Smart Meters

Debate between Lord Lennie and Lord Henley

Monday 8th July 2019 Lords Chamber

[Lord Lennie]

To ask Her Majesty’s Government what assessment they have made of the roll-out of smart meters.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, the smart meter rollout in Britain is making good progress, with over 14.3 million smart and advanced meters operating, as of the end of March 2019. The programme remains on track to offer smart meters to every home and small business by the end of 2020.

[Lord Lennie (Lab)]

I thank the Minister for that Answer—just the 50 million or so short of target. Given the promised financial benefits to hard- pressed customers and the obvious global advantages of moving to a low-carbon economy associated with SMETS 2, why do the Government persist in leaving the implementation of this policy to the energy suppliers? Can the Minister state clearly why Ofgem rejected five of the major suppliers’ rollout plans for 2019 as being inadequate? Do the smart meters just not do what it says on the tin?

[Lord Henley]

My Lords, I had better write to the noble Lord with greater detail about Ofgem’s comments. It has completed the 2019 review and believes that suppliers are on track to meet our commitment that every household should have had the offer by 2020.

Environment and Climate Emergency

Debate between Lord Lennie and Lord Henley

Monday 1st July 2019 Lords Chamber

[Lord Henley]

My Lords, we passed the legislation last week. We have announced an environment Bill, the Agriculture Bill is coming along, we have announced an energy White Paper and there is the industrial strategy, which has energy-specific parts. A whole range of government action is going on and there will be more to come.

[Lord Lennie (Lab)]

My Lords, I will give the Minister a second chance—as he knows, everyone deserves a second chance—to answer the question that was not answered in last Wednesday’s debate. Why will international aviation and shipping not be included in the Government’s climate change emissions legislation?

[Lord Henley]

My Lords, as I made quite clear in the debate last week, our plans for net zero cover the whole economy, including international aviation and shipping.

Nissan in Sunderland

Debate between Lord Lennie and Lord Henley

Tuesday 5th February 2019 Lords Chamber

[Lord Henley]

My Lords, I accept that a no-deal exit would be difficult. The point we are making is that we do not want no deal; that is why we are looking for a deal. Other than that, I have to say to the noble Lord that he paints a unduly gloomy picture. Things might be difficult for the automotive industry but, as I made clear, he will have seen that over the past few years—that is, since the vote in 2016—competitive decisions have been made in the automotive industry that have brought new car models to Nissan, Toyota, BMW, PSA Vauxhall in the UK, and that has created jobs in all parts of the country.

[Lord Lennie (Lab)]

My Lords, other car makers in this country—Honda, Toyota and BMW—have pulled out from bringing models to this country. That demonstrates a lack of confidence in the future of manufacturing here, due in part to Brexit uncertainty. Nissan clearly does not feel that it can rely on the assurances given by the Secretary of State in his recently published letter that there will be free, frictionless trade between here and Europe. Why not?

[Lord Henley]

Things have changed. It is not solely to do with that. As other noble Lords have said, the whole car industry is going through a rather turbulent time. We only have to look at what has been happening in, for example, sales of diesels. For that reason, Nissan has to make difficult decisions. It has decided that it will go ahead with the X-Trail but will build it in Japan, no doubt for markets over there. Nissan is still committed to Sunderland. There are still 7,000 jobs there. There are still 35,000 more jobs in the supply chain. Things are not as bad as the noble Lord is trying to suggest.

Smart Meters

Debate between Lord Lennie and Lord Henley

Tuesday 20th November 2018 Lords Chamber

[Lord Lennie]

To ask Her Majesty’s Government what progress they have made on the roll-out of SMET2 smart meters.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, more than 12 million smart meters are operating across Great Britain, with more than 400,000 meters installed every month. As of Sunday 18 November—two days ago—industry information showed that more than 138,000 SMETS 2 meters were connected to the national smart metering network.

[Lord Lennie (Lab)]

I thank the Minister for that response. Yesterday, Which?, the consumers’ champion, published a report that stated that the Government’s £11 billion rollout of smart meters to hard-pressed customers is seriously behind schedule. To meet their target of a smart meter in every household and small business would now require 30 smart meters to be installed every minute of every day between now and the end of 2020. Currently less than one-third of that figure is actually taking place. In addition, the Government’s projected financial benefits to customers have been slashed from £47 a year to less than £1 a month. Can the Minister say what specific actions the Government are taking to both turn around the lamentable rollout performance and restore the projected financial benefits to customers?

[Lord Henley]

My Lords, I am aware of that report but, as I made clear in my original Answer, we are installing more than 400,000 meters every month and that figure is increasing. We are still confident that we will be able to ensure that by the end of 2020 every household in the country will have been offered a meter. That is the aim that we have set out. We are also still confident that we expect to see a net benefit of around £5.7 billion for the entire rollout—benefits for individual consumers as they get greater choice and the advantage of being able to monitor their electricity and therefore keep their bills down, and advantages to the companies themselves.

Domestic Gas and Electricity (Tariff Cap) Bill

Debate between Lord Lennie and Lord Henley

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

[Lord Lennie]

Before this comes to an end, would the noble Lord repeat what he said about midata having the ability to steer customers to the cheapest tariff available to them in association with smart meters? When does the noble Lord think this will become available? This is quite revolutionary. It is exactly what is needed, and it was suggested in the Smart Meters Bill, if the noble Lord recalls, that the smart meter could provide that kind of information. Is that how it would be communicated—through a smart meter—or directly to customers?

[Lord Henley]

Midata is a method of electronically transferring customers’ data from a company system to a third party, such as a price comparison website. I was saying that that could lead to innovative third-party switching devices. I think I might have said at Second Reading of the Smart Meters Bill that some apps were already available that could do that for an individual. Therefore, the noble Lord, Lord Lennie, could sign up to something that said, “Always shift me to whatever is the cheapest tariff”. I cannot remember the name of the one already in existence. The noble Lord might then find that two or three times a year he was changing supplier without knowing it, always going to a cheaper one. It might be that the noble Lord, being very virtuous, wanted a greener one or something else, and other such things could be arranged. I hope that is what midata will help the noble Lord and others to do.

[Lord Henley]

The noble Lord is absolutely right about the SMETS 2 meters. I will write to him about SMETS 1 meters and it might be that he is correct about that. I was only mentioning that as an advantage that will be available in the future to customers.

[Lord Lennie]

On that basis, I beg leave to withdraw Amendment 3.

--- Later in debate ---

[Lord Henley]

I am sorry that the noble Lord, Lord Lennie, is having problems getting to meet Ofgem, but I am sure that it is an assiduous reader of our debates and will have noted what he said. In case it is not, I will pass on his message to Ofgem to say that he would be grateful to have that meeting—obviously, I want to be as helpful as possible.

That may assist our discussion on Amendments 25, 26 and 28, which would amend Clause 7 to include matters that Ofgem must have regard to when carrying out its review of the conditions for effective competition. As the noble Lord is aware, the Bill purposely does not define what the conditions for effective competition should be, although, as a major government programme, it requires Ofgem to consider the progress that has been made in rolling out smart meters.

It is right that Ofgem considers the market as it evolves over the next few years. Setting out now in the Bill the factors that it must consider would not be helpful. The BEIS Select Committee agreed with that approach in its report, which states:

“We believe that setting a definition of ‘the conditions for effective competition’ before setting the cap could create incentives for suppliers to game the system or treat the cap as a box-checking exercise rather than going above and beyond their obligations. It would also risk creating unnecessary opportunities for legal challenges”.


The factors set out in the noble Lord’s amendment appear to be broadly sensible. But this is a job that is best left to the regulator and is something that has to be considered in the light of the market as it is at the point that it is being reviewed, not now. Obviously we will have to consider that on different occasions if we have to extend the Bill. I do not see how binding Ofgem to a set of factors would be helpful.

As I made clear earlier and as my noble friend has made clear, Ofgem recently published a paper on the setting of the cap, which is out for consultation at the moment. It includes a consideration of the factors that indicate that the conditions for effective competition are in place and the extensive programme of work aimed at making it easier for customers to engage in the market and encourage them to switch suppliers. Ofgem also set out in its annual report on the state of the energy market an assessment of issues such as barriers to market entry or exit, the level of competition between firms, and the range and quality of service offerings. In its work on future supply market arrangements, it is assessing whether more fundamental changes to the structure of the retail energy market may be needed to allow disengaged consumers to get a good deal. Ofgem has said that it will need to assess which, if any, of these it considers to be crucial to lifting the cap.

Ofgem has said in its consultation paper that it expects to keep these factors under review as the market develops and that it will report on progress in creating the conditions for effective competition, alongside its annual reports on the energy market. It has also said that in order to recommend that the cap should not be extended for another year, it would expect to see sustained progress that would allow it to be confident that currently disengaged consumers could gain a reasonable deal from the energy market without price protection.

I hope that the noble Lord will accept that his amendment is possibly overly prescriptive. Ofgem will consider what is relevant and necessary at the time. I hope, therefore, he will be able to withdraw his amendment. I repeat what I said earlier: I hope he manages to have his meeting with Ofgem and, if he has any problems, he should get in touch with my office.

[Lord Lennie]

I am grateful to the Minister for his offer of support for my meeting with Ofgem. I am sure it will happen soon—I am sure Ofgem has ears and eyes and can read, so I expect a call fairly soon. I am also grateful that he welcomed the suggestions we have laid out in the amendment and finds them useful as a steer that Ofgem may choose to use. I am not sure that they are the be all and end all, but it is a range of suggestions. I will certainly read the consultation paper Ofgem has put out and respond to it. In the meantime, I am happy to beg leave to withdraw the amendment.

Ffos-y-Fran Opencast Coal Mine

Debate between Lord Lennie and Lord Henley

Tuesday 5th June 2018 Lords Chamber

[Lord Henley]

My Lords, I am not going to think again. The 2006 Act is perfectly clear, as are the other Acts offering further powers to the Welsh Government. This is a matter for the Welsh Government, and they have responded.

[Lord Lennie (Lab)]

My Lords, were the Minister a protestor, who would he aim his protest at? Would it be the local authority or the Welsh Government?

[Lord Henley]

As I said, the Welsh Government have responded to this report. Obviously the original planning application was dealt with by the Merthyr Tydfil local authority.

Smart Meters Bill

Debate between Lord Lennie and Lord Henley

2nd reading (Hansard): House of Lords
Tuesday 13th March 2018 Lords Chamber

[Lord Lennie (Lab)]

My Lords, I should start by making a declaration—or perhaps a confession. I am a smart meter user. I accepted the offer made by the company. It is a SMETS 1, so it is not doing me much good in terms of reducing my consumption or the cost—but at least I have one. That, I think, may be unique among Members of this House, but not so much so among the wider public. I also thought until yesterday that we might be able to have a debate which did not involve the European Union. However, having seen E.ON’s and RWE’s proposals, we are reminded that this is not taking place in a vacuum and that E.ON will now become the major provider for the customers of electricity while RWE is getting back into green research and the provision of electricity—reversing a decision that was taken before our decision to come out of the European Union.

I thank all noble Lords who have taken part in the debate. I share with everyone their support for the Bill—with reservations, and unfortunately it is those reservations which are going to take up most of my time. I thank in particular my noble friend Lord Grantchester for his analysis at the start of the debate. It has saved me a lot of time because he has already done the work. I shall try to avoid any repetition during the course of what I have to say. I also thank the Minister for the meetings and briefings we have had about the proposals prior to this debate. They have been very helpful in our preparations.

The Bill has three stated interrelated purposes. The first is extending the powers of the Secretary of State in regulations for smart meters. The second is introducing a special administrative regime, the SAR, with a Data Communications Company, the DCC, to ensure that service continues in the event of their insolvency. The third is to introduce new powers to allow Ofgem to facilitate half-hourly settlements.

First, the extension of powers that are currently due to expire on 1 November 2018. The Bill seeks a further five-year period, until 2023, during which time the completion of the rollout of the smart meters and their claimed benefits will have become evident. That is the plan. What are the chances of this and what benefits will consumers see? The rollout requires companies to have offered every household and small business, and there are 40 million to 50 million of them, a meter by the end of 2020. The offer of the smart meter 1 has been slowed down, while the smart meter 2 is in some kind of preparatory phase and is being tested for workability and interoperability. So the chances of meeting the 2020 deadline are fast receding, unless the Government announce some huge increase of capacity to achieve their intention. The benefits to consumers are deemed to be so positive that they will take little persuasion—but, in this House and in other places, the consumer seems less trusting of the benefits than the Government seem to think. The record tells a different story.

Thus far, the second-generation SMETS 2 have been installed in only 70, perhaps 100, households out of a total of 50 million. If the SMETS 1s can be upgraded to SMETS 2 capability, it will account for some of the increase—but it will still need three times the current rate of approach, interchange and offer of these meters to achieve the 2020 deadline.

The benefit for the customer is that he or she will be in control of their pattern of energy usage, with real-time information being provided and an end to estimated billing. That is true: the smart meter tells you how much you have spent today. At any point in time, it will give you a scare. You have spent £5, £10 or whatever it is you have spent today. It does not tell you anything about what it is that is consuming that money. The DCC will be provided with a half-hour readout of the overall usage of our electricity consumption in order to benefit its purchasing power and allow it to more accurately purchase electricity to meet our needs, each half-hour of the day, as I understand things.

That should lead to a reduction in the price it pays at certain times in the day. That will then be passed on to the consumer in reduced billing. Someone talked about half-hour billings; I do not know if that is going to come about any time soon, but we will certainly know when it is cheaper to run certain types of electricity consumption. In order to make those changes, the customer has to be sure of the benefits or they are not going to change anything. They are going to carry on doing what they do at the time they prefer to do it. The chances of the lower-end pre-paid customer changing their habits, given the other pressures that there are in their life, are more remote than for those who perhaps have more time on their hands, can study these things and can make adjustments to habits that have been ingrained for some years, as they go through life, with family, children who move away and so on.

How will the Government force the energy companies to pass on savings that they will make to the customers? There was some talk in the energy committee in the other place that the Government will make sure that this happens, but how do they intend to enforce it? The Energy Minister in the other place quoted Richard Nixon, who said:

“If you’ve got them by the balls, their hearts and minds will follow”,—[Official Report, Commons, Smart Meters Bill Committee, 23/11/17; col. 73.]


but if you have not, they are not going to. That is about the size of it. I am not sure that the squeeze is happening quite where it needs to happen. Do the Government anticipate a change of heart among the energy companies towards their customers? That is unlikely. They are private businesses; they are in business to make a profit. That is their right and that is what they are set up to do. Their shareholders are their principal guides and they expect a return. It is hard to see where the customer fits into the squeeze there might be on the price of electricity to suppliers. The Government need to think through how the customer benefits are to be realistically delivered.

Another thing concerning the change in our pattern of usage of night-time electricity for white goods is that there are increased risks that the Government should be aware of. Household fires are more likely with unsupervised white goods. Nuisance neighbour noise disputes will be on the increase as energy powers machines at night, particularly in places where people live one on top of another, in blocks of flats and so on. So the attractions of changing patterns of usage of electricity may not lead to the greenfield nirvana the Government seem to believe in.

One of the things that might have been possible—maybe the Minister will comment on this—was the Government taking responsibility for providing the customer with tariff information. Would it have been possible under SMETS 1? Is it possible under SMETS 2? SMETS 3 could possibly, if it has not been thought of before, inform customers about their best possible energy price sources. It is hard enough right now to know exactly where my best deal is, comparing tariffs within one supplier, let alone across a range of suppliers, with six major companies and a number of other minor providers. It is a complicated matter. Could the Government introduce this into the SMETS system and pass on the information to customers? That would be a real benefit and a real selling point for the meters being accepted by more customers.

I turn to the DCC. The Government intend the regime to take back control should the company go into administration. A special administration regime is to be established. The provocation for this lies somewhere between the recent failure of Carillion, an oversight in the original setting up of the DCC and doubts about the performance of Capita, the current DCC operator. If the DCC fails, the customer will foot the bill. The risk of failure is said to be extremely low. However, the impact would be high. Could the Government provide some analysis or report to reassure us that the DCC’s remote chances of failure are so unlikely that no one can see it happening? What happens if the DCC decides to walk away from the contract? Are there penalties? What are they? Might the Government be left high and dry, not by the failure of the company but by the company no longer wishing to provide the service because it does not believe it will meet the 2020 deadline, let alone those beyond it?

These are some of the questions. We support the Bill. It is deficient in some areas and these will be explored more as we go through Committee and Report, but I would be grateful if the Minister could answer some of the questions raised so far.

[Lord Henley]

My Lords, on the last or second to last point made by the noble Lord, Lord Lennie, he looked forward to a world with a SMETS 3 or 4 that might be able to assist a customer in finding a new supplier and direct him in that way. I think we are already there. I imagine that the noble Lord reads the Guardian more often than I do, but the Guardian of 11 March was talking about one company that is developing some sort of dongle that can be plugged into one’s meter and will automatically switch one to the best supplier according to the programme one puts in. One can put in, “I want the greenest supplier” or “I want the cheapest supplier” and one could find oneself having a different supplier from month to month, possibly two or three times a year. The future is good. I refer the noble Lord to that article to see just what is happening out there and what smart meters, as they are at the moment, could possibly lead to.

I have to say that, listening to the debate, I felt that it was a fairly Eeyoreish performance, even by the standards of this House. The noble Baroness, Lady Featherstone, was politer—she referred to it as a masterclass in faint praise. The noble Baroness, Lady Maddock, was, as always, very kind to me: after making her Eeyoreish speech, along with her colleagues and all other noble Lords, she said that she expected something more optimistic from me, “Because the noble Lord always is very optimistic”. I think there is nothing wrong with being optimistic when one has technical developments that are going to bring great benefits to everyone. They are going to bring benefits to the consumer, as I made clear in my opening speech, but they will also bring benefits in terms of reducing our overall consumption and in many other ways.

Like the noble Baroness, Lady Featherstone, I was very amused by the picture of her noble friend Lord Teverson under the floorboards or somewhere—I am not quite sure where he was; it was rather a confusing picture, but he was in the rain with a torch. All I can do is refer the noble Lord to Hilaire Belloc’s “Lord Finchley”. The noble Lord will remember that Lord Finchley came to an untimely end because he tried to do these things himself. In future, the noble Lord can get someone else to look at these things, but smart meters will solve the problem for him.

Others, such as the noble Lord, Lord Whitty, and me, took us back to 2008. I was very grateful to him for doing that and for saying that back in 2008 he was giving warnings, in his Cassandra-like way, and now he could say, “I told you so”. The great thing is that he can say “I told you so” to everyone here, in that the 2008 Act, as the noble Lord and others on the Benches opposite will remember, was passed under a Labour Government. The 2011 Act that I referred to was passed under the coalition Government. I think that we had a Liberal Democrat in both the business department and the energy department during that time, so their fingers must have touched this at some point. Now, in 2018 we have a Conservative Government, so perhaps, like Peter Simple’s Dr Heinz Kiosk, I can just say, “We are all guilty!”, if something has gone wrong. I think, from the degrees of optimism I have listened to in the course of the debate, that there is a general acceptance that smart meters are going to be able to do something that has not been available before and that, as I said, that will bring great advantages to us.

A very large number of questions of a fairly detailed sort have been raised and I will try to address a number of them. However, I think that what a debate of this sort also shows is that even a Bill such as this—a Bill that is broadly welcomed on all sides, that has been through pre-legislative scrutiny, that has had a very useful trip through another place since that pre-legislative scrutiny and that is now here—will benefit from what your Lordships can do in Committee. I look forward to that Committee and hope that we can tease out just where the problems are so that I can give appropriate assurances on matters that are relevant to noble Lords and, if necessary, make amendments, but I do not think that that will be necessary. As the noble Lord, Lord Grantchester, put it, this is a largely technical Bill dealing with three small matters, but its title allows us to discuss the generality of smart meters, smart metering and how we get the rollout completed. I hope that in the course of this debate, Committee and further stages we can continue that process and provide the proper assurances.

This afternoon, I propose to answer a few of the questions to the best of my ability. I think it would be useful if I write another letter to all noble Lords who have taken part in this debate and place a copy in the Library, setting out a more detailed answer of the sort that one cannot properly give to some of the more detailed questions and very sensible suggestions made by my noble friend Lady Manzoor. I give that assurance that I will send that detailed response to all noble Lords.

In the meantime, I shall answer a few of the questions that have been asked. The first, and most important, is to give some sort of assurance that we believe that it is still possible, despite the numbers which the noble Lord, Lord Grantchester, quoted from Which?. The numbers probably appeared in the Daily Mail as well, for all I know—that was another publication that was mentioned. We believe that we will be able to get there in due course. The rollout to date has been growing. Around 400,000 smart meters are being installed every month. That has to get up to a bigger figure if we are going to get to the end in the three years that are available. I do not think that is representative of the next phase of the programme when most suppliers will be installing smart meters with greater numbers of installers and more types of customers across Britain. We will certainly continue to collect data—this was something that the noble Baroness, Lady Maddock, asked about—on the rollout, getting independent, official, quarterly statistics on progress by the large suppliers, and we will make sure that they are published quarterly, as I think they have been since September 2013. In addition, a summary of the annual rollout progress for the calendar year is published every March, so we should have that in due course. I do not know whether it will be before Committee, as no one has yet given me a suggested date for the next stage of the Bill.