Domestic Gas and Electricity (Tariff Cap) Bill

Lord Berkeley Excerpts

Committee: 1st sitting (Hansard): House of Lords
Monday 11th June 2018 Grand Committee

Moved by

[Lord Berkeley]

2: Clause 1, page 2, line 15, at end insert—
“( ) the need to ensure that holders of supply licences communicate with domestic customers in appropriate formats about the different domestic supply contracts which are available, including any tariff cap which may apply.”

[Lord Berkeley (Lab)]

My Lords, in moving Amendment 2, I shall speak also to Amendment 9 in my name and comment on some of the other amendments in this group.

These amendments focus on communication, particularly with vulnerable people who cannot necessarily use electronic means or who have other special needs. It is important that there is an obligation on the authorities to communicate the tariff cap “in appropriate formats”, so that those who receive this information will able to choose the means by which it takes place. Amendment 9 requires the same provision of information,

“relating to different domestic supply contracts and tariff cap conditions”.

It is the same argument: people must have the information so that they are able to choose what tariffs to go for.

I received some information from a group called Keep Me Posted, which is a well-known and probably much-loved organisation. It is a coalition of leading charities, consumer organisations, trade unions and businesses, which campaigns to ensure that all service providers offer consumers the choice to receive a paper version of their bill. That is not in the amendment but it is something that I hope the Minister will consider. Independent research by a company called Opinion Research Services found that 81% of UK adults want to choose how they receive important information such as bills and statements. But, as we all know, some businesses are restricting access to paper bills and statements, and if customers do not have these, it is difficult for them to make an informed choice.

There was another study by London Economics in 2015 about managing money online—which is what we are really talking about—involving 2,399 consumers. Half of them were sent a mock bank statement and a notice of change by post; the other half were sent them electronically. The result was that 82% of those in receipt of a paper statement correctly recalled their balance, as opposed to a meagre 32% of those who received the electronic billing. That is a really strong argument, I suggest, for being able to choose the means of receiving this information in a way you can understand and then taking action.

It is good that the Government have required the banking sector to issue statements once a month and free of charge on what I think is called a “durable medium”—I would call it paper—or something more accessible, going back at least five years. This is good at a time when there is greater competition within the banking industry and some may wish to cut their costs in that way. I hope that the amendments in this group will provide some incentive to Ministers to find ways of ensuring that even the most disadvantaged, who cannot do electronics or may not be able to see well or who have another disability, can get the same information in an appropriate format so that they can make the choices which the Bill is clearly trying to achieve. I beg to move.

Amendment 3 (to Amendment 2)

Moved by

--- Later in debate ---

[Baroness Neville-Rolfe (Con)]

My Lords, I join others in thanking the noble Lord, Lord Berkeley, for setting off a discussion on this important issue of communication with consumers on electricity prices and the cap. I was going to add to the discussion from my own experience as a householder in Wiltshire. I have had a letter from SSE which is meant to tell me simply how my electricity prices are increasing, what I could do and how I might be able to pay less. I have to say that it is very difficult to understand, so there is a problem outwith the legislation that we are putting through. It is also wrong to suggest that energy companies are always trying to dissemble. How well they do depends on satisfying the consumer and the better ones want to be able to say clearly what is happening.

If we were to add to the system a requirement to communicate about the tariff cap provision, it would make the sort of letter that I have already described yet more complicated. My own experience is that these things can be costly to business. When the minimum wage came in, I remember being telephoned by the business department—I was at Tesco at the time—to ask whether we could put the minimum wage on our payslips. Having talked to our ICT people, I discovered that it would cost us an extra £1 million to put the minimum wage on the payslip. It was therefore agreed that the minimum wage could be communicated in other things. I worry that if we in this Committee put down requirements, it could have a similarly escalating effect on costs.

I have looked at the impact assessment—noble Lords will remember that I am always passionate about the usefulness of impact assessments—but this one does not go into any detail. It just suggests that there are savings to consumers. If we were to add extra provisions on communication, we would need to consider the cost of that because it would then get passed through to the consumer. That cost will apply to the small, new entrants to the industry as well as to the bigger suppliers.

That leads me to one final thought. When we took through the Consumer Rights Bill, in which we were also concerned about communication to consumers, the department worked with the industry to produce special communication. That was then used across the retail industry to inform shops as to the new rights that were coming in for consumers. I wonder whether some of the concerns raised today could not be met by voluntary action within the industry, dedicated to improving clarity for consumers in this important area.

[Lord Berkeley]

The noble Baroness cited a figure for the cost for communication but in terms of the total cost to the businesses we are talking about, that figure must still be very small. Given the example that I quoted of the banks being required to provide paper statements for anybody who wanted them, surely it is more important that anybody should have access by whatever reasonable means to the information, even at the expense of them paying a little more on communication. The people who will suffer are those who cannot fiddle with their emails, even if they can get the information by email.

[Baroness Neville-Rolfe]

I can understand that. Clearly, there may well be a case for requiring some communication to be online and some on paper because some people cannot manage online. However, what I am saying is that this will involve changes in systems across however many energy suppliers there now are—I do not know whether it might be 40, 50 or 60—and there is a cost to that, which we have not looked at or costed. How that fits in with suppliers’ information systems can make a big difference. Clearly, the Bill is going ahead rather rapidly. I have seen no analysis of this angle of things, which is why I support these amendments this afternoon, at least in the form of probing amendments.

--- Later in debate ---

Amendment 3 (to Amendment 2) withdrawn.

[Lord Berkeley]

I am grateful to the Minister for his response to my amendment. I think I detected a cautious welcome to be followed by, “It’s not really necessary because it’s all in the Bill anyway”. I was slightly concerned about the comments he made in response to the noble Baroness, Lady Neville-Rolfe, about the cost of communicating other than by email. It would be good to have some evidence of that cost but I shall reflect, with others, on what he said and we may come back with something different or better on Report. Perhaps if the noble Lord was happy to meet beforehand, that might be useful too. On that basis, I beg leave to withdraw the amendment.

Amendment 2 withdrawn.

Manufacturing: Digital Technology

Lord Berkeley Excerpts

Thursday 2nd November 2017 Lords Chamber

[Lord Henley]

My Lords, I can only say how much I agree with the noble Lord. We have to look at what digitalisation offers to us while also bearing in mind what the noble Lord, Lord West, said about threats. That is why we want to make the right response. I note what has been said.

[Lord Berkeley (Lab)]

My Lords, one of the real benefits of digitalisation is on the railways. As the Secretary of State recently said, we can get many more trains on the line more safely with digital signalling. The Minister’s predecessor will have recently received a report from the railways on digitalisation. Will he say something about how the finances for the railways will change so that there is enough investment in both the tracks and the cabs and locomotives, including freight, to make sure this happens quickly and safely? I declare an interest as chairman of the Rail Freight Group.

[Lord Henley]

I am grateful to the noble Lord for mentioning the railways. I will be heading back north again on the west coast main line. I know quite how good that is at the moment, but I have also been told just how much it could be improved with digitalisation of the signalling and what improvements we can see on that front. I look forward to improvements there over coming years. The noble Lord asked about finances for the railways. He would not expect me to make any response at this stage. I hope he will be patient and wait for what comes out of the industrial strategy later this month.

Brexit: Aerospace Industry

Lord Berkeley Excerpts

Monday 6th February 2017 Lords Chamber

[Lord Prior of Brampton]

The noble Lord raises such an interesting question that I cannot actually answer him, so I will have to write to him afterwards.

[Lord Berkeley (Lab)]

My Lords, will the Minister explain why, in the case of the air and the medical agencies that have just been discussed, the Government are looking into how this can be integrated with Brexit, but they have already made a decision to leave Euratom without any debate at all? They are all the same kind of safety regulators: what is the difference?

[Lord Prior of Brampton]

My Lords, I think that the difference is that the Euratom treaty was inextricably linked to the original European Communities treaty. When we exercise Article 50, it will automatically have an effect on the Euratom agreement, whereas the other issues that we are looking at are regulatory issues in which we have a much greater degree of discretion about how we work together in the future.

Energy: Storage

Lord Berkeley Excerpts

Wednesday 1st February 2017 Lords Chamber

[Lord Prior of Brampton]

My Lords, battery technology could offer huge benefits to the way that we both generate and store electricity and could provide better capacity to our electricity system in the UK. It could also enable us better to deal with the more intermittent nature of some renewable energy. The work done by Imperial College indicates that the savings per annum for producing electricity in this country could run at between £1 billion and £2 billion a year, so it is very important that we get the regulatory system right.

[Lord Berkeley (Lab)]

My Lord, the Government recently announced a special tariff addition to people’s electricity bills to cover emergency stand-by generation to meet the peaks in—I think this was the wording—“weekday evenings”. Apparently, they are particularly targeting coal-fired power stations and nuclear power stations. How do you switch them on and off just like that for a peak in one evening?

[Lord Prior of Brampton]

My Lords, I do not think that there is any intention to switch nuclear power stations on and off to cover short-term peaks in demand; coal-fired generation, on the other hand, is much more flexible in that regard. The whole point of these new smart systems is to allow much better demand management over the peaks and troughs of energy demand so that, hopefully, we will need less generation capacity in the future than we have done in the past.

Electricity Supply: International Interconnectors

Lord Berkeley Excerpts

Thursday 26th January 2017 Lords Chamber

[Lord Prior of Brampton]

My Lords, I am aware of the small modular nuclear reactor programme. I will have to write to the noble Lord to tell him where we have got to in that process.

[Lord Berkeley (Lab)]

My Lords, will the Minister explain his answer on the Government wanting more nuclear? There are reports in France that there is a very serious shortage of power because so many of the nuclear power stations are on stop because they are breaking down—and that is before France starts operating its new one. Is it therefore not likely that there will be nothing coming from the interconnector for quite a few years, so should we not have alternative arrangements for the interim?

Green Investment Bank

Lord Berkeley Excerpts

Thursday 12th January 2017 Lords Chamber

[Lord Prior of Brampton]

I can give an absolute assurance that, in assessing which company or organisation might acquire the Green Investment Bank, the integrity and commitment of that company to the green purposes of the bank is crucial.

[Lord Berkeley (Lab)]

One of the interesting comments in last Sunday’s press about the issue was that Macquarie bank was one of the favourites to buy the Green Investment Bank. The Minister will be aware of Macquarie’s ownership of Thames Water, where it has stripped probably three-quarters of the assets of the company, to the extent that it will be unable to fund the Thames tideway tunnel. Is that a good example of integrity?

[Lord Prior of Brampton]

As the noble Lord will know, the Government signed confidentiality agreements as part of the sale process and I cannot comment on any individual purchase or otherwise.

Hinkley Point C

Lord Berkeley Excerpts

Thursday 15th September 2016 Lords Chamber

[Baroness Neville-Rolfe]

While I agree with my noble friend about Sizewell B, which I had the pleasure of visiting during its construction phase all those years ago, I cannot agree with him on the general approach. For reasons that I have already explained, nuclear is a central part of our future and I have explained what would happen if the Hinkley power station is badly delayed. I do not believe it will be. We have learned from Flamanville and from the troubles in Finland. Our own chief scientist has given us reassurance on that. I have visited CGN myself. It is producing a nuclear power station in Taishan on similar technology, which is nearly ready for operation. We cannot afford to wait, because the existing fleet is coming offline. By 2030, except for Sizewell B—my noble friend’s legacy—we will not have any nuclear power stations, unless we invest now in a new nuclear fleet. This proposal is on the table and we have decided, having looked at all aspects, that it is right to proceed.

[Lord Berkeley (Lab)]

My Lords, I am not against nuclear at all, but the Minister has tried to say that this technology is proven and works, yet nothing I have heard in the Statement or in other noble Lords’ comments this afternoon indicates that that is the case. The Finland scheme is years out of date and is not finished. The last thing I read about the one at Cape Flamanville was that the French nuclear regulator had said it could not generate more than 60% of its planned output because the basic design of the welding inside the core, surrounded by concrete, was faulty. It looks as if that means the whole thing has to be broken apart and started again, if that is possible.

It is fine saying that we have learned from their mistakes, but how many more mistakes have yet to be uncovered? It seems to me pretty irresponsible for the Government to commit maybe in the end £16 billion of taxpayers’ money to a technology that is not proven when there are so many other technologies for generating electricity that are. I cannot think of any precedent—maybe the Minister can give me an example—of such profligacy with government funding apart from, of course, in the MoD. I leave them to one side.

[Baroness Neville-Rolfe]

I cannot agree with the noble Lord. In business you learn from mistakes and—I remember this well—from other people’s mistakes. As I have explained, EDF has learned from Flamanville and Finland, and CGN is already producing a reactor of this kind. The consortium is taking the construction risk. That is one reason why we believe this is a good approach.