14:30 Roger Williams (Brecon and Radnorshire) (LD)

The Energy Bill Revolution is calling for the revenues from two carbon taxes—the EU emissions trading scheme and the carbon price floor—to be invested in a massive energy efficiency programme that would eliminate the scourge of fuel poverty once and for all. Compared with much of Europe, the UK has a bigger fuel poverty problem because of our poor quality housing.

Improving the poor quality has to be the focus of solving the problem. Investing in better housing should be the next Government’s top infrastructure priority and funds need to be found. The last Liberal Democrat conference passed policies to recycle carbon taxes for that purpose. Investing in better housing is also good for jobs and the economy, as well as having major health benefits.

In terms of prices in the UK, I accept that lower prices are always welcome, but we must recognise that the Department of Energy and Climate Change quarterly energy prices update shows that in 2011 the cost of a unit of domestic electricity in the UK, including taxes, was the third lowest in the EU15 countries. Similarly, the cost of a unit of gas was the second lowest in the EU15. Buying a unit of energy in the UK is cheap by international standards. What makes the bills expensive—the bills are the key issue—is that we have to buy so many units because our houses just do not keep the heat in.

The Energy Bill Revolution has pointed out that the Treasury is already receiving the proceeds from the auction of carbon permits under the EU emissions trading scheme, which along with money from the carbon price floor, may raise an average of £4 billion over the next five years. That money ultimately comes from those who pay energy bills, and the Energy Bill Revolution suggests that it should be invested in energy efficiency measures to help cut those bills. I am proud that as part of the zero-carbon Britain policy that we passed at our most recent party conference, the Liberal Democrat party decided, in common with other EU Governments, to allocate revenue from the EU ETS and the carbon price floor to an energy efficiency programme designed to assist households suffering from fuel poverty. I hope that the Minister will take that large ask seriously and consider the use of carbon taxes to achieve it. I also ask him to consider how to support hard-to-treat homes, because improvements to easy-to-treat homes, cavity walls and loft insulation will all soon be done.

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14:59 Albert Owen (Ynys Môn) (Lab)

One statistic, which comes from the Department of Energy and Climate Change, is that, on average, fuel poverty in rural areas is twice that of urban areas. The fuel-poor are concentrated in many of the rural areas of the United Kingdom. I am glad that the Minister is present, because he has given evidence to the Energy and Climate Change Committee on a number of occasions, and I know that he is sincere in his wish for an all-UK solution to fuel poverty, whether for those in a large urban town or city or those in a small rural area.

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15:14 Mr Mark Williams (Ceredigion) (LD)

The Energy Bill Revolution campaign, in whose measures I am particularly interested in this debate, calls for revenues from two carbon taxes—the EU emissions trading scheme and the carbon floor price—to be invested in a widespread energy efficiency programme in the hope of eliminating poverty. The campaign believes that investment in improving the energy efficiency of the UK’s leaky homes would save the average family money, provide the jobs mentioned by the hon. Member for Bethnal Green and Bow (Rushanara Ali) by developing the green economy, and boost growth. Incidentally, it has also undertaken polling that suggests that it would be a popular form of investment. Most people feel that it would bring them more benefit than some of the more controversial road or rail projects.

I want to mention some local initiatives. The hon. Member for Hexham (Guy Opperman) spoke about the need to develop bulk-buying oil syndicates; 70% of my constituency, including my house, does not have access to mains gas, and I wonder what the Department of Energy and Climate Change is doing to support the development of such syndicates, for domestic oil in particular. There have been schemes in the past. I think that a predecessor of the Minister’s alluded, in a letter, to a competition; I think it is less a question of a competition than of a drive to encourage the development of oil syndicates. I declare an interest, because my family is the beneficiary of one, organised by an inspiring lady, Jane Wakeham, in the village of Llanddewi Brefi. She has built an oil syndicate for her community; we have talked about the big society, but I think that that initiative was always there. What should the Department do to encourage the development of such syndicates? We need them on a much bigger scale, not least in my area, which is off-grid for gas.

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15:28 Julie Elliott (Sunderland Central) (Lab)

There is wide agreement throughout the House that whatever measurement is used, the number of people in the country classed as fuel-poor is too high. It should be a source of shame that in Europe only Estonia has a higher proportion of its population in fuel poverty. Things appear to be getting worse, and among the reasons for that is the fact that the issues raised in the debate are so complex and wide-ranging that there is not one solution. There are knock-on effects for many Departments. Housing issues have been mentioned a number of times in this debate, but they are not the responsibility of the Department of Energy and Climate Change. There are also issues about the supply of energy to off-grid homes. The solutions to these difficulties will be many and multifaceted, and we must recognise that.

It should go without saying that energy efficiency must also be a key consideration when combating fuel poverty. However, the Government’s record on fuel poverty and energy efficiency has been hugely disappointing. The energy company obligation in its original form, which I should remind Members was the only energy efficiency programme available to the public under this Government, was expensive, bureaucratic and poorly targeted at the fuel-poor. Of course, any scheme that attempts to address fuel poverty must be welcomed, particularly after the Government scrapped Warm Front. However, ECO was a scheme of only modest ambition, aiming to lift only 125,000 to 250,000 households out of fuel poverty, and it has been condemned by the Select Committee on Energy and Climate Change as

I must comment on the reference the hon. Member for Brecon and Radnorshire made to Liberal Democrat party policy on energy. Much of it is honourable, and much of it I would not disagree with. However, it is a shame that the Secretary of State for Energy and Climate Change, who is a member of the Liberal Democrat party, does not vote in the House for Liberal Democrat policy. A particular example is the 2030 decarbonisation target. He is on public record as saying that he agrees with it, but he does not vote for it. Everyone I meet in the sector who invests in energy, whether they are in insulation or renewables, says that one of the things they want is that 2030 target, in order to secure investment. I had to draw attention to that.

Is my hon. Friend aware of the poll carried out for the Energy Bill Revolution group, which showed that 85% of people—a massive proportion—want the Government to prioritise energy efficiency and make it one of the key things that they use their investment in infrastructure for? Clearly, that would be a popular policy, as well as one that would help to address the implications of climate change and take people out of fuel poverty.

I thank my hon. Friend for that intervention. Fuel poverty and energy efficiency are important issues. Whenever I knock on doors and talk to people, they are among the main issues that they are very concerned about. People are very worried about their heating bills, and tackling heating bills is not only about tackling energy costs at source but about ensuring that homes are insulated as well as they possibly can be, so that the amount of energy used is as low as possible; that is important because of the impact that it would have on not only climate change, but household bills. Of course, it is not just in the domestic market that energy is a key factor; energy bills are one of the biggest factors in industry, and in employing people. The knock-on implications of energy are massive, so getting it right is very important.

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15:41 The Minister of State, Department of Energy and Climate Change (Michael Fallon)

The hon. Gentleman asked about hypothecating some of the carbon taxes towards this objective. If that were to involve additional spending, the revenue from those taxes would have to be produced from elsewhere, or else we would become involved in additional borrowing. None of that is easy at a time when we still face a deficit of more than £100 billion. He asked specifically about extending the gas grid, and the grid is being extended in the current seven-year period that runs from 2013 to 2020. The aim is to connect some 75,000 off-grid homes each year. Those homes will be reasonably close to the existing grid, but that is expensive and a contribution has to be made by the householder, by some other agency or by the local authority. I do not want him to be under the impression that nothing is happening. I will take his points back to the transmission operators and the companies, including his view that more should be done. The aim is to connect more homes to the grid in each successive year.

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