Consumers: Paper Billing

Lord Lipsey Excerpts

Monday 25th November 2013 Lords Chamber

[Lord Lipsey (Lab)]

My Lords, this House has a proud tradition of speaking up for the vulnerable in society and this evening the Question for Short Debate in the name of the noble Baroness, Lady Oppenheim-Barnes, stands firmly in that tradition. I congratulate her on it.

It is bad enough having to pay bills; it is worse having to pay for the bills you have to pay. Yet that is increasingly the situation with Britain’s rapacious utility companies. The mini-scandal we are debating this evening first came to my attention when a letter arrived in our post saying that, from July 2013, we would have to pay £1.50 for each paper bill BT sent to us—that is, £6 a year. That seemed—and still seems—wrong, so I complained to Ofcom. In her reply to me of 19 June, Colette Bowe, Ofcom’s chair, said:

“We believe providers are entitled to make commercial decisions on the methods through which they provide bills and whether they impose charges to do so”.

I was under what appears to be an illusion that Ofcom was supposed to be about regulating the market, not prostrating itself before its imperial diktats. She went on to say that Ofcom did,

“protect certain vulnerable groups from being charged for receiving bills”.

At that stage, my heart started beating faster with excitement. Then she cited the main group that this applied to: the blind and visually impaired. So, thanks to Ofcom, if you are blind you are entitled to have the bill you cannot read free in any format you choose. You could not make it up.

What is wrong with Ofcom’s supine stance? It is simply this: yes, it is right that the transformative culture of IT has advanced, should advance and will continue to advance. That is altogether a good thing. Those who support the position of the noble Baroness, Lady Oppenheim-Barnes, tonight are not in any sense technological Luddites. However, it is an essential precondition of such technical advance that those who cannot benefit from it for one reason or another should be protected from it to the maximum extent possible, and are not penalised simply because they were not lucky enough to grow up, as our children have, in an age where being online was completely natural to them. New technology will be more successful if it is adopted by people as a free choice, not forced down their throat.

I will illustrate my point by quoting some figures from the ONS about daily computer use among adults. It is rising, yes, but in 2013 it still stood at 70%. That means 30% of the population not accessing a computer daily, either because they cannot, or do not have a computer. They may not have a computer because they cannot afford one. They do not have the good fortune that we rightly have as Members of this House in having one provided. They must buy it themselves and that is not an easy thing for everybody to do.

Not surprisingly, the figures for old people are very much lower. For those over 65, daily computer use is about half that of the population generally: only 37% of people over 65 access their computer once a day. Roughly 6 million pensioners, therefore, would struggle to get their bill by computer.

Let us say that half of them—that is a guess, but probably not far out—are BT subscribers. That means that BT might hope in time to make £18 million a year out of its new policy—money screwed out of pensioners, fully franked by Ofcom; money that alone would pay the £5 million bonus of BT chief executive Ian Livingston nearly four times over. Gosh, it is not surprising that they get big bonuses when they think up such brilliant wheezes to screw money out of their more vulnerable customers.

You would have thought that Ofcom might have had some regard to public opinion. Eighty-four per cent of people think that they should have a choice of how they get their bills, according to an Opinium Research poll for the campaign Keep Me Posted, to which the noble Baroness referred. Forty-one per cent fear that they might miss a payment without such bills. If we think particularly of older pensioners, those are the kind of things that make them worried sick. They do not think, “Oh dear, I might have forgotten to pay”; they think that their telephone might be cut off so that they could not ring the doctor or the hospital if they have a fall. Those things matter to them. Indeed, £6 matters to a pensioner a great deal more than it does to some other people in society.

BT and the other anti-post billers will not act. Why should they? It is already given them. Ofcom will not act. Why should it? The free market is its creed. So who is left to act? The Government, who, perhaps in the forthcoming communications Bill, need to legislate to bar the imposition by charge of online-only billing. That would cost Ministers nothing—the Treasury will be glad to learn that—but would be a much appreciated sign that they understand that the vulnerable must be protected against the vagaries of the unregulated free market.

--- Later in debate ---

[Viscount Younger of Leckie]

I can reassure the noble Baroness that that is not the case. We are encouraging businesses to bring in processes that will help more the vulnerable—I have already spelt out what we are doing. The Government, of course, provide the framework, but we believe that it is very much for companies to decide to put themselves in a position to help people in this respect.

[Lord Lipsey]

I am sorry to interrupt the noble Viscount again but, to press the point, why is it in the interests of companies to help the vulnerable?

[Viscount Younger of Leckie]

It is in the interest of companies to look after all their customers, otherwise they will go away. That includes all those people who are vulnerable and, as I mentioned earlier, all those across the spectrum who require the service. As I mentioned earlier, looking at the generational issues the picture is complex in terms of the current needs of customers.

My noble friend Lady Oppenheim-Barnes raised the issue of some companies not being up front about the charges, which is a very fair point. In the communications sector regulations are in place that prescribe that such charges must be set out in a clear, comprehensive and easily accessible form so that consumers can make informed decisions. The consumer rights directive will mean that suppliers should obtain consumers’ express consent to any extra charges and that they should not use a tick-box approach that requires consumers to un-tick boxes in order to avoid charges. The directive must come into force by June 2014.

The noble Baroness also raised the issue of charging premium-call rates. In April, Ofcom announced plans to simplify the pricing of telephone numbers such as 0800 numbers. Under its proposals, calls to 0800 numbers from mobile phones will be free. Ofcom will publish the final proposals shortly. The noble Baroness also raised the issue of payment by cheques. There may be a legitimate charge for paying by cheques rather than paying electronically, but this charge is not levied as a norm. Any such charge would need to have been justified by relation to the additional cost. That is underpinned by the Consumer Rights (Payment Surcharges) Regulations 2012, to which I alluded earlier.

The noble Lord, Lord Lipsey, raised the issue of the response that he received from Ofcom about his question regarding a charge from a bill from his service provider. I repeat that what companies charge for their services is a commercial decision. In a competitive market consumers have choice and can move to a different provider. On the role of regulators, more widely, the Government have announced a number of reviews that look at competition and consumer issues. That may help to address the comments raised earlier by the noble Baroness, Lady Hayter. For example, the PM has asked the regulators to instigate an annual review of the state of competition in the energy market. Ofcom published telecoms proposals in the summer and the Government have called on the industry to provide greater price transparency, particularly in communications with customers at the point of contract renewal.

The noble Lord, Lord Lipsey, raised the generational issue of those aged over 65 who are offline. The Government are committed to helping people access the benefits of digital services. The Government Digital Service Digital Inclusion Team is working closely with the noble Baroness, Lady Lane-Fox, to ensure that we protect the vulnerable.

My noble friend Lady Maddock made a good point about security online. Trust and security are major concerns and the Government are working with the online security industry to make it simpler and easier to protect individuals online. My noble friend also asked about charges for telecoms paper bills. Recipients of paper bills are not generally charged extra, even though they are being charged more than the discounted price. Should companies wish to charge for a paper bill or make a reduction for a digital bill or digital payment, they must ensure that the charge reflects only the different processing costs incurred.

This House may recognise that, with advancing technology, the number of people feeling disfranchised by online billing is likely to diminish over time. I fully accept that there remain those who continue to wish for, and, indeed, need, paper through the post in the form of receipts, bills and statements, but we do not believe that legislating further on charging for paper bills is necessary when options are available and protections are already in place for the most vulnerable.