Smart Meters Bill

Patricia Gibson 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

(7 years, 1 month ago)

Commons Chamber
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Patricia Gibson Portrait Patricia Gibson (North Ayrshire and Arran) (SNP)
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We in the Scottish National party support the roll-out of smart meters, but it is essential that maximising consumer and environmental protections lies at the heart of any strategy to do so.

It is empowering for consumers to have near real-time information on their energy consumption to help them to control and manage their energy use, and in turn save money and reduce emissions. If roll-out is effective and well managed, there are obvious benefits to consumers. Nearly eight in 10 people with a smart meter would recommend one to others, and the same number with a smart meter say they have taken steps to reduce their energy consumption. Those with an in-home display model in particular feel they have a much better idea of what they are spending on energy and check it regularly. If having new technology in their homes helps consumers feel that they can exercise better control over energy consumption and be better informed about their energy use, with greater control over their bills, then of course that must be welcomed.

In previous speeches, we have heard about switching suppliers. I would like to say, right at the outset, that switching suppliers has a limited effect. Research shows that people who switch tend to be those who are better off. They switch and they save money. However, there is not a sufficient impact on the lowest income households, which are in most danger of fuel poverty. They find it much more difficult to switch suppliers.

We often hear that smart meters are free to consumers. They are not. They are paid for through energy bills. Every household will, ultimately, pay for the new meter roll-out via their bills. It is important that consumers understand that having a smart meter is a choice. Trading Standards has expressed concern that data from citizens advice bureaux suggest that consumers are not being told that they can refuse a smart meter, if they so choose.

Toby Perkins Portrait Toby Perkins
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There is a really important point here about consumers from the lowest income households. Given that companies have different tariffs, why do the Government or the companies themselves not say, “We’ll stop you having the responsibility of deciding the best tariff for you. We have all the data. At the end of every quarter, we’ll look at your bill, tell you what would have been the best tariff and put you on it, so you always save the money without having to do all the work yourself”? Companies should have the information to be able to do that.

Patricia Gibson Portrait Patricia Gibson
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What the hon. Gentleman says sounds eminently sensible. The problem is that the better off and most well-informed people are switching and saving. That is being subsidised by the people who are unable to switch and save because they do not feel up to the task. The poorest households are actually subsidising the most affluent households, which have the ability and the expertise to switch and save. That is a real issue that has to be addressed. Similarly, as mentioned before, those on prepayment meters—the poorest households in our communities—must have access to smart meters if they want them.

It is important, as part of this process, that the Government’s regulatory framework clearly establishes the rights and obligations of all aspects of smart metering design, development, installation and operation, as well as monitoring and reporting. Customers must be reassured, and continue to be reassured, that their data and security are robustly protected in the course of the smart meter roll-out. There is concerning evidence, however, that smart meters are being installed before the programme’s requirements as an internet-connected energy system have been fully determined. The UK Government must do everything in their power to protect consumers during the roll-out. There were disturbing reports last March in the Financial Times of GCHQ intervening in smart meter security, claiming to have discovered glaring loopholes in meter design, and causing some alarm. Such concerns must be fully addressed.

The plan to install smart meters in every home by 2020 must not leave consumers out of pocket. It must be asked whether the cost of the roll-out will be borne by all energy consumers. The successful operation of smart meters can also be a postcode lottery. In areas with a poor mobile signal, there is a real chance that smart meters will not work. If we are applauding the merits of smart meters, this has to be borne in mind, because digital inclusion matters.

Almost 100,000 fewer households were in fuel poverty in 2015 than in the previous year in Scotland, but there is still much more to be done. The Scottish Government have commissioned a review, due to be completed next year, of the definition of fuel poverty in order to inform a new fuel poverty strategy that will be followed up by a warm homes Bill. There has to be a focus on those in most need of help to heat their homes.

Ed Davey Portrait Sir Edward Davey
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The last time the Scottish Government reviewed the definition of fuel poverty, they came up with a definition that I did not think was very good, whereas in England and Wales we reviewed it and came up with a policy that secured cross-party consensus. May I urge the hon. Lady to go back to Edinburgh and look at the fuel poverty definition we produced here in Westminster?

Patricia Gibson Portrait Patricia Gibson
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As the right hon. Gentleman knows, when something is being done well, others should learn from it—I am a great advocate of that approach—and if something is being done well in Westminster, the Scottish Government have no difficulty learning from it. I only wish that that was reciprocal.

We need to be mindful of those most in need of help to heat their homes, and that must involve a joined-up approach, as a wide range of policy areas are encompassed by any attempt to tackle fuel poverty. Citizens Advice has stated that consumers in vulnerable situations could miss out on the potential benefits of the £11 billion smart meter roll-out, which they will be helping to fund through their energy bills. Such risks might relate directly to the installation and/or the ability of these households to benefit from the smart meter system.

Generations of British consumers have been locked into a “risky and expensive” project by the UK’s subsidy deal for a new nuclear power station at Hinkley Point in Somerset. That is not my assessment, but the assessment of the National Audit Office. Under the terms of the 35-year contract, EDF is guaranteed a price of £92.50 per MWh it generates—twice the wholesale price. The subsidy will be paid through energy bills that the Government’s own figures estimate will translate into a £10 to £15 chunk on the average household bill by 2030.

I do not want to revisit last week’s debate, but I should mention at this juncture that the National Audit Office has also pointed out, worryingly, that withdrawal from Euratom

“might be interpreted as a change of law”,

resulting in an adjustment of the £92.50 price promised to EDF, or might even trigger a one-off payment to EDF through a compensation clause in the contract. I shall leave that for the Minister to consider in his own time, but the fact is that EDF has been guaranteed three times today’s price for electricity for 35 years.

Former Conservative Energy Secretary Lord Howell—among many others—has criticised the Hinklev deal, calling it

“one of the worst deals ever”

for British consumers and industry, and has protested against

“endless government guarantees of risk-free returns to the investors”.—[Official Report, House of Lords, 22 October 2015; Vol. 765, c. 789.]

We now know that when Hinkley has been completed, several renewable alternatives will be cheaper. When it comes to helping consumers to keep their bills down, it is hard to see how the white elephant that is Hinkley will do so. Perhaps, for that reason, it is easy to understand why I am so concerned about the fact that consumer protection has not always necessarily been at the heart of the Government’s thinking. The price cap is, of course, welcome, but there is still a huge subsidy from the taxpayer for the energy from Hinkley Point. It seems that we are giving with one hand and taking with the other.

Every household needs and deserves a safe, affordable energy supply. The Government strategy must be clear, and what is best for consumers must lie at the heart of the entire process. By contrast, in Scotland minimum energy efficiency standards will be developed and announced in the private rented sector, with consultations on how owner-occupiers can improve the energy efficiency of their homes with financial incentives. Ultimately, the Bill must be about empowering consumers and delivering better, smarter and cheaper ways of heating our homes. Smart meters are part of that, but they must deliver for all, especially our vulnerable consumers, and deliver in a way that enables data to be secure and protected. The environmental benefits are, of course, also important.

We support the Bill, but, as I have said to the Minister, we have reservations. We urge the Government to ensure that the important elements to which I have referred lie at the heart of the legislation.