Special Report on Fuel Poverty

Transcription

1 UK GENERAL ELECTION 2015 Special Report on Fuel Poverty Supported by

2 Introduction Energy Action Scotland is the national charity working for warm, dry homes and an end to fuel poverty in Scotland. With more than 1 in 3 Scottish households struggling to afford to heat their homes to an adequate level, Energy Action Scotland and its members across the country are keen to know the policies of the political parties on the issue of fuel poverty in Scotland. Fuel poverty is caused by a combination of factors. The three main causes are low disposable household income, the high price of domestic fuel and poor energy efficiency of the home. The responsibility for these factors is split between matters reserved to the UK Government and those devolved to the Scottish Government. All of them have to be addressed in order to eradicate fuel poverty in Scotland. The Housing (Scotland) Act 2001 created a statutory duty to ensure, so far as is reasonably practicable, that people are not living in fuel poverty in Scotland by November Energy Action Scotland created the following questionnaire for political parties fielding candidates in Scotland for the UK General Election on 7 May All the responses received from such parties will be published. The Questions 1. Please outline your party s commitment to ending fuel poverty in Scotland and indicate how you would meet the statutory target to eradicate fuel poverty by How would your party protect fuel poor, vulnerable and low income households from high or rising domestic fuel prices? You may wish to comment specifically on energy suppliers social initiatives such as the current Warm Home Discount or on energy efficiency programmes such as the current Energy Company Obligation, particularly in light of this funding being devolved in future following the Smith Commission s proposals. 3. What are your party s proposals in relation to the Winter Fuel Allowance and Cold Weather Payments, both at a UK level, and at a Scottish level in relation to the Smith Commission proposals? 4. How would your party ensure sufficient resources are made available to help the fuel poor, and in particular to ensure their living conditions do not impact negatively on their health? 5. Do you have any brief additional comments in relation to how your party would tackle fuel poverty in Scotland? Parties responded to the questions as follows

3 Scottish Conservative Party 1. Political parties across the spectrum have recognised that fuel poverty is a problem we cannot afford to ignore. Eradicating fuel poverty, as far as reasonably practicable, will require action in different areas of policy as well as different levels of government - local, Scottish and UK Government. The three most significant factors influencing fuel poverty are energy prices, energy efficiency and household income. The Conservative-led Government has taken a range of measures, which resulted in falling energy bills over the last five years, introduced an unprecedented energy efficiency investment programme and, crucially, got the economy back on track with 1.9 million more people in work and wages finally growing in real terms too. 2. The Conservative-led Government has taken numerous steps to tackle fuel poverty. Energy bills are now falling and all the major suppliers are passing on the savings from lower global wholesale prices. The Government has taken 50 off the average energy bill by reducing the green levies placed on household bills and it will continue to meet with the big firms to make sure that hardworking households are getting a fair deal. We have helped increase the number of independent energy suppliers from seven to 21, made it easier for customers to switch to better deals, slashed the number of tariffs to just 4 per supplier, and cut switching times in half. The cheapest energy tariff on the market is now 100 less than last year when Labour was calling for a 'freeze'. Energy efficiency plays a vital role too and the Green Deal offers households upfront finance to make energy efficiency improvements, paid for by energy bill savings. In addition, over 750,000 households have already benefitted under the Energy Company Obligation which targets vulnerable households and hard-to-treat homes. The Government's Warm Home Discount scheme helps around two million low income and vulnerable households with their energy costs by giving a 140 discount on electricity bills. In our 2015 General Election Manifesto, we pledged to ensure that every home and business in the country has a Smart Meter by 2020, delivered as cost-effectively as possible, so consumers have instant, accurate bills and can switch to an alternative provider within one day. We also pledged to support low-cost measures on energy efficiency, with the goal of insulating a million more homes over the next five years. 3. Our record on both of these measures is a positive one. Cold Weather Payments have been increased from 8.50 to 25 to help vulnerable people during periods of severe weather. Winter Fuel Payments have been maintained supporting over 12 million older people across the UK, whilst being reformed so that a "temperature test"

4 Scottish Conservative Party is now applied and expats in hot countries do not receive them. Conservatives have committed to protecting Winter Fuel Payments for the duration of the next Parliament. Following the Smith Commission, benefits included in the Regulated Social Fund are due to be devolved, including Cold Weather Payments and Winter Fuel Payments. Combining this with further welfare powers, the Scottish Parliament will have the flexibility to introduce its own schemes targeted at tackling fuel poverty and the Scottish Conservatives will develop policy with this in mind. 4. Nobody should be forced to live in conditions that negatively affect their health. There is a range of measures that we have introduced to help with rising energy bills as well as energy efficiency, as outlined above. In the long term, however, we need also need to look at our energy security and the sources of energy which significantly impact on bills. At the moment, we are relying too much on expensive energy imports and the Scottish Conservatives have long argued for an evidence-based approach to unconventional gas as well as further investment into conventional power stations. We have long criticised the Scottish Government's obsession with wind power, which provides an intermittent, unreliable and unpredictable source of power that requires backup at all times from conventional generation. 5. We have proposed a number of measures in our manifesto that are aimed at reducing Scotland's reliance on onshore wind power, including the stopping of any further public subsidies through energy bills as well as changes to the planning system in Scotland. We have also criticised the lack of awareness of the Council Tax Energy Efficiency Discount Scheme across Scottish local authorities, which needs to be promoted more for people to take advantage of it.

5 Scottish Green Party 1. Scottish Greens are determined to end the scandal of fuel poverty. Our General Election manifesto says, We will implement the world s most ambitious home energy efficiency programme, slashing energy bills and carbon emissions, creating thousands of jobs and helping end the fuel poverty crisis. Action is needed on 3 fronts; low incomes, high fuel costs and energy inefficient homes. In order to address energy inefficient homes we will tackle both new buildings through improved building standards and action to ensure compliance, and existing homes through a combination of increased funding for a national retrofit strategy and mandatory minimum energy efficiency standards at point of sale or rental. For existing buildings, we will amalgamate all of the existing energy saving schemes into one National Retrofit Strategy. This will be a largely universal scheme to offer the most cost-effective energy saving measures for free to everyone, regardless of income. This will be an area-based scheme, offering energy saving measures to every household in each area, starting with those areas with the highest rates of fuel poverty. We will address low incomes through measures such as a 10 living wage by 2020; greater redistribution of wealth and resources through for example our proposed wealth tax on the richest 1%, and in the long-term a citizens income scheme. We will address the cost of fuel through tight regulation of energy utilities to ensure they offer fair pricing structures to all customers and offer genuine social tariffs to their most vulnerable customers. We will also ensure that every home has a smart meter in order to remove the vagaries of estimated billing. We will also support local authorities to create local publicly owned energy companies to utilise the public estate for generation, leverage investment in schemes such as district heating, supply affordable energy to people at risk of fuel poverty and return a profit to local authorities. However, successive governments have failed to take enough action on fuel poverty, which makes eradicating fuel poverty by 2016 now impossible. This does not diminish the Scottish Green s determination to end the scandal of fuel poverty as soon as possible.

6 Scottish Green Party 2. During the Smith Commission negotiations we won agreement for the devolution of powers to determine how supplier obligations in relation to energy efficiency and fuel poverty, such as the Energy Company Obligation and Warm Home Discount, are designed and implemented in Scotland. At present, we believe that some of these energy efficiency schemes are flawed. Specifically, consumer protection is insufficient; incentives for whole-building energy retrofits are poor and measures to support those in fuel poverty are wholly inadequate. We would prefer to see a national retrofit programme as mentioned above but will be listening to evidence on the effectiveness of schemes and potential for change during the devolution process. 3. The Winter Fuel Allowance should not be means tested as suggested by other parties as it undermines the universal principle of the benefit. In the long-term, this kind of payment would be likely to be replaced by a citizen s income scheme. Cold Weather Payments should continue and be linked with advice and help for people to access energy efficiency improvements. 4. See answer to Q1. 5. We believe energy efficiency should be seen as a national infrastructure priority. Investment would support small businesses and apprenticeships in low carbon construction. There is a much greater role to play for the community-ownership of energy generation for many reasons including the fairer distribution of financial benefits.

7 Scottish Labour Party 1. Poverty in Scotland is on the rise again and we all must unite in tackling this blight on people s lives. It was the Scottish Labour Party which introduced the target to abolish fuel poverty in Scotland by 2016 and we have not faltered in our commitment or ambition. As a Party, we are as one in working across both Scotland and the UK with large-scale initiatives such as the proposed 2017 price freeze, the scrapping and replacement of Ofgem and our plans to challenge the market domination of the Big Six energy retailers. Here in Scotland our action will focus on energy efficiency, reducing consumption and making the most of alternative sources of energy. 2. We all know how much the last five years have hurt the poorest families with energy bills rising by an average of 300. That is why Labour will freeze energy bills until 2017, ensuring that bills can fall but not rise. We will also give the regulator the power to cut bills this winter. During our price freeze, we will reform the energy market so that it delivers fairer prices and a better deal for working families. The generation and supply businesses of the Big Six energy companies will be separated. They will be required to open up their books and they will have to sell their electricity through an open exchange. We will also simplify energy tariffs and make it easier for people to compare prices to get the best deal. We will end unfair contracts and automatic rollovers to more expensive tariffs. A tough new energy watchdog will enforce our reforms, with new powers to protect off-grid households in areas such as rural Scotland as well as strip energy companies of their licences if they repeatedly harm the interests of consumers. We will work with energy companies to review the cost of energy for the very poorest households, such as those using pre-payment meters. 3. We have taken the tough choice to restrict Winter Fuel Payments for the richest five per cent of UK pensioners, which allows us to guarantee that there will be no additional changes to the Winter Fuel Payments (nor to free TV licences or bus passes for pensioners) in Scotland. As well as taking action to support the 197,000 people in Scotland who use off-grid

8 Scottish Labour Party energy by bringing them under the remit of the new energy regulator, we will bring forward the payment of Winter Fuel Allowance to allow pensioners using off-grid energy in rural areas to take advantage of cheaper prices. 4. So many of our policies at this election are aimed specifically at helping those in greatest need, suffering from fuel poverty and cold damp housing. We will raise the minimum wage to more than 8 an hour and introduce the living wage across all public sector contracts raising household income for those experiencing in work poverty. Through abolishing the Bedroom Tax we will free up 175 million to establish a Scottish Anti-Poverty Fund. We will work with local authorities, housing associations and installers to support local area based energy efficiency schemes, retrofit existing properties as well as building more than 20,000 energy efficient new homes per year by We will regulate to drive up energy efficiency in the private rented sector and further develop micro-generation schemes, so that alternative energy supplies are more accessible. 5. A hot meal in a warm home is an essential of life and it is Labour s mission to secure that for every child, every adult and every pensioner in Scotland. It was Scottish Labour which introduced the central heating programme and fuel poverty targets, the Winter Fuel Allowance and Cold Weather Payments and it is Labour which continues to lead the way with our commitments on freezing energy prices and tackling poverty wages. Labour has always been and remains the party of ambition when it comes to social justice, welfare and fuel poverty.

9 Scottish Liberal Democrat Party 1. We are absolutely committed to ending fuel poverty in the UK. We know that ensuring that everyone is able to adequately heat their homes needs a package of measures, including a reduction in fuel prices as well as low-income households having a larger disposable income and homes being more energy efficient. 2. Our policy on energy prices has been to focus on increasing energy market competition, and to help consumers to save money by switching suppliers. This has resulted in 14 new entrants to the energy sector since 2010, over 3 million people switching suppliers last year alone, and an average energy bill reduction of 50 in Switching supplier can save the average household around 200 a year. But we want to go further, forcing energy companies to allow customers to change to any cheaper supplier in just 24 hours and extend the principle of gainer led switching - where the new provider organises the switch for you. Understanding the energy we use is key to cutting use, and helping people to reduce their energy bills. That is why we will give people easier to understand information about their own energy use, with a national rollout of smart meters for electricity and gas. We will guarantee that by 2017, anyone on a prepayment meter can choose a smart meter instead and we will help and encourage people to form new energy cooperatives so that they can benefit from group discounts for their energy bills. We will continue to back new entrants to the energy market, smart meters and faster switching to promote proper competition, aiming for at least 30% of the household market to be supplied by competitors to the Big 6 by We also know that we must help people with the cost of living. That is why in Government Liberal Democrats have delivered on their commitment to increase the Income Tax Personal Allowance, in fact, we have gone further than we promised and have raised the threshold to 10,600. We have lifted over 260,000 people in Scotland out of paying Income Tax altogether and have given over 2 million people a tax cut of 800. In the next Parliament, we want to go further and raise the Personal Allowance to 12,500 before considering if there are changes which we can make to the National Insurance system. We will also ask the Low Pay Commission to look at ways of raising the National Minimum Wage without damaging employment opportunities and we will establish an independent review to consult on how to set a fair living wage across all sectors. These measures will help to ensure that those on low and middle incomes will keep more of the money that they earn to support themselves and their families.

10 Scottish Liberal Democrat Party Thanks to our triple lock pension guarantee, pensions have gone up by over 800 since And we want to legislate in the next Parliament to make the triple lock permanent, guaranteeing decent pensions rise each year. We will continue to support measures like the Warm Home Discount, which help people to meet their energy costs. But in order to make the savings we need to make, we will look again at universal benefits, like the Winter Fuel Allowance, which pensioners who are higher rate taxpayers receive. Liberal Democrats have argued for years for home rule powers, with Sir Menzies Campbell producing his first report back in 2012 long before any other party. The Smith Commission Agreement means that more decisions for Scotland will be taken in Scotland and that we can address any distinctly Scottish problems, whilst holding on to the advantages of the UK such as the Pound, pensions, our armed forces and a strong UK voice in the world. We believe that the best way to end fuel poverty and to ensure that everyone lives in a warm home is to build a strong, sustainable economy. That is what we have done over the past five years, but there is still work to be done if we want to continue to see economic trends, like 0% inflation, which have a tangible effect on people's household budgets. 3. We will continue to support the Winter Fuel Allowance for pensioners who are basic rate taxpayers, but we will withdraw eligibility from pensioners who pay tax at the higher rate. We are pleased that in Government we have increased Cold Weather Payments by permanently increasing the rate to 25, from the earlier level of 8.50 a week, to help pensioners with their energy bills during the winter months. 4. The Liberal Democrats have put forward a clear plan to balance the books and to do so fairly, supporting those who need help and protecting low and middle-income earners. We will cut less than the Conservatives whose plans put in jeopardy our vital and valued public services, but we will avoid the reckless borrowing of Labour and the SNP who once again threaten to derail our economy with crippling debt interest payments. We are, for example, the only party with a clearly costed plan to give the NHS the 8bn it needs, with 800m for the NHS in Scotland.

11 Scottish Liberal Democrat Party We know that health and wellbeing are affected by far more than just the quality of health and care services and we will act to ensure that everything government does supports people to improve their wellbeing: we will work to improve the wider factors that affect our health like warm homes, good air quality and access to healthy food so everyone can have the best opportunity to lead a healthy life. Warming our homes is an essential part of the fight against climate change, and also vital to keep bills affordable. Energy prices in Britain are lower than the EU average but our bills are higher because our homes are so poorly insulated. That is why we will boost community energy efficiency by empowering the Green Investment Bank to develop innovative financial products for whole street or districtwide energy efficiency retrofits. We will develop a range of targeted, innovative programmes to support those aims looking at innovations like Insulation on prescription to link up the NHS with the fuel poverty agenda; an Off-Gas-Grid Strategy to help rural areas benefit from new technologies; and interest-free loans to fund energy efficiency home improvements. 5. Liberal Democrats will place our primary emphasis in tackling fuel poverty by keeping our economy strong and improving energy efficiency, but we will do so whilst tackling climate change. Studies consistently show that the most cost effective way to tackle climate change as well as to cut energy bills is to cut energy use. Liberal Democrats in government have already had substantial success in helping people reduce their energy use and so save money, households use of gas and electricity has been falling by on average 2.5% each year. But still many of our homes are far too leaky and that is bad for household bills and bad for our efforts to tackle climate change. While pushing prices down Liberal Democrats have invested in green energy. We have almost tripled the electricity generated from renewable sources and created the world s first Green Investment Bank. We have set out our Green Britain guarantee with five green laws to put the environment at the heart of government policy and establish a permanent legal framework for a prosperous, sustainable economy.

12 Scottish Liberal Democrat Party We can t trust the Tories to keep the lights on while fighting climate change; the SNP have missed their climate change targets for each of the last three years and Ed Miliband's plan to freeze gas and electricity prices have drawn criticism with experts claiming it would undermine investment in green energy. Liberal Democrats want to see falls in wholesale energy prices benefit consumers but the best way to do this is through greater competition rather than heavy-handed state intervention. Liberal Democrats understand the importance of ensuring that everyone has a warm home: we will build the strong economy and the fair society that we need to ensure that everyone has the opportunity to enjoy one.

13 Scottish National Party 1. It is a scandal that there should be any fuel poverty in an energy-rich nation like Scotland. In total, the Scottish Government will spend around 300 million over 3 years on fuel poverty and energy efficiency. The SNP Scottish Government are doing everything we can within our limited powers to provide a wide range of energy efficiency measures to individual households and to local authorities. We are actively working with councils and energy companies to ensure that Scotland continues to get its fair share of funding for efficiency programmes. In April this year the SNP Scottish Government announced further measures to tackle fuel poverty, taking their commitment to tackling fuel poverty and improving energy efficiency in 2015/16 to 103 million. This funding includes a new 14 million loans scheme, which will offer homeowners interest-free loans of up to 10,000 for energy efficiency measures. The Scottish Government has also launched the next phase of its Cashback scheme, which will see 10 million made available to homeowners and private tenants, and 5 million for social landlords. This scheme allows private sector households to claim up to 5,800 for installations recommended by an energy advice report, and households in remote areas will be entitled to greater amounts to cover the increased costs they face. In 2014/15, 1,700 social landlord tenants benefitted from the Cashback scheme while it delivered 4,000 energy efficiency measures to 3,400 households in the private sector. These measures, combined with 65 million for area based fuel poverty schemes and funding for support and advice to householders, takes the Scottish Government s commitment to tackling fuel poverty and improving energy efficiency in 2015/16 to 103 million. 2. We will support lower energy bills for consumers by pushing for the Energy Company Obligation to be funded through general taxation and not as a levy on energy bills. We will also support new powers to make sure that energy companies pass on the benefits of lower prices to consumers, saving households around 100 on energy bills based on recent wholesale prices.

14 Scottish National Party 3. We support retention of the Winter Fuel Allowance and Cold Weather Payments. 4. The SNP Scottish Government have committed 103 million to tackling fuel poverty and improving energy efficiency for this coming year. A new national Scottish Government funded scheme worth up to 224 million over seven years will launch in September, which will make homes easier and cheaper to heat. The scheme will install insulation, heating and low carbon or renewable measures in the homes of households who are identified as living in fuel poverty, with a wider range of options for people living off the main gas grid including solar thermal and biomass systems. It will also ensure that people who live in more remote parts of Scotland will get the same level of service, as the delivery costs can be varied between six regions. 5. Given Scotland s energy wealth, no one should have to live in fuel poverty in Scotland and the SNP will continue to prioritise action in this area.

15 Energy Action Scotland (EAS) Suite 4a, Ingram House, 227 Ingram Street, Glasgow G1 1DA Tel: Fax: Website: Company limited by guarantee. Registered in Scotland No Charity No. SCO Cover photo: Parliamentary copyright images are reproduced with the permission of Parliament May 2015