7. Debate on the Equality and Social Justice Committee Report — Fuel poverty and the Warm Homes Programme

– in the Senedd at 3:31 pm on 21 September 2022.

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Photo of David Rees David Rees Labour 3:31, 21 September 2022

(Translated)

Item 7 this afternoon is the debate on the Equality and Social Justice Committee report, 'Fuel poverty and the Warm Homes Programme'. I call on the Chair of the committee to move the motion, Jenny Rathbone

(Translated)

Motion NDM8072 Jenny Rathbone

To propose that the Senedd:

Notes the Equality and Social Justice Committee report on Fuel poverty and the Warm Homes Programme, laid on 18 May 2022.

(Translated)

Motion moved.

Photo of Jenny Rathbone Jenny Rathbone Labour 3:31, 21 September 2022

Diolch yn fawr. This debate on fuel poverty and the Warm Homes programme I hope will be useful to all Members, as this is something that I know all our constituents are extremely worried about. The committee started this inquiry in the spring of this year, when energy prices were a third of what they are today. And Wales is particularly vulnerable to this unprecedented hike. Wales has some of the oldest housing stock in Europe. Inadequately insulated homes, concentrated mainly in the private sector, either owner-occupied or private rented, cost a disproportionate amount to heat and rely on carbon-emitting energy sources. The UK overall is bottom of the European league table for homes insulation. UK houses lose an average of 3 degrees Celsius of indoor heat after five hours, three times faster than in Germany. And even southern European countries like Italy and Spain, who don't experience our cold and prolonged winters, have homes that are, on average, twice as well insulated as UK homes. This is shocking indeed. 

Over 20 years ago, the warm homes Act set out to improve the energy efficiency of Welsh homes and eliminate fuel poverty. A combination of flawed policy making, inadequate regulations and upheavals in world energy markets means that not only are we are a long way off achieving that aim, the situation is now acutely critical. As a result of the April price cap rise, the Welsh Government has estimated over 600,000 households, or 45 per cent of all households, are living or will be living in fuel poverty in Wales as soon as winter starts. Presumably—matters have got worse since then—that is now the fate of the majority of households in Wales. The most vulnerable are those who face the grim choice between eating or heating. As set out in this report, Government action on an unprecedented scale is urgently needed. 

I would like to thank all the people who were involved in making this inquiry report, all the stakeholders and policy experts who gave formal evidence, the members of the public who spoke to us about their personal experiences of the issues we are covering in the report, and the committee clerks and research staff who supported our inquiry, as well as the auditor general and his team at Audit Wales for their meticulous audit of the Warm Homes programme, which was published in November last year. 

Gas used to be considered an effective and relatively cheap way of heating our homes. That was until gas started being used to fire up power stations as an alternative to coal, and this, combined with the fallout from the war in Ukraine, have put rocket boosters under market prices. This turmoil has created such an unprecedented crisis for households this winter. The National Institute of Economic and Social Research says these rises will hit the poorest households in Wales harder than any other UK nation or region. And some households spend over a quarter—26 per cent—of their income on energy and food, both of which have experienced massive inflation. For these people, as the NIESR points out presciently, neither wage growth nor welfare benefits will compensate for this fast rise in inflation.

Photo of Jenny Rathbone Jenny Rathbone Labour 3:35, 21 September 2022

We're pleased as a committee that the Welsh Government has accepted the first three of our recommendations, which relate to the immediate action required to review the effectiveness of the winter fuel support scheme, to maximise the benefits of the VAT cut for energy-saving materials and insulation. Is the Welsh Government in a position to now share the outcome of its review of the winter fuel support scheme? We all need to know which local authorities and other stakeholders have the most effective strategy for maximising take-up as we face even more critical problems this winter.

The Welsh Government has invested an additional £4 million in the Fuel Bank Foundation, which provides people with pre-payment meter top-ups and a heat fund for the pre-purchase of heating oil for low-income households who are off the gas grid. That's very welcome, and it would be good to know whether the Government thinks that is going to be sufficient to meet the demand this winter. 

There has already been a large number of public, private and voluntary organisations offering to set up warm hubs this winter so people aren't shivering at home. What role does the Welsh Government envisage, in partnership with the fuel poverty advisory panel and others, to ensure that these excellent initiatives will marshal the immediate resources required in the very poorest communities to prevent people literally freezing to death?

While the Warm Homes programme made a positive difference to some 67,000 households who received its support, its shortcomings ranged from the size and scale of the programme to restrictive eligibility criteria and a poorly designed grant cap, which stifled more holistic whole-house approaches. Nest and Arbed became, in essence, gas boiler replacement schemes, prioritising carbon-emitting heating systems over other interventions. The emphasis placed on replacing boilers without complementary works to insulate homes was described by one of our stakeholders as

'buying a teapot with cracks in it.'

The figures for 2020-21 show that nearly all the measures installed by Nest in that year were for central heating systems rather than insulation schemes, which means that they were continuing to build in carbon-emitting systems. Our report, alongside the auditor general's, sets out in black and white the lessons that must be learnt from the flaws of the current Warm Homes programme. Recommendation 6 from our report in particular encapsulates the need for the next programme to be bigger in scale, smarter in who it targets and greener in its interventions. 

Now that the Senedd has resumed its normal business for this autumn term, we look forward to the launch of the next Warm Homes programme. Can the Minister highlight, either now or in writing to the committee, the ways in which our specific points regarding the successor programmes have or have not been addressed? Specifically, you say that

'the next iteration will be responsive to market and supply chain conditions, balancing demand with available capacity.'

Wise words, given the level of disruption Wales and the world are experiencing. In the long term, tackling fuel poverty and ensuring our energy security relies on effective decarbonisation across all homes, and that includes improved energy efficiency. 

Wales has come a long way in generating over half the energy it currently consumes from renewable resources. The challenge for the Welsh Government is how that can translate into a fair, just, green transition in the context of the way the UK energy market is currently rigged to the most expensive cost of gas. Switching to renewables is key and it's urgent.

You have accepted the committee's eighteenth recommendation for a clear, long-term strategy for decarbonisation to give industry the confidence to invest in skills, technology and people. We know that the net zero skills plan is needed now, so hopefully there will be no slippage on the projected December publication date.

The transition to net zero will need to look at Welsh housing stock of all ages and tenures. The greatest number of fuel-poor households are in the private rented sector and in rural areas, and specific steps are needed to address these. The challenges for tenants in the private rented sector are particularly acute. Not only have very few privately renting tenants benefited from the existing programme, research highlighted in our report found little correlation between the energy efficiency of a property and market rental rates. Both Welsh and UK Governments therefore need to address this through a combination of incentives for landlords, more rigorous standards and engagement across the board. 

So, specifically in relation to recommendation 22, can the Minister indicate whether it plans to urge the UK Government to act on proposals to increase the minimum energy efficiency standards to energy performance certificate C for all rented properties by 2028? And if the UK Government is unwilling to act, would the Welsh Government go ahead with implementing these higher minimum energy efficiency standards in Wales only? I look forward to Members' comments and the Minister's response. 

Photo of Altaf Hussain Altaf Hussain Conservative 3:41, 21 September 2022

I'm delighted to be contributing to this afternoon’s debate on our committee report on fuel poverty and the Warm Homes programme. I would like to thank our Chair, Jenny Rathbone, for steering us through a significant number of important issues, which, in this period of economic challenge, have become even more important for families the length and breadth of Wales. Fuel poverty, the risk to families’ health and well-being as we enter the coldest months of the year, with prices already much higher than a few months ago, is a threat that this Senedd and this Welsh Government need to respond to. Indeed, we are in a different place to when the committee started this work, with families facing the cost of fuel, increases in the costs at the supermarket till, the risk of a recession and the impact of fuel poverty, which will, this year, hit more households than we have previously seen.

I would like to focus on the response of the Minister to the committee's recommendations. Our report is clear in the conclusions we have reached, based on the wealth of evidence that we considered, and there is a sense of purpose in what we recommended. And as we published our report in May, four months ago, I am hoping that the Minister has now made significant progress in advancing our recommended actions, with changes in the weather heading towards us. 

I would like assurance on the delivery of our recommendations, and in particular on these following areas: firstly, we called for a review of the support offered to low-income households via the winter fuel support scheme before autumn 2022, assessing take-up rates by local authority area, assessing the effectiveness of the promotion and awareness raising, and considering whether further outreach work to proactively support harder to reach and vulnerable groups is needed. The Minister’s response said a review was happening. Has this now been concluded and, if not, when? Can the Minister assure me that the review is as comprehensive as the committee has called for, to fully understand the effectiveness of support to low-income households and to think through the enormity of the challenges that many more households are now facing? 

Secondly, I am concerned that the Minister’s acceptance of some of our recommendations is not reflected in the accompanying narrative. For example, in our fifth recommendation, where we call for smarter, less restrictive eligibility criteria to ensure, as a minimum, that any household that meets the definition of fuel poverty is able to access support when needed in the next iteration of the Warm Homes programme, the Welsh Government says it

'will consider the Committee’s recommendation when designing the detail of the eligibility criteria to ensure the points raised are addressed.'

My reading of this does not commit the Government to doing exactly as the committee recommended, despite accepting the recommendation. Can the Minister confirm this afternoon that the new programme will be smarter and less restrictive?

These are key considerations, and I am sure that Members will want to know that lessons are being learnt, which I would urge the Government to publish as soon as possible. The challenge of a programme that is smarter in who it targets was also raised by Audit Wales in their report, stating that the Government should set out how it intends to ensure that the next iteration of the Warm Homes programme is bigger in scale, smarter in who it targets and greener in its interventions. I agree with the auditor general.

On this recommendation, 6, I’m afraid the narrative again doesn’t match the acceptance of the recommendation. We are again told just to wait for the Minister to set out the scope and purpose of this new programme. Does the Minister accept the view of Audit Wales that the new programme should be bigger in scale, smarter and greener? If so, will that be made clear this afternoon, to give confidence to Members that significant progress is being made, along with the details we should now expect to see?

Thirdly and finally, I want to touch on another area in our report that is of critical importance. 

Photo of Altaf Hussain Altaf Hussain Conservative

Whilst I have some concerns about the speed of ministerial responses, at a time of unprecedented and immediate challenge, there are several areas in our report that are around the longer term. One of our recommendations, No. 11, asks that a future area-based scheme develops a community engagement strategy to ensure that the benefits of existing networks are maximised—

Photo of David Rees David Rees Labour

The Member needs to conclude now, please.

Photo of Altaf Hussain Altaf Hussain Conservative

—and that local communities feel a much stronger sense of buy-in. This is important. Wales is a small country; we have substantial capacity in our network of local authorities, housing providers, community and third-sector groups who have reached an ability to engage directly with communities to help get that buy-in. There is a reason why this is vital.

I would like to hear from the Minister about it. Thank you.

Photo of Sioned Williams Sioned Williams Plaid Cymru 3:47, 21 September 2022

(Translated)

This inquiry and report on the Warm Homes programme and fuel poverty is perhaps one of the most important that I've been part of as a member of a committee in the Senedd to date, because every winter, hundreds of thousands of people in Wales have difficulty in affording to heat their homes, living in damp, cold conditions that are dangerous for their health. That was the situation last winter, and the winter before that, and the winter before that, before the war in Ukraine started, before the height of the current energy crisis. A crisis already existed that made the scrutiny and detailed analysis by the committee, to ensure that the next version of the programme benefits from learning key lessons and does what needs to done, urgent work and vital work, vital in terms of our need as a nation to respond to the climate crisis and our vital efforts to cut carbon emissions, and in terms of our duty to eradicate the completely unacceptable levels of fuel poverty that, as the Chair said, have reached 45 per cent, and probably higher.

And if that wasn't enough of an incentive to drive us forward, we started to inquire as a result of the egregious and expensive failures of the Warm Homes programme as noted by the Audit Wales report. The deficiencies noted were fundamental and shocking, considering the importance of the programme and the size of the public expenditure on it, and the recommendation of the committee that the new version should include a monitoring and evaluation framework and robust management is vital. The most important thing to note, perhaps, is that the funding for the programme was totally insufficient. Evidence from the future generations commissioner was striking in that regard, and underlined the failure of the programme to date in terms of its ambition and its impact and the urgent need for action on this.

The price of further delay before investing and taking action on the next iteration of the Warm Homes programme is far higher now in terms of fuel poverty of course, as a result of the current energy crisis. Plaid Cymru supports the recommendation of the committee and is pleased to see the Government response, which does accept every recommendation. But a number of the responses to the recommendations suggest that an update would be provided to the Senedd about the next iteration of the programme by the beginning of this new term, and in the light of the crisis that faces us, that threatens the health and, indeed, the lives of families, we need a clear timetable and a clear policy commitment to an ambitious and comprehensive programme to tackle the cost-of-living crisis and the climate crisis, that will achieve our aims effectively, in accordance with the findings of the report. When will we hear that, Minister? I'd like to have a clear timeline in your response to this debate.

And whilst we're waiting for action and implementation of the new iteration, Plaid Cymru supports the view of NEA Cymru that changes should be made and new investment should be made now within the current Nest programme, to make it more effective and to deepen its impact. The Government should maximise the benefits of the current scheme by giving it a financial boost and adapting it to include fabric and insulation measures alongside new heating systems. The fabric and worst-first approach to retrofitting, targeting the poorest households in the least energy-efficient homes, needs to be at the heart of the next iteration of the Warm Homes programme. This would decrease the demand for energy and would achieve the double aim of decreasing fuel poverty by decreasing energy use and, therefore, carbon emissions.

Plaid Cymru has also called on the Tory Government at Westminster to tax the grotesque profits of the gas and oil companies to help to fund a programme to improve the housing stock in Wales, which is amongst the least energy efficient in the UK.

One thing that is clear is that we need to take radical action on a scale that we've never seen to date. We like to use that term, 'radical', perhaps we use it too often. This programme does demand the true meaning of the word 'radical'. This report does show a way forward that is free of the complexities and the failures of the previous programme. The Government has accepted the map that has been proposed. What we and what thousands of residents in Wales need to hear is when the next step on the journey will be taken.

Photo of Jane Dodds Jane Dodds Liberal Democrat 3:52, 21 September 2022

(Translated)

When we were all starting out on this inquiry, we didn't know that this would be the most important issue for us all, and, to be honest, I'm a little saddened that there aren't more people here in the Chamber, because this is the most important issue that we're all facing and all the people that we represent are facing. I'd like to start by, first of all, thanking the individuals and organisations who participated in this inquiry, and the Minister too, and also our Chair and my fellow Members.

It is important that this report is set in its context, given what we are facing now, and, as I said, this is the single most important issue. In our hearts and in our heads we should all be thinking, 'We have to focus on this for the sake of the people that we all represent.'

Forty-five per cent of households in Wales are likely to be in fuel poverty this year. The Bank of England has predicted that inflation will hit around 13 per cent by the end of the year. Some 70 per cent of people living in fuel poverty don't receive any benefits and much of the support available isn't relevant to them, therefore. And prior to the pandemic and the current cost-of-living crisis, a third of children in Wales were facing poverty.

I want to focus on one of the elements that we looked at, and I know that this has already been referred to this afternoon, and that is the Government's Warm Homes programme, and Arbed and Nest.

Photo of Jane Dodds Jane Dodds Liberal Democrat 3:54, 21 September 2022

The committee's report and the auditor general's report set out a number of issues and concerns: poor contract and programme management; issues in reaching rural communities and private renters; lack of clarity around the criteria and objectives; and the sheer pace and scale needed. We heard in the evidence to the committee that whilst the programme has helped many people across Wales, it really did lack the impact, the reach and the effectiveness needed to really move the dial for the right people, in the right way, on fuel poverty and decarbonisation. Almost half of those who received support through the programme last year were deemed to not be in fuel poverty, and that figure was more than 60 per cent in the previous year.

Just touching on those in rural communities that I, and I know others here, represent, they face particular challenges in dealing often with very old properties that are difficult to retrofit and to insulate, and those in rented accommodation have very little recourse to address these issues and, as we know, can, in some circumstances, face difficulties and are reprimanded in doing so. It would therefore be helpful to hear from the Minister what steps are being taken, or options explored, to ensure that rural communities and private renters are not left behind in the next phase of the programme.

In addition, then, to looking at what needs to happen next, I hope the Government will be committing to an investigation to address the apparent failure to properly manage public money. The issues around transferring funds from one element of the programme to the other raise questions. A quick analysis of the annual statements of the programme show that the number of households receiving support under the scheme declined from 5,500 to 4,500 in 2020-21, and at the 2016-17 rate, it would take a 111 years to insulate every household, and at the 2021 rate, 135 years. So, there are a huge number of questions here to look at in relation to the scale and level of investment, and also how the programme, going forward, can reach those rural communities and our private renters.

I do believe that it is important to focus now on learning those lessons and moving forward, but the fact remains that the statutory target to eradicate fuel poverty by 2018 was widely missed. Four-hundred million pounds has been spent on a project that has fallen short of its objectives, and we face, as I said at the beginning, an energy crisis that could have partly shielded people in Wales had the Warm Homes programme done its job. Diolch yn fawr iawn.

Photo of Sarah Murphy Sarah Murphy Labour 3:57, 21 September 2022

I want to start by also thanking my colleagues, the Chair and the clerks on the Equality and Social Justice Committee for their work on this vital and timely 'Fuel poverty and the Warm Homes Programme' report, as well as those who gave evidence and spoke before the committee. I am pleased that the Welsh Government has responded by either accepting or accepting in principle the recommendations of the report. We know that the cost-of-living crisis is impacting so many across our communities. This report has been critical in identifying the gaps in support, and understanding how the Welsh Government can help to ensure that no home is left behind. And as we start this term, I look forward to hearing how the Welsh Government sets out the next iteration of the Warm Homes programme, and we'll welcome plans to make the eligibility criteria, in particular for support, less restrictive, as set out in recommendation 5. 

There are many people in our communities who desperately need this support, but have been unable to access it. For example, Marie Curie highlights that recommendation 5 is an opportunity to support those who are terminally ill, have cancer, or neurological conditions, and are now facing fuel poverty because of the ongoing crisis. Dying people in Wales, as well as those suffering chronic illness, spend a lot more time and a lot more money on heating their homes sufficiently, and, as Marie Curie found, are terrified about the cost of heating their homes going forward. We must ensure these people in our communities are eligible for and are effectively signposted to appropriate support.

I am also pleased that the Welsh Government has accepted recommendation 3, to work with the fuel poverty advisory panel to identify immediate to short-term solutions to support families already in fuel poverty. It's heartbreaking that some of the most popular videos on social media at the moment are people suggesting turning off all the radiators in your home and relying on an electric blanket to get you through the next few months. The anxiety and stress about covering increasing fuel costs is escalating across our communities, and if we thought that there was a chance that UK Government would do the right thing and put the public first, then we were very wrong. As Martin Lewis from the Money Saving Expert said, households will face a typical energy bill rising to £3,500 a year from this autumn, and the current planned support from the UK Government is woefully inadequate.

The UK Government has adopted the UK Labour policy to have a price cap. However, the UK Government has rejected calls to implement a windfall tax on the companies that continue to pocket immense profits from the crisis. It's estimated that it will cost £150 billion between now and 2024, which will come from borrowing. So, we will have to pay it back somehow, essentially kicking the can, and the cost to the public, down the road.

But also, the cap will be £2,500, with everyone receiving £400 over the next six months. By my calculations, that is still at least £600 short of the estimated £3,500. Where is the UK Government expecting this to come from? Residents in my own constituency in Bridgend and Porthcawl are telling me that, with food, fuel and energy prices increasing whilst many wages stagnate, this will be impossible for them to cover.

Fortunately, once again, our Welsh Government will do what the UK Government will not, and will protect the many and the most vulnerable. We see that in several recommendations and responses by the Welsh Government in its response to our report—that focus on collaboration and partnership between local authorities, including making sure that people have access to the Wales fuel support scheme, where residents can claim a one-off payment of £200 through their local authority to ensure that they can pay their fuel bill, as well as fuel vouchers and a heat fund for people on prepayment meters facing hardship.

We also heard yesterday from our First Minister that £1 million will be made available for community centres, sports clubs and other groups to provide warm banks to help towards their fuel costs, as they provide warm and welcoming spaces for people to continue to congregate. It is only truly by understanding the lived experiences of this crisis that we can ensure that the right help is given, and I think that we have done our best to capture their voices in our report. But, we all have a responsibility to ensure now that people needing support are aware of where and when they can access it, and to make sure that the support is as accessible as possible for people in need to receive it.

Photo of Mark Isherwood Mark Isherwood Conservative 4:02, 21 September 2022

The committee's report found that the Welsh Government's £360 million Warm Homes programme lacked scale, size and purpose. This is a matter of serious concern, as is the report's finding that the drastic changes to the energy market over the course of this year are expected to hit the poorest households in Wales harder than any other UK nation or region, according to the National Institute of Economic and Social Research.

Although the Welsh Government accepted 21 of the report's recommendations, it's concerning that it accepted the remaining two only in principle. As I stated in this Chamber last autumn as Chair of the Public Accounts and Public Administration Committee, it is the collective view of the Public Accounts and Public Administration Committee that the use of 'accept in principle' must not be used in response to committee reports again, and recommendations must either be accepted or rejected. Where further work is required to implement a recommendation, or if a deadline for implementation cannot be met, this should be set out clearly in the detail of the response.

Separately, as Chair of the cross-party group on fuel poverty and energy efficiency, I am also aware of concerns within Fuel Poverty Coalition Cymru about the Welsh Government's responses to some of the report's recommendations that it has accepted. As National Energy Action, NEA Cymru, stated in its submission to the committee's consultation,

'current schemes are insufficient to address the scale of fuel poverty in Wales, let alone decarbonise homes....now is a vital moment to consider how far the current Programme has taken us, and going forward take the opportunity to provide guaranteed support for the 'worst first'—i.e. those on the lowest incomes in the least efficient homes—improving the lives of fuel poor households as we decarbonise and upgrade the energy efficiency of their homes.'

They said that

'Poor energy efficiency is a key driver of fuel poverty and more than 80% of fuel poor households in Wales live in inefficient homes; higher than any other UK nation.'

They said that

'The resulting impact of poor-quality housing on health services is acute, costing the NHS in Wales approximately £95m every year. Conversely, Public Health Wales estimated that for every £1 spent on improving warmth in vulnerable households, this results in £4 of health benefits, and there could be close to 40% fewer hospital admissions for some cold-related illnesses in those with upgraded homes. The average annual saving for bringing a home up to a reasonable level of energy efficiency is...over £300 every year and over £1,000 for the poorest households in the least efficient homes.'

They concluded that: there must be adequate funding to meet the problem and that this funding should be spent on a 'fabric first' basis, working on the energy efficiency of the built environment to get homes net zero ready before, or at the same time as, making changes to the heating in a home; the programme must be delivered with adequate advice and awareness raising; and there must also be trust from households that the changes that are made to their homes will be of good quality, underpinned by access to sufficient redress. Lastly, to ensure confidence, there must be transparency in government plans.

As both they and the Fuel Poverty Coalition Cymru state, it is vital that the next iteration of the Warm Homes programme focuses on lifting households out of fuel poverty, supporting the worst first—i.e., those on the lowest incomes in the least efficient homes—and is backed by sufficient long-term funding and legislation to meet targets set in the Welsh Government’s tackling fuel poverty plan. With reference to funding, they state that although the Welsh Government accepted the recommendation that it should identify the funding required to respond by reviewing the sufficiency of its spending allocations for energy efficiency in housing, the response regarding this is non-committal, and that investment and funding to hit fuel poverty targets is needed. Overall, they state the key thing is a Warm Homes programme to lift households out of fuel poverty, lifting the worst first.

As the Auditor General for Wales stated in his report last November on the Welsh Government’s management of the current Warm Homes programme,

'When looking at any replacements for the Warm Homes Programme, the Welsh Government have several issues to resolve. These include rethinking the energy efficiency measures offered, being clearer about the core purpose of the Programme and tightening future contracts to align costs and to incentivise better value for money.'

Photo of Mabon ap Gwynfor Mabon ap Gwynfor Plaid Cymru 4:07, 21 September 2022

(Translated)

Thank you to the committee for its work. I welcome the report, and it echoes much of what I’ve heard. Unlike the committee, I cannot speak on behalf of the rest of Wales, but I can speak on behalf of my own constituency on the frustrations experienced in trying to implement some of these plans, and also the lessons to be learnt.

I want to focus on some of the lessons from one experience in Dwyfor Meirionnydd. Consider the village of Tanygrisiau in the Ffestiniog area. Tanygrisiau suffers the worst level of fuel poverty in the UK, and it’s among the lowest income levels—and they are off gas, too. My predecessor, Dafydd Elis-Thomas, had been battling to find a solution to the heating problems in Tanygrisiau since his election back in 1974. Around two years ago, Arbed am Byth came to Tanygrisiau, but from what I’ve heard, the scheme cannot be described as being successful there.

The contract was given to a Scottish company, who were supposed to partner with a local organisation, Y Dref Werdd, which knows the area well and has been battling to resolve fuel poverty in the area for years. But there was no discussion at all between this company and Y Dref Werdd, although Y Dref Werdd were the grass-roots partner. We must learn that lesson, therefore, and ensure that there is local input in developing this work.

The financial contract went to a company from Scotland, but it was volunteers from Y Dref Werdd who had to market and advertise these plans, and they did so voluntarily. The company had no understanding of the area, never mind the topography of the area. They had thought that they could introduce gas pipes for some of the homes in order to deliver against their targets, but there’s a reason why that infrastructure isn’t in place—because there’s strong stone under the ground. If they’d had discussions with people on the ground then they would have known about that, and would have adapted their plans.

Ultimately there were 41 PV panels, and that’s a step forward, of course. But no direction was given as to how to make the best of these panels, and it’s entirely insufficient to resolve the fuel poverty in that area. With Nest, they identified the most frightening problems in the homes, and they resolved them, but the other works were not done. For example, if there was a need for a new boiler, then that boiler was installed, but nothing was done to insulate the home, exactly as Jenny Rathbone explained at the beginning of this debate. 

If I could just mention one thing that the report has missed, and that is there are similar programmes being implemented from Westminster, such as the ECO programme. There are cases where Welsh Government and UK Government schemes can run alongside each other, but they can also conflict. To the ordinary person on the ground, it makes no sense that these programmes compete with each other; they don't understand why these programmes can't work together. So, I would also suggest that any new plans from Government should look at what else is being put in place, and if it is possible to dovetail the work in order to make the most of it. 

Recommendation 6 that the next programme needs to be more ambitious, to all intents and purposes, is entirely right and should be accepted. And as Sioned Williams said, nowhere near enough funding that is needed has been invested to date. It does suggest that the Government doesn't fully appreciate the scale of the challenge facing them. Our housing stock in Gwynedd is among the oldest in Europe, with many listed buildings and many within the national park. So, what will the Government do to ensure that these buildings can take advantage of any new programme for the future?

I hope, with those few words, that these lessons can be learned as the Government moves forward to develop its new plans.  

Photo of Carolyn Thomas Carolyn Thomas Labour 4:11, 21 September 2022

During my time as county councillor, I gained first-hand experience of people struggling with fuel poverty and trying to cope with the additional burden of faulty heating systems, especially off grid. I was asked to visit an elderly resident who was having problems with her oil central heating. The lady had her doors and windows wide open to release the terrible fumes, and the house was absolutely freezing. The leaking oil boiler was in the old lady's pantry and it was terrible. Not only was the lady suffering fumes and was cold, she had mobility issues and was partially sighted as well. I soon discovered that others had boilers installed in the old pantries. 

I also visited residents of a sheltered housing accommodation complex, and they had storage heaters that ran out of heat by four o'clock, and then had to plug in electric heaters, which were really costly. They were cold in their properties, and I campaigned to get mains gas up to their village. The council were eventually able to work with the utility company and they helped to fund it, and it made such a difference. They installed gas central heating in the properties. Some were suspicious of having gas, but many felt blessed not to have the large old boilers inside the houses, and the homes were so much warmer with a reliable form of heating. 

I've been contacted by residents who have had broken old boilers and no central heating, and unable to afford to replace them, wondering what they can do, and they've been put in touch with the grant funding from Welsh Government. They've been upgraded to gas boilers, taking up little room and being reliable through the scheme. I'm telling these stories because not all properties, especially older ones, are suitable for air source heat pumps, and replacement gas boilers over recent years have been extremely beneficial to many, and should not be discounted, especially for those with no alternatives when they've been absolutely desperate. This funding has been a lifeline to many people. 

Where possible and in all new-build homes, air source heat pumps should be, of course, used, and solar, and I've seen the benefit of this being installed. Ten years ago, when I visited this elderly lady, we also had a new development being built of 43 houses, and they all had air source heat pumps. Again, people were suspicious of them, but they worked and they've been really good. That, again, was thanks to Welsh Government funding at that time, to help afford to build that. 

We do have issues, though, with connecting to grid, and that overlaps into the next debate going forward. Where solar energy has been fitted to sheltered accommodation bungalows, those that have just gone to the mains gas, there are issues that they cannot connect to the mains grid now. So, we need to make sure the boiler repairs and replacements are made in the best interests of tenants, helping to keep their bills down and their homes warm, ensuring that homes are insulated and have effective heating. It's the best tool the Welsh Government has for helping people to survive this crisis.

A lot of the houses now have also gone through enveloping works, and it really does make a difference. In fact, all the council houses now in the area that I represented have gone through the enveloping works. That's funded by the council, but also working with Welsh Government and the funding. In the shorter term, measures taken by Wales have been a lifeline, especially the vouchers for those on prepaid meters, and they've been offering vital instant relief. I've been to the foodbank for people, to help collect food, but when they've had no power to heat and to cook the food, it's been incredible, wondering what to do, and I've actually tried to help them, putting money in the meter myself. But now, to have those vouchers available is just making such a difference, so, I'm so grateful for that. We now need to ensure that the Warm Homes scheme assists as many houses as possible as quickly as possible for the long-term benefit. Thank you.

Photo of Jane Hutt Jane Hutt Labour

Diolch, Dirprwy Lywydd. I do welcome the inquiry and report from the Equality and Social Justice Committee on fuel poverty and the Warm Homes programme, and thank Members for their contributions in this important debate today.

But the report from this inquiry makes a valuable contribution to the delivery of our programmes and initiatives to tackle the cost-of-living crisis, particularly in the current economic and political climate, and it was a far-sighted decision to undertake this inquiry, and we thank the committee for their evidence, their insights and their recommendations. As your report makes clear, the cost of energy has become increasingly influential in determining the level of fuel poverty in Wales. The energy price increase assault on our living standards has had a devastating effect already on households who are least able to pay. Many can no longer afford the essentials on which we all depend in our everyday lives; the inconceivable cruelty of families not being able to put food on the table or provide basic essentials, such as heating and lighting, in 2022 is hard to believe but is the reality for so many.

Just reporting on some of the actions and many more, of course, that have been brought forward in a statement yesterday by the First Minister, but actions since the report was published on 4 August, I met with Ofgem about changes being made to the frequency of changes to the price cap. And I met Ofgem again on 26 August, with the Minister for Climate Change, the day the October price was announced, and we expressed deep concerns at the price-cap increase to £3,549. The new Prime Minister has taken steps to act upon the concerns we've raised, with the announcement of the energy price, and I look forward to the UK Government's update on Friday. However, we remain concerned—a price cap of £2,500 over two years fails to provide additional targeted support to those who need it most. The UK Government has the financial firepower and moral responsibility to better support householders through this crisis. And we've consistently called for a social domestic energy tariff, set lower than standard tariffs, to better protect low-income households. We've called for a significant increase in the rebate paid through schemes, such as the Warm Homes discount, the permanent removal of all social and environmental policy costs from household energy bills, and for these costs to be met from general taxation, at least part-funded by windfall tax on the excess profits being enjoyed by gas and oil producers.

On 17 February and 11 July, with the support of my Cabinet colleagues, the Ministers for Climate Change and Finance and Local Government, I hosted summits to explore what more the Welsh Government can do to support households through this difficult time. But on 26 May, I also met with energy suppliers, including heating oil companies, to seek assurances that steps are being taken to protect vulnerable households as winter approaches. And we are taking action, investing more than £318 million since October on a range of measures to help those most in need. I've expanded the support available through the discretionary assistance fund to households living off grid, to help with the purchase of heating oil and liquid gas, particularly important for rural communities and raised in this debate today. More than 900,000 households have received their £150 cost-of-living payment this year, and the winter fuel support payment of £200 reached more than 166,000 households. The Welsh Government fuel support scheme is now up and running for this coming winter, and we will be open for applications from next Monday, 26 September.

And I welcome the recommendations from the Equality and Social Justice Committee on the significant Welsh Government cost-of-living initiative. As I said in my response to the recommendations, we are working with the local authorities to ensure that we can reach out and improve that take-up, but also, as Members will know, we have extended the scheme, which means that up to 400,000 households will be eligible. People on child tax credits, pension credits, disability benefits, carer's allowance, as well as contributory benefits and those receiving help from the council tax reduction scheme to pay their council tax bill will now all be eligible for the £200 payment. I know that all partners and, indeed, all Members will play their part to ensure that there is a robust take-up of this scheme. I've written to the Chair of the Equality and Social Justice Committee providing further information on the take-up of the fuel support scheme introduced last year, and I will update that as we get further information.

But, Members will know that we're also funding the Fuel Bank Foundation to expand its network, to offer support to the most vulnerable households across Wales that have to prepay for their fuel. Working with our partners in the Trussell Trust, I was pleased to launch this in Wrexham, where their foodbank had already developed this scheme and also learnt from Blaenau Gwent foodbank, who were already engaged with the initiative. But, the scheme will also provide them with support to top up their prepayment meter or purchase a full tank of heating oil. 

We continue to call for the removal of standing charges from prepayment meter tariffs. As a matter of priority, we're working with stakeholders to make sure that people are aware of the short-term support on offer to help with the immediate crisis. And following the success of the two 'Claim what's yours' campaigns, we have helped people claim more than £2.7 million in extra income, and we will run a third 'Claim what's yours' campaign to help people access all the benefits from Welsh Government, UK Government, and the support that they're entitled to. But, longer term action is needed, as made clear in the recommendations in this report. Improving the energy efficiency of our homes and ensuring that we use only the energy we need to create a decent and safe home is our long-term ambition. Our housing retrofit programmes are based on principles of treating the worst first, on a fabric-first basis, with heating measures designed to deliver a just transition to low-carbon heating for the health and well-being of our people and the planet. 

The consultation outcome report on the next iteration of the Warm Homes programme will be published later this year. The Minister for Climate Change will also publish a written statement setting out how these recommendations will be considered in the next iteration of the Warm Homes programme. And at the same time, we continue to invest in the current Warm Homes programme, increasing its budget by 10 per cent this year to £30 million, with a total investment of £100 million in the current three-year budget settlement. This will support approximately 5,000 households with much-needed free home energy efficiency measures by the end of this financial year. The Nest scheme is also expected to provide free, impartial energy-efficiency advice via the helpline to over 1,600-plus households per year. This will be extended from November with a winter fuel campaign to provide advice and signposting to vital support services, as I've outlined.

Finally, the Nest contract also continues to innovate, and this year has included the installation of solar panels. This will shortly be supplemented with the introduction of battery-storage solutions, which remain recommended through the whole-house assessment. The combination of these two measures will help to mitigate the worst of the recent indiscriminate energy price rises, making the solar energy accessible to households during peak times, when the solar photovoltaics are less efficient. We obviously take other evidence today from the debate in terms of access to the grid.

On behalf of the Welsh Government, I again welcome this valuable report, accepting 21 recommendations in full and two recommendations in principle. Those will be delivered, and we'll seek to implement these recommendations with the importance that they deserve, supporting our collective efforts to respond to the cost-of-living crisis and tackling poverty in all its forms, including fuel poverty. This will also provide sustainable actions in response to the climate emergency.

Photo of David Rees David Rees Labour 4:24, 21 September 2022

(Translated)

I call on Jenny Rathbone to reply to the debate. 

Photo of Jenny Rathbone Jenny Rathbone Labour

Thank you very much. Thank you to all the people who took part in the debate, particularly those who haven't been involved in the committee's deliberations. I think it's particularly important to hear from other people who are able to give a particular specialist view, whether it's of their constituency or of their specialist interest in fuel poverty. I think that there is still quite a lot of need to clarify a lot of the detail on all of this, and the committee is going to follow up with some written correspondence so that we can get a better idea of exactly (a) how we're going to respond to the current crisis, and, (b) the latest Warm Homes programme, which I appreciate is the Minister for Climate Change's remit, and she is currently not able to be with us. So, we look forward to her very important plans for the long-term future of our country.

Photo of Jenny Rathbone Jenny Rathbone Labour 4:25, 21 September 2022

Just looking at what other people have said, we need to—. As Altaf has reiterated, a recession beckons, and therefore things can only get worse. Sioned Williams spoke about the damp conditions that families have always had to put up with every winter, regardless of the current crisis. I think several Members spoke about the need to really take on board the audit office's report, which was published nearly a year ago now. Now, the Welsh Government has accepted all its recommendations, and to do the Welsh Government credit, we are now seeing regular evaluations of programmes, to ensure that programmes are delivering on what they're supposed to be doing.

It was very useful to hear from Mabon ap Gwynfor about the particular problems that have been faced by one of the poorest and coldest communities in his constituency, where the contract went to an organisation that wasn't familiar with the topography of the area, and although solar panels were recommended and were installed, it didn't maximise the benefit because it didn't go with insulation, and that is something that came out of our report. One of the reasons why Carolyn picked up on the issue of air source heat pumps is there really isn't any point in installing air source heat pumps in homes that haven't been insulated, because it just actually increases the bills, because then you've got a massive electric bill instead of a massive gas bill. So, I think the emphasis that the Minister put on fabric-first as the way forward is definitely a very useful one, because we definitely need to—. Even if we don't have the technology today that will suit particular homes, we need to ensure that we're not losing the heat that we are currently losing.

One of the things that Jane Dodds said was to point out just how the last Warm Homes programme fell short of what we need to do to protect our families and make our own contribution to the climate emergency. So, in 2020, it would have taken 111 years to complete the insulation of all our homes, and in 2021, with the rate at which things were being done, it would take 138 years. The planet can't wait for that. We absolutely have to get on with it now. So, I think that one of the things that we absolutely have to, all of us, do is ensure that people are thinking 'insulation, insulation, insulation' as well as 'renewables, renewables, renewables.'

Two little stories. One is: I spoke to somebody on the doorstep this morning, saying, 'I see you're having your roof replaced, had you thought about putting solar panels on your south-facing roof?' 'Oh, that's a good idea—I hadn't thought of that.' So, I said, 'Well, you really do need to get on with it now, because you've got the scaffolding up, and your roofers, who are not qualified to do this work, will tell you that they'll be able to be instructed as to where you've got to put the reinforcements to install the solar panels.' Otherwise, you undo all the good work before you can install new ones. The second is a small business who absolutely delighted me by telling me that he got 17 solar panels installed just in the last week, and showed me the little meter that showed just how much energy he was generating, and therefore how much money he was saving, which will keep his business alive. Unless businesses are thinking along these lines, 'How can I do something?'—. If you've got the money, you need to invest it in insulating your home and installing renewables. There is no alternative to this. So, I think we have very significant challenges ahead as the Audit Wales report absolutely made clear, and the statistics speak for themselves, I'm afraid, in terms of the difficulties we’re facing this winter.

One of the points that Sarah Murphy raised is what happens to people who can’t go to warm hubs? If you’re terminally ill, you probably don’t want to be mixing with a lot of other people. How are they going to be kept warm this winter? Because they’re not going to benefit from warm hubs and they may be desperately trying to ensure the best life that remains for that individual, but how are they going to do that without impacting on the lives of the other members of the family, and that’s something I think we really do need to think about? Thank you very much for all your contributions.

Photo of David Rees David Rees Labour 4:30, 21 September 2022

(Translated)

The proposal is to note the committee's report. Does any Member object? No. The motion is therefore agreed in accordance with Standing Order 12.36.

(Translated)

Motion agreed in accordance with Standing Order 12.36.