Disclosure of State Pension Credit Information (Warm Home Discount) Regulations 2011

Lord Marland Excerpts

Tuesday 12th July 2011 Grand Committee

Moved By

[Lord Marland]

That the Grand Committee do report to the House that it has considered the Disclosure of State Pension Credit Information (Warm Home Discount) Regulations 2011.

Relevant document: 25th Report from the Joint Committee on Statutory Instruments.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)]

I feel slightly like something on a treadmill. There is only one more measure after this, noble Lords will be pleased to know. I will try to keep them entertained for as long I can, then we will rush off for a Statement.

I shall speak to the draft Disclosure of State Pension Credit Information (Warm Home Discount) Regulations 2011 for Great Britain. Noble Lords will recall considering the Warm Home Discount Regulations 2011 on Tuesday 29 March. That instrument enabled the warm home discount scheme to take effect on 1 April this year. The regulations to be discussed today allow for rebates to be targeted at the core group of low-income pensioners that I mentioned in March by allowing information to be lawfully shared between energy supply companies and government. The Warm Home Discount Scheme Regulations 2011 require that these pensioners are provided with a rebate off their electricity bill from their energy supply company. This rebate will be worth £120 this winter, rising to £140 by winter 2014-15.

This winter, we estimate that about 800,000 pensioners will receive this rebate. We estimate that this figure will rise to more than 1 million pensioners for the subsequent three years. In total, rebates worth more than £580 million are expected to be provided to this group over the four years of the scheme. To help energy suppliers to identify which of their customers is a low-income pensioner and to provide them with this rebate, we need to allow the suppliers and the Government to share information. Sharing sensitive and personal information in this way, without seeking individual consent first, requires a legal gateway. The instrument the Committee is considering today is made under Section 142 of the Pensions Act 2008, which confers power on the Secretary of State to make regulations allowing for such information sharing. These regulations also set out what data may be shared and what it may be used for, and put in place robust offences to protect the data and prevent their misuse.

I will explain each of these areas in more detail. In terms of information sharing, this instrument allows the Secretary of State to disclose name and address information of pension credit customers to participating electricity suppliers, and allows participating electricity suppliers to provide name, address and meter point administration number information about their domestic electricity customers to the Secretary of State. These records will then be compared—a process sometimes called data matching. Where there is a match, the Secretary of State will tell each supplier which of their customers to provide with a rebate. Where there is not a match, we will write to those pension credit recipients to ask them to contact a government call centre and confirm their eligibility. If they are eligible, the energy supplier will be required to provide them with a rebate. The key advantage of data matching is that most customers will get the rebate automatically, without claiming. This will help to ensure that the most vulnerable receive the support that they need.

--- Later in debate ---

[Baroness Smith of Basildon]

My Lords, we have previously discussed the Warm Home Discount Regulations in Committee at some length and the regulations before us follow from that. When we discussed them before, the Minister was generous enough to acknowledge that the Labour Government were very clear when they brought in the voluntary arrangements that should they be successful, they would bring in legislation for compulsory support. Today’s regulations add to that compulsory support. What we did not envisage was that this would happen against the backdrop alluded to by my noble friend Lord Whitty: a drastic two-thirds cut in warm front grants. The Minister is very aware of our concerns and our opposition to those cuts. As welcome as these discounts are, my fear is that with the very substantial increases in bills for next year that have been announced, next winter’s bills will be so much larger that the impact of the discount, which will be extremely welcome to those who receive it, will be less than envisaged when the level was first set.

I have two questions for the Minister, and I have given him notice of them. One is to seek confirmation on a point which my noble friend Lord Whitty also made. It is about the use for which companies can contact recipients of grants. I want to be assured that when the Secretary of State discloses information to an electricity supplier it can not be used for the purposes of sale or promotion by that company. Sub-paragraphs (b) and (c) of Regulation 5(1) state that the reasons for giving the information are,

“enabling the supplier to so provide that rebate”,

which is entirely reasonable and welcome, and

“enabling the supplier to offer relevant assistance to that customer”,

which is also entirely reasonable and welcome. However, in Regulation 5(3), there is a very broad definition of relevant assistance including:

“energy efficiency measures, thermal efficiency measures and advice and assistance relating to energy and thermal efficiency … advice and assistance relating to the generation of electricity or heat produced by microgeneration or the production of heat produced by any plant which relies wholly or mainly on wood as a fuel”,

and the list continues. Energy companies can contact the recipient on such a broad base, and they may use that to try to promote sales growth. I am not sure that that is what is intended, so if the Minister could be clear that the broad definition is not a sales pitch for energy companies, it would be helpful.

On the previous regulations, we discussed the reconciliation mechanism that will be in place to make sure that the information shared is accurate. I am not clear whether there will be further regulations on that. I understood that second and third statutory instruments will be coming through. If they will not, will the Minister tell us how that will be funded? When we discussed this before, I think there was an issue about who would be responsible for funding the reconciliation mechanism. If he can give us an answer on that today, it will be very helpful. However, we broadly support the regulations with those two caveats on which we would like answers.

[Lord Marland]

I thank noble Lords, as always. The noble Lord, Lord Teverson, was first in to bat. Funnily enough, Teverson is not a natural terrorist name, I feel. You do not think that with that name—a Cornish name, no doubt—he is going to be immediately arrested at the airport for some data matching. The data-matching issue is very important. There is no great science. Indeed, we have trialled it. We have trialled 340,000 people on the pension credit and, luckily, we hit the jackpot with about 205,000. There is a gap, and it is very important that we follow up the people who we could not access through the matching, but we have made substantial inroads into the number.

The noble Lord, Lord Whitty, has great expertise in this area, particularly on the subject of fuel poverty. We all know that both Governments, particularly our Government, are determined to attack this dreadful feature of our society which is exponentially going off the dial in terms of numbers, despite the best intentions of the previous Government and, indeed, the much better intentions of this Government to try and sort it out. In truth, the House is unified in dealing with this dreadful problem. It is fundamental that we get to grips with it and I know that we will carry it out. As your Lordships will know, we have instructed Professor Hills to carry out a fuel poverty review. It is an independent review and we are looking forward to seeing what suggestions he comes up with.

--- Later in debate ---

[Baroness Smith of Basildon]

My understanding is that the Energy Bill, which has completed its stages in this House, is being delayed in the other place, which has not been having debates on the alternative vote or the House of Lords. In fact, if he is able to enlighten us on why there is no date set for the final stages of the Energy Bill in the other place, that would be gratefully received because many of us in this House, who fully supported so much of that Bill, are very disappointed that it does not seem to be going any further.

[Lord Marland]

Indeed, no more disappointed than I am. Of course, one has to take into consideration all the legislation going into the other House. We genuinely tried to persuade the other place to allow it to come in, but it is so log-jammed with legislation. I am not sure whether it is entirely true that the other place has not debated Lords reform, or indeed alternative voting. However, I take the noble Baroness’s point and no one is more disappointed than our department in not being able to get the Bill through.

The noble Baroness, Lady Smith, made a very good point, as always, about the parameters. Broadly speaking, this is not to be used as a method of mis-selling.

[Baroness Smith of Basildon]

Nor of any sales promotion.

[Lord Marland]

Yes, nor of any sales promotion, let alone mis-selling—a subject that we debated extensively on the Green Deal. We must be vigilant that that does not happen. Let me state this absolutely categorically; indeed, I will go through the notes because I do not want to have any doubt. This instrument sets very tight parameters around the use of information, limiting it to requiring electricity suppliers to give their customers an automatic rebate on their electricity bills—it is limited to that—and to being able to offer their customers advice and assistance in specified areas on energy and thermal efficiency. Any other reason, such as sales promotion, is not permitted and would be unlawful. I hope that that clarifies that issue in words of one syllable.

There is not going to be a further order on the subject of reconciliation. We accept that pensioners who will benefit may not be evenly distributed between the energy supply companies. As a result, we have put in place a reconciliation mechanism to allow the costs of the scheme to be distributed fairly between energy suppliers, based on their market share. Regulations to allow for this came into force on 1 July 2011. I hope, with that, I can commend these regulations to the Committee.

Motion agreed.