Clause 14

Consumers, Estate Agents and Redress Bill – in a Public Bill Committee at 9:00 am on 19th April 2007.

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Reference of matters to the Gas and Electricity Markets Authority

Question proposed, That the clause stand part of the Bill.

Photo of Jim Fitzpatrick Jim Fitzpatrick Parliamentary Under-Secretary (Employment Relations & Postal Services)

Clause 14 requires the new council to refer a complaint that it considers to raise issues of general relevance made under clause 11(1)(a) to Ofgem. It will also be required to refer complaints made by designated vulnerable consumers and those relating to the disconnection or threatened disconnection of a gas or electricity supply to which clauses 12(3) or clause 13 apply. The council will refer such complaints when it considers that Ofgem’s regulatory functions may be exercisable and when Ofgem is not already aware of the complaint. When a complaint about a gas or electricity disconnection is made to the council and referred to Ofgem, the council is not obliged to investigate until the authority has had a reasonable chance to exercise its enforcement functions.

Clause 14 focuses on resolving problems in the most effective way. When the authority has enforcement powers in respect of complaints made by the consumer, it is sensible to ensure that Ofgem—the regulator—is aware of the matter and that it has the opportunity to use its powers to resolve it. That position is the same as the current provision.

It is important that Ofgem is made aware of problems that arise from a situation in which a licencee’s behaviour breaches licence conditions. Ofgem has powers to enforce licence conditions by, for example, imposing financial penalties of up to 10 per cent. of turnover. Ofgem also has powers to determine connection charges. When a consumer seeks connection to the electricity or gas network and is not willing to accept the distribution company’s quotation for the work, the issue can be referred to Ofgem, which can make a determination on the reasonable amount that a consumer can be asked to pay. That is an example of an issue that can be referred to Ofgem by the council for resolution.

The clause provides for the new council to notify a complainant if it considers that a complaint refers to a matter that can be referred to Ofgem under existing legislative provision. In our sitting of Tuesday 17 July, reference was made to the need to ensure that the council notifies a complainant in accordance with the key performance targets that we will set out. I commend the clause to the Committee.

Photo of Mark Prisk Mark Prisk Shadow Minister (Business, Enterprise and Regulatory Reform)

Thank you, Mr. Caton. I, too, welcome you to the Chair. I do not think that I have had your guidance before in a Standing Committee or, as we must now call them, a Public Bill Committee, but I am delighted to have such guidance now as we continue our deliberations.

I welcome the Minister’s opening remarks on the clause. He rightly said that it will require the council to refer a complaint that stems from clauses 11, 12 and13 to Ofgem when it considers the authority’s powers to be exercisable which, in principle, is a perfectly reasonable measure. However, as the Minister will know, there will be cases on the margins of Ofgem’s power, as it were, over which there may be some dispute, particular regarding disconnections. It would be helpful if the Minister would express his views or give some guidance to the Committee now or in the future as to what will be the guiding principles in cases that involve a dispute over whether a matter should be referred to Ofgem.

Photo of Susan Kramer Susan Kramer Shadow Secretary of State for Trade & Industry, Trade & Industry, Shadow Secretary of State, Liberal Democrat Spokesperson (Trade and Industry)

Thank you, Mr. Caton. We are making the matter of who is speaking for the Liberal Democrats very complicated, so I much appreciate your powers of observation.

For the sake of clarification, as I understand it, Ofgem will be responsible for setting the standardsfor complaints procedures for electricity suppliers. Presumably, Ofgem will need to get information about the kinds of complaints that are being made from the National Consumer Council, whether or not suppliers’ complaints procedures are adequate, or whether the process is effective in the real world. Does the Minister see the Bill as providing the structure that will allow the transfer of necessary information?

Photo of Jim Fitzpatrick Jim Fitzpatrick Parliamentary Under-Secretary (Employment Relations & Postal Services)

In our Tuesday sitting, there were quite a few references to double acts—I myself was subject to some of the knockabout. The hon. Members for Richmond Park and for Solihull were not referred to then as Thelma and Louise, but I can assure them that if they ever were, it would be in a complimentary sense. [Interruption.] The hon. Member for Rochford and Southend, East (Mr. Duddridge) clearly does not have a problem with which Minister will respond to him today.

The arrangements about whose uncertainty the hon. Member for Hertford and Stortford asked will to a certain extent have to be worked out in the implementation and work programme stage in the months ahead to identify the lines of responsibility. The new council will clearly have a keen interest in ensuring that it knows when it will have responsibility and when it can and cannot pass matters on. There will need to be co-operative arrangements and understandings between the regulators and the NCC on how to handle complaints, who should do so and how to resolve issues that could be handled by either or both. They will have to identify in due course how the arrangements are working and I am sure that that will be of direct interest to the consumer, who needs to be confident that it is seamless. The consumer will need to understand that a complaint that they register will be dealt with. Whether it is handled by one or by the other will be a matter for the organisations, but they will need to communicate that to the consumer so that the consumer knows that their complaint is being handled and who they can contact.

On the point made by the hon. Member for Richmond Park, flows of information will be established between the regulators, the redress schemes and Consumer Direct under the redress provisions. I know that she has informally raised matters about complaints handling procedures, and we shall deal with those in detail later—probably under clauses 47 to 52. We are happy also to talk to her informally to give her as full an answer as possible before the matters are raised in more detail in due course.

Question put and agreed to.

Clause 14 ordered to stand part of the Bill.