My Lords, we now come to an issue which concerns the final impact of the whole superstructure of energy policy on the lives of millions of people, because we are dealing here with the issue of fuel poverty.
I shall speak also to Amendment 92B. These two amendments seek to insert a reference to fuel poverty into the section of the report which deals with the statement of policy for energy. When we think about it, it is very odd that that reference is not already there. Energy policy has economic objectives and security and environmental aspects, but also a very important social aspect that should appear in the statement. My first two amendments in this group address that issue.
Amendment 104C is, in a sense, more substantive, along with the amendments in the name of my noble friend Lord O’Neill. They relate to the one clause in the Bill that really deals with fuel poverty—Clause 136. However, it is also important that we ensure that fuel poverty features in any statement of policy on energy in the future.
Before I go any further, I should declare a small interest in that I am the chair of a small charity which conducts research into fuel poverty and energy efficiency.
It is actually a bit depressing that right up to Clause 136 we cover almost every aspect of the energy market and do not mention fuel poverty at any point. Fuel poverty is the inability of millions of our fellow citizens to heat their own homes to a minimum standard of comfort. It is also true, I regret to say, that Clause 136 was introduced by the Government at only a very late stage in the Commons procedure, almost the last stage, and received virtually no consideration. The policy statement which backed it up following the Commons procedure—the blue document which the Government issued—set out aspects of their fuel poverty strategy.
The Government have come to this a bit late, in any case. The first period of this Government was a pretty disgraceful one, when they cut back on efforts to help bring millions of households out of fuel poverty. The Warm Front programme, which was taxpayer-funded and treated the homes of 200,000 low-income households every year, was first cut and then abolished, although parallel schemes still exist in Scotland, Wales and Northern Ireland. The Government also cut back on the decent homes expenditure for improving the stock in the social housing sector. They also made clear at a pretty early stage that the aim to eliminate and eventually abolish fuel poverty was being abandoned. This aim, set out originally in the Warm Homes and Energy Conservation Act, had been pursued by the previous Government with growing difficulty over the past few years as global oil and gas prices rose. Not until this Bill and the document to which I have already referred was that abandonment formally acknowledged.
The Government also closed the CERT scheme—previously known as EEC—which placed an obligation on the supply companies to provide energy efficiency improvements and was skewed towards the fuel poor. Admittedly, the Government have replaced that with the ECO provision, which is reflected in this Bill and the earlier legislation, but the ECO is supposed to do a multitude of things. It is supposed to replace Warm Front and CERT, but actually the feedback we get—and I am sure the Government get—from the ground is that it is not achieving anywhere near its targets. The feedback from the supply companies, the installation companies, the insulation companies, consumer groups, fuel poverty campaigners and the Government’s own fuel poverty advisory group is that what is supposed to be conducted under the ECO is less in volume and more expensive per item than under the previous system.
I am not blaming everybody in the Government. I am not even blaming every DECC Minister, because I know DECC has fought quite hard on this front from time to time. I know that it was Her Majesty’s Treasury
that forced Chris Huhne to abandon Warm Front. I also know that there are attacks on Ed Davey and the DECC position which are now expressed in terms of removing green taxes, but one of the items that is described as a green tax is actually an allocation to help the fuel poor and to tackle the problems of fuel poverty. There is talk that the Government believe that that should come no longer from consumer bills, but from general taxation. But the first thing the Government did was to abolish the scheme which was paid for by general taxation. Can the Minister let us know what she thinks is now the prospect of HM Treasury agreeing to a new major scheme funded by taxation to address fuel poverty?
Of course, the Government do have some money. A little remarked fact about the latest developments over the past few years on energy prices is that one of the beneficiaries has been HM Treasury, with VAT on energy prices and on a lot of the so-called green taxes and, of course, with the VAT consequences of introducing the carbon floor price. The estimate is that upwards of £4 billion is going out of higher energy prices into the coffers of the Treasury and not one penny of that has yet been allocated to addressing the acute problems of fuel poverty.
I accept also that the Government have done one other thing: they have introduced a warm homes discount to override the tariff so that there is a cut in the energy bills of the fuel poor. However, that is not a solution. It is a welcome cushion for those people but it does not tackle the basic problem. The Government have not only dropped or seriously curtailed all previous energy-efficiency programmes, but also, during the course of this Bill, rejected propositions from myself and others that we should try to get a structure of tariffs which help the fuel poor.
In Committee, they rejected my proposition of a standing charge and removal of discrimination against people who pay by prepaid meter, which hits the fuel poor particularly, or having any structure of tariffs which favours the low-paid and the fuel poor. All were rejected by the Government in Committee and in another place. It is also true that one of the effects of the Prime Minister’s intervention in this—the so-called simplification of tariffs, aspects of which I approve of—has led to a number of supply companies dropping their specialised tariffs directed to the special needs of pensioners, who form a substantial proportion of the fuel poor.
I accept that it is not entirely DECC’s fault but the net effect of all this is to aggravate a seriously dreadful problem in our society. From about 2005, rising energy costs have made it very difficult to make a dent in fuel poverty. I know that Chris Huhne came to government in the first instance wanting to look at a new strategy. Indeed, it is no secret, because someone told the press that at one point he approached me as a former Minister in this area to conduct an assessment. I was flattered and surprised, and slightly tempted, by the proposition. But eventually I found out that DECC was under pressure to redefine fuel poverty so that it was not such a problem or such a requirement on government energy policy. I rejected the approach on that basis, as did others, because it was clear that
whatever happened and however you defined fuel poverty, it is a big number which is going up under present world conditions.
I am glad that Professor John Hills took on this task. He has produced a very solid document in terms of strategy for tackling energy fuel poverty, very little of which appears in the Government’s blue book. He produced a new definition of fuel poverty, which has some merits and addresses some of the problems of the previous definition, but in my view is not adequate. It has knocked a few million off the total figure of fuel poverty but it is still, as I said at the time, a big number which is growing. The gap facing the fuel poor to keep their families warm is growing all the time.
This whole Bill is about how we run, regulate and provide for energy supply to our population and to our businesses. All we have is the pretty feeble Clause 136 as a hook on which to hang an as yet undefined and weak fuel poverty strategy. The first two amendments in the group try to make sure that fuel poverty is up there with the other objectives of energy policy in the Government’s statement of policy. I cannot see how they can possibly object to that reference. The third amendment relates to the strategy. It attempts to turn a very woolly clause into one which has targets—and clarity of those targets—that relate to the improvement and efficiency of the dwellings of the fuel poor, as well as to the reduction and eventual elimination of fuel poverty in this country. If the strategy does not have ambitions and targets, it will not receive the priority and future consideration in energy policy that fuel poverty deserves.
I accept that the Government probably need to do more work on that strategy, and that is why my amendment does not specify exactly what those targets should be, but it does require the Government to set out those targets for 2020 and 2030. My noble friend Lord O’Neill is more specific on that in his amendments in this group. Either way, to give any confidence to the millions of people who are in fuel poverty out there, and the many more who are aware of the problem—who are sympathetic and demanding action—the Government need to accept that the policy and the strategy they come up with should actually mean something.
We need to refer to fuel poverty clearly in the policy statement. I hope, therefore, that the Government can accept the first two of my amendments without any great difficulty. I also hope that they will accept either my third amendment or that of my noble friend Lord O’Neill, or at least commit themselves to coming forward at Third Reading with something very like it which gives a structure and a framework for fuel poverty. As we know, fuel poverty is a terrible curse on our country. It causes people to skimp on food, and to not buy necessities for their children. It causes serious lung and heart conditions in thousands of our citizens at an estimated cost of £1.3 billion a year to the National Health Service. It causes whole families to live in discomfort, in anxiety, in the cold, and in distress. It is shocking that this Bill and the energy policy of the Government do not give greater prominence to the need to tackle this curse.
These amendments, if the Government can accept them, would go some way to deal with this. The Government need to accept the first two amendments
as they are, because they do not of themselves present an obligation but they indicate a commitment to tackle this issue. I hope that the Government will also accept something like my third amendment, so that we can start making it clear to the rest of Government and to the population out there that this Government do care about fuel poverty, are prepared to do something about it, and will do so as rapidly as they can in the context of the big reform of the energy markets. I beg to move.