Domestic Gas and Electricity (Tariff Cap) Bill

Lord Berkeley Excerpts

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

Moved by

[Lord Berkeley]

2: Clause 1, page 2, line 15, at end insert—
“( ) the need to ensure that holders of supply licences communicate with domestic customers in appropriate formats about the different domestic supply contracts which are available, including any tariff cap which may apply.”

[Lord Berkeley (Lab)]

My Lords, in moving Amendment 2, I shall speak also to Amendment 9 in my name and comment on some of the other amendments in this group.

These amendments focus on communication, particularly with vulnerable people who cannot necessarily use electronic means or who have other special needs. It is important that there is an obligation on the authorities to communicate the tariff cap “in appropriate formats”, so that those who receive this information will able to choose the means by which it takes place. Amendment 9 requires the same provision of information,

“relating to different domestic supply contracts and tariff cap conditions”.

It is the same argument: people must have the information so that they are able to choose what tariffs to go for.

I received some information from a group called Keep Me Posted, which is a well-known and probably much-loved organisation. It is a coalition of leading charities, consumer organisations, trade unions and businesses, which campaigns to ensure that all service providers offer consumers the choice to receive a paper version of their bill. That is not in the amendment but it is something that I hope the Minister will consider. Independent research by a company called Opinion Research Services found that 81% of UK adults want to choose how they receive important information such as bills and statements. But, as we all know, some businesses are restricting access to paper bills and statements, and if customers do not have these, it is difficult for them to make an informed choice.

There was another study by London Economics in 2015 about managing money online—which is what we are really talking about—involving 2,399 consumers. Half of them were sent a mock bank statement and a notice of change by post; the other half were sent them electronically. The result was that 82% of those in receipt of a paper statement correctly recalled their balance, as opposed to a meagre 32% of those who received the electronic billing. That is a really strong argument, I suggest, for being able to choose the means of receiving this information in a way you can understand and then taking action.

It is good that the Government have required the banking sector to issue statements once a month and free of charge on what I think is called a “durable medium”—I would call it paper—or something more accessible, going back at least five years. This is good at a time when there is greater competition within the banking industry and some may wish to cut their costs in that way. I hope that the amendments in this group will provide some incentive to Ministers to find ways of ensuring that even the most disadvantaged, who cannot do electronics or may not be able to see well or who have another disability, can get the same information in an appropriate format so that they can make the choices which the Bill is clearly trying to achieve. I beg to move.

Amendment 3 (to Amendment 2)

Moved by

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[Baroness Neville-Rolfe (Con)]

My Lords, I join others in thanking the noble Lord, Lord Berkeley, for setting off a discussion on this important issue of communication with consumers on electricity prices and the cap. I was going to add to the discussion from my own experience as a householder in Wiltshire. I have had a letter from SSE which is meant to tell me simply how my electricity prices are increasing, what I could do and how I might be able to pay less. I have to say that it is very difficult to understand, so there is a problem outwith the legislation that we are putting through. It is also wrong to suggest that energy companies are always trying to dissemble. How well they do depends on satisfying the consumer and the better ones want to be able to say clearly what is happening.

If we were to add to the system a requirement to communicate about the tariff cap provision, it would make the sort of letter that I have already described yet more complicated. My own experience is that these things can be costly to business. When the minimum wage came in, I remember being telephoned by the business department—I was at Tesco at the time—to ask whether we could put the minimum wage on our payslips. Having talked to our ICT people, I discovered that it would cost us an extra £1 million to put the minimum wage on the payslip. It was therefore agreed that the minimum wage could be communicated in other things. I worry that if we in this Committee put down requirements, it could have a similarly escalating effect on costs.

I have looked at the impact assessment—noble Lords will remember that I am always passionate about the usefulness of impact assessments—but this one does not go into any detail. It just suggests that there are savings to consumers. If we were to add extra provisions on communication, we would need to consider the cost of that because it would then get passed through to the consumer. That cost will apply to the small, new entrants to the industry as well as to the bigger suppliers.

That leads me to one final thought. When we took through the Consumer Rights Bill, in which we were also concerned about communication to consumers, the department worked with the industry to produce special communication. That was then used across the retail industry to inform shops as to the new rights that were coming in for consumers. I wonder whether some of the concerns raised today could not be met by voluntary action within the industry, dedicated to improving clarity for consumers in this important area.

[Lord Berkeley]

The noble Baroness cited a figure for the cost for communication but in terms of the total cost to the businesses we are talking about, that figure must still be very small. Given the example that I quoted of the banks being required to provide paper statements for anybody who wanted them, surely it is more important that anybody should have access by whatever reasonable means to the information, even at the expense of them paying a little more on communication. The people who will suffer are those who cannot fiddle with their emails, even if they can get the information by email.

[Baroness Neville-Rolfe]

I can understand that. Clearly, there may well be a case for requiring some communication to be online and some on paper because some people cannot manage online. However, what I am saying is that this will involve changes in systems across however many energy suppliers there now are—I do not know whether it might be 40, 50 or 60—and there is a cost to that, which we have not looked at or costed. How that fits in with suppliers’ information systems can make a big difference. Clearly, the Bill is going ahead rather rapidly. I have seen no analysis of this angle of things, which is why I support these amendments this afternoon, at least in the form of probing amendments.

--- Later in debate ---

Amendment 3 (to Amendment 2) withdrawn.

[Lord Berkeley]

I am grateful to the Minister for his response to my amendment. I think I detected a cautious welcome to be followed by, “It’s not really necessary because it’s all in the Bill anyway”. I was slightly concerned about the comments he made in response to the noble Baroness, Lady Neville-Rolfe, about the cost of communicating other than by email. It would be good to have some evidence of that cost but I shall reflect, with others, on what he said and we may come back with something different or better on Report. Perhaps if the noble Lord was happy to meet beforehand, that might be useful too. On that basis, I beg leave to withdraw the amendment.

Amendment 2 withdrawn.