I beg to move,
That this House has considered fuel poverty.
I am delighted to open the first annual debate on the important issue of fuel poverty. The fact remains that far too many of our fellow citizens and constituents struggle to afford to keep their homes at reasonable, comfortable temperatures. As I will argue, we are making progress, with some 780,000 fewer fuel-poor homes in 2014 than in 2010, but there is a lot more to do to meet the demanding targets we have rightly set ourselves, as a country, for 2030. It is quite right that the Government of the day are regularly held to account for what they are doing, and encouraging others to do, in the face of this stubborn and complex social challenge.
The debate is important because it is an opportunity for Government and Parliament to hear directly from MPs from across the nation about their experience and insights. In our day-to-day work, we, as MPs, come across the consequences of fuel poverty, not least its impact on the wellbeing and health of our constituents.
Before we get into the discussion, I want to set out the context. Over the past five years, Government have taken action to overhaul the framework for tackling fuel poverty in England. At long last, we have a long-term strategic framework for action on fuel poverty, which is rooted in the 2015 fuel poverty strategy and the long-term statutory target. The journey began in 2012 with the independent review of fuel poverty led by Professor Sir John Hills. The review found that fuel poverty is a distinct issue, separate from income poverty.
However, the debate clearly links to other areas of policy, such as the action the Government are taking to improve living standards by means of the national living wage and by increasing tax thresholds for the lowest-paid. Likewise, we could not have made clearer our determination to make sure that the energy market works for all. Ofgem’s introduction of a prepayment meter tariff cap is a welcome first step. As the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman), indicated last week, a consumer Green Paper will be out shortly.
Today, I want to focus on the policy framework that is specific to fuel poverty. The journey to this point started with Professor Hills’s review, which reflected on previous activity and measures to tackle fuel poverty. The review highlighted the fact that although the 10% indicator that had, until that point, been used to measure fuel poverty was well-meaning, it was fundamentally flawed. In 2013, the Government confirmed that the findings of the Hills review of fuel poverty would be adopted, including the low income, high costs indicator. That measure finds a household to be living in fuel poverty if its income is below the poverty line and it has higher-than-typical energy costs.
In 2014 the Government introduced the fuel poverty target for England. The target is to ensure that, so far as is reasonably practicable, fuel-poor households are improved to a band C energy efficiency rating by 2030. In 2015 we saw the publication of “Cutting the cost of keeping warm: a fuel poverty strategy for England”, which set out the principles that the Government would apply and the approaches to be taken when making progress towards the fuel poverty target. The strategy set out the importance of effective levels of public accountability and the role that the Committee on Fuel Poverty, a non-departmental public body formerly known as the Fuel Poverty Advisory Group, will play in that. I welcome the insight and challenge that the committee brings as we look to tackle the serious and long-term societal issue of fuel poverty.
Recognising that 2030 is some way off, the strategy includes interim milestones to guide activity in the shorter term, helping to focus our attention on making progress as we move forward. The milestones are to ensure, so far as is reasonably practicable, that fuel-poor households are improved to a band E rating by 2020 and to a band D rating by 2025. That is the framework.
The fuel poverty target is certainly ambitious, and I have not heard anyone argue to the contrary. The band C target is set at a level that only 7% of fuel-poor households currently enjoy. We are aiming high, and it is right for us to do so. As the Committee on Climate Change reiterated in its report last week, the target is extremely challenging. However, we must be clear that meeting that challenge may provide huge benefits for households that need support. Improving those E, F or G-rated homes to band D can reduce energy costs by an average of £400. I am pleased to be able to say that although the challenge is significant, progress is being made.
Looking to our 2020 milestone, the percentage of fuel-poor households living in homes rated band E or higher has already improved from 79% in 2010 to 88% in 2014—the latest year for which statistics are available. Looking at the 2025 milestone, we see that the percentage of homes rated band D or higher has improved from 29% in 2010 to 59% in 2014.