My Lords, the gracious Speech commits the Government to bringing forward measures to help tackle unfair practices in the energy market and reduce energy bills. In my brief contribution this evening I will concentrate on fuel poverty. Can the Minister explain exactly what the Government are proposing on energy prices? How does this interact with the Fuel Poverty (England) Regulations 2014 and the fuel poverty strategy of 2015?
I should declare my non-pecuniary interests. I am president of the Sustainable Energy Association, president of the National Home Improvement Council, a vice-president of the Local Government Association and a vice-president of National Energy Action, a fuel poverty charity. I am grateful, as always, for their briefings on this issue.
The scale of fuel poverty is very worrying and has been for well over 20 years. What is more, the levels are increasing and have increased since the publication of the fuel poverty strategy in 2015. Since 2011, levels in England have been based on the low-income, high-cost definition whereby an individual is considered fuel-poor when their fuel costs are above the national median level and when spending that amount leaves them an income below the poverty line.
Monitoring in the other three UK nations uses a 10% definition, which simply means that you are spending more than 10% of your income on fuel. The latest figures for England show a small increase in the number in fuel poverty since the fuel poverty strategy was introduced. It was 2.35 million households and has risen to 2.38 million. That is nearly 11% of all households in England. United Kingdom-wide statistics are no longer produced by the UK Government but the last figures in 2015 highlighted a figure of 4 million households in fuel poverty. Whatever the definition of fuel poverty, the main drivers remain the same—the price of energy, the level of household income, the quality of energy efficiency of dwellings and the vulnerability of the occupants of those dwellings. From 2004 to 2014, we saw gas prices soar by 125% and electricity prices by 75%. In recent weeks, we have all heard announcements of new increases by the major suppliers.
Improvements in the levels of energy efficiency in our dwellings have reduced by 75%. Typically, the vulnerable are older people, children and those with long-term illnesses. We now have 1.8 million households in this category, up by 40,000 since 2013.
Wages and benefits have not kept up with prices. Those unable to work have seen their income stagnate or reduce, and half of all fuel-poor households are in work. We have heard the rosy picture and the not so rosy picture of our economy from noble Lords’ contributions but any rosiness in the economy has not affected the people in fuel poverty I am talking about.
This situation puts huge pressure on our National Health Service. The World Health Organization estimates that 30% of winter deaths are caused by cold housing. That means that in this country 9,600 people are dying needlessly through the winter months. It costs our National Health Service £5 billion to treat the effects of living in cold homes, at a time when we hear daily about the pressures on our health service. The Government have committed to various targets to achieve better energy efficiency but current resources are less than half what is required to meet them. There are no bespoke programmes so progress has been very limited. The 2015 fuel poverty strategy committed to prioritise the most severely fuel-poor through cost-effective measures and ensuring that vulnerability is reflected in policy decisions. However, the transition to supporting those who most need help has been very slow. The energy company obligation is the only delivery mechanism in England and spending reduced from £1.3 billion to £640 million over 18 months, rather than the original 12 months. Therefore, I ask the Minister: will the changes to this be part of the government proposals announced in the gracious Speech?
Another scheme for the vulnerable is the warm home discount scheme, which provides an automatic electricity bill rebate to low-income older-age households. Like ECO, this policy is paid for through a levy on energy consumers’ bills and is delivered across Great Britain. Some people do not always remember to apply for the £140 payment at the right time. If they do not do so, they end up paying for the people who are getting that help.
I have three questions and a suggestion. First, will action on energy prices go alongside co-ordinated support to drive up low household incomes? Secondly, the most sustainable solution to fuel poverty is to increase energy efficiency, so will the Government ensure that the National Infrastructure Commission includes energy efficiency as part of the upcoming infrastructure assessment, as was included, indeed, in the Liberal Democrat manifesto? Will the Government re-target current fuel poverty support and address the gaps in provision? Lastly, I urge the Government to build on local practice and replicate consistent outcomes in all our towns and cities. Much could be done in this way if the Government supported and resourced local authorities’ activities under the Home Energy Conservation Act, which I successfully steered through the other place a very long time ago. We are one of the richest countries in the world. When will we see the end to vulnerable people dying each winter in this country? It does not have to be like this.