Baroness Oppenheim-Barnes
Main Page: Baroness Oppenheim-Barnes (Conservative - Life peer)Consumer Rights Bill
Baroness Oppenheim-Barnes Excerpts
Baroness Jolly
My Lords, we have taken great care in developing these remedies, for obvious reasons, and we have had a very good example today. Services are a vital part of our economy. In addition, SMEs and micro-businesses make up the vast majority of services businesses. It is therefore essential that we get these remedies right.
When we consulted on these remedies in 2012, respondees supported the approach that we are taking. They considered it a sensible, balanced approach. Based on the support that we received for this approach to remedies, I am not convinced we need to amend them as this amendment proposes. The remedies that we have are clear for traders and consumers, and it is set out clearly in the Bill when the consumer can ask for each remedy. This is important: The British Retail Consortium told us that it agreed that,
“this approach would be helpful to the extent it is practical and realistic”.
However, we have also catered for the more extreme cases where personal safety is at risk. Here I should say that these notes were written before we had heard the story just told by the noble Lord, Lord Harris. Let me reassure him that the Bill does not force the consumer to have a trader whom they do not trust back in to repeat a service. The remedies set out in detail in this chapter of the Bill are not the only remedies available. To make this clear, we have written into Clause 54 that the consumer retains their access to common-law remedies.
Baroness Oppenheim-Barnes (Con)
Before my noble friend goes too far, what are the other remedies and how soon are they available?
Baroness Jolly
I will come back to the noble Baroness with chapter and verse on the remedies, but they will not be available until the Bill has been passed.
The remedies consumers retain under common law are the right to damages or, in some cases, the right to treat the contract as at an end, rather than being limited to the statutory remedies in the Bill, as long as they do not claim for the same loss twice. I am sure that no noble Lord would do that.
I recognise that consumers and traders will not want to go to court in most cases. That can, in some cases, be expensive and time-consuming. However, knowing that they retain the right to go to court is intended to empower the consumer to ask for their money back. It should also encourage the trader to agree with the consumer to do this. The consumer’s rights under this chapter of the Bill are not the only legislation ensuring that services are performed safely. For example, building regulations require that building work does not compromise the safety of people in and around the building.
Many service providers rely on their reputation and word-of-mouth recommendations. If they have made a mistake, they will want the opportunity to return to fix it. It would not be fair on those traders to take away that opportunity. Many consumers would also want the trader to rectify a problem with a service rather than have the inconvenience of finding another provider. There is also nothing to stop the trader volunteering to give the consumer a price reduction without a re-performance. The trader and the consumer are free to come to an arrangement separate to the statutory remedies in the Bill. Reputable traders will negotiate a remedy with the consumer, taking into account what the consumer has asked for. Given that consumers will be able to access compensation where re-performance is not desired and that our consultation showed broad support for our approach, I ask the noble Baroness to withdraw the amendment.
Baroness Wilcox (Con)
I found it quite frightening listening to what the noble Lord was saying there. That sounded like the beginning of a great fire that he was putting his foot into. I go to my doctor and give him permission to find out data from me: where I shop, where I do this, where I do that. It is a simple thing to say, but where does it move next? I go to my moneylender and he says, “Well, tell me about this, give me permission to see that”. This sounds terribly frightening to me.
Baroness Oppenheim-Barnes
On the same point, I am appalled at what is being proposed for doctors. As things are, they never look at their patients any more. They screw up their eyes and look at the screen; they cannot see the current condition of their patient. On a very good World Service programme a little while ago, three people were interviewed about the medical profession. One very prominent doctor in America, who had previously been in the deepest jungles, said that doctors in America could not compete with those in the jungles because they knew their patients and their patients’ background and did not sit staring at a screen instead of at the patient.
“Display of information about rights under this Part
(1) Suppliers of goods and services to which this Part applies shall be required to display at the point of sale information in plain and intelligible language and in a reasonable format which explains to consumers the relevant rights of consumers under this Part.
(2) The “point of sale” in subsection (1) means—-
(a) the trader’s premises;(b) any other premises at which the contract is agreed;(c) if the contract is agreed via the trader’s website, that website.(3) If the contract is agreed via email, the requirement in subsection (1) is for the information to be given in the email offering or (as the case may be) accepting the contract.
(4) If the contract is agreed orally but outside premises as mentioned in subsection (2), the supplier must at the point the contract is agreed give to the consumer a written notice containing the information required by subsection (1).”
Baroness Oppenheim-Barnes
My Lords, I start by apologising if I repeat things that I said at Second Reading but I regard all three of my amendments that I have tabled as a dress rehearsal for Report. I am particularly grateful to have been joined in support for these amendments by two other former chairmen of the National Consumer Council: my noble friend Lady Wilcox and the noble Lord, Lord Whitty.
My first amendment, Amendment 51, is something that I feel deeply about and is important to any sort of success in the Bill. I think of all the years that I and others have spent introducing consumer legislation and sitting on Committees—Second Reading Committees and other Bill Committees. At the beginning the of the Bill’s Committee stage in the other place, witnesses were called from all three consumer bodies that are best known and have the most experience. The stunning information that they gave was that 75% of all consumers had no idea of their rights or obligations. Therefore, every piece of past consumer legislation that I and others have been involved in has proved to be fairly worthless. We now have this important Bill, which is very welcome and comprehensive, and on which the Government have spent time, involving witnesses and great expense. We should realise that without this amendment, we might all be wasting our time.
Not only do consumers want this legislation but businesses do, too. The British Retail Consortium said that it would be only too happy to join in this. The point of sale is the point at which the consumer decides to buy the goods or pay for services. It is essential that they know what their rights and obligations are at that stage. This is possibly the most crucial of all amendments because without it the Bill could simply go through, be welcomed by all who knew about it—certainly by most noble Lords here—and be worth nothing. This amendment, I hope, is the first crucial step in righting that wrong. It probably needs more detail by the time it comes to Report, and needs to provide precisely what information is required. I was very impressed by similar amendments tabled by my noble friend Lady Neville-Rolfe regarding goods bought online, which will be covered in this way.
This is a matter for which under no circumstances would I accept anything less than approval. It is fundamental; it says what it says quite clearly. I am grateful to the National Consumer Federation for helping me to draft these amendments and for its support. I hope that other Members of the Committee will also be in support.
Baroness Jolly
I can rely on the noble Lord, Lord Harris of Haringey, to put me on the spot. The de minimis element of £5 may be worth looking at but that sort of decision is considerably above my pay grade. Noble Lords should consider how irritating it is to listen to commercial adverts. The advert itself may be absolutely fine but then all the rights are read out so quickly that you cannot take them in, or at least I cannot do so.
We have strong backing from business organisations to promote the summary of consumer rights to their members on a voluntary basis. It will be a central tool that we provide to businesses in April. It will help them comply with the new obligations they will have and explain these rights to their customers, so avoiding costly shop-floor mistakes that undermine their reputation. We do not need every single retailer in the country to be obliged to display the summary of consumer rights to achieve our objective of increasing consumer knowledge and confidence but we will be looking for a significant take-up. We consider that this approach, supported by Which?, will be far more effective, and far less burdensome, than the mandatory approach proposed by these amendments. Therefore, I ask the noble Baroness, Lady Oppenheim-Barnes, and the noble Lord, Lord Whitty, to withdraw this amendment.
Baroness Oppenheim-Barnes
I am very disappointed because the response we have had sounds like a wonderfully constructed Civil Service briefing. There is a very simple definition of merchantable quality. When I was Minister of State for Consumer Affairs, I was already very concerned about people not being aware of their rights. I therefore introduced an education pack into schools. I introduced it in every type of school. First, the children—young men and women—concerned were very interested. They did not find any difficulty in defining merchantable quality. One, who was only 10 years old, said, “My mother just bought a knife that says it was extremely sharp. It doesn’t cut anything. Is that merchantable quality or not?” That is simple to answer. I am not suggesting the kind of information provided at the point of sale needs to be complicated; it is very important that it would be drafted in a way that was comprehensible to most people, not too long and not too detailed. If this amendment was finally passed I would want to have a great deal to say about a description of merchantable quality, both from experience and, believe it or not, from school children.
“Application of this Part to regulators
(1) This section applies to regulators which are involved in protecting consumers (“consumer regulators”).
(2) It shall be the duty of consumer regulators to promote the rights of consumers under this Part.
(3) In exercising their functions, consumer regulators shall have regard to the desirability of promoting—
(a) accurate, plain and intelligible information for consumers about goods and services;(b) fair and reasonable practices in the selling of goods and services;(c) fair and reasonable pricing of goods and services;(d) the inclusion of comprehensive information on goods and services in contracts;(e) quick and fair means for consumers to make complaints and have disputes resolved. (4) Any fines levied by a consumer regulator on a trader for breaches of rights under this Part shall, following deductions by the regulator for its reasonable administration costs, be used to compensate consumers for breaches of their rights under this Part.”
Baroness Oppenheim-Barnes
This amendment is also very important. It is common knowledge that not a great deal is known about the actual defined duties of the regulators. I remember when I received the first Monopolies Commission report in my department, to the effect that the nationalised electricity industry was of positive disadvantage to consumers for all sorts of reasons. At that point we were able to start looking at privatising the industry, because one of the most cogent parts of the report was that it was not operating either in the interests of its customers or of its employees, which was true. So we then started to embark on a long series of denationalisation and privatisation of the utilities. When we did so, it was implied that the regulators would be very important, they would have great powers, and that they would exercise those powers on a regular basis, and also investigate. There has been a feeling recently that the regulators are not necessarily asking all the right questions.
Once again, the National Consumer Federation has given a number of examples which refer to the actual requirements as far as these people are concerned. It is its job to identify risks, scan the horizon and use consumer insight, creating the right incentives for the market to work well for consumers, ensuring that the data is published, and working closely with other regulators. It does not give the impression of being in touch at all at the moment. It needs to involve consumers and their representatives, including consumer bodies, to have a regular dialogue. What is most important is to ensure compliance with licence conditions and other rules through investigations and effective enforcement as well as imposing penalties for firms which, as we know, often amount to many millions. Only recently one of these regulators has, for the very first time, insisted that in the case of that particular fine, a certain amount had to be paid in refunds to consumers as a result of the firm not doing what was necessary, or what the regulators required them to do.
The very important first move that I would like to see, as part of this amendment, would allow them to go a lot further than that. We hear about the multimillions that are paid in fines and we are not sure where it all goes, although we know that it goes to the office of the regulators. But there is no reason now why my proposal should not be a requirement on regulators, without any real change of law, when a really bad result, certainly as far as consumers are concerned, has led to a fine. This is another very important amendment, because it is very basic and deals with problems that a lot of people do not comprehend today. They see these big fines—they read about them in the newspaper—but do not actually see them directly benefiting them. They will do, but it is not all that clear.
As I said, this amendment is a quick and fair move for consumers to make complaints and involve themselves in disputes, and also proposes, in subsection (4), that these,
“fines levied by a consumer regulator on a trader for breaches of rights … shall, following deductions by the regulator for its reasonable administration costs, be used to compensate consumers”,
who have been put at a disadvantage. Again, this is not asking the Government to do anything but to define more clearly the role of the regulator: what it should be and how this should be carried out. I beg to move.
Baroness Maddock (LD)
My Lords, I support my noble friend on this, partly because during the passage of the Energy Bill—the noble Lord, Lord Whitty, was there when we did this—I managed to get the Government to accept my amendment to promote more accurate information on energy bills. In reading my noble friend’s amendment here, I would like the regulators—just as in my amendment that is now law—to “uphold” rather than “promote” in subsection (2). I would also want them to be “upholding” rather than “promoting” in subsection (3)(a), with reference to energy bills. That is something that they should make sure happens. It is part of the law. I strongly support my noble friend here. It would be very good if we could get this in other areas. We have something rather better in energy bills thanks to the Government accepting an amendment last year in the then Energy Bill.
Baroness Jolly
This has been a very interesting debate, interwoven with sorry tales about regulators. Of course, the noble Lord, Lord Blencathra, as an MP, regularly heard these tales from constituents coming into his constituency surgery. One of the regulator’s primary objectives is to take account of consumer interests. They must report annually on how they fulfil their functions, and they have done much good work for consumers. Water companies have agreed to return £1 billion to consumers after negotiating with Ofwat and the Consumer Council for Water. All but two water companies agreed in their plans to keep prices at inflation levels. Ofcom has capped second class mail prices, while Ofgem has made npower pay £55 million to consumers due to incorrect billing. However, it is also important to know that Citizens Advice does a lot of advice in this area.
I refer noble Lords back to my comments on Amendment 105A regarding the good work that Citizens Advice is doing. In addition to those comments, I shall expand on the benefits that that body provides to consumers. It promotes consumer rights and clear, intelligible information for consumers. Sixteen million people were helped through the Citizens Advice digital service, while 84% of clients said that their understanding of their rights had increased and 86% of clients reported a positive impact of advice on their lives. All this is a key port of call for consumers in the regulated sectors. I also mention that relevant consumer bodies play a vital role in this regard, especially in helping consumers on matters around redress, complaints and securing the best deals in issues such as utilities. The effect of this amendment would be to place extra requirements on regulators and increase bureaucracy when there is a drive to cut the costs of regulation and increase efficiency. The Government believe that in many cases it would also replicate protections that already exist and take away the discretion of regulators to decide what is appropriate in the circumstances.
On regulators levying fines for breach of any part of this amendment, the enhanced consumer measures set out in Clause 79 and Schedule 7 to the Bill would achieve a similar aim. In summary, there is a limited benefit in adding more duties on the regulators. Noble Lords can be reassured that much is being done for consumers by regulators, but of course we salute the wonderful work being done in the world of consumer rights as championed by my noble friend, and we will be happy to meet her to discuss the amendment. However, I ask her to withdraw it.
Baroness Oppenheim-Barnes
I thank my noble friend for that reply. She will not be surprised to hear that I am, shall we say, disappointed, but obviously I am not put off. I do not want to be accused of currying favour with the Opposition because that is not my primary objective, but nevertheless from time to time they do seem to have a closer grasp, although not as close as those of us who have been MPs and have held constituency surgeries where these things come up over and over again. There is a distinct division in your Lordships’ House between those of us who have such experience and those who do not. I think that this is one of the occasions when it shows. For the moment, I reluctantly withdraw the amendment.
“Obligations on suppliers of utilities
(1) This section applies to suppliers of electricity, gas, water, sewage systems, telephony (including mobile telephony), internet connections and analogous utilities (“utilities suppliers”) and consumers of those utilities.
(2) Utilities suppliers shall provide consumers with the options of receiving bills in paper or electronic format.
(3) Utilities suppliers may not levy a charge on consumers who opt to receive bills in paper format, and may not reduce prices for consumers who opt to receive bills electronically.
(4) Utilities suppliers shall provide consumers with the option of paying bills by cheque.
(5) Utilities suppliers may not levy a charge on consumers who opt to pay by cheque, and may not reduce prices for consumers who opt to pay by means other than a cheque.
(6) In this section “cheque” has the meaning given in the Bills of Exchange Act 1882.”
Baroness Oppenheim-Barnes
I know that this is also very popular with people throughout the country. Again, it deals with obligations on the suppliers of utilities and the way in which the regulators would actually set about ensuring that all the provisions set out in the proposed new clause are met. They define what the duties should be in relation to these utilities. Once again, I am grateful for the support I have been given by supporters of the Keep Me Posted campaign around the country in drafting the amendment.
The use of digital information is not just a matter for old crones who cannot actually operate the technology. Although I am one of them, I nevertheless realise that there are many who can but who have the same problems. I am hoping that all the various obligations that this amendment would put on the suppliers of utilities, being a little more prescriptive than the previous one, are acceptable. That applies absolutely more than ever to subsection (4) of the proposed new clause:
“Utilities suppliers shall provide consumers with the option of paying bills by cheque”,
as well as not levying a charge. I went into that part of the new clause in some depth recently when I looked up some old bills. I could see that in 2005, the postage cost 45 pence. It is now 52 pence, but the actual amount that you have to pay can be anything upwards from £6, although it is less than that for some of them. The postal costs of sending out those letters are 22p, not 45p or 52p. My noble friend Lady Neville-Rolfe said in reply to my noble friend Lord Hodgson’s good amendment on this point that it is not for the Government to tell companies how they should organise their costs. I entirely agree; it is for the regulators to do that. It is not a thing for Governments but the regulators.
Many people feel dismay when they receive these extra charges because some 7 million people do not have access to broadband. They are being fined for something they have no hold over whatever. Everyone objects to being charged for something that has been their right for many years. Suddenly they have to pay something extra, and it affects in particular the elderly and those who rely on carers. It is not only those people who are affected, although they are obviously the most important; it affects many people who do not have the computer skills they need because they say they cannot take anything in until they have typed it from the computer on to a piece of paper. That applies through all levels of education and age. I am not going to name names, but one of the most senior physicians in the country expressed exactly that view and said to me: “Can I write to someone about this? Who should I tell?”. I said: “You’ve told me”, and so have many other people.
It is a cruel policy to fine people in this way. It is a form of fine for being unable to do something digitally, perhaps due to other conditions. The subsections in the amendment deal particularly with each problem. It does not involve huge ramifications or costs for the Government. It does not even have marginally big costs for the industry; so, once again, I consider the amendment to be crucial. I am sorry to have to bring all of them out like this, one after another in a non-yielding way, which is not my normal way. I therefore hope that noble Lords will support me.
Lord Clarke of Hampstead (Lab)
Noble Lords will know that I am not a regular attender on the Bill but the amendment, once I had read it, sparked off all sorts of thoughts, particularly for those who I meet in branches of the Post Office and desperately want to use normal transaction methods. The terms of the amendment will be welcomed by countless customers who have not been, and perhaps do not want to be, involved in electronic transactions. It is a fact of life that many find the modern method of conducting exchanges with suppliers, especially of utilities, by electronic means a convenient way to settle their accounts or bills. It is also a fact that many do not want to avail themselves of this advantage of modern technology. They are quite happy writing out their cheques, sending off payment for their bills and getting a nice receipt back through the post. I must declare an interest as a former postman, so the idea that people might start using the post gives me a lot of satisfaction.
A particular point of the amendment which I am delighted to see is the safeguard against the form of financial punishment that comes in if people do not want to take up the advantages of getting 10 direct debits, paying three weeks in advance and all that nonsense. People who do not want to do it should not be made to pay for those people who do. If people are getting the advantage of these financial rebates or discounts, they are being paid for by somebody, and they are being paid for by the other people who are not involved in reductions in tariffs.
I came in tonight to say how pleased I am to see this amendment because it is what a lot of people want: straightforward exchange, paying bills, getting receipts and tucking them away in a drawer. If you ever have to tidy up people’s affairs after they have departed this earth, you will find that some people keep their bills for many years.
The debate on the previous amendment gives me the opportunity to talk about a particular regulator. The noble Baroness, Lady Oppenheim-Barnes, referred to the cost of postage, and I am delighted that she did because the regulator has not done much of a job on the question of payment to Royal Mail by its competitors. Are talks going on which will make it a bit fairer? The competitors of Royal Mail are dumping their post into the system and under the universal service obligation, Royal Mail has to deliver it, which is the expensive part. Are any discussions going on that will bring this downstream access, as it is called, under some control so that the competitors’ payments to Royal Mail bear some relation to the true cost? At the moment, to maintain the universal service obligation Royal Mail has to subsidise its competitors because there is a requirement they are all owed a margin of profit. The Government should be looking at that margin of profit with the regulator.
I am delighted with this amendment. I just hope that the people of this nation will be able to say that they can sleep in their bed at night not having to worry about www dot coms. My noble friend Lord Harris made me feel much more competent when he explained the difficulty he had dealing with a particular whatever they call these websites. That is me. It shows that I am not all that dim. I am fairly dim, but I am in good company with my noble friend Lord Harris.
Baroness Hayter of Kentish Town
I think we will just call the noble Lord, Lord Stoneham, a brave man. I would not take that lot on.
The noble Lord, Lord Hodgson, is right. We had a brief canter around this area last week on his amendments. I just want to thank the noble Baroness, Lady Oppenheim-Barnes, for focusing the Government’s attention on this. As I think the noble Lord, Lord Hodgson, said, this is a Consumer Rights Bill and this is a very basic right: to be able to have a choice about whether to have your bills on paper and to pay by cheque—without paying for the privilege.
We need to keep at the centre of our debates those customers who struggle to get paper bills, and easily accessible and understandable information. The figure of 7 million has been mentioned of people who do not have internet access. We have a lot of people who find that even reading is quite difficult, let alone trying to do it on a small handheld telephone. But as we mentioned last week, there are other people as well, not just those who do not have access to printers, but who, for example, need a domestic bill to prove their identity, as my noble friend Lord Harris of Haringey has said. But there are also carers and cared-for people, as the noble Baroness, Lady Maddock, has highlighted. There are also divorcing couples, which is the time when you have to start splitting bills; the self-employed who need to make claims; people who work away or are in hospital for a long time, who may not have access to their normal internet and can quickly lose track of what is happening.
I will take two minutes to tell you the very sad story of a friend of mine who was virtually battered to death. She was in hospital for a very long period after this. But the only way she was able to help the police find the culprit was when she woke up in hospital. The usual thing happened, her post came in. Her bills came in and she was able to see that a credit card had been used. The police could then go and see where that money had come from, and find a photograph of the culprit. I am glad to say that the attempted murderer is now well locked away. But there are all sorts of reasons why people feel secure when they are able to see that sort of data on paper.
That may be an extreme example, but people want to check on what bills have come; they want to check on who paid them; flat sharers want to be able to divvy them up; and people who have got any problems, particularly with paying bills, as we mentioned last time, where they have to work out which bill to pay when in order to make sure that nothing is cut off. They literally do this with paper. I sometimes think that those who run the utilities just do not understand how people live. Maybe they should spend a day with my noble friend Lord Clarke of Hampstead sitting in a post office and hearing about how people do things; they would learn a little more.
Finally, some companies take particular advantage of their poorer customers. On the wider issue of price, we know that energy suppliers target their lowest price at the big users and actually penalise their smaller customers for not using very much, and then go on to make it even worse by charging those very customers if they want their bills on paper.
It is great that some people can do all of this electronically, but they are likely to be younger, and more savvy. I wonder whether the utilities really have to make life difficult for the rest of us—who want paper bills and the use of cheques—to encourage others to take up the electronic option. People who choose to do it electronically do not do it to save £6; they do it because that fits in with their way of life. I doubt very much they need a £6 bribe, if you like, to go electronically. That may have been the case earlier on, but now it is not the reason. Rather it is an excuse for the utilities to get a bit of money out of people who want to pay by cheque rather than, any longer, acting as an incentive. I hope that the Minister hears the strength of feeling. She may recall when we had the debate in the Chamber that this was the feeling across the House, and there will be a lot of support. It would be advisable for the Government to take the initiative and do this rather than have the sort of defeats that we have seen tonight in the Chamber.
Baroness Oppenheim-Barnes
My Lords, I would like to make a point in the limited time remaining, which is that the companies that continue to give paper bills and continue to give the sort of services we have asked for are not losing anything, because of all the extra money they have earned from the vast majority of people who are paying online. So there is no financial loss to any of these companies, and particularly to BT.
Baroness Neville-Rolfe
My Lords, first, I thank my noble friend Lady Oppenheim-Barnes for her amendment, for her previous two amendments and for providing us with a useful and constructive discussion. She was not here for what I was going to describe as a gallop, but my noble friend Lord Hodgson rightly described as a canter, around this issue in our previous session. I shall not, in the interests of time, repeat everything I said on that occasion. For example, we had a good discussion about the point that the noble Lord, Lord Harris, made about ID. While I have the floor, I also pay tribute to everything that my noble friend Lady Oppenheim-Barnes has done for the consumer over many years. Things have improved as a result of things done recently, from domestic and EU sources. This Bill, if we can get it through, will make further improvements.
I was also glad to hear of my noble friend Lady Maddock’s experience, which I shall come back to in a minute. I am well aware of the Keep Me Posted campaign, which the noble Lord, Lord Harris, mentioned, and have indeed talked to some of the campaigners about their plans. It is good for the postal angle to have been articulated by the noble Lord, Lord Clarke of Hampstead, whom I thank. I also understand that this amendment is talking about the regulated areas, not everything in general; that point is well made.
We are returning to an issue that has been debated in the House on a number of occasions. It is very much a House of Lords issue and I therefore thank everyone for their thoughtful contributions. The amendment is addressed to utility suppliers but my noble friend Lord Hodgson mentioned banking, which is not in the amendment but, no doubt, similar considerations apply. All these sectors have regulators to ensure that consumers are treated fairly, in accordance with licensing rules and wider consumer protection law, including those intended to protect the more vulnerable in our society—a point that I am going to come back to.
Customers may take queries or complaints to the relevant regulator and receive some form of assurance on their position—for example, should a business seem to be charging excessively for supplying a paper statement or for processing a cheque payment. I believe that we have already established a consensus that some individuals value retaining the option of paper transactions. We are all clear that the terms of the contract must be set out at the outset, at the time of agreeing the contract, and that they must be clear and transparent. In particular, consumers need to be clear and agree if there is to be a change in the way in which they receive and pay their bills. In this way, the customer knows how bills and statements are to be provided and on what terms. As I mentioned in our previous debate, paper bills and cheque payments have never been free. The fee for processing them was always borne by the consumer but was tied up in the administrative costs of the utility, and the charge was spread across the customer base. Thankfully, today these charges are more transparent and linked to costs.
This amendment would be of particular disadvantage to online customers, for whom statements are readily available and can be printed if necessary, especially by the young but increasingly by our digitally aware “silver surfers”, because many people are embracing the internet at every age in a very surprising way. I welcome the opportunity to save money that paperless bills offer, and so do many people. Paying by direct debit, which was condemned by my noble friend Lord Blencathra, can also enable people—some of them vulnerable and elderly—to budget more effectively than being faced with quarterly or lump-sum bills. There can be some value there. For them, the proposed statutory requirement set out in these amendments adds little but the possibility of extra costs.
It is undoubtedly more expensive for a regulated business to print out and post bills to its customers than it is to deliver them electronically online. It is not for the Government to dictate that certain costs cannot be accounted for with the consequent burden instead being potentially passed on to all customers. It is surely reasonable to incentivise customers to use the cheapest processing mechanism by sharing savings with them. This amendment would outlaw that and almost certainly drive up the charges to online customers.
Baroness Neville-Rolfe
It is always good to have that sort of good experience on the public record. I thank the noble Baroness for that intervention.
The noble Lord, Lord Clarke of Hampstead, asked whether there were any talks going on with the regulator to ensure that payments to Royal Mail are fairer. I will need to write a letter to the noble Lord on what is largely a Royal Mail competition issue, if I may. I was also pleased that the noble Lord, Lord Blencathra, shared his experiences, knowing that he comes from the north of England, even though I do not think that I agreed with him on every aspect. The noble Lords, Lord Hodgson and Lord Blencathra, talked about meters. The Government are working with industry on smart meters which will enable readings without a visit to a house and therefore make the cost of energy use more visible. That will be better for consumers.
In conclusion, this is a difficult area, as we do not want society to incur the costs of printing and sending off bills to everyone if that is not needed. The trouble is that if there is no cost to paper bills, people will just opt for paper anyway even if, like me, they can manage online. I think that that is a risk. I know that is not a popular thing to say but I hope that noble Lords will reflect on that aspect of things. There is already a range of billing, payment and statement options available on the market. We agree that it is important that the appropriate protections on access to paper bills are kept in place, and are doing that through our licensing regimes and specific regulatory and sector interventions and by driving quality, choice, fair prices and value for money for consumers through good competition and good consumer law.
We will of course reflect on what has been said in this lengthy and important debate, and see if anything can be done. However, in the light of what I have said, I ask my noble friend to withdraw her amendment.
Baroness Oppenheim-Barnes
I thank my noble friend for that very careful and detailed response, which was extremely interesting. She paid a lot of attention to what has been said. I am afraid that she will not change my mind but on this occasion I beg leave to withdraw the amendment.