That this House has considered Government policies on tackling fuel poverty.
It is a pleasure to see you in the Chair, Sir Roger. A household in fuel poverty is defined as one that commits more than 10% of its income on energy to maintain a satisfactory heating regime. Fuel poverty includes three elements. The first is the household’s income, from which we compute that 10%; the second is the household’s energy requirements, on which the quality of the housing stock and the availability of cheaper tariffs have an influence; and the third is the fuel prices themselves. It is sobering to think that across the United Kingdom as a whole, no fewer than 6 million households are living in fuel poverty. In Scotland in 2022, some 791,000 households were fuel-poor.
I have recently received more than 200 emails from pensioners in Glastonbury and Somerton who do not know whether they can afford to turn on the heating this winter. Does my right hon. Friend agree that the Government should provide targeted energy discounts for vulnerable households, to reduce the number of people living in fuel poverty?
It will be the first surprise of the day for everyone that the answer is yes. I very much agree that we need that—or if not that, something of the sort. Meaningful action that is fit to meet the needs of the different parts of the United Kingdom is long overdue.
While households in fuel poverty are committing more than 10% of their income, households in extreme fuel poverty are committing more than 20% to meet their energy needs and keep their home warm. In Scotland, there were 311,000 such households in 2019. By 2022, the figure had risen to 472,000.
This issue is particularly acute for us in the northern isles. In Orkney and Shetland, 31% of households live in fuel poverty; the Scottish average, which is higher than that of the rest of the United Kingdom, is 24%. It is not difficult to see why fuel poverty is particularly acute in the northern isles. Winters are longer, darker and colder than in other parts of the country. We are off the gas grid. Most of our homes are heated using electricity, oil and sometimes liquefied petroleum gas or solid fuel. Yes, an increasing number of people are able to use photovoltaics and ground or air-source heat pumps, but the bulk of our heating still comes from conventional sources.
I congratulate the right hon. Gentleman on securing this important debate. I recently visited the home of an elderly pensioner in my constituency. I sat in her freezing cold living room with her for more than an hour while I took instructions on a matter. She was wearing two jumpers, a scarf, thick trousers and boots. She was dressed in that way because she was too afraid to put the heating on, as she did not think she would have the money to pay the bill. Does the right hon. Gentleman agree that the Government’s cruel cut to the winter fuel allowance will have a serious impact on the health and wellbeing of some of our most vulnerable people?
I am sad to say that I do agree. I have seen the same thing time after time in houses across my constituency. I have seen people sitting with two, three or four layers on and a blanket over their knees. If there is any heating, it might come from a single bar on an electric fire or something of the sort. With the winter fuel payment, we have to understand that there is a generational difference: the people who were getting that payment were in large part brought up in an age when people did not borrow; they lived within their means. Taking away that money puts them more acutely at risk than people of other ages. When we devise policy, we sometimes have to look at the social and psychological impact as much as at the political and the economic. The hon. Member makes a good point.
In communities such as mine we have older, much less energy-efficient housing stock. Some elements of last week’s Budget may mitigate the worst effects. It did not have the comprehensive strategy that I wanted, but in the interests of fairness we should acknowledge that if the increase in the minimum wage leads to increased household incomes, it will have an impact on some people living in fuel poverty. The retention of the state pension triple lock will also provide some mitigation. To that extent, those things are welcome, but in the context of the wider influences on fuel poverty, they will hardly hit the sides. The energy price cap has now been put up to £1,717, which is an increase of £150, and it seems likely that there will be a further increase come January. The situation among the fuel-poor is only likely to get worse, which is where the hon. Member’s point about the winter fuel payment comes in.
It is true that the mechanism of pension credit is there to mitigate the worst effects, as I anticipate the Minister will say, but we have known for 20 years that there are problems with all the tax credit schemes and with the variation in uptake across the board. Again, it is a generational thing. Knowing the community that he comes from, the Minister will know that among older people in parts of the country there is still a real stigma attached to a means test. They will always be less likely to apply for something that they could otherwise have been given by right. For those who live in fuel poverty, it now feels as though anything given with one hand is being taken away with the other.
It is a pleasure to serve under your chairmanship, Sir Roger. I congratulate the right hon. Member for Orkney and Shetland (Mr Carmichael) on securing this important debate on fuel poverty.
I would like to highlight the impact of poor-quality housing on fuel poverty. I am acutely aware of that in my constituency of Shipley. We have some really poor-quality housing. As is typical for a northern town or city, we have a higher proportion of homes that are non-decent, which means that they do not meet the standards for a warm and dry home. That has knock-on effects for people’s health and wellbeing. As I know from my work, older people are more likely to live in those non-decent homes, which can have significant impacts.
Data from Friends of the Earth, shared with me, shows that in Shipley alone there are 17 energy crisis hotspots. Those are neighbourhoods that have below-average household income but above-average energy bills. We need to use those sorts of data to focus our efforts to tackle fuel poverty, and the excellent work that the Government are doing to invest in home insulation, on those energy hotspots. I am very proud that the Government are looking to invest in new homes, but it is critical that those homes are warm and energy-efficient so that we can reduce the incidence of fuel poverty in future with new social housing. I was pleased to see that the Liverpool city region is working with Octopus Energy and with home manufacturers to create homes that will be guaranteed zero bills for at least 10 years. They could do that at scale because of the new methods of manufacturing. In addition to home insulation, there are some huge opportunities to address fuel poverty as the Government embark on the housing programme.
There are clear links between fuel poverty and pensioner poverty: the two go hand in hand. It is a scandal that between 2010 and 2024, under the watch of the past Conservative Government, the number of pension credit claimants halved from 2.6 million to just 1.35 million. Sadly, over the same period, pensioner poverty rose from 12%, or 1.2 million people, to 16%, which is 2.1 million people. That is a real scandal.
Thank you, Sir Roger, for calling me to speak. I pay tribute to my right hon. Friend the Member for Orkney and Shetland (Mr Carmichael) for securing this debate at this crucial time as we head into winter.
Last week, I spoke in the debate on NHS winter preparedness. We know that our A&E departments, doctors and other health services are particularly busy in winter. People living in fuel poverty end up contributing to that, because if you are elderly, vulnerable or ill and you cannot afford to turn on your heating, you are more likely to suffer complications, get sick with flu or covid or be admitted to hospital with hypothermia. The NHS spends about £1.4 billion every year to deal with the consequences of people living in cold or damp homes. It is worth noting that this is about the impact not just on an individual’s finances, but on the resources of the health services.
In Harpenden and Berkhamsted and, I am sure, across the country, local charities and even local district and county authorities are looking at how they can support those who are falling off a cliff edge after the winter fuel payment was scrapped. Does my hon. Friend agree that the impact he mentioned is not confined to the NHS? Charities and councils are picking up the slack created by fuel poverty’s not being dealt with properly.
That is a good point. Citizens Advice Winchester told me that it spends a huge proportion of its time dealing with people who have issues with energy bills, particularly at the moment. A variety of organisations are being drawn into this.
The hon. Member for Shipley (Anna Dixon) mentioned housing quality. It is worth noting that the UK has the oldest housing stock in Europe: 38% of houses in the UK were built before the 1940s, compared with about 11% in Spain. Those houses were obviously not designed with particularly high energy standards. One thing the Liberal Democrats were calling for during the general election was an emergency home energy upgrade programme for people who are living in poverty, people in social housing and people who cannot afford their bills. Retrofitting insulation is good not only for people who are struggling and the NHS, but for the environment. We urge the Government to double down on retrofitting and improving the quality of our old housing.
Directly linked to that issue are buildings’ energy efficiency standards, which were reduced under the last Government. New builds should be net zero; they should be hugely energy-efficient. There is no excuse for any new house to have occupants who live in fuel poverty, and we should do everything we can to ensure that that does not happen.
I grew up on a farm in the middle of nowhere, and I represent a large area of the Meon valley, which is very rural. As my right hon. Friend the Member for Orkney and Shetland pointed out, many rural villages, farms and houses rely on solid fuel heating—they are not on the gas grid—and have to have electrical storage heaters. That is hugely expensive. Rural areas also have a slightly higher proportion of elderly people. I have had a huge amount of correspondence from people living in rural areas and elderly people who are particularly worried about the coming winter. I heard from someone called Julia, who has osteoarthritis and osteopenia and has to walk with crutches. She is on a waiting list to be transferred to more affordable accommodation. She often has to skip meals to make ends meet and she dreads turning on the heating because of the cost. With poor circulation, she frequently loses feeling in her feet from the cold.
It is a pleasure to serve under your chairship, Sir Roger. I thank the right hon. Member for Orkney and Shetland (Mr Carmichael) for securing the debate, which gives us all an opportunity to participate. To be perfectly honest, I do not think that the right hon. Gentleman has ever had a debate that I have not come along to: he brings forward issues that I am very interested in, and I thank him for that.
I want to give a Northern Ireland perspective, which I hope will illustrate exactly what the issues are. Others have given theirs, and I am sure that those who follow will back up the theme. Reports on fuel poverty in Northern Ireland certainly make grim reading. Northern Ireland Fuel Poverty Coalition highlights comparative statistics showing that fuel poverty levels throughout the United Kingdom are as follows: 21.5% in Northern Ireland, 10.4% in England—people might be pretty lucky to live in England, but those in fuel poverty would not say that—26.5% in Scotland and 23% in Wales.
We should try to figure out exactly what those stats mean. A recent Northern Ireland Housing Executive report indicates that if the measure is based on 21° heat in living rooms, the figure for Northern Ireland is closer to 30%. In other words, it is the highest in the United Kingdom. It gives me no pleasure whatever to say that, but it gives an idea of where the problems are.
I should have said at the start—I apologise for not doing so—that it is nice to see the Minister in his place. I look forward to his response. I also look forward to the contribution by the shadow Minister, ever my friend.
The fact is that people have got used to dressing for outside when they are living in their house. The right hon. Member for Orkney and Shetland illustrated that incredibly well in his introduction, but that is a fact for those people. The hon. Member for Maidstone and Malling (Helen Grant), who is no longer in her place, also gave an illustration, describing a constituent she visited who was wrapped up almost like a teddy bear, with all the clothes that she had on. The fact is that if she had not had those clothes on, that lady would probably have been fairly close to hypothermia.
We all have those stories, and I am always heartbroken when they come in. One constituent told me:
“I live alone on my pension and will either have to stay in bed all day or keep a coat on and hot water bottle it, if I can afford the electricity to keep boiling the kettle.”
The hon. Lady illustrates a point that she rightly says is replicated regularly among all our constituents. This debate today is about them, and that is why we are here. We are here to make a point on behalf of our constituents who are in those predicaments and under other incredible pressures.
From a quick survey I did in my own office, one staff member sets her heating temperature at 21°C, while the rest of the staff would set it at less, as they would just take the chill off by sitting under blankets. Fuel poverty may affect more people than perhaps the Minister, shadow Minister or anyone really understands. That staff member said that she has to do so because she has children, so she has to prioritise heat. That is understandable: if there are children in the house, we would want to keep them warm.
Here are some stats and figures, which are quite stark: the staff member’s gas statement showed that last November she topped it up with £294. She did the same in December and January, and then in February it was down to £245. For her, in that four-month period, the gas cost £1,127. If we add that up over the year, it is almost £3,500 for the energy, just to keep the house warm. Thank the Lord for summer and the heat that it sometimes brings—maybe it is not as much as we wish, but none the less it brings heat and we can have the gas on less.
My example illustrates the problem. My staff member is not in the house from 8.30 am until 5.30 pm, but for those months she is still in fuel poverty. By the way, she is well paid; I say that to make the point that many people find themselves in a predicament on this issue. How much more so for our pensioners, who are not out of the house and warm in their workplace—for the stay-at-home parents, for our disabled, or for all those people who have different pressures? I often think that when we illustrate something with an example, there are so many other examples of people who are in different circumstances but under the same pressures.
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What can we do? What tools have we at our disposal? We have the warm home discount and the energy company obligation scheme, to which I will turn in a minute, but I first wish to raise a couple of more specific issues that relate to tackling fuel poverty in communities such as mine.
The Minister has already heard me raise the question of an isles tariff; in fact, we met earlier this week to discuss it. Orkney and Shetland has been at the heart of supplying the nation’s energy needs for the past 40 or 50 years, as we have played host to the oil and gas industry. Shetland now has one of the biggest onshore wind farm developments anywhere in the country, but in the shadow of the turbines are some of the greatest and most acute problems with fuel poverty. That is now generating genuine frustration. As we play host to major energy developments—latterly renewables—there is very little or no community benefit for those who host them.
Serious attention now needs to be given to the question of an isles tariff. It does not need to be an isles tariff; it could be something that applies across the highlands and islands and in other areas that are particularly badly affected. I am pretty sure that Ofgem will not be keen—as far as I can see, Ofgem is never keen on anything that will actually make a difference—but if it can accept the principle of differential treatment through a social tariff, which is now the subject of a consultation, a geographical tariff should also be given serious consideration.
Many of my constituents rely on electric storage heating. Access to “total heating with total control” tariffs, which were designed by the former hydro board specifically with communities like mine in the highlands and islands in mind, still provides them with the best and cheapest available source of heating. However, it does not allow them to take advantage of different tariffs when switching or other ways of saving money are available. It requires two meters, one of which has two readings. As smart meters are rolled out, it appears that although they may be smart, they are not smart enough to do something that the old technology did quite easily.
There is then the question of the radio teleswitch, which is the delivery mechanism for many tariffs. It is due to be switched off in 2025, as the last of the BBC analogue signal is decommissioned. We all need to cross our fingers and hope it lasts until 2025, because it could quite easily fall over at any point. When it does, the string and chewing gum that are keeping it going at the moment will simply no longer be enough.
Will the Minister give me an update? Before the election, his predecessor agreed to hold a roundtable. The election intervened, but I am pleased to hear that the roundtable went ahead and that the different players were brought together in the room. It appears to have made some progress, but my constituents would be keen to hear the details.
The Government’s manifesto promised a strategy with a warm homes plan, whereby £13.2 billion would be committed to address fuel poverty. The Budget last week allocated £3.4 billion over three years. That is a sizeable chunk of money, but it is not the £13.2 billion that we were promised. Presumably the remaining £9.8 billion will have to come in years four and five of this Parliament if the Government’s commitment is to be met.
I have two problems with that approach. First, it will leave a lot of people in fuel poverty for another three years while they wait for the money to come. Secondly, if the money comes at all, we will be shovelling it into wheelbarrows to get it out over the two years, a situation that always brings the law of unintended consequences into play, as we have seen time and again with energy efficiency measures, renewable energy development and so on. There is money that must be spent within a target time, but there is neither the existing labour force nor the skills base to deliver the work, so a whole load of fly-by-night companies are set up that come into our communities from outside, do substandard work, go away and eventually go bankrupt while constituents are left to pick up the pieces.
It is obviously for the Treasury to decide how the money will be spent, but looking towards years three, four and five of this Government, can the Minister give me some assurance that there is a view towards a strategy that will use the money that is currently committed, that we will have a clear idea, and that we can start planning now how to use any money that comes in future?
The two existing vehicles for alleviating fuel poverty—the warm home discount, which reduces bills by £150 a year for those who qualify, and the energy company obligation, which assists people with energy efficiency adaptations, renewable energy adaptations and so on—are both means-tested, which takes us back to the question of cliff edges. Most concerningly of all, those measures are due to end in 2026 unless they are renewed by the Government. The Minister will have an easier conversation with the Treasury if he bears it in mind that the funding for the schemes comes not from the Treasury but from the energy companies.
We need to know that there is a plan for the continuation of those schemes or for something that will seek to achieve the same end. It would be good if that plan could come as part of a Green or White Paper outlining a strategy. That is what is lacking at the moment: we have a scheme here, a scheme there, an idea of this and an idea of that, but there is no overarching strategy to ensure the best possible delivery. At the beginning of this debate, I gave the stat that 6 million homes across the whole United Kingdom are living in fuel poverty. That is not something that we should be prepared to live with.
I agree that we should be targeting winter fuel support to the poorest pensioners, but we must also do all we can to ensure that those who are eligible for pension credit, and thereby for a winter fuel payment, are brought on to pension credit. The Department for Work and Pensions estimated that almost 900,000 eligible households were not claiming that benefit. It is fantastic that colleagues in government are working to raise awareness of pension credit among our poorest pensioners and to ensure that support is available.
I pay particular tribute to local organisations in my constituency, such as Age UK Bradford and Citizens Advice Bradford, that support pensioners who experience fuel poverty. I also thank housing associations and Bradford council, which provide both advice and direct support to tackle fuel poverty and to ensure that people have the right advice and benefits. I hope that the Government will continue to make efforts to ensure that the poorest pensioners receive the support available to them.
Obviously not everyone in fuel poverty is a pensioner and not every pensioner is in fuel poverty, so I am glad that the right hon. Member for Orkney and Shetland is holding this broader debate on the subject. We must recognise that fuel poverty affects not just older people, but families of all ages.
A lot has been done through the Budget to raise people out of poverty by increasing the national living wage, but we must also target bills. Families who care for someone with a disability or a chronic condition can use much more energy, and therefore have much higher energy bills. For those families, it is really important that, through GB Energy, we invest in clean energy to get bills down.
This debate is really welcome. We must recognise that tackling fuel poverty requires a comprehensive approach that takes housing into account, lifts people out of poverty and gets bills down. I hope the Minister will outline how those actions together will reduce fuel poverty for people of all ages.
I acknowledge what the hon. Member for Shipley said: not all elderly people rely on the winter fuel allowance to heat their homes—we know that—but because the removal has been brought in so quickly, right before winter, a lot of elderly people were not expecting it and will be plunged into crisis. Julia emailed me with a clear ask for the Minister: if the Government are removing the winter fuel payment, will they consider expanding qualifying benefits to include housing benefit, council tax support, disability benefits and attendance allowance? That would be a lifeline for her and many others who face similar hardship.
We have told people for years to get rid of the fire and get a cleaner heater that uses oil or gas. Now people cannot afford to turn it up, and that is all before we take into account the crushing blow of the removal of the winter fuel allowance, which affects millions in the UK. It particularly affects my constituents in Northern Ireland, who are so reliant on oil as their method of heating.