Recovery of gas charges etc.
Energy Bill [Lords]
4:30 pm

Mr Brian White (North East Milton Keynes, Labour)

I beg to move, That the clause be read a Second time.

I began this Committee by pointing out that security of supply had a demand side aspect and I conclude it by saying that energy companies have a role in achieving the Government's fuel poverty strategy. We touched on the matter in our debate on clause 177—I thought that this new clause might have been considered then—but I am happy that this debate will conclude our proceedings, because it serves to remind us that energy is a universal and essential service.

Ofgem has a duty to develop codes of practice in a number of areas, including the most efficient use of supply, which we discussed in the Committee; methods of payment for fuel; dealing with customers in difficulty; the use of prepayment meters, which was debated under clause 177; and services for customers who are of pensionable age, disabled, chronically sick, blind or deaf. The codes of practice contain detailed procedures that companies should adopt when consumers are unable to pay gas or electricity bills and set out a range of payment options available to assist in budgeting and to help in debt recovery.

The most crucial factor is the customer's ability to pay. In the 1980s, there were 60,000 gas and 100,000 electricity disconnections. In 2003, there were 15,900 gas and 1,360 electricity disconnections. Those figures are for Great Britain, because in Northern Ireland there has been no disconnection since 1999. There is also the issue of self-disconnection—when people are unable to charge prepayment cards or tokens. There have been major improvements in that area too, with the development of sophisticated and sensitive policies on emergency credit. Also, prepayment meters are

calibrated to help to guarantee companies both the payment of current consumption and the recovery of debt for the 2 million gas and 3.5 million electricity consumers who use such meters.

The licence conditions do not allow disconnection during the winter months, but when people are disconnected in the other seasons, there is no policy to enable them to be reconnected during the winter months. During the recent consultation, which was referred to earlier, questions were raised as to why the presence of a non-pensioner occupant in the property allows disconnections to occur. We do not do that with water, so why do we do it with energy?

The consultation paper has encountered an adverse reaction, not least from the National Consumer Council and from others in the energy field. They pointed out both the anachronistic language, which refers to infirmity, and the proposal that disconnections should continue. There is no rational reason for putting the other occupants of a property at risk, irrespective of the circumstances of the bill payer. The paper also refers to social services and how they can sort things out, without taking on board the fact that they are already overworked. I do not understand how social services will be able to either arrange for the debt to be repaid or broker a deal.

This is the nub of my new clause: I can well understand why companies want to retain disconnections, but I cannot understand why Ofgem and the Government would want to keep them. A legal ban on disconnections from fuel supply would encourage alternative tariffs as well as the development of different payment methods and schemes that we could build on, such as Fuel Direct.

The debate's focus on defining vulnerability is a good example of why we need to stop disconnections. I thank the Minister and the Government for moving away from the stale old argument that disconnections are required to keep people in check. That was the argument of the 1980s and the early 1990s, but I am glad that the Government have moved away from it. The approach that we took to the Water Act 2003 is the right way forward.

In conclusion, let me make it clear that the new clause refers to domestic customers. I am sure that it is defectively drafted and that it would have loads of unintended consequences, so I shall not press it to a vote. However, I want the Minister to take on board the spirit of what I have said and to recognise that there is widespread concern about the proposals that emerged from the consultation exercise.

Mrs Anne McIntosh (Shadow Minister, Environment & Transport; Vale of York, Conservative)

I congratulate the hon. Gentleman on having moved his new clause. Can the Minister tell us how the Government define a vulnerable customer? The National Consumer Council has put forward what I think is a workable definition, and I wonder whether the Government are minded to accept it.

Mr Nigel Griffiths (Parliamentary Under-Secretary, Department of Trade and Industry; Edinburgh South, Labour)

I congratulate my hon. Friend on having moved the new clause and on his great success last year with his private Member's Bill, which many

of us welcome. I agree that disconnections for debt should be minimised. Indeed, I hope that they can be eliminated, as they have been in Northern Ireland. He welcomed the reduction from an average of 250 people per constituency being cut off—which was an absolute disgrace—to 30, but that is still unacceptable. That is why the Government are doing more to reduce it further.

Appropriate safeguards have to be built in to the disconnection arrangements, especially where vulnerable customers are affected. This morning, we heard the example of the elderly couple whose gas supply was cut off and who died of hypothermia. The Government believe that a ban on disconnections could increase debt levels and the costs associated with recovering debt. We are also concerned that a number of people would be forced into having prepayment meters as the only alternative to debt, when many hon. Members have spoken forcefully against any increase in such meters and the associated costs.

Mr Brian White (North East Milton Keynes, Labour)

The Minister is arguing that prepayment meters are the only way forward. There is a range of options to consider, and prepayment meters, properly calibrated with emergency credit on them, can play a useful role. Disconnections have no role to play.

Mr Nigel Griffiths (Parliamentary Under-Secretary, Department of Trade and Industry; Edinburgh South, Labour)

I entirely agree with my hon. Friend that that is only one method of payment. Of course, it might be appropriate in some circumstances. However, I know from constituency experience that unfortunate individuals facing the threat of being cut off generally have other problems too, so it is important and appropriate to involve social services and others in counselling and working with them; they should not be left alone.

I also have concerns about self-disconnection. What can follow from self-disconnection is a disconnection from society and from the services that can help people, whether their problems are with drugs—we all have such people in our constituencies—or with factors less linked with poverty than with other circumstances that can affect their lives.

I am pleased to alert the Committee to the fact that Ofgem has, with Ministers' encouragement, undertaken extensive discussions with suppliers about disconnection. Those have focused on improving the processes for identifying and dealing with vulnerable customers, and clarifying procedures for notifying the relevant agencies when such customers are in difficulties with payments.

Proposals were put forward in April for improved industry-wide arrangements; I am informed that, as far as possible, they will ensure that valuable customers do not face disconnection in future. It is obviously important that we monitor that carefully.

The trend has been good. The figures speak for themselves, with a massive decrease in the number of disconnections—somewhere in the order of a sixth or seventh of the number of disconnections of only a few years ago. We have the good example of the elimination of disconnections in Northern Ireland, so

it is clear that the sentiments of my hon. Friend the Member for Milton Keynes, North-East and other hon. Members are being taken forward by the Department of Trade and Industry, and by the regulator and the electricity suppliers.

The change has been made in a way that has a great element of social inclusion. Those customers who do not have difficulty in paying their bills regularly—they have incomes that are adequate and lifestyles that match their incomes and they therefore do not suffer fuel poverty and are not threatened by disconnection—have been less sympathetic than my hon. Friend. They might not appreciate the need for us all to care about the more vulnerable. The trend towards eliminating disconnections is good. As I said this morning, disconnections were accepted almost as a matter of routine when I was a member of an electricity consultative committee. I never accepted that. My heart is very much with my hon. Friend.

Ofgem is taking steps, prompted by my hon. Friend the Minister and my right hon. Friend the Secretary of State. With everything moving in the right direction, and with the Northern Ireland example for us to emulate, I hope that I have persuaded my hon. Friend not to press his new clause.

Mr Brian White (North East Milton Keynes, Labour)

I welcome the Minister's commitment to monitoring. I have concerns about that lingering clinging to the comfort blanket of disconnections—as if it makes a difference. We live in a grown-up world; we do not need that comfort blanket. I urge the Minister in his discussions with Ofgem to take that final step. We have done so much good work; only one more step is needed. I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Question proposed, That the Chairman do report the Bill, as amended, to the House.

Mr Nigel Griffiths (Parliamentary Under-Secretary, Department of Trade and Industry; Edinburgh South, Labour)

I thank you, Mr. O'Brien, for your excellent chairing of the Committee. On behalf of the Committee, I also thank your co-Chairmen, Mr. Sayeed and Mr. Gale. I am grateful to members of the Committee, from all parties, for their contributions. I am grateful also to the Clerks, the attendants, the police and Hansard. I thank the staff at the Department of Trade and Industry for their excellent vigilance. I extend warm words also to the hon. Members for Tewkesbury and for Vale of York, to those who speak for the Liberal Democrats and to others for allowing such well informed debates.

I do not know whether it was a threat or a promise when the Opposition Whip said at the beginning of our proceedings that he would be a speaking member of the Committee. He failed to tell us that he would be speaking not in the Room but outside—in the Tea

Room and elsewhere. None the less, his attendance and his usual Whip's reticence have facilitated the work of the Committee, and I am grateful to him for that. With that, and with a word of thanks to you, Mr. O'Brien, I hope that the Bill will proceed as appropriate.

Mr Laurence Robertson (Shadow Minister, Economic Affairs; Tewkesbury, Conservative)

As the Committee knows, in general, we support the Bill. We have done our best to add to the improvements that were made in another place, and we look forward to further debate on Report.

May I thank you, Mr. O'Brien, and your fellow Chairmen, Mr. Sayeed and Mr. Gale, for your expert guidance and good humour, and Mr. Lee, the Clerk, and his staff for their help? I should also like to thank my hon. Friends the Members for Vale of York, for South-West Hertfordshire, for Salisbury (Mr. Key) and for Bury St. Edmunds (Mr. Ruffley) for their guidance and good humour and for the hard work that they have put into the Bill, much of which is complicated. I am grateful to them. I also pay tribute to Liberal Democrat Members, who have contributed greatly, as has the hon. Member for Angus (Mr. Weir), who has, all alone, provided us with a great deal of worthwhile information.

May I also pay tribute to the Labour rebels, who have made the Committee very interesting? I look forward to hearing their contributions at later stages. I am sure that they will not lose their voices, and will continue to promote the beliefs that they hold so sincerely. I thank the Parliamentary Under-Secretary of State for Trade and Industry, who has dealt with some of the Bill. I think that he would acknowledge that the Minister for Energy, E-Commerce and Postal Services has probably handled the greater part of it, which is only right, given his brief, and I should like to pay tribute to him in his absence. He showed his customary degree of courtesy and friendliness, and was a pleasure to work with. I thank him as well.

Mr Andrew Stunell (Chief Whip; Hazel Grove, Liberal Democrat)

I am delighted to add my thanks and congratulations to you and your fellow Chairmen, Mr. O'Brien, for having steered us through what was not too stormy a Committee stage. I should like to thank the two Ministers. They have not always had the easiest of tasks, with the Opposition in front of them and the enemy behind them, but they have successfully steered the Bill to its next stage. Some of us will have more to say about it on Report—it is still work in progress.

I very much appreciated working with the hon. Member for Tewkesbury and his team, and with the hon. Member for Angus. We receive a lot of support from our officials and the Clerks, and I should not like to exclude them from my thanks. I look forward to our debates on Report.

Mr Bill O'Brien (Normanton, Labour)

On behalf of my co-Chairmen and myself, I thank members of the Committee for the co-operation that we have received in our sittings. The proceedings have not been difficult to conduct because members have recognised the rules of debate, which

has been helpful to us as Chairmen. We have, of course, been guided by the Clerk, so I should like to make special mention of him and thank him for his co-operation and guidance on amendments and new clauses that have been submitted and put on the amendment paper. We also owe special thanks to the

Hansard staff, who work hard on our behalf to ensure that the record is correct. It is only right to thank them and all concerned with their work.

Bill, as amended, to be reported.

Committee rose at one minute to Five o'clock.