Consumer Rights Bill

Baroness Oppenheim-Barnes Excerpts

Wednesday 26th November 2014 Lords Chamber

Moved by

[Baroness Oppenheim-Barnes]

50: After Clause 86, insert the following new Clause—
“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) At the consumer’s request, which can be done by any means at any time, including at the time of signature of the contract, forthcoming bills shall be sent to that consumer in paper format free of charge instead of the digital version proposed by the utilities suppliers.
(3) If the request is introduced when the contract has already started, it will be taken into account within 10 working days after the date of request.
(4) This section applies equally to those who wish to pay by cheque.
(5) In this section, “cheque” has the meaning given in the Bills of Exchange Act 1882.”

[Baroness Oppenheim-Barnes (Con)]

My Lords, I beg to move the amendment standing in my name on the Order Paper, which I will read because the details will reoccur during what I have to say. The amendment would place an obligation on “suppliers of utilities”. I specify utilities because their suppliers are the worst offenders and the easiest to deal with. The amendment,

“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 … At the consumer’s request, which can be done by any means at any time, including at the time of signature of the contract, forthcoming bills shall be sent to that consumer in paper format free of charge instead of the digital version proposed by the utilities suppliers”,

currently. The amendment continues:

“If the request is introduced when the contract has already started, it will be taken into account within 10 working days after the date of request … This section applies equally to those who wish to pay by cheque … In this section, ‘cheque’ has the meaning given in the Bills of Exchange Act 1882”.

The most important information to give your Lordships’ House on the need for this amendment is about the people whom it concerns. For the most part, they will be elderly with very limited means. They may have access to digital versions of their bills but, for a variety of reasons, do not or cannot learn how to use it. Many of the elderly people at whom this amendment is directed will have carers and want to hold a piece of paper in their hand. They want to see a bill. They want to see that it has been paid. They want to see how much it has cost them. These people, the vulnerable people, are those with whom I am mostly concerned. However, they are not by any means the only people who are desperate to get these important pieces of information, without having to pay for it, from the utilities, which are, on the whole, the worst offenders. This is very important to a lot of people. Many people can use all sorts of complicated, digital machinery but still want a piece of paper in their hands. I am in both categories. I have a personal interest because I am one of the old fogeys who do not do it, but I also object to paying for getting my piece of paper.

It would be interesting to list the legislation that other countries have passed in this respect. In France, where there is strong support for digital bills, there is a new piece of legislation. Article 3 of its decree stipulates that, at the consumer’s request, which can be done by any means at any time, including at the time the contract was signed, upcoming bills shall be sent to him or her free of charge, instead of the digital version proposed by the operator. If the request is introduced when the contract has already started, it will be taken into account within 10 working days after the request. That is now the law in France. A similar provision has been introduced by the Spanish courts and is now the law in Spain.

There have been exchanges on other issues related to the consumer rights directive, to which I shall refer. Once again, we have a Consumer Rights Bill before your Lordships’ House, and it would seem strange if we did not consider this to be the right place to put that legislation. We have to implement that directive within a limited period; we have roughly six months left in which to do so, and this is therefore an important occasion at which to impress upon the Government the urgency of the matter.

The directive does not refer in particular to the type of case that I am discussing but to information that has to be provided on paper, unless one agrees to take it by some other durable medium, such as e-mail et cetera. It is clear that it relates to contracts. I have clearly put in the amendment that these are contracts which are taking place with the various utilities. It is also convenient to include that provision because it will be in the hands of the regulators, which I believe can be relied upon entirely to represent consumers if this proposal is passed into legislation.

Among the replies in opposition to the amendment is, first, the claim that it applies only to contracts. However, I have carefully made it clear that these contracts are as described in my amendment. Under the directive, delivery of key information—I should make it clear that this is not what has been enacted in France or Spain—should be given on paper unless one agrees to receive it via some other durable medium such as e-mail. Therefore, it is clearly in the directive. It is not related specifically to the type of contracts I am talking about but nevertheless it means them as well.

One of the arguments that has been expressed against the amendment is that consumers who may have financial difficulties—and they are by no means all of the consumers who are interested in this but they are obviously the key ones—often benefit from contracts which are at the lower end of the scale of contracts available in that particular area. I suppose that is some help to them but it still does not cover the costs. Therefore, we come back to the point where these huge utilities say that it is going to be very costly for them to deliver by paper and that they are giving them contracts that are probably better than others in some respects but they really cannot afford to put a stamp on an envelope. The cost, because they have delivery contracts, is 22 pence.

These big industries cannot afford either to give notice that increases are taking place before they have taken place. However, they can afford to put the information online ready to press a button to send it to all the people who have opted for digital communications. When they press that button, they could easily press a button to send the information that their other consumers require on paper. The opposite argument to theirs is that many people who opt for digital communications forget to look. I understand that this happens to a very large proportion of those who receive information digitally. When they forget to look they have to go to a call centre quickly. Dealing with late payment calls to the call centre costs these industries about £5.30. However, we have not heard them striking those out of the contract yet.

Therefore, I feel that this is a very modest amendment. It is well within the Government’s capabilities to introduce it. An equivalent measure has been introduced in other countries. I cannot think of a good reason why it should not be here. No big organisation in the areas I have specified is going to be making a huge loss, or in fact making any loss at all. Often the cost is about £2. In my experience it is as much as £6 and it does not apply to all these regulated companies. Many of them already supply paper bills without charging. I see no reason why we should not accept this part of the directive into our Bill, which is after all the Consumer Rights Bill. For once I think Europe is doing the right thing before us. I am one of the people who voted against joining originally but I do not think Mr Farage will be very happy with what I have just said. Therefore, I will listen with great interest to my noble friend.

--- Later in debate ---

[Baroness Neville-Rolfe]

I agree that broadband is a substantial investment. The Government and the utilities are putting a large amount of investment into a broadband structure, not least—I used to campaign on this when I was on the Back Benches—to ensure that there is proper broadband right across the UK. There are obviously costs to consumers in change but it is extraordinary how the cost of software, smartphones and so on has come down as a result of our innovative industries in the UK demonstrating great progress.

Transparency is also important. If utility providers choose to make a charge for providing a paper bill or for settling bills by a more expensive payment method, the law requires that these additional charges be made clear to customers before they are bound by a contract. We are working on this. We are not standing still. The regulators keep a close eye on charges to customers and on the issue of choice and there is a good deal of work going on in this area. For example, Ofcom has announced that it will be collecting further information on energy suppliers’ approaches to settling price differences between payment methods. When Ofwat approves water companies’ charges each year it makes sure that the companies offer a reasonable range of payment options. Ofcom published research in July which looked at the affordability of essential telecom services. It found that the cost of the itemised bills was not a material concern to its customers.

Turning to the amendment in detail, I shall explain why I cannot accept it. There are legal constraints, particularly from European directives, which would prohibit legislation in the manner proposed. My noble friend Lady Oppenheim-Barnes mentioned the French and Spanish legislation in this area and the excellent staff in the House Library have provided a note on that. It records that the French Minister made an order regulating billing for electronic communications services—that is, calls, text messages and the internet. However, some of the parallels stem not from the consumer rights directive but from French national policy under French law. We have already fully implemented the consumer rights directive in the UK—that is the directive to which my noble friend referred—and that process was completed in June. I should add that the consumer rights directive requires the provision of pre-contractual information on a wide range of matters before the consumer is bound by a contract. However, it does not require bills to be provided to the consumer in paper form. I just wanted to clarify the legal position.

Although I agree that we need to think about the interests of the 7 million people who are not online, what really matters is getting people the best advice and putting them on the right tariff. Citizens Advice is seeking to help people to do that, as are the comparison sites to which the noble Baroness, Lady Hayter, referred, and to save significant sums of money. The key message we should take away from today’s debate is how much you can save by being on the right tariff.

As I have said, the Government cannot support the amendment but I want to take action in this area. I thank the noble Baroness, Lady Oppenheim-Barnes, for promoting the importance of choice for a paper bill and the need to keep a close watch on this important issue. We also need to ensure that the pace of change is not so fast that it is detrimental to consumers, a point well made by several noble Lords.

I announce today two things. My honourable friend the Minister for Consumer Affairs will ask Citizens Advice and Citizens Advice Scotland to develop new guidance on this issue. This means that when a consumer phones Citizens Advice or CAS with a concern, the staff have useful relevant information to help the consumer. The Competition and Markets Authority has agreed to follow up its recent work on problem debt by considering further practices or markets that may generate particular problems for consumers with low incomes. If lack of access to paper bills is highlighted as an issue, the Government would look to act further.

In conclusion, I do not agree with the terms of the noble Baroness’s amendment, although I value all she has done during the passage of this Bill and in her long career as a consumer champion. The world is changing. We cannot and should not try to prevent that. But paper bills and cheque payments are available and we are taking action shortly through the Small Business, Enterprise and Employment Bill to make accepting cheques more attractive to business. I have set out in detail what is being done to protect choice and I have announced some action today as a result of the contributions that have been made by my noble friends and others during the passage of the Bill.

I warmly thank the noble Baroness, Lady Oppenheim-Barnes, for making this debate possible, but I ask her to withdraw her amendment.

[Baroness Oppenheim-Barnes]

My Lords, I thank the noble Baroness for the amount of time that she has spent on this issue with me. I also thank her for not making more public some of the arguments that I put forth when we met privately.

We shall have to do this. The fact that the French have taken one road and the Spanish another does not solve anything. The directive says that when a contract is embarked on its details can be provided in a way appropriate to the means of the person and should be given on paper unless other requests are made. Identity proof by passport or driver’s licence immediately knocks out most of the neediest people in the country: the elderly. They do not drive cars. They do not have passports. They do not go away. Those sorts of helps are not really any good to them. But the number of people in this country who still do not have broadband is about 1.7 million, so there is a big area of exclusion.

I am grateful to everyone who has contributed, and especially to my noble friend Lord Tebbit. His seal of approval is very important to me and to the House. Therefore, I think I really must test the opinion of the House.