Asked by
Lord Dodds of Duncairn
To ask Her Majesty’s Government what assessment they have made of
the impact of rising energy prices on the most vulnerable people
in society, and the most effective means of helping them.
The Parliamentary Under-Secretary of State, Department for
Business, Energy and Industrial Strategy () (Con)
My Lords, the largest element of gas and electricity bills, which
is wholesale costs, has increased significantly. The Government
are committed to protecting customers, especially the most
vulnerable. Households will continue to be protected through the
winter by the price cap and through the warm home discount,
winter fuel payment and cold weather payment schemes. A new £500
million household support fund has also been made available to
councils to help the most in need over the winter.
Lord Dodds of Duncairn (DUP)
My Lords, I thank the Minister for his Answer. We are looking at
extraordinarily steep increases in energy prices over a
relatively short period, coming on top of already big increases.
This is causing real fear and anxiety among vulnerable people,
especially the elderly, about the financial severity and hardship
to come. So can the Minister go further today and announce new
measures that will deal with the immediate crisis that people are
facing, especially in the context of other cost-of-living
pressures which are coming the way of hard-pressed families and
individuals?
(Con)
I totally understand the point that the noble Lord makes.
Unfortunately, I am not in a position today to announce further
measures, but I can tell him that we are actively engaging with
stakeholders and energy companies. The Prime Minister and the
Chancellor are in urgent discussions and we hope to announce some
action shortly.
(Lab)
My Lords, was it not entirely predictable that there would be a
surge in gas prices, and in such circumstances what further work
will BEIS and the Government undertake? Why did they not have
further plans at the ready to address the situation to help
struggling households and to mitigate the impact of deepening
fuel poverty as a result of those rising costs, as already
referenced by the noble Lord, Lord Dodds?
(Con)
I am not clear what further plans the noble Baroness is referring
to, but, as I mentioned, we have a whole series of mitigations in
place to protect precisely the people whom she mentioned. For
example, the warm home discount scheme has helped millions of
people at a cost of several billion pounds, and we will continue
with policies such as that to help the most vulnerable.
(Con)
My Lords, is it appreciated in this drama of exceptionally high
prices that the whole process of moving to a decarbonised world
and energy transition requires the most careful management of
balance between supply and demand? If supply is discouraged or
undermined while demand is still rising, we will get again and
again the huge, volatile and extremely damaging rise in fuel and
power prices that we have now. Is that not the main lesson to be
learned from the mess that we are in now?
(Con)
I know that my noble friend, as a former Energy Minister himself,
is very experienced in these matters. Of course, the underlying
point that he makes is right—but it is a transition that will
take place over many years and, in the meantime, there will of
course be considerable demand for fossil fuels.
(LD)
The Minister has just talked about mitigations that the
Government have in place, but those mitigations were inadequate
before the price rise that we have seen, and clearly will be
completely inadequate in dealing with the huge increases with
which vulnerable families will be faced in the next few months.
On measures that the Government might take that will require
expenditure, have they considered raising the money required by
imposing a windfall tax on those oil and gas companies whose
profits have soared as prices have soared?
(Con)
There are a number of different policies under consideration but,
of course, the situation is never as simple as the noble Lord
would have us believe. Many of the North Sea producers over which
we would have taxation control have long-term contracts in place
at fixed prices to supply wholesalers in the United Kingdom. So
it is not clear that there are excessive profits being made—but I
am sure that this is something that the Chancellor will want to
look at in his review, to see what else we can do in this area.
(Lab)
My Lords, if the Government want to focus any help with the cost
of living crisis on those in greatest need, the simplest and
fastest way in which to do so is to boost social security. Why
are they not proposing such a boost?
(Con)
Let me tell the noble Baroness what we are doing. The winter fuel
payment provides all pensioners across Britain with between £100
and £300 to put toward their fuel bills, which costs £2 billion a
year. The cold weather payment provides vulnerable households on
qualifying benefits with payments of £25 during periods of cold
weather, and the Government have spent £100 million on that. We
will continue to spend considerable sums of money to help those
most in need.
(Con)
My Lords, one thing that we have learned over the past 22 months
is that government targets sometimes have to be adjusted in the
light of circumstance. Would there be a situation in which the
Government might reconsider their net-zero timetable; for
example, if costs on consumers or taxpayers were disproportionate
and if there were a realistic prospect that technological
improvement would mean a significant fall in those costs with a
deferral?
(Con)
Of course, we want to keep all these things under review but, as
my noble friend is well aware, net zero is a legally binding
commitment, legislated for by Parliament—and, of course, it is
the duty of government to carry out the wishes of Parliament. If
a future Parliament or Government wish to reconsider that, I am
sure that the Government at the time would want to take full
cognisance of that.
(Lab)
My Lords, we all wish to protect vulnerable households, and there
are many support schemes targeting approximately 3 million
households. The expected increase in the price cap in April is
around £600 per household to a total of £1,865 a year. While the
Government continue to dither, Labour has announced costed,
detailed plans to reduce the size of the exposure and extend help
to more households to limit increases to just £5 a year for the
most vulnerable. What target do the Government have in mind to
reduce the size of the exposure in the forthcoming price cap
rise, to be announced on 7 February?
(Con)
Before I answer the noble Lord’s question, I understand that this
is his last outing as a member of the Opposition Front Bench.
From my point of view, it has been a pleasure sitting opposite
him and dealing with his questions and points. I am sure that he
will have a lot to contribute to the House from the Back Benches
in future, and I certainly wish him well.
Of course, the price cap is a matter for the independent
regulator—Ofgem—and we will find out in a couple of weeks’ time
what it will be. The Government have already announced £500
million for local authorities to support vulnerable householders
across the country with essentials, including utility bills. As I
said in response to earlier questions, we are looking at what
else we can do.
(Con)
When my noble friend considers the impact of higher energy
prices, will he bear in mind the fact that, wherever the cost of
meeting net-zero targets has become an electoral issue, with the
gilets jaunes in France, the elections in Australia and Canada
and the municipal elections in the Netherlands, the party
opposing higher taxes on energy has won?
(Con)
We have taken careful note of the points that my noble friend has
made. I know that we have discussed this in previous debates but,
as I said to my noble friend Lord Hannan, net zero is a legally
binding commitment that Parliament has placed upon the Government
and, as long as that remains the case, that will be the policy of
the Government.
(LD)
My Lords, what is the Government’s response to the predictions of
National Energy Action that children will be forced to do
homework in cafés, libraries, the homes of friends and relatives
and even A&E departments due to rising energy bills at home?
What support will the Government provide to prevent further
educational disadvantage to children and young people from poorer
homes whose education has already suffered enormously as a result
of the pandemic?
(Con)
I outlined in earlier answers the support that we are providing
for vulnerable families for their energy bills to do precisely
that. As I also said, we are currently engaging with stakeholders
and looking to see what else we can do in this area.
(Con)
My Lords, the winter fuel payment is currently less than it was
in 2009, the cold weather payments are the same as they were in
2008, and the warm homes discount—which I agree is an excellent
measure—has stayed the same since 2011. Given that the cost of
fuel is rising so substantially and also that most of these
benefits are available only to those who are claiming pension
credit, will the Government now look at urgent measures to
increase the take-up of pension credit, which has been stuck at
40% of people not claiming it since 2010? It would be a direct
way of getting help to people immediately.
(Con)
My noble friend is asking about social security policy, which, I
am sorry to say, is not within my speciality, but I will
certainly write to her with details on that. On the warm homes
discount, she will of course be aware that we consulted last year
on increasing the discount and extending the number of eligible
households that would qualify for it. We will be responding to
that consultation soon.
