I am sad to say that I do agree. I have seen the same thing time after time in houses across my constituency. I have seen people sitting with two, three or four layers on and a blanket over their knees. If there is any heating, it might come from a single bar on an electric fire or something of the sort. With the winter fuel payment, we have to understand that there is a generational difference: the people who were getting that payment were in large part brought up in an age when people did not borrow; they lived within their means. Taking away that money puts them more acutely at risk than people of other ages. When we devise policy, we sometimes have to look at the social and psychological impact as much as at the political and the economic. The hon. Member makes a good point.
In communities such as mine we have older, much less energy-efficient housing stock. Some elements of last week’s Budget may mitigate the worst effects. It did not have the comprehensive strategy that I wanted, but in the interests of fairness we should acknowledge that if the increase in the minimum wage leads to increased household incomes, it will have an impact on some people living in fuel poverty. The retention of the state pension triple lock will also provide some mitigation. To that extent, those things are welcome, but in the context of the wider influences on fuel poverty, they will hardly hit the sides. The energy price cap has now been put up to £1,717, which is an increase of £150, and it seems likely that there will be a further increase come January. The situation among the fuel-poor is only likely to get worse, which is where the hon. Member’s point about the winter fuel payment comes in.
It is true that the mechanism of pension credit is there to mitigate the worst effects, as I anticipate the Minister will say, but we have known for 20 years that there are problems with all the tax credit schemes and with the variation in uptake across the board. Again, it is a generational thing. Knowing the community that he comes from, the Minister will know that among older people in parts of the country there is still a real stigma attached to a means test. They will always be less likely to apply for something that they could otherwise have been given by right. For those who live in fuel poverty, it now feels as though anything given with one hand is being taken away with the other.
What can we do? What tools have we at our disposal? We have the warm home discount and the energy company obligation scheme, to which I will turn in a minute, but I first wish to raise a couple of more specific issues that relate to tackling fuel poverty in communities such as mine.
The Minister has already heard me raise the question of an isles tariff; in fact, we met earlier this week to discuss it. Orkney and Shetland has been at the heart of supplying the nation’s energy needs for the past 40 or 50 years, as we have played host to the oil and gas industry. Shetland now has one of the biggest onshore wind farm developments anywhere in the country, but in the shadow of the turbines are some of the greatest and most acute problems with fuel poverty. That is now generating genuine frustration. As we play host to major energy developments—latterly renewables—there is very little or no community benefit for those who host them.
Serious attention now needs to be given to the question of an isles tariff. It does not need to be an isles tariff; it could be something that applies across the highlands and islands and in other areas that are particularly badly affected. I am pretty sure that Ofgem will not be keen—as far as I can see, Ofgem is never keen on anything that will actually make a difference—but if it can accept the principle of differential treatment through a social tariff, which is now the subject of a consultation, a geographical tariff should also be given serious consideration.
Many of my constituents rely on electric storage heating. Access to “total heating with total control” tariffs, which were designed by the former hydro board specifically with communities like mine in the highlands and islands in mind, still provides them with the best and cheapest available source of heating. However, it does not allow them to take advantage of different tariffs when switching or other ways of saving money are available. It requires two meters, one of which has two readings. As smart meters are rolled out, it appears that although they may be smart, they are not smart enough to do something that the old technology did quite easily.
There is then the question of the radio teleswitch, which is the delivery mechanism for many tariffs. It is due to be switched off in 2025, as the last of the BBC analogue signal is decommissioned. We all need to cross our fingers and hope it lasts until 2025, because it could quite easily fall over at any point. When it does, the string and chewing gum that are keeping it going at the moment will simply no longer be enough.
Will the Minister give me an update? Before the election, his predecessor agreed to hold a roundtable. The election intervened, but I am pleased to hear that the roundtable went ahead and that the different players were brought together in the room. It appears to have made some progress, but my constituents would be keen to hear the details.
The Government’s manifesto promised a strategy with a warm homes plan, whereby £13.2 billion would be committed to address fuel poverty. The Budget last week allocated £3.4 billion over three years. That is a sizeable chunk of money, but it is not the £13.2 billion that we were promised. Presumably the remaining £9.8 billion will have to come in years four and five of this Parliament if the Government’s commitment is to be met.
I have two problems with that approach. First, it will leave a lot of people in fuel poverty for another three years while they wait for the money to come. Secondly, if the money comes at all, we will be shovelling it into wheelbarrows to get it out over the two years, a situation that always brings the law of unintended consequences into play, as we have seen time and again with energy efficiency measures, renewable energy development and so on. There is money that must be spent within a target time, but there is neither the existing labour force nor the skills base to deliver the work, so a whole load of fly-by-night companies are set up that come into our communities from outside, do substandard work, go away and eventually go bankrupt while constituents are left to pick up the pieces.
It is obviously for the Treasury to decide how the money will be spent, but looking towards years three, four and five of this Government, can the Minister give me some assurance that there is a view towards a strategy that will use the money that is currently committed, that we will have a clear idea, and that we can start planning now how to use any money that comes in future?
The two existing vehicles for alleviating fuel poverty—the warm home discount, which reduces bills by £150 a year for those who qualify, and the energy company obligation, which assists people with energy efficiency adaptations, renewable energy adaptations and so on—are both means-tested, which takes us back to the question of cliff edges. Most concerningly of all, those measures are due to end in 2026 unless they are renewed by the Government. The Minister will have an easier conversation with the Treasury if he bears it in mind that the funding for the schemes comes not from the Treasury but from the energy companies.
We need to know that there is a plan for the continuation of those schemes or for something that will seek to achieve the same end. It would be good if that plan could come as part of a Green or White Paper outlining a strategy. That is what is lacking at the moment: we have a scheme here, a scheme there, an idea of this and an idea of that, but there is no overarching strategy to ensure the best possible delivery. At the beginning of this debate, I gave the stat that 6 million homes across the whole United Kingdom are living in fuel poverty. That is not something that we should be prepared to live with.