CONSUMERS' COMMITTEES

HC Deb 20 July 1989 vol 157 cc587-92

Lords amendment: No. 2, in page 2, line 22, leave out subsection (4).

Mr. Wallace

I beg to move, as an amendment to the Lords amendment, amendment (a) in line 1, at end add `and insert (4) In appointing a person to be a member of a consumers committee the Director shall have regard to the desirability of appointing a person who has knowledge of the geographical make up of the area.'.

Madam Deputy Speaker

With this it will be convenient to take Lords amendments Nos. 100 and 62 to 64.

Lords amendment No. 65, after clause 50, insert the following new clause—National Consumers' Consultative Committee— .—(1) There shall be a committee, to be known as the National Consumers' Consultative Committee, of which the Director shall be chairman and the ordinary members shall be the persons who for the time being hold office as chairmen of consumers' committees. (2) The Committee shall meet at least four times a year and shall be under a duty—

1. (a) to keep under review matters affecting the interests of consumers of electricity generally; and
2. (b) to facilitate the exchange of information relating to such matters between the Director, the ordinary members and their respective consumers' committees."

Amendment (a) to the proposed Lords amendment, at end add— `and (c) to make a report available to the public at least once a year on matters affecting the interests of consumers generally.'.

Mr. Wallace

The Under-Secretary of State may recall that we had a similar debate on Report on an amendment tabled by the hon. Member for Rother Valley (Mr. Barron) to provide for a geographical link between membership of a consumers' committee and the area in which the committee served. I do not deny that I make this point very much from a Highlands and Islands viewpoint, but I am sure that it has similar consequences in other parts of the country. Issues will arise in a particular geographical area that can best be reflected by people with a knowledge of that area.

The cost of connecting new consumers to the electricity supply has caused considerable controversy in the north of Scotland. The Bill states that the cost of supply will be reasonable in the circumstances. I should welcome the Minister's assurance that the circumstances refer to the consumer as well as to the supplier.

People would certainly not be satisfied if large sums were charged, but it would be more satisfactory if their views were represented on the consumers' committee by people from their area rather than by people from other areas. It is theoretically possible under the Bill for a person from Carlisle who has never set foot in the Highlands and Islands and has no concept of the problems of consumers to represent that area on the committee.

I do not intend to elaborate the point. It is straightforward and very much in the consumers' interest. I cannot see how it compromises what the Government are trying to do in privatising electricity. However, it would mean that the interests of consumers were more likely to be represented by those who knew what those interests were.

Mr. Simon Hughes (Southwark and Bermondsey)

It may be helpful for me to add an equally short point from a different geographical perspective. A matter that concerns me, and is a regular concern of hon. Members who represent inner cities, is the way in which our fuel industries and the cost of them affect those on the lowest incomes. A quarter of my constituents are pensioners, and the problem of fuel poverty is illustrated most graphically by a simple comparative statistic. In general terms, for people in the middle classes and middle income brackets, fuel bills are on average 5 per cent. or less of their domestic outgoings. For those in the lowest socio-economic groups and those in the bottom 20 per cent. of income groups, the fuel bill is sometimes as high as one quarter of the regular household budget. The Minister will know that the figure is sometimes one fifth, but often rises up to one quarter.

The group made up of pensioners and the poorest in our society needs to be well represented round the table at which consumers' needs and the implementation of supply systems and programmes that affect consumers' needs and the cost of supply will be determined. I must say to the Minister with some strength that I am aware that his Department has regularly monitored the way in which the cost of fuel bites on those who are least able to afford it simply because they have the lowest household income for everything, including fuel. I am aware that the Department knows and agrees that the statistics are often as I have specified and that fuel can use up a substantial part of those household budgets.

In those circumstances, will the Minister give me and those of us who represent areas where there are many on low incomes and many pensioners, including those living alone, some reassurance that the voice of those people will be well and truly represented on the consumers' committees?

Mr. Thomas McAvoy (Glasgow, Rutherglen)

The Opposition welcome the Government's decision to accept the Lords amendment and I want to spend a couple of minutes outlining the reasons for that. In Committee, we took the view strongly that information is power and that it is essential that there is as wide a spread of information as possible to ensure that the system brought forward by the Government for monitoring the electricity industry is accountable not only to local people, but, more widely, to allow full accountability and scrutiny.

The Government originally outlined a regional set-up which meant that there was no link-up for information to be shared throughout the country and for knowledge to be used to put pressure on the system for the benefit of the consumer. The intention behind the amendments and the reason for our support for them is to ensure that matters that affect the interests of electricity consumers generally, including the important issue of prices, are kept under review at a national level in a formal structure. That would ensure a forum for discussion and the exchange of information relating to national policy for electricity consumers. In Committee, we maintained strongly that the Government's proposals were not enough and that there should be some improvements. We welcome the proposals in the amendments which will ensure that there is a national forum to scrutinise what is happening in the electricity industry.

I always shudder when I quote an hon. Member from a Committee Hansard because I think that in future another hon. Member may do the same to me. However, I will take that risk, so here goes. I will quote from a series of debates in which we were putting forward the point that the Government's proposals were not enough. I take some delight at this stage in quoting some of the Minister's comments. He said: The hon. Member for Gordon claimed that our proposals would not allow for comparison or variation of performance between different areas and regions. That is, of course, the purpose of the amendment. He continued: That is highly unlikely for two reasons. Clause 46(2)(d) provides a statutory duty under which the director general must publish in his annual report 'a general survey of the activities during that year of the consumers' committees'. That applies to all consumers' committees throughout the country. On that basis, people will have the means by which they can compare the advice and activities of the different consumers' committees. That is clearly stated as an obligation in the Bill. The Minister was saying then that the status quo was fine, yet he is now prepared to accept an amendment that puts forward a principle that he rejected in Committee.

7.45 pm

He also said: It is right that the Bill allows for independent reports to be made more often than annually and on a regional basis. It is also proper that the reporting structure should be encompassed within the new regulatory regime of which the committees will he part. That is the radical new step which I think that hon. Gentlemen will understand if they reflect on it later outside the rhetoric of party confrontation. If they do not, they should have a word with the area councils in their constituencies. The councils are over the moon about the new teeth that we are giving to consumer representatives—[Interruption.] I am not exaggerating. His rhetoric was part of party confrontation and he automatically rejected the Labour amendment. That rhetoric has now been shown to be misplaced and he has accepted the principle that he was attacking then. However, his rhetoric carried him away in Committee. About major improvements for consumers he said: We have given them teeth and made them part of the regulatory body. On that basis, we unashamedly ask Opposition Members to withdraw their amendment. If they do not, we shall triumphantly vote against it."—[Official Report, Standing Committee E, 16 February 1989; c. 1033–34.] We welcome unashamedly the conversion of the Government to our point of view and triumphantly we will not vote against the proposal.

Mr. Malcolm Bruce

I want to speak briefly to amendment (a) to Lords amendment No. 2 which relates to the annual report. It is a matter that we debated fully in Committee, but as the amendment has been selected, it is an appropriate point at which to say to the Minister that the arguments we put in Committee, which the Labour party supported, about the desirability of having an annual report lead me to say that such a provision should be in the Bill. I hope that the Minister will tell us, if he is not prepared to accept the amendment, what assurances he can give.

The hon. Members for Rother Valley (Mr. Barron) and for Cardiff, West (Mr. Morgan) said in Committee that over the years much useful information had been contained within the annual reports from consumer bodies. Without an annual report, it is felt that one cannot monitor from year to year how effectively consumer interests are being protected. The objectives may not be set out and the success in meeting objectives may not be recorded from year to year. It remains my view and, I suspect, the view of Labour Members that annual reports are desirable. It is a matter of regret that the Bill does not require them.

I would be delighted if the Minister were to accept the amendment. If he does not, I hope that he will tell us what measures he is likely to take to ensure that, in general, annual reports will be the norm rather than the exception.

The Parliamentary Under-Secretary of State for Energy (Mr. Michael Spicer)

I begin by speaking to the Lords amendments, which I ask the House to accept. They deal with a variety of aspects of the new regional consumer committees which will be set up under clause 2 and which will be a key component of the radically new consumer protection arrangements in the Bill. They will be the director general's eyes and ears. For the first time a set of statutory powers and duties will equip the committees with a formidable set of teeth to deal with consumers' concerns. The Government's basic proposals have been widely welcomed by existing consumer bodies.

The amendments address aspects of the committees' make-up and functions in ways which the Government believe will materially improve their effectiveness. There has not been a fundamental change in the Government's policy, as the hon. Member for Glasgow, Rutherglen (Mr. McAvoy) implied. These are strengthening amendments. We have listened to what was said in Committee, in the House and in the other place and we have introduced improving amendments which do not go against the concepts that we advanced earlier.

Amendment No. 2 removes the criterion which the director general was required to take into account when appointing members of the consumers' committee. That will increase his flexibility when making appointments to the committee and will help to ensure that the best people are appointed, from whatever background. In answer to the hon. Members for Orkney and Shetland (Mr. Wallace) and for Southwark and Bermondsey (Mr. Hughes), may I say that we are not specifying particular groups, whether on a regional basis or on the basis that they represent poor people or pensioners. They made a good point. It is right that the director general should consider such groups, but appointments will be at his discretion. That is right. Above all, he should look for ability. As the committees will be structured regionally, they will have a regional dimension.

In answer to the hon. Member for Rutherglen, may I say that I have never said that meetings of such groups were a bad thing. The Government have never suggested that. We are against reinstituting a completely independent national body such as the electricity consumers council. It is proposed in amendments Nos. 62, 63 and 65 that there should be a national consumers' consultative committee chaired by the director general and composed of the chairmen of the regional consumers' committees. The director general will include in his annual report a general survey of NCCC activities. That, incidentally, partly answers the question about annual reporting raised by the hon. Member for Gordon (Mr. Bruce).

The committee will meet at least four times a year. It will keep under review matters affecting the interests of consumers of electricity and facilitate the exchange of information between the director general and the consumers' committees. It will be a good forum for the chairmen of the committees to compare notes and for the director general to compare the standards of the committees. We welcome that and I propose that we accept the Lords amendments. The effect will not be the same as setting up a completely independent and different consumers' body, like the present one.

Mr. Simon Hughes

I sat on the Committee of the Bill to create London Regional Transport in which we had a similar debate about consumers' interests. At the end of the day some concessions were made to include a representative, for example, of the disabled, and undertakings were given that certain matters would be for the director general to consider. Will the Minister go further and say that people representing groups suffering from fuel poverty, whether on a geographic or demographic basis, will be specifically represented?

Mr. Spicer

The director general designate will look carefully at what the hon. Gentleman and other hon. Members say about the interests that should be represented on the committee. I am sure that he will take these exchanges seriously when assessing who should be represented. That is different from a statutory requirement to include certain groups. The problem with designating specific interest groups, whether regional, poor people or others, is that one can think of many types of groups. It is completely open-ended. We want an effective group to represent consumers and that can best be done by the director general appointing the members in conjunction with the chairmen.

Mr. Hughes

Will the Minister make it clear that it is his view that the issue of fuel poverty must be properly addressed by the representatives chosen by the director general? That is important because it affects the most vulnerable group of consumers. If the Minister can say that, it will confirm the importance of this exchange.

Mr. Spicer

I do not want to say anything from the Dispatch Box which gives the impression that the Government are leaning on the director general. Personally, I believe that it is a good idea to accommodate the interests of poor people within the new structure. That is why we have taken so much trouble to introduce licensing conditions on prepayment metering systems and why so much effort has been devoted to the licences. Clearly the interests of poor people will be borne in mind by the director general and in the licensing conditions for prepayment meters. The statutory position is clear. This is a discretionary, not a statutory, power. I am sure that the director will listen carefully to these and other exchanges.

The hon. Member for Gordon wants an annual reporting system. Amendment No. 63 already places a duty on the Director General of Electricity Supply, who will chair the NCCC, to include in his annual report a general survey of its activities during the year. That is in addition to his existing duty to include a general survey of the activities during the year of the regional consumers' committees in his annual report, which will be published. We fully understand the purpose of amendment No. 65(a), but its spirit is accommodated within our amendments and in the Bill.

Mr. Malcolm Bruce

I hear what the Minister says, but he will recall the debate that we had in Committee, when we said that it was not entirely satisfactory that the director was effectively determining what he put in his report rather than putting in what the consumer committee wanted to be said. Will the Minister at least give an assurance that he will monitor the situation if there is any evidence that the consumers' committees are dissatisfied, and that the Government will review the matter if the feeling is that the consumer interest will not be adequately reported?

Mr. Spicer

I can speak with authority only to what is in the Bill. I can say authoritatively that we have taken on board many of the arguments made to us in Committee, and that there will be an annual publishing requirement on the various committees and the National Consumers' Consultative Committee as well. The hon. Gentleman has made this good point fairly, but it has been accommodated within the Bill. It would be worthless for me to go further because we are speaking to a future Act of Parliament, and, however many protestations or exhortations I make, that is what will determine what happens. The Bill meets the hon. Gentleman's objection, and I hope that on that basis he will not press his amendment to a vote. However, I urge the House to agree to the Lords amendments.

Question, That the amendment to the Lords amendment be made, put and negatived.

Lords amendment No. 2 agreed to.

Lords amendments Nos. 100 and 62 to 65 agreed to.