Regulation of Property Agents

Mark Pawsey Excerpts

1st reading: House of Commons
Wednesday 18th October 2017 Commons Chamber

[Alok Sharma]

When we talk about the ban on letting agents’ fees and making the system fairer, the industry has talked about an increase in rents as a possible impact, but that did not come to pass in Scotland. We want to introduce fairness across the system, and I hope that that will ultimately mean lower charges and lower fees for tenants.

[Mark Pawsey (Rugby) (Con)]

It cannot be right that those who visit a property agent to buy enter into an area of high regulation, but there is no protection for those who go to the very same agent to rent. Does the Minister agree that today’s announcement levels the playing field for homeowners on the one hand and tenants and leaseholders on the other?

[Alok Sharma]

I absolutely agree with my hon. Friend.

Smart Meters Bill

Mark Pawsey Excerpts

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons & Ways and Means resolution: House of Commons
Tuesday 24th October 2017 Commons Chamber

[Mark Pawsey (Rugby) (Con)]

I welcome the Secretary of State’s speech introducing this Bill. He set out very clearly the benefits of the smart meter programme and what the Bill’s two main provisions will do. First, the Bill will extend the Secretary of State’s powers by five years, from 2018 to 2023. It is interesting that the legislation gives such powers in five-year batches to ensure that the powers are not unlimited. There would be plenty of objections from the Opposition if there were unlimited powers in the Bill, which takes us to 2023. It is entirely appropriate that it should be brought before us, because the very ambitious pace originally set has not been achieved, and the programme is running rather more slowly than we anticipated.

We also heard, secondly, about the introduction of the special administration regime for the body—the data communications company—managing the communication between the smart meters and the energy companies, as well as about the need for resources and facilities to provide protection and rescue given the rare possibility of financial failure. I was very pleased to hear the hon. Member for Salford and Eccles (Rebecca Long Bailey) say that the Opposition will support the Bill and that they welcome and value its measures.

I want to touch on the status of the data communications company, because the programme is running behind schedule and the company is involved in handling rather bigger sums than previously expected. The costs are now expected to run to £900 million, and the project has become more complex than originally anticipated. The energy companies are under pressure from the regulator to increase the rate of installation, which has led to more of the SMETS 1 meters—the first generation meters—being installed. It would be helpful if the Minister clarified when he sums up what will happen when we move to SMETS 2 meters. There is some concern that SMETS 1 meters may need to be replaced. I think the Secretary of State said that there would be an upgrade, but will the Minister talk the House through that process. I will come back to that concern later.

The cost of proofing the technology against cyber-attack has increased. This place has been affected by such an attack, so we all understand the importance of that. We will need to look at the DCC’s cost and revenue. The provisions relating to protection and rescue are very important. Will the Minister comment on the likelihood that those provisions will be needed?

This debate gives us all the opportunity to talk about the aims and objectives of installing smart meters. I am pleased that we have now upped the rate, with 370,000 now being installed per month. The principle of smart meters is fantastic and brilliant: the information about usage is sent to suppliers by the network that is being created. There are real benefits for the utility company. It already knows rates of usage, but this will tell it specifically where the demand is coming from, how much demand there is and at what times of day. All that will enable utility providers to predict demand better, which will in turn give us all the benefit of security of supply.

There are also real benefits for the consumer. By being informed about their energy usage, the consumer can decide to use energy when it is cheaper. They will have a greater awareness of their usage, and they will be able to manage their bills better and reduce their consumption. I am struck by the analogy with the computers we all find in our cars these days.

Our car’s mileage per gallon will vary according to the speed at which we drive on the motorway and how we drive—how much of a hurry we are in. It is possible to modify the mpg. I always find it interesting to note how I might be able to get an extra mile per gallon by modifying my behaviour. I see a real parallel between that and the usefulness of smart meters.

The other principal advantage I see is that of accurate billing. Many people pay for gas and electricity on the basis of what they estimate they may need, so in many instances they pay for more than they use. That is great, because it sometimes allows them to build up a credit and they do not have a debt to the energy provider, but as one person put it to me, that is not great for the family cash flow; so paying their bills on the basis of the amount of energy used rather than an estimate provides a real benefit.

The fourth advantage, which we have not yet seen but is a matter of concern, is that with smart meters, switching between suppliers ought to be easier because anyone looking to switch would have much more accurate data on which to compare suppliers’ tariffs. That should enable them to make a more informed decision. The technology within the meter should enable the switch to be made more easily. There is a real link here—the Secretary of State referred to it—between that ability and the need for some control and management of prices.

[Matt Western (Warwick and Leamington) (Lab)]

I have not done this before. There is a huge amount of sense in everything that the hon. Gentleman is describing, but I was surprised to hear—and maybe he would be—that more deprived households have not been prioritised for the introduction of smart meters. Given what the hon. Gentleman has been saying, it would be a real advantage to their household economy if they were prioritised. Would he welcome that?

[Mark Pawsey]

I thank my constituency neighbour for his remarks. Of course, the issue is the use of the second generation of meters—the SMETS 2 meters—and we need to get them into as many places with prepayment plans as possible, so that those households too can get the benefits of seeing when their electricity is cheapest and using their appliances when they get maximum advantage.

[Amanda Milling]

My hon. Friend mentioned switching. We need to actively encourage consumers to switch their energy providers to a much greater extent, so I am sure he will join me in welcoming the package of initiatives that are being taken. We talk about smart meters today; we have the energy switch guarantee as well. We should also be looking to make the process easier.

[Mark Pawsey]

I could not agree more. In many ways I regret the need for us to consider a price cap, because I believe the answer to the problem that we are trying to tackle is to make it easier for consumers to understand exactly how much energy they use and how much it would cost from another supplier and to make it possible for them to make an easy, effective switch.

[Sir Edward Davey]

In answer to the hon. Member for Warwick and Leamington (Matt Western), is not the real point that consumers on prepayment meters have to pay more than the rest of the population because of the cost of administering a prepayment meter and a move to a smart meter would remove that cost, so prepayment meter consumers are likely to benefit the most, and that aspect of the roll-out, which I tried to achieve as Secretary of State, should be accelerated?

[Mark Pawsey]

The right hon. Gentleman makes a superb case for getting smart meter roll-out moving as quickly as possible.

There are lots of reasons why we need to move on to SMETS 2 meters, but we have some problems with smart meters and SMETS 1. I had not come across those until this weekend, when I received an email from my constituents Mr and Mrs Lafferty, who are dual-fuel customers of First Utility. They were interested in the idea of a smart meter; they understood the benefits; and they arranged for an installation. In the first instance, that took two to three months, and regrettably the meter was installed in a location that was not particularly accessible to them, as elderly residents. Their daughter has to look at the meter. She also has to look at the meter because, just a few months after the installation of their smart meter, they decided to transfer to another provider, EDF, believing that there would be a better price. They were astonished to find, however, that their smart meter was not compatible. Their smart meter is now being used as a dumb meter, with their daughter having to visit their home to take readings. One concern is that such accounts discourage people from taking advantage of smart meters.

I put a message out on Facebook to my constituents to comment on the issue and, if I may, Madam Deputy Speaker, I would like to read one or two. One said that they

“had smart meter installed by one company. It worked fine, but then I changed company and it doesn’t work for the new company. Ridiculous that there isn’t a standard technology.”

The answer, of course, is that there will be, but we need to crack on with it. Another constituent said:

“good to see how much we were spending but it hasn’t changed the way we do things.”

That is something we need to get across. Another said:

“Not yet changed supplier, but I know when we or if we do, we will need to change the meter. The installer said they are working on a meter which would be easily compatible across all suppliers so wouldn’t need changing. So it might be worth waiting.”

We must not put people off in the short term, because of any issues that are happening right now.

Smart Meters Bill (First sitting)

Mark Pawsey Excerpts

Committee Debate: 1st Sitting: House of Commons
Tuesday 21st November 2017 Public Bill Committees

[Stephen Kerr]

Q Has the lack of interoperability in the SMETS 1 meter been a drag?

Audrey Gallacher: It has probably been a bigger issue in the newspapers than for customers. That is one thing that we should bear in mind. Last month, 572,000 smart meters were put in and about 200 people contacted Citizens Advice with complaints or questions, so thankfully the customer experience and research looks a lot better than if you are just reading the news clippings.

Bill Bullen: I would make the case even more strongly than that: I do not think there really is an interoperability problem. The companies out there rolling out SMETS 1 generation meters have gone to great lengths to ensure that that is not a problem. We certainly exchange customers with smart meters with other suppliers all the time, and there is not a problem with interoperability. I think the issue has been massively overplayed, frankly.

[Mark Pawsey (Rugby) (Con)]

Q May I follow that up? I have a constituent—

[The Chair]

I would be grateful if people did not jump in. I will allow you to follow it up, but in future please indicate rather than just jump in.

[Mark Pawsey]

Sorry, Mr Gapes. I wanted to follow up the point from Mr Bullen. A constituent told me that they changed supplier and had a smart meter installed. Subsequently, when they wanted to make a further change, they discovered that their smart meter had become a dumb meter. Is that a rare occurrence or a regular one?

Bill Bullen: Unfortunately, not all suppliers have engaged with smart meters. Some suppliers do not offer a smart prepayment product, for example. So if your constituent switches to a company that is not offering a smart product, clearly that will be an issue, but that is not to say that they could not switch supplier to someone else who is offering a smart prepay product.

[Mark Pawsey]

Q They went to the supplier because they thought it would be particularly competitive on price, and they were very disappointed to find that they were not able to have the benefits of their smart meter. They feel let down by the sector as a whole as a consequence.

Bill Bullen: First, since the price cap came in, there has been very little difference in price between suppliers. Obviously, consumers do have to check that the new supplier will offer a smart prepaid product.

[Mark Pawsey]

Q They reasonably assumed that the new supplier would be able to provide such a product. At no stage did it ever cross their mind to ask whether the new supplier would be able to provide them with data through their smart meter.

Bill Bullen: I cannot answer on behalf of all suppliers, obviously, but clearly there are suppliers out there who are engaging in SMETS 1. We have interoperability in SMETS 1 and we exchange customers all the time. I guess there will always be suppliers who do not have or have not invested in the systems for their own strategic reasons or, for whatever reason, have decided not to support a particular product. That will always be the case. I would not want to make too much of one or two examples, but generally speaking there is interoperability between people engaged in the SMETS 1 meter market.

[Mark Pawsey]

Q You suggest that if people who have a SMETS 1 meter are thinking about switching, they should ask the new supplier whether it can provide to them on a smart basis.

Bill Bullen: It would be a very sensible thing to do right now, yes.

Audrey Gallacher: In the short term, that would certainly be the advice, because, as Bill said, some companies do not have full interoperability. Some companies are not even rolling out any smart meters at all at the moment, and we have got 60 suppliers out there. So, yes in the short term, but there is an enduring solution coming down the line where all the SMETS 1 meters will be enrolled into the new central smart Data and Communications Company systems. Hopefully that will happen next year.

[The Chair]

Mr Kerr, you were in the middle of a string of questions. I will give you one more and then move on to someone else.

Smart Meters Bill (Second sitting)

Mark Pawsey Excerpts

Committee Debate: 2nd Sitting: House of Commons
Tuesday 21st November 2017 Public Bill Committees

[The Chair]

For the convenience of the Committee, I have four indications of questions that have to be asked before 2.45 pm, so moving on now to Mr Pawsey.

[Mark Pawsey (Rugby) (Con)]

Q May I move on to a bit of the Bill that we have yet to cover in our deliberations—the special administration regime? The Government say that the risk of the DCC failing is very low, but none the less want to put in this special administration regime. In what circumstances could you envisage the DCC failing, and do you agree that the likelihood of that happening is, as the Government say, very low?

Derek Lickorish: This is not my expertise, but I am under the impression that Ofgem has a responsibility to make sure that DCC can carry out its operations. If, heaven forbid, it does not work, that is probably the worst case scenario, and what happens then?

[Mark Pawsey]

Q How would you define it not working? What constitutes not working?

Derek Lickorish: We have just been talking about over the air firmware upgrades. Remember, this is a world first: we are world first with so many elements of this that have not been tested. If we are unable to do over the air firmware upgrades at scale, that must be a failure.

[Mark Pawsey]

Q Would that cause the DCC to fail and this special administration regime to kick in, in your view?

Derek Lickorish: It could do. I am afraid I feel out of my depth in being able to construct a scenario. Let us face it, we have said that DCC went live a year ago. Today, everyone is astonished to find that only 250 meters are connected to it, but it is working.

[Mark Pawsey]

Q Are the Government just being prudent by including this clause in the document?

Derek Lickorish: I think it is a very prudent situation. There must be an anxiety, otherwise why have they done it?

Richard Wiles: Likewise, I am not able to answer as to the exact reasons, but bringing previous Acts together under one is a sound idea. With regards to how DCC would reach that situation, again, I have no absolute definition as to how that could happen now.

[Matt Western (Warwick and Leamington) (Lab)]

Q This is not my specialist subject, but I am interested in the asset provider side. I am trying to get my head around this. Could you give me an idea of how many manufacturers are supplying to the industry?

Richard Wiles: There are different manufacturers for SMETS 1 and SMETS 2.

--- Later in debate ---

[The Chair]

Q Mr Deshmukh, anything to add?

Sacha Deshmukh: I would just add that I think the research Mr Carden refers to is the most recent research by Populus. You are absolutely right that prepayment customers reported 89% recommendation—so, very high. The pattern of the very high recommendation continues to all low-income customers, or customers with a vulnerability in the household, so low-income credit customers are also strongly recommending the product.

Even among households that are not low-income, the levels of recommendation are significantly higher than in other areas of technology. It would be fair if you were then to say that the experience of buying energy through an analogue technology has been particularly poor—and it has. Clearly, those levels of satisfaction are also linked to the fact that this was the last area of pretty much any of our daily lives where people had been reliant on such old-fashioned technology, even in the credit mode.

[Mark Pawsey]

Q May I ask once again about the special administration regime? The previous witnesses were not able to help us tremendously on that. Ms Vyas, you have come out in great support of the special administration regime. You have described the DCC as key national infrastructure. Can you explain why this is such an important part of the Bill?

Dhara Vyas: A big part of it is to do with data privacy. The creation of the DCC means that your supplier has access to your information, but via the DCC. Consumers retain control of their information and allow their supplier to access their information on a daily, half-hourly or monthly—as a minimum—basis.

[Mark Pawsey]

Q This is the provision in respect of the very unlikely possibility of the DCC becoming insolvent.

Dhara Vyas: I am so sorry; I thought you meant a comment on the DCC in general, not the actual provision in the Bill.

[Mark Pawsey]

Q No, I am particularly interested in why you think that the special administration regime is such an important part of the Bill.

Dhara Vyas: As a backstop, because the DCC should not be in a position where it could fail.

[Mark Pawsey]

Q Under what circumstances could it possibly fail?

Dhara Vyas: My understanding of the provision in the Bill is that it is to ensure that financially it is kept afloat.

[Mark Pawsey]

Q Why should it not remain afloat? That is the question I am asking. What is the likelihood of that ever happening? How could the need for it ever arise?

Dhara Vyas: If suppliers are not able to keep on—I think the DCC is funded by suppliers?

Sacha Deshmukh: I am not an expert in special administration regimes either, but my understanding is that however unlikely this is, this form of regime structure is relatively common in large infrastructure suppliers in the country, whether in the water sector, the rail sector or, in this case, the energy sector with this new infrastructure provider. But I am afraid that beyond that, I am not an expert in special administration regimes.

[Mark Pawsey]

All right, we will save it for the next witness.

Dhara Vyas: The rationale behind our response is very much that it is crucial that it should not fail.

[The Chair]

We aim to finish this session at 3.15 pm, and I have two colleagues who want to speak, Mr McCabe and Mr Kerr. I call Mr McCabe.

Smart Meters Bill (Third sitting)

Mark Pawsey Excerpts

Committee Debate: 3rd sitting: House of Commons
Thursday 23rd November 2017 Public Bill Committees

[Mark Pawsey (Rugby) (Con)]

Is the hon. Gentleman making the case, then, that consumers should have no choice in the matter, and that the installation of a smart meter in everyone’s home should be obligatory?

[Dr Whitehead]

No, I am not making that case, and I am deliberately not making it, because, as has been emphasised in the evidence sessions and on a number of other occasions, the smart meter programme is voluntary. People do not have to have a smart meter in their home if they do not want one. By the way, in the future that will create some difficulties and expenses for energy supply companies inasmuch as they may have to run a dumb meter inspection programme, as it were, alongside a different meter management programme for smart meters. Nevertheless, that is the position that all of us have taken from the beginning. The smart meter programme is not compulsory.

I am reminded of a visit I undertook some while ago with the then Energy and Climate Change Committee, where we talked about smart meter installation in the US. In some states, they had sheriffs and marshals on hand to ensure the installation of smart meters in particular people’s homes.

Smart Meters Bill (Fourth sitting)

Mark Pawsey Excerpts

Committee Debate: 4th sitting: House of Commons
Thursday 23rd November 2017 Public Bill Committees

[Dr Whitehead]

My hon. Friend the Member for Birmingham, Selly Oak has tabled an amendment that is not only interesting but timely and important. As he says, it would be overwhelmingly helpful to the roll-out procedure and would not force anyone to do anything. It would give the Minister the opportunity to consider what should be done, perhaps by secondary legislation or something similar, to confront the issues raised by what we might call reverse meter logistics, which the industry is beginning to talk about.

The amendment is particularly helpful, because this problem is not a theoretical problem for the future, or something that we can think about during the extension period; it is happening now. Indeed, the problem is not only happening now, but its extent and complexity will inevitably increase hugely as the number of new meter installations ramps up, and it will increase even more if we have any further issues with replacing SMETS 1 and SMETS 2 meters as we go through the roll-out process.

There are several aspects of the problem. First, what about malfunctioning and existing smart meters that are no longer installed and are now redundant? Secondly, what about the huge number of existing meters that will be removed and need to be disposed of as smart meters are installed? It is a combination problem. However, it is joined together by the issue of the status of meters generally—not just smart meters—in the firmament of electricity and gas supply.

Indeed, my hon. Friend has pointed out the existence of the MAPs, and it has been a long-standing arrangement in the industry that the meters are not owned by the suppliers; the meters are merely read by the suppliers. The supplier will contract others, even, as happens currently, when a dumb meter is being replaced by another dumb meter. The normal thing is that the supplier will contract with a MAP to put a meter in. The MAP has a very secure asset, inasmuch as they put the meter in, get a charge for the operation of the meter and they carry out a contract for the supplier, but they always essentially own the meter in the last instance.

When we pursue a programme of removing old meters, whether they are dumb meters or previous generation smart meters, we have a problem that is precisely the reverse of the situation when the meters go in, namely that the meters being removed by suppliers—because they are the people putting the new meters in—do not actually belong to them. So as I understand it, we now have a situation where, in warehouses up and down the country, there is supposed to be a process of reverse meter logistics taking place. That consists, essentially, of triaging those old meters, deciding who the actual owner of a meter is, and then inviting the owner of that meter to come and collect it, in order to dispose of it. The suppliers themselves do not have the ability, in their own right, just to dispose of the meter, because it is not their meter to dispose of.

The consequence of that is, first, one is not entirely sure who the owner of the meter is in some circumstances, when a meter has been taken off a wall. Unless there has been careful archiving and, as it were, archaeological numbering of meters, to determine where they need to be taken, and unless there are absolutely first-class systems of triaging, inevitably the system of getting those old meters out becomes jumbled up.

We could have meter mountains across the UK. The meters are potentially valuable assets. They are worth having, with their rare earths, rare metals and all the rest of it; they can be recycled well. However, if there are warehouses full of meters whose provenance is not known and nobody is coming to claim them, and the meters cannot be processed, the only solution is to go and tip them into landfill. Then we will get a terrible outcome to what should be an entirely different process as far as meter re-provision is concerned.

My hon. Friend the Member for Birmingham, Selly Oak touched on the reason for that; it is because of the waste electrical and electronic equipment directive. In case hon. Members think that directive will no longer apply once we leave the EU, I remind them that it has already been implemented into UK law.

The WEEE directive introduces producer responsibility for disposing of electrical and electronic goods. In principle, that is a good thing: when someone needs to dispose of their fridge, freezer or hi-fi system, the company that produced it should have a hand in that. Quite sophisticated systems have evolved for sending electrical goods back to their producers for disposal. That is fine for goods labelled “Panasonic” or “Electrolux”, but I am sure hon. Members can see that it is much more difficult for redundant meters.

If we are not careful, this issue will overwhelm the roll-out or at least have a significant negative effect on the overall atmosphere of it. After all, before the directive was implemented we had fridge mountains in this country, as the Committee may recall.

[Mark Pawsey (Rugby) (Con)]

But not any more.

[Dr Whitehead]

That is because the WEEE directive operated properly, but before it was implemented there were a number of small alps of electrical goods around the country. It will reflect badly on the smart meter roll-out if we end up with Dolomites of old meters as a memorial to it.

We must sort this problem out. Amendment 6 gives the Minister a golden legislative opportunity to do so; we may not get another, so he should be anxious to grasp this one with both hands. I hope he will.

Smart Meters Bill (Sixth sitting)

Mark Pawsey Excerpts

Committee Debate: 6th sitting: House of Commons
Tuesday 28th November 2017 Public Bill Committees

Returning to new clause 11, amendment 17 provides that the new powers conferred by new clauses 8, 9 and 10 come into force by regulation. As I said, they have an expiry period, and the intention of the amendment is to reduce the risk that the powers expire before the changes have taken effect. Finally, amendments 18 and 19 amend the long title of the Bill to reflect the proposed inclusion of new clauses 8, 9 and 10.

[Mark Pawsey (Rugby) (Con)]

The Minister has given some accounts of why these clauses are being introduced at this stage. Has he consulted the energy companies, Ofgem and the other bodies that are referred to, to ensure that they are aware of the amendments to this Bill?

[Richard Harrington]

Yes, I can confirm to my hon. Friend that there has been widespread consultation. The amendments are very well spoken about in the industry and they will not come as a surprise at all. In fact, the general reaction is that the industry is very pleased that we have managed to introduce them with an act of pure opportunism of getting them through parliamentary scrutiny—assuming that we do—not as a standalone piece of legislation but as an important amendment.