Energy Bill
Debate between Lord O'Neill of Clackmannan and Baroness Liddell of Coatdyke
Baroness Liddell of Coatdyke
My Lords, I will be brief. I welcome the proposed new clause. Unfortunately, I did not have the opportunity to attend the briefing yesterday evening but wish to make a couple of points. I have had a lifetime’s involvement in fuel poverty, having come from an area where the fuel poor are always with us. Sometimes one of the key things you need when dealing with fuel poverty is not fancy targets or models but a soupçon of common sense. This is one of the areas that troubles me about the Green Deal. If you are expecting the fuel poor to front-end facilitations to their house, for example, they are not going to be able to do it because they cannot afford to do so. It is great having a wonderful model that says, “If you up-front the amendments to your accommodation, you will benefit in the longer-term”. However, if you cannot afford to turn your heating on, you are hardly going to be able to afford cavity wall insulation.
I make a plea for some basic common sense when dealing with this matter. I heard the praise of the noble Lord, Lord Jenkin, for the fact that the amendment repeatedly says:
“The Secretary of State must”.
Frankly, the Secretary of State needs some enforcement powers to encourage the industry to get involved actively in the campaign to move people out of fuel poverty, unless he is going to go down to B&Q and get a hammer, nails and some insulating material. We need to have enforcement. With this Bill, as always, a lot of the detail will be in secondary legislation. Until we see the nuts and bolts of the secondary legislation, we will not see whether my common-sense points will be met. I welcome the proposed new clause and will read the secondary legislation with interest when it comes along. However, I repeat that common sense matters even more than targets in relation to this. I urge officials to bear that common sense in mind when they craft the secondary legislation.
Lord O'Neill of Clackmannan
I am very happy to follow my noble friend. The fight against fuel poverty in the past 10 to 15 years has been bedevilled by loose definitions and arbitrary targets. The amendment goes some way to mitigate concerns that have arisen about that. It sticks in my craw to say this but the Government must be praised for obtaining support for the measure from Derek Licorice, the chair of the Fuel Poverty Advisory Group, and Jenny Saunders of the NEA. The fact that people are giving understandably cautious support, but none the less a blessing, for the measure is an indication that Ministers have sought to build bridges on this issue. Known targets and definitions have been taken away and a rather more complex Hills approach has been adopted. That approach has its drawbacks but does take account of the complexity of the situation. Therefore, it is desirable to move forward not using the bludgeon of statutory change but rather a regulatory approach, as that will enable subsequent Ministers of whatever political complexion to adjust and calibrate the policies.
It is also fair to say that for us in Opposition to try putting forward amendments at this stage would be somewhat premature—although, from what one can gather of the parliamentary timetable ahead of us, we will have time, probably over the Recess, to look at some of these issues. Obviously, the statutory instrument and regulatory approach will be the subject of consultation and discussion. One would hope that that need not take an unduly long period. None the less, it will give us some opportunity to look at the fine print of this.
Some of us would be happier about this if we were to see the colour of the Government’s money, or indeed money at all from the Government. Their approach to fuel poverty has been to withdraw state funding from this and make it a tax on the consumer rather than on the country as a whole. That is a flawed policy. It would not be difficult for the Green Deal to become more successful than it is at present, but if it does not become substantially better we will have to look again at the Government providing funds for some of the major programmes that will be required to address areas of fuel poverty. We are not talking about individual households but street after street after street. If approached on that basis, we could deal with an awful lot of the most deep-seated areas which Hills recognises are the core of the problem.
As I said, I do not wish to be grudging in my support for this approach. There will obviously be difficulties and flaws but this is not the time to identify them. The opportunity for that will come on Report and beyond, when we have had time to digest some of the indigestible graphs to which the noble Lord, Lord Jenkin, referred. If we can do that, we can perhaps make something of this. At the end of the day, somebody has to pay for it. At the moment, that will fall in the main on the shoulders of the consumer of gas and electricity. That is not a satisfactory approach to social injustice on this scale. Even with the Hills modification, the scale is intolerable for a society such as ours to leave to some kind of slipshod market mechanism, the like of which we have seen in the Green Deal. The Green Deal might work. It is the only show in town but it will have to start working very quickly or some of us will not be confident that the great ideas and reasoned approach in this White Paper, these documents and expressed in this amendment will be enough, without proper financial support, to tackle the major social problem we have here.
Baroness Liddell of Coatdyke
My Lords, I support my noble friend in his amendment. The amendment seems particularly sensible and apposite, because at the time that this legislation was being crafted we were not aware of some of the mis-selling issues that were to emerge from the customers of energy suppliers. The last time I checked, there was something like 27 cases still pending with Ofgem, and that was before the announcement of the fines relating to mis-selling affecting Scottish and Southern Energy. Given the number and complexity of tariffs, many people will be checking whether they have been mis-sold.
It has been suggested that there is a danger that the mis-selling of electricity and energy in general could reach a stage where it matches the mis-selling of PPI and some of the financial services mis-selling. This would be useful for the Government to have in the armoury should that situation emerge. It is not radical; it is actually quite a simple measure. If we take into account that the most recent instances of mis-selling had been in the pipeline at Ofgem for around four years, my noble friend’s proposal to extend the time period from five to 15 years is measured and logical. I do not see this as greatly controversial but as a way of dealing with a problem that may be coming over the horizon and that would save recourse to additional legislation in the future. If the Minister cannot make a commitment today to support my noble friend’s amendment, perhaps this is something we might be able to return to on Report.
Lord O'Neill of Clackmannan
Following on from my two colleagues, it seems that mis-selling is endemic in certain areas of our public services—public with a small p rather than in the sense of Government-run.
A bank is as much a utility as the provider of electricity or gas. Mis-selling results in fines and punishments, which seem to be absorbed, and the public end up paying the fines through higher prices. We do not normally see a reduction in dividends as a consequence of this, but we might see a reduction in investment, which is one of the difficulties that we have if we clobber the utilities that want to invest. We require them to invest in order to sustain our supplies of power, gas and the like and, if we fine them very heavily, however understandable that is, we perhaps endanger some of that much needed investment. On the other hand, we are talking about the legitimate concern customers have in getting some kind of redress that they have not had in the past. That should also act as a deterrent to the companies so that they do not go about setting tariffs in the misleading and cavalier fashion that they have in the past.
We are talking about organisations that are persistent offenders when it comes to overcharging and misleading the public and, at the moment, we do not seem to be capable of deterring them. If we had simpler means for the public to get redress and for ensuring that these offenders are punished, we might begin to develop a deterrent culture, under which they would be a lot more reluctant to jump headlong into fiddling tariffs in the way that they have done recently—usually at the expense of not just the vulnerable but the whole spectrum of society. As we do not always know the full character or nature of the abuse, it is about time that we tried to introduce some more blanket form of deterrence. To my mind, a blanket form of deterrence in the form of easier access for the public to seek redress would be a major caution to these potential persistent offenders, which are in the dock at the moment as far as a large section of the community is concerned.