Energy and Climate Change Committee Report

Nigel Evans Excerpts

Thursday 20th December 2012 Commons Chamber

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

May I say on behalf of the coalition Government that we greatly welcome the report published today? There is a lot in it, and I will certainly be studying it in more detail over the Christmas period as I munch my cold turkey. The imperative of acting in the interests of consumers and being prepared to be radical is something the Government take to heart. That is why we are bringing forward the most radical, sweeping changes since privatisation to how consumer tariffs operate. We will take on board my hon. Friend’s recommendations, including those published today. We are absolutely aligned in the interests of ensuring that consumers get the best deal.

May I also welcome my hon. Friend’s announcement today of a further inquiry? We all have an interest in ensuring that we do much better and raise the level of ambition in relation not only to communicating these messages but to understanding the underlying causes. It sounds as though the report will greatly help policy making.

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. I have, exceptionally, allowed that lengthy intervention because I know that the Minister is not allowed to make his own speech, but please could any further interventions be shorter?

[Mr Yeo]

May I assure my right hon. Friend that the phrase “cold turkey” is not going to be associated with my Christmas at all? Nevertheless, I welcome the constructive engagement that my Committee has with him and his Department, on these issues in particular.

The members of my Committee are all such gluttons for punishment and so well supported by our staff that we are, as I said, launching another inquiry today. Our consumer engagement report concluded that there was an urgent need to begin engaging consumers with the smart meter project, and that the concerns that have been raised about smart meters need to be addressed if roll-out is to be a success. Every home and small business in the country is due to have a smart meter installed by 2020. That roll-out will be paid for partly by consumers in their bills. Energy suppliers are expected to benefit from reduced operating and generation costs, and suppliers should pass on some of those savings to consumers through lower prices. In order to reap the benefits of smart metering, consumers will need to use the information about energy use provided by their in-home display to reduce their energy consumption and cut their energy bills.

Our consumer engagement inquiry suggests that only about half of people have heard of smart meters and that not all of them support roll-out. Although the full roll-out is not due to begin until 2014, there is a risk that if engagement levels do not increase, consumers may be reluctant to allow smart meters to be installed in their homes. That could be an obstacle to the success of the programme and the potential for consumers to benefit from it.

Our consumer engagement report also highlighted a lack of consumer trust in energy companies, but it is those very energy suppliers that will be delivering smart meter roll-out directly to consumers. The Government must not be complacent. They should spread the word to consumers as part of the honest conversation that my Committee has recommended. The Committee will monitor progress towards delivering the smart meter roll-out and we are today putting out a call for evidence. We are particularly concerned to explore: what criteria will be used to judge the success of the project and whether the cost and time scale predictions are realistic; whether smart meters will empower consumers to take greater control of their energy consumption; whether enough is being done to ensure that financial benefits accruing to suppliers will be passed on to consumers; how to achieve transparency on what consumers are paying towards the roll-out; and how to ensure that vulnerable customers, including consumers on pre-payment meters, reap the benefits.

The consumer engagement report that we are publishing today has important messages for the energy industry, for the regulator, for consumers and for the Government. I commend the report to the House.

Question put and agreed to.