Oral answer (Lords) on Fuel Poverty - Apr 4

To ask Her Majesty’s Government what is their estimate of the number of households in fuel poverty; and what action they intend to take to reduce that number.

My Lords, in 2016, 2.55 million households in England were in fuel poverty. We can measure progress using the total fuel poverty gap—that is, the reduction in bills required for all fuel-poor households to heat their home at a reasonable cost, which has decreased by £25 million since 2010. The best long-term solution to tackle fuel poverty is to improve energy efficiency, which we have made the primary focus of our energy company obligation.

I thank the Minister for his Answer. I hope he agrees that we have not cracked this problem yet. The official figures are the tip of the iceberg. Since I last asked this Question, things have become worse, with fuel price hikes and a massive rise in the private rented sector, where fuel poverty is at its worst. The Government’s plan for insulating and upgrading homes is 60 to 80 years behind target. What practical steps will the Government take to solve this Victorian problem before we get to the 22nd century?

My Lords, we should treat the figures with some caution. They are based on income below the poverty line, and thus are relative figures. That being the case, there is always the danger that the more one does the worse they get, because you can never actually meet that target. 

However, the noble Baroness is right to look at practical measures. I referred to the energy company obligation, which has delivered 2.4 million energy saving measures since 2013. I also refer to the warm home discount scheme and the various measures we announced recently to deal with the private rented sector, providing extra insulation for houses and increasing the obligation on landlords to spend more on bringing their houses up to an appropriate level of insulation. I refer to the Domestic Gas and Electricity (Tariff Cap) Act 2018, which made various changes, and the work that Ofgem has done on the safeguard tariff. I could go on.

Does my noble friend agree that one simple, practical measure would be to make the winter fuel payment taxable? It is paid out by the department for social services anyway, so that would be very easy. The tax collected could then be used to increase the payment, so that those who do not pay tax would get a higher sum. That would mean it was self-adjusting. There would be no further expenditure, but it would at least mean that more of the expenditure went to those who need it.

I suspect it is a benefit of which a large number of Members of this House are in receipt—I see one or two indicating that they are not. I note what my noble friend said. It is a very good suggestion, and I will ensure that my right honourable friend the Chancellor is made aware of it.

My Lords, the Minister is absolutely right to mention the private rented sector. One year ago, the minimum energy efficiency standards regulations came into force, which meant that properties could not be rented unless their EPC was E or above. However, properties are still being advertised that do not meet that criterion. What are the Government doing to ensure that local authorities apply those regulations and fuel poverty is reduced in that sector?

The noble Lord is right: it is for local authorities to do that, but he will also remember that we brought forward further regulations this year, which he and I debated in this House, whereby we increased the obligation on landlords in how much they should be expected to spend to raise houses in the private rented sector to, I think, at least band E. I forget the precise level that they have to be at.

My Lords, how many households dependent on universal credit have to choose between sufficient food for their children and sufficient heating to keep the children warm during the winter months? If figures are not available, will he commit the Government to commissioning a study to find out that information?

My Lords, I will see whether those figures are available and if they are, I will make them available to the noble Baroness. In my original Answer, I was trying to address the importance of the aggregate fuel poverty gap. We are seeing that come down over the years; the aggregate fuel poverty gap was of the order of £857 million in 2010 and it has now dropped by £25 million to £832 million.

My Lords, as renewable energy prices become more and more competitive with new technology, would one fairly simple way to ease fuel poverty not be to reduce the subsidy charge on electricity bills that has to be imposed to pay for green subsidies? Does my noble friend not agree that the energy gap Her Majesty’s Government imposed has not been a great success, since fuel bills are rising all round?

On that last point, I assure my noble friend that we estimate that the price cap will save consumers something of the order of £1 billion annually on their bills. On his first point about setting the levels of subsidy for renewables, it is important to provide the appropriate subsidy to see that we get the appropriate developments in renewable energy. As my noble friend will be aware, we have seen a dramatic drop in the cost of producing offshore wind, for example; the same is true of solar and we hope those trends will continue.

One of the key aspects in reducing fuel poverty is giving people the tools to manage themselves, through the infrastructure development of smart meters. On this development curve, can the Minister give the House a measure of success regarding how many households have been drawn out of fuel poverty by their introduction?

My Lords, the noble Lord is right to talk to the importance of smart meters. We hope that by 2020, every household will have been offered a smart meter. Most people are satisfied with them and, if used properly, we expect smart meters to enable consumers to take something of the order of £300 million off their fuel bills.