giving me the opportunity to bring this urgent issue here today.

As we enter the winter months, lots of us are really looking forward to the festive period, but for many the winter months, with their colder weather, are a time of genuine worry, stress and anxiety. That is the case for many vulnerable people, particularly in low-income and disabled households, who once again are greatly concerned about high energy bills over the coming winter. That concern has been relayed to me by constituents and all the disabled organisations I regularly meet, which have been stressing to me for months their members’ real concerns about energy bills. It is a top priority for them.

At the outset, I would like to thank the many organisations that sent me briefings for today’s debate: Sense, Scope, the Cystic Fibrosis Trust, Mencap, Marie Curie, Age UK, and Kidney Care UK, as well as Citizens Advice, National Energy Action, Warm This Winter and Centrica—a record amount of briefings for me. Yesterday’s disappointing autumn statement did nothing to address the concerns of low-income, vulnerable and disabled households about energy bills this winter.

Alongside that, Ofgem’s announcement means that households will start paying higher prices for their energy as they enter 2024. I was reliably informed that the new price cap represents a £94 increase on the current rate, but I have since received an email from National Energy Action saying:

“At first glance, it might look like prices are only increasing slightly, but they are not. That’s because Ofgem has just changed how it calculates ‘typical use’. Just three months ago this was a 2-3 bedroom household using 2,900 kWh of electricity and 12,000 kWh of gas a year. Now it’s based on a household using 2,700 kWh of electricity”—

It is a pleasure to serve with you in the Chair, Sir George. I congratulate the hon. Member for Motherwell and Wishaw (Marion Fellows) on securing this debate and setting out in comprehensive detail the evidence base for an energy social tariff. I also thank the Backbench Business Committee for granting the debate.

Everyone should have access to a warm and secure home. For the majority of people, that will be provided through the marketplace, although our energy market is imperfect and invariably, at all times, in the interest of fairness, there is a need for Government intervention. Before the current cost of living crisis, that intervention was provided predominantly through the energy price cap, which, while not perfect, performed an important role. The energy price cap has been increased today, although from what we have heard from the hon. Lady, and from the feedback that I am receiving, that will be of limited relevance to many of those who are struggling with their bills.

The dramatic increase in energy prices, primarily caused by the Russian invasion of Ukraine, has necessitated a different approach, and to their credit the Government have stepped in with more direct support over the past 18 months to two years. My right hon. Friend the Chancellor of the Exchequer continued with that strategy yesterday in his autumn statement, and I particularly welcome the increase in the local housing allowance. I have also heard that, as the hon. Lady has outlined, there is some concern as to whether he has done enough. I think he has tried, and I hope he has done enough, but in many ways I am on tenterhooks to see whether he actually has.

That said, it is clear that in the medium-to-long term—when I talk about the medium term, realistically I am now talking about 2024-25 onwards—a different approach is required to protect the most vulnerable. The energy price cap on its own has run its course, and it is thus appropriate to consider a social tariff, which can provide longer-term, more targeted support for the most vulnerable households.

It is a pleasure to see you in the Chair, Sir George. I congratulate the hon. Member for Motherwell and Wishaw (Marion Fellows) on securing this important debate.

It is pleasing that the Ofgem chief executive has called for a “serious assessment” of an energy social tariff and that energy suppliers are saying they stand ready to work with the Government to deliver one. That leaves me curious to know what the hold-up is. Surely it cannot be that difficult if water companies and broadband businesses already use this very approach. We are not used to congratulating water companies in this place, but I am aware that Severn Trent and, I believe, all the other water companies in the country use a scheme called WaterSure, which is a social tariff to cap water bills for vulnerable households. Ofcom goes out of its way to advertise social tariffs for broadband and phone packages for those on benefits—the very people I assume the Chancellor expects to work from home on pain of losing their benefits.

As we have heard, in last year’s autumn statement we were told that the Government planned to consult this summer on long-term measures, including a social tariff. Perhaps I missed the Chancellor’s update yesterday, but I would be grateful if the Minister could update us on what has happened to the consultation on the energy social tariff and when she expects to announce some progress.

This is a particular issue for disabled people and those with long-term medical conditions. A survey for the disability equality charity Scope, which the hon. Member for Motherwell and Wishaw mentioned—it is very active in Scotland and throughout England—found that in the west midlands, the region I represent, the number of disabled people getting into debt because of energy costs was double that of non-disabled households, and around 37% of disabled people said they were reduced to buying lower-quality food, skipping meals and often eating less than they felt they needed. There are numerous reports—I recall questions in the House and a debate on this—of people who need their homes at constant temperatures because of their medical conditions. Those who suffer from severe arthritis would be a good example, as would those who rely on medical devices to keep them alive. Those people are having enormous difficulty paying bills.

I will not go into great detail this afternoon on behalf of the Opposition on the background and the need for a social tariff, or a similar instrument, because the hon. Members who have taken part in the debate have made the case for one excellently. I congratulate the hon. Member for Motherwell and Wishaw (Marion Fellows), who introduced the debate, not only on the debate, but on the comprehensive way in which she presented the case for social tariffs and urged the action that needs to be taken.

I very much commend the contribution—thoughtful, as always—from the hon. Member for Waveney (Peter Aldous). On other occasions, I have said that he is virtually an hon. Friend on these issues. I commend him for the forthright and detailed way in which he not only made the case for social tariffs, but also talked about what we ought to be talking about this afternoon, which is what happens after we have concluded that this is the right thing to do. He covered the fact that the onus is on the Government to take action and what considerations we have to undertake to secure not just a sticking-plaster solution for perhaps one winter, but something that applies long term and targets the right people in society, giving them the help that they need to keep their energy bills affordable.

I also very much commend the contribution of my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe), my actual hon. Friend. Among other things, he set out the groups of people involved. In particular, he talked about those in very difficult circumstances that have not just arisen from the energy price shock that we had a little while ago, but that affect their daily living requirements on a longer-term basis. They are the people who would very much be eligible and we should think very seriously about ensuring that those people have that long-term social tariff support.

That point is very much underlined by Ofgem’s very recent announcement on the energy price cap. The announcement underlines—if underlining were necessary —just what a difficult situation the people we are talking about continue to find themselves in. The price cap comes to just under £2,000 for a dual fuel tariff. Of course, that is not the actual bill that anyone will pay; it is an average of the sort of bill that people can expect to pay under the price cap. A lot of people—particularly those in disadvantaged and difficult situations—will pay a huge amount more, either because of their need for constant heat, because of their circumstances, or because they have other issues such as a combination of difficult living circumstances, inadequately insulated homes and high heating bills all at the same time. The price cap is the very least indication of where a lot of those people will be. Not only that, but we know from projections that the cap will be something like that for a very long time to come.

I am extremely grateful to my hon. Friend, who is making a very valuable point. It would be very helpful if the Minister could tell us what discussions the Government have already had with the energy suppliers and the director of Ofgem, since they have both indicated that they are in favour of a social tariff. Some of the work referred to by my hon. Friend must have been done—we just need to hear what has been discussed.

My hon. Friend is absolutely right. Basically, what we need on the table now is—as they say about homework—for the Government to show their workings. That is why I emphasised that we need not just the promise of a consultation, but a consultation with some substance in the consultation document. We need to see how the thinking process has emerged and what propositions there might be. I agree that getting a social tariff right is quite a long way further on from deciding that there should be one.

It is absolutely right to undertake that process, but we have virtually no information. The Government have certainly not conveyed anything to me about their workings. All I know, along with everybody else, is that there is no consultation. It appears that no action is taking place at all. I would certainly be happy to talk to the Minister about ways to establish a decent social tariff without placing a substantial burden on the taxpayer in order to bring it into being over time. That is an open offer, but we will see whether it is taken up.

To conclude, the onus is on the Minister to stand up this afternoon to say that first, yes, there will be a consultation; secondly, that although we have missed out on help that could have come forward this winter, we will urgently consider what can be done in the meantime to help stabilise some of those bills in light of the new price cap for this winter; and, thirdly, that the Government, as my hon. Friend the Member for Birmingham, Selly Oak has said, will lay their workings on the table at a very early date so that we can collectively take part in the debate as to how we get a social tariff that works in the long term and that protects the people and makes their energy affordable in the way that we all want.

This is an incredibly important issue, and I thank hon. Members from across the House for their contributions to the informed, interesting and heartfelt discussion. I particularly wish to thank the hon. Member for Motherwell and Wishaw (Marion Fellows) for raising this important topic for debate and for the previous conversations that we have had on this subject—I have had similar such conversations with many Members across all political parties. I also thank the hon. Members for Birmingham, Selly Oak (Steve McCabe) and for Southampton, Test (Dr Whitehead) and my hon. Friend the Member for Waveney (Peter Aldous) for their valuable contributions to this important debate.

As the Minister for energy, consumers and affordability, I am working really hard to try to bring down bills for households and to tackle fuel poverty as it is clearly the most important thing on my mind. I recognise the challenges that families face and continue to stand firm behind energy consumers.

Last winter, as Members will know, we spent £40 billion on an unprecedented package of support for households and businesses. That meant that a typical family have saved £1,500 through the energy price guarantee and energy bill support scheme since last October.

The hon. Members for Motherwell and Wishaw and for Birmingham, Selly Oak both raised the important issue of support for disabled people, particularly those with in-home medical equipment. The Government’s support package assists the most vulnerable with rising energy bills, including charges incurred by patients dependent on medical equipment and devices as part of their homecare. I am reminded of my mother who suffered with chronic obstructive pulmonary disease and who sadly died at the age of 67, so I am very conscious of the kind of care that we should be giving to this important group of people.

We have certain specialised NHS services, which include the provision of financial support to offset increased energy costs faced by patients using medical equipment at home. Home oxygen suppliers, as I have previously mentioned, also reimburse patients for the cost of electricity that is required to run oxygen-concentrate devices in a patient’s home.

As the departmental ministerial disability champion, I am aware that energy prices are a major concern for those with a disability or a long-term health condition. I am proud of the support that the Government offer to those with disabilities. That includes, for example, more than 6 million people across the UK eligible for extra costs disability benefits who have already received the £150 disability cost of living payment. It also includes the personal independence payment, which pays up to £172.75 a week to those with the greatest additional needs. Our national disability strategy, published in 2021, sets out the actions that the Government are taking to improve the lives of disabled people.

I acknowledge the work that the Government have undertaken on prepayment meters. Would the Minister be willing to consider extending that to households in which a disabled person is living?

I thank the hon. Member for that intervention. Of course, from a prepayment meter point of view, one thing that we really wanted to ensure was that we were not penalising those who were vulnerable. I am always very happy to consider anything that would help and enable us to ensure that.

We also welcome Ofgem’s new rules to ensure that all consumers get the service that they deserve. Suppliers will now be required to prioritise vulnerable customers first when they request help, offer timely repayment plans for those struggling with bills and make customer ratings easy to find on their websites. Furthermore, the Government and Ofgem have been working to progress towards a shared priority services register, which could make things easier for customers and better prioritise services to vulnerable consumers who are dependent on a regular energy supply.

Overall, the best approach to consumer protection is to have an effective retail market. That is why we are pursuing retail market reforms that will set us on a path to unlocking competition, investment and innovation, which will empower consumers and enable suppliers to succeed and usher in new business models.

The Government are reviewing the fuel poverty strategy for England. Under the current approach, we see energy efficiency as the best way to tackle fuel poverty as it contributes to the long-term reduction of energy bills, as well as reducing carbon emissions in line with net zero. There are multiple targeted schemes in place in England to deliver efficiency measures to low-income and fuel-poor households. Targeted energy efficiency support is provided to fuel-poor households in England, Wales and Scotland through the energy company obligation.

Last winter, we extended and expanded the warm home discount scheme, which supported fuel-poor households by taking £150 directly off their energy bills. For this winter, we expect over 3 million households to receive a rebate under the scheme. As the hon. Member for Birmingham, Selly Oak said, following a public consultation in 2021 we reformed the scheme in England and Wales to better target households in fuel poverty and provide the vast majority of rebates automatically. Last winter, around 95% of eligible households received their rebates automatically, without having to take any action, under this element of the scheme. The remaining 5% received their rebates after confirming their details to the Government’s warm home discount helpline.

Under the reformed scheme, we have focused the support to households in receipt of means-tested benefits who are living in properties that we estimate to be relatively costly to heat. We have used data on benefits and property characteristics to identify eligible households, and we estimate that the reformed scheme should enable around 560,000 more fuel-poor households to receive a rebate, including around 160,000 more households with a person who is disabled or has a long-term illness. At the time of the Government’s response to the consultation, we assessed that the proportion of rebates received by households with a disability or long-term illness should remain higher than the proportion of the fuel-poor population with a disability, and higher than the proportion of the overall population with a disability. Although the reforms were not possible in Scotland, because of differences in Government-held data, we implemented an expansion of the scheme in Scotland to support more fuel-poor households. The scheme obligates energy suppliers to provide additional energy-related and financial support, known as industry initiatives, to households in or at risk of fuel poverty. The industry initiatives may include benefit entitlement checks, energy advice, energy efficiency measures, financial assistance and debt write-off, and can be given to households regardless of their eligibility for a rebate.

I thank the hon. Members for Waveney (Peter Aldous), for Birmingham, Selly Oak (Steve McCabe) and for Southampton, Test (Dr Whitehead) for their contributions. I also thank the Minister for her perspicacity; she managed to go through everything that the Government have done for disabled people and to protect consumers. However, I am still waiting to hear that there will be a consultation on an energy social tariff. I am disappointed that I have not heard that there will, because so many disability organisations have listened to this debate and wanted to hear good news.

I thank the Minister, and I note some of the work that has been done. But in spite of all that work that has been done, and that the Minister said will be done, disability organisations are still—I will use the Scottish term, which the hon. Member for Birmingham, Selly Oak will understand—ragin. The Government have to do better.

That this House has considered energy social tariffs.