Energy Bill [HL]

Baroness Northover Excerpts

Wednesday 2nd March 2011 Lords Chamber

[Lord Grantchester]

With the permission of my noble friend Lord Whitty, I shall move his amendment. I pay tribute to him for his clear leadership on consumer interests. He has laid out in his amendment a very clear way forward regarding smart meters. I could not do justice to the exposition that he would have made far more adeptly than me. However, there is an important element that we should debate tonight and on which we should question the Minister on the way forward.

As we all know, there is considerable anxiety and resistance from consumers, arising by and large from misunderstandings over the operation of smart meters. However, smart meters offer the opportunity to reduce inaccurate bills to consumers, as well as to lower their costs. We had a full debate in Committee and wish to build on the positive discussions and proposals being considered with the Energy Retail Association and Energy UK, especially with regard to the code of practice. I know the Minister is also keen to bring in the benefits of smart meters in a constructive manner. He spoke in Committee of his dialogue with the energy companies, without saying exactly what he would do on this matter. This amendment would allow him to construct a good way forward. I beg to move.

[Baroness Northover]

My Lords, Amendment 157 draws attention to the need to ensure that the smart meter installation visit promotes consumer confidence and protects customers. We have already proposed to require suppliers to develop a code of practice governing the installation process and to ensure that the installation is not used for unwelcome sales activities.

Since the prospectus was published, suppliers have made good progress in drafting a code, with input from consumer groups and others. The smart metering programme has made it clear that the code will not be voluntary. We will shortly set out our detailed decisions in this area as part of the government response to the consultation. We have all the necessary powers to put the code in place, backed up by a licence obligation, under Section 88(3)(g) of the Energy Act 2008 as it now stands.

Amendment 158 in this group would require the Government to consult on a strategy to deliver the intended benefits of smart meters to consumers and to report on progress. Therefore, I assure your Lordships that the Government are clear that they are accountable for the successful delivery of the programme and its benefits. Indeed, this recognition was behind our recent decision that DECC would take direct responsibility for the next phase of the programme. We made this clear in announcing that decision in December, and it includes accountability for ensuring delivery of benefits.

However, provision in primary legislation is not required. Indeed, this provision would cut across the things that the Government are already doing to achieve the intent behind these amendments. The Government are already consulting on our strategy to achieve the benefits sought for the programme. As many of your Lordships will know, the Government published a prospectus in the summer last year containing a wide range of proposals for consultation. These proposals covered the policy design for the implementation of smart metering, including a wide range of proposals for the technical, commercial and regulatory arrangements required to deliver the benefits.

This has already been a very full and detailed consultation, with several hundred pages of published consultation documents. The prospectus was supported by two full impact assessments setting out clearly the benefits that we seek. We will shortly publish the conclusions of this process, which will confirm the Government’s strategy and plans. It would therefore be unnecessary to reconsult on this strategy and it would cast doubt on our conclusions to do so.

It is important to say that there will need to be further work to develop the benefits management arrangements and, crucially, the consumer engagement strategy. If necessary, we will bring forward proposals for changed or additional measures using the Secretary of State’s powers. It is also important that we have strong programme management arrangements, and that the measurement and reporting of benefits is robust and rigorous. We will set out how this will be taken forward. All these matters will be specifically addressed as the programme is taken forward by the Government.

I hope that the noble Lord will be able to assure his noble friend that much of what he is seeking is already in train and that his amendments would cut across that. I am sure that that is not what his noble friend intended. On that basis, I hope that the noble Lord will be willing to withdraw the amendment.

[Lord Grantchester]

I thank the Minister for her fulsome acknowledgement and exposition of where we are with smart meters and of everything that is going on within her department with regard to the industry. I shall certainly reassure my noble friend and he will enjoy the most fulsome remarks that she has just expounded. With that, I beg leave to withdraw the amendment.

--- Later in debate ---

Moved by

[Baroness Northover]

162: Before Clause 88, insert the following new Clause—
“Special administration under the Energy Act 2004Amendment of section 166 of the Energy Act 2004
(1) Section 166 of the Energy Act 2004 (indemnities) is amended as follows.
(2) After subsection (3) insert—
“(3A) As soon as practicable after agreeing to indemnify persons under this section, the Secretary of State must lay a statement of the agreement before Parliament.”
(3) After subsection (6) insert—
“(6A) Where a sum has been paid out by the Secretary of State in consequence of an indemnity agreed to under this section, the Secretary of State must lay a statement relating to that sum before Parliament—
(a) as soon as practicable after the end of the financial year in which that sum is paid out; and(b) (except where subsection (4) does not apply in the case of the sum) as soon as practicable after the end of each subsequent relevant financial year.(6B) In relation to a sum paid out in consequence of an indemnity, a financial year is a relevant financial year for the purposes of subsection (6A) unless—
(a) before the beginning of that year, the whole of that sum has been repaid to the Secretary of State under subsection (4); and(b) the company in question is not at any time during that year subject to liability to pay interest on amounts that became due under that subsection in respect of that sum.Special administration under this Chapter”

[Baroness Northover]

This is a minor and technical amendment to ensure consistency of statutory reporting to Parliament under the Energy Act 2004 and the Bill with public expenditure rules. The amendment to ensure consistency will apply both to the special administration regime for electricity transmission and distribution companies and gas transporters created by the Energy Act 2004, and to the provisions for a special administration regime for energy supply companies under the provisions in this Bill. I beg to move.

[Lord Jenkin of Roding]

My Lords, I of course accept the amendment that the Government have moved, but I return to the issue that I raised in Grand Committee about the uncertainty created by the third of the three tests of whether a company can be put into administration, which is that the company is likely to be unable to pay its debts. Under the original Act, that was a decision to be taken by the company. Under this Bill, it is a decision that will be taken by the Secretary of State. Despite what my noble friend said in reply to that debate in Grand Committee, it seems to me that this still leaves a substantial area of uncertainty for the industry. My noble friend said at the time that there would be consultation with the company and its directors. What I would like to suggest and, indeed, if we were going to reach this clause next Tuesday—we have made such haste this afternoon and evening that in a sense I have been a little bit caught short—I would have tabled an amendment to say that it should be done only with the consent of the company. That would make the case. I wonder whether my noble friend can say something about this now or whether this is a point I could raise again at Third Reading.

[Baroness Northover]

I thank my noble friend for that comment. I think the best way to take this forward is by consultation. If he would like to discuss the details with officials, we could see what, if anything, needs to be addressed.

Amendment 162 agreed.