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House of Lords
Wednesday, 17 May 2006.
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Salisbury): the LORD CHANCELLOR on the Woolsack.
The Lord Chancellor: Leave of Absence
The Secretary of State for Constitutional Affairs and Lord Chancellor (Lord Falconer of Thoroton): My Lords, before business begins, may I take the opportunity to inform the House that I will be undertaking a ministerial visit to Nottingham on Friday, 19 May? Accordingly, I trust the House will grant me leave of absence.
Fuel Poverty
Lord Palmer asked Her Majesty's Government:
What steps they are taking to reverse the rise in the number of pensioners and low-income families experiencing fuel poverty.
The Minister of State, Department for Environment, Food and Rural Affairs (Lord Rooker): My Lords, the Government's target is to eradicate fuel poverty in vulnerable households in England by 2010. In the 2005 Pre-Budget Report, the Chancellor of the Exchequer announced that an additional £300 million would be made available to tackle fuel poverty, taking the total fuel poverty funding in England alone to more than £800 million over the years 2005 to 2008.
Lord Palmer: My Lords, I thank the Minister for that reply. Will Her Majesty's Government consider a top-up payment that could be set against the credit for fuel bills, thereby alleviating the enormous geographic differences between people living on the north coast of Scotland and those living on the south coast of England?
Lord Rooker: My Lords, I will take advice on the noble Lord's novel suggestion because I cannot answer it off the top of my head, although I suspect the answer is no. There is a variation. I have answered quite specifically in some ways for England because Defra is responsible for England, although there are targets for the United Kingdom. I have the regional figures, which do show disparities and high take-up levels, but I will speak about the regions of England today rather than about Scotland. Of course, the winter fuel payment will remain for the lifetime of this Parliament, which will be a considerable help.
Baroness Gardner of Parkes: My Lords, does the Minister not think that there is quite a problem in that those who are least able to afford the fuel are the ones who have to pay by either pre-payment or key-charge meter? Is there any answer to that?
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Lord Rooker: My Lords, the noble Baroness is absolutely right. It is even worse than that for the most vulnerable in terms of fuel poverty. Some 30 per cent of households in fuel poverty are not even on the gas network, compared with 13 per cent of the national population. Gas central heating is certainly the most effective way of keeping oneself warm. It is all very well me saying that you can save money paying by direct debit, but you have to have a bank account, and the poorest people do not necessarily have one. It is possible to save up to £40 a year by switching suppliers, but I accept that that does not really meet the needs of the poorest in our nation.
Lord O'Neill of Clackmannan: My Lords, although I welcome the Prime Minister's announcement last night that there will be no new nuclear build and that we now have access to money which we did not have before as a result of his taxation of the excessive profits of the oil and gas companies, does my noble friend realise that many households, particularly those with young, chronically sick and disabled children, will still not benefit from the winter fuel allowance that pensioners are receiving? Would it not be possible to use some of the remaining revenues from the welcome tax on the North Sea profits by making it available to poor and disadvantaged families by way of some form of winter payment, and can he pass that message on to the Chancellor in the hope that he might make a Statement in the autumn to that effect?
Lord Rooker: My Lords, I will certainly pass that message on to the Chancellor, but I would not want the House to be misled by my reference to the winter fuel payment; I realise that that is specific to pensioners. Our target is vulnerable households; in other words, the elderly, the disabled, the long-term sick and families with children. The warm front scheme of £800 million over three years, which is the scheme I referred to, has already helped 1 million households since June 2000. Many of those households are of the exact type that my noble friend described.
Lord Dixon-Smith: My Lords, one of the best ways to help the fuel poor is to improve the insulation of their homes. A large proportion of that has been dealt with until now under the energy efficiency commitment, under which the electricity suppliers fund the insulation industry. The result has been a large expansion in that industry. Fifty per cent of that assistance has to go to the lower quartile of the income sector, which includes the fuel poor. I understand that the programme has been so successful that funding is now being reduced for the industry. Certainly, my understanding is that 80 per cent of insulation suppliers have had their funding from this programme reduced by 50 per cent Does the Minister have any idea of the Government's intentions to maintain the previous level of insulation improvement?
Lord Rooker: My Lords, as I said, in the Pre-Budget Report, which was only last November, the Chancellor announced an extra £300 million on top of what was already being spent, taking the budget to
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£800 million. That is not just for central heating, but also for insulation and other matters. I do not know how much the industry was spending, but the target is for vulnerable households. It does not apply just to central heating. It is for a range of assistance that they can get through the warm front scheme, which is managed for the Government by Eaga Partnership. As I said, more than 1 million households have gained since 2000, and many people—millions—have been lifted out of fuel poverty over the past few years.
Lord Barnett: My Lords, how do the Government define when someone is in poverty as opposed to fuel poverty?
Lord Rooker: My Lords, one does it by looking at the household and the income. As I said earlier to my noble friend, there is a range of people, and assessing the numbers of benefits available to people on low income or people with a disability, and reaching those vulnerable households, is done by means of demographics. It is a matter of people applying, but millions of people have been taken out of fuel poverty on that basis. In 1996, 5 million people were alleged to be in fuel poverty; by 2003, that was down to 1.2 million. I accept the recent increase, because those are the latest figures I have, but energy prices have increased and therefore that will go up. It is done basically through the income scheme and the income of the families concerned.
Lord Marlesford: My Lords, if pensioners who pay the top rate of income tax of 40 per cent—which basically means people with a taxable income of £40,000 or more—were to be taxed on the winter fuel payment and that tax were handed to pensioners who are not paying full tax, would it help?
Lord Rooker: My Lords, it would be a complication of the tax system. The winter fuel payment is paid across the board to stop the problem of means-tested benefits, which is that they do not get to the people you want to get them to. For those who do not need it, there are plenty of avenues where they can put the money, such as Age Concern or local schemes. If it was not paid across the board and there were an element of application or means-testing, it would not reach the vulnerable households we are trying to get to.
The Countess of Mar: My Lords, is it not the case that many of the people who live in these vulnerable households will already be on income support? Do allowances for heating come into the calculations for income support? I assume that they do. Is that not a means by which they can be adjusted—in other words, increase income support for fuel when it is necessary?
Lord Rooker: My Lords, I do not think that that is the case. People are looked at on the basis of their income and I do not think that income support necessarily takes account of that. On the other hand, when applications are made for the warm front scheme, an assessment is carried out of the house or
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dwelling where the people are living to see how they can best be helped to save money. Virtually no one in this country could not save money on fuel by means of various adjustments around the house.
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