Clause 14

Energy Bill – in a Public Bill Committee at 3:30 pm on 14 January 2010.

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Schemes for reducing fuel poverty: interpretation

Photo of Simon Hughes Simon Hughes Shadow Secretary of State for Energy and Climate Change

I beg to move amendment 7, in clause 14, page 11, line 29, leave out paragraph (b).

Photo of Peter Atkinson Peter Atkinson Conservative, Hexham

With this it will be convenient to discuss amendment 8, in clause 14, page 11, line 41, leave out subsection (4).

Photo of Simon Hughes Simon Hughes Shadow Secretary of State for Energy and Climate Change

Clause 14 sets out the interpretation of schemes for reducing fuel poverty. The two amendments are intended to be probing amendments to discover what power the Government are seeking to give or keep to themselves to redefine fuel poverty.

I will briefly remind colleagues where we are. The genesis of the definition in legislation is in the Warm Homes and Energy Conservation Act 2000, where there is both a definition of fuel poverty and an ability of the Government to define it. Under that Act, a person is to be regarded

“as living ‘in fuel poverty’ if he is a member of a household living on a lower income in a home which cannot be kept warm at reasonable cost.”

There is a provision for the Secretary of State in England or the National Assembly for Wales, by regulations to set out

“(a) ...what is to be regarded...as a lower income or a reasonable cost or the circumstances in which a home is to be regarded for those purposes as being warm, or

(b) substitute for the definition...such other definition”.

There is a power for Ministers and a process of consultation to define fuel poverty.

This is a parenthetical point, but I have always thought that fuel poverty is not a phrase used in the real world of the Old Kent road or anywhere else. Too poor to pay the bill would be common parlance. I hope we can get away from what is not conventional English. I always try to say, when one’s bills cost more than 10 per cent. of one’s income, or more than 10p in the pound.

The background is that the Government are failing badly in their current targets and we expect them to fail completely when the 2010 figures on fuel poverty are published. I have heard the Minister say that he is trying all he can but the chance of the Government meeting their fuel poverty targets seems to be, if not formally, in all probability, impossible, given that we are already in 2010. Government grants have helped 5 million people install some kind of insulation, but according to the figures I have there are still 5.4 million in fuel poverty in the UK, and that number has more than doubled from 2.5 million three years ago. We know, welcome and appreciate the schemes in existence but they clearly have not solved the problem. Sadly, it is a problem where the Government have failed to live up to their promise and expectation.

We want to be clear that the Government are not seeking in the clause to allow Government to fiddle the targets and the definition. I want to make two obvious points that follow from that. Clause 14 says that fuel poverty would be reduced if either of two things happen:  either the total number of people defined as fuel poor under the Bill and previous Acts is reduced, or in clause 14(1)(b),

“the extent to which any person is living in fuel poverty is reduced.”

I understand the argument that if people are more able to pay their bills or do not find it as difficult, the problem is less. Amendment 7 suggests that it would be more honest and honourable to delete subsection (1)(b), so that the truth came out, which is how many people spend more than 10p in the pound on fuel bills; rather than trying to obscure that by another definition looking at the number of people for whom the extent of fuel poverty is reduced. Of course, that is an important indicator. It is an important bit of information to collect, but in our book it should not be the way to define who is or is not in fuel poverty.

Secondly, clause 14(4) says:

“If, by virtue of regulations under subsection (2)(b) of that section, the definition in subsection (1) of that section is substituted, the Secretary of State may by regulations specify what is to be regarded as a reduction in the extent to which a person is living in fuel poverty for the purposes of this Part.”

That seems to allow Ministers far too much discretion to define later, by secondary and not primary legislation, what reductions in fuel poverty are. I thought that when the previous legislation was passed, we were clear that the definition of fuel poverty should be included in the Bill and could not be tampered with by regulations.

I have one last question to ask in this context. Six years ago, my hon. Friend the Member for Hazel Grove (Andrew Stunell) piloted through Parliament the Sustainable and Secure Buildings Act 2004, which provided for building regulations to be extended to cover any building undergoing a major alteration or extension, or when occupants moved home. The purpose was to ensure not just that new buildings were good and warm but that improvements were made when alterations and extensions were made or when people moved. My hon. Friend has regularly chased Ministers to ask, “When are you going to do anything about this?” I know that it is principally the responsibility of the Minister’s colleagues in the Department for Communities and Local Government and not the Department of Energy and Climate Change, but it relates to both emissions and insulation, and therefore to bills.

I would be grateful, as would my hon. Friend, to hear whether the Government intend to do anything, as the Act requires them to do, to use their existing powers to solve the problem. That would be a much more useful response than a piece of legislation allowing the Government to change the definition. I hope that we can persuade the Government that the regulations to do so are not necessary and that we should define what we mean in the Bill. I therefore hope that the Minister is minded to accept my amendments in one formulation or another.

Photo of Charles Hendry Charles Hendry Shadow Minister (Energy and Climate Change) 3:45, 14 January 2010

The hon. Member for North Southwark and Bermondsey has raised an interesting and important point. We are right to be suspicious on such issues. The Government have form on changing the basis for calculating statistics and relative figures so they can say, “You can’t make a comparison on that basis because the figures haven’t been collected over a long enough period.” Particularly when one can see us heading so rapidly in  the wrong direction on fuel poverty figures, one might imagine that the Government would be keen to find a way out of a problem of their own making.

It is reasonable in considering fuel poverty not to pursue a one-dimensional approach. To suggest that people are either in fuel poverty or out of it does not give a full understanding of how the world looks. We have an extra definition of severe fuel poverty, but it is reasonable to have gradations as well, so we can understand more clearly to what extent people are in fuel poverty.

My primary concern is amendment 8. Subsection (4) appears, almost on a whim, to give the Secretary of State the opportunity to redefine fuel poverty. That ought to be dealt with in primary legislation. I am not quite so concerned about some of the earlier issues referred to by the hon. Member for North Southwark and Bermondsey, but it is important that the Government should not be able to change definitions on a whim to meet statistical challenges.

Photo of David Kidney David Kidney Parliamentary Under-Secretary, Department of Energy and Climate Change

I need to correct slightly something that I told the hon. Member for North Southwark and Bermondsey in answer to a question he asked. The obligation is presently split among the energy companies by customer numbers, but the amount of money that must be spent under the voluntary agreement is split among them according to their market share. That is not the kind of reconciliation scheme that I propose in the Bill; there are excellent reasons, including an entitlement and a kernel group, that make that way of dealing with it unsuitable. I am sorry if I said slightly the wrong thing in my answer.

It is the job of a parliamentarian scrutinising a Government Bill to be suspicious, but I think that the point we are making has been misunderstood. Here are the qualifications or triggers for a scheme to be acceptable. If we have a scheme of the kind that I have described, I am sure that it will take some of the people who receive the benefit out of fuel poverty, and will move others towards it. That is therefore a qualifying condition for making the scheme, and the benefit is advantageous to those who receive it. Moving someone from spending 20 per cent. of their income on energy to spending only 10 per cent. might not take them out of the definition of fuel poverty, but it is a big benefit to them. Otherwise, we would have to design a scheme that was aimed only at those who are just in fuel poverty, to shift them over to the other side of the line. I hope that people will accept that the measure is not at all to do with trying to change the definition of fuel poverty, or even to change the accounting for the number of people and households in fuel poverty.

When it comes to changing the definition, as has been pointed out, there is a method in the Act that set up the scheme for eradicating fuel poverty that allows for an amendment, and for a statutory way of making such an amendment. The Bill is not about amending the definition of fuel poverty; it is about amending the scheme if the definition were changed by the statutory route provided for under the existing Act. The measure is consequential, because if the definition is changed we need to change the terms of the scheme. That is all it is for.

Photo of Simon Hughes Simon Hughes Shadow Secretary of State for Energy and Climate Change

That is helpful, because it gives me a signpost to the amendment that I ought to have tabled and which I could have therefore explored on Report. If  I have understood the Minister correctly, the amendment needs to be to the previous Act and not to the Bill. I understand the regulatory options given under that Act. I am grateful for the support from the hon. Member for Wealden for the principle of the second amendment in the group, but the mischief is that clause 14(1) states:

“For the purposes of this Part, fuel poverty is reduced if—

(a) the number of people living in fuel poverty is reduced, or

(b) the extent to which any person is living in fuel poverty is reduced.”

It could therefore be possible under the proposed legislation for the Government to say, “We have reduced fuel poverty because all those who spend more than 10p in the pound on their fuel spend less, but not a single person has actually crossed the threshold into spending under that amount”. [Interruption.] The Minister of State has said no from a sedentary position. I am completely willing to be corrected if have misunderstood, but why is clause 14(1) drafted such that paragraph (a) or paragraph (b) is the definition? Why can we not keep the definition to paragraphs (a) and (b)?

Photo of David Kidney David Kidney Parliamentary Under-Secretary, Department of Energy and Climate Change

Every year, we publish the statistics for fuel poverty, and every year in the future we will do so. The clause does not change anything at all in that publication about how we are doing.

Photo of Simon Hughes Simon Hughes Shadow Secretary of State for Energy and Climate Change

I have the statistics here; they are public knowledge. I will go back and reflect on the original Act and the Bill and their interconnections. I  will look again at the publication from the Minister’s Department that gives the figures. Like the hon. Member for Wealden, I am concerned that we should not allow a definition that people have grown to understand—

Photo of Simon Hughes Simon Hughes Shadow Secretary of State for Energy and Climate Change

The Minister is saying that we are not. She will understand that that is the concern. We are rightfully probing to ensure that the 10 per cent. of income spent on fuel remains the ratio and the definition. If the Minister is saying that that will not change and I can satisfy myself, we will not trouble him further. We are keen that people understand what is going on. On that basis, and for the time being, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 14 ordered to stand part of the Bill.

Clause 15 ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned.—(Derek Twigg.)

Adjourned till Tuesday 19 January at half-past Ten o’clock.