HC Deb 01 December 1998 vol 321 cc789-96

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Pope.]

10.42 pm
Mr. Ken Purchase (Wolverhampton, North-East)

I am pleased to have the opportunity to bring to the attention of the House what I believe to be a denial of justice for my constituent—Mr. Neil Bailey, from the Wednesfield area of my constituency—by an arm of British Gas known as British Gas Trading, post-privatisation and subsequent reorganisation.

Mr. Bailey became an innocent victim following the digging up of the pavement outside his home by Transco, to repair gas pipes. Transco is another former part of British Gas. It carried out the work and, on completion, the Transco engineer knocked on the door of my constituent's house and asked that he may be allowed into the garage to bleed the system of air, after putting the gas supply back on.

Unfortunately, my constituent's wife, Mrs. Bailey, was unable to give access to the engineer: the meter was located in the garage, to which she did not have access while her husband was away at his work in Birmingham. She was unable to convince the engineer that she had no access, and, in the end, telephoned for Mr. Bailey to leave his work in Birmingham to come to Wolverhampton to allow the engineer into the garage.

I should explain that Mrs. Bailey has a bone disease, which makes life very difficult for her, as well as arthritis and a heart condition, for which she will shortly undergo a double bypass operation.

On Mr. Bailey's return, he not only gave access to the engineer, but loaned him the tools necessary to do the job. He also explained how the engineer might find the person next door to gain access to his premises.

A short while later, when Mr. Bailey was about to return to work, the engineer came up the path again and asked if he could have access once more, through the garage, to the meters. My constituent explained that there was a secure door, which would require a little work, and that in any event it was now time for him to go back to Birmingham and resume his work. He could not put up with further delays.

When Mr. Bailey came home, late in the afternoon, he was met by three people. One was a policeman; the others were from the gas companies. The policeman had a warrant to search the premises, on the ground that Mr. Bailey was suspected of stealing gas from British Gas Trading. It was alleged that he put in and took out a second meter according to the time of arrival of the quarterly bill, this gaining access to gas that he should not have had. That was alleged by the Transco man, who said that he had seen the meter earlier.

A thorough search of the premises was carried out by the police officer and the gas company employees, who—surprise, surprise—found no sign of another meter. End of story, the House may think, perhaps rounded off by an apology; but no—the gas meter was removed, and Mr. Bailey was arrested, taken to the police station and charged with stealing gas.

The forensic examination found nothing wrong, and the Crown Prosecution Service decided not to prosecute by reason of insufficient evidence, there being only the word of the Transco engineer.

End of story now, the House may think. Again, an apology would have helped—but no: British Gas Trading decided that Mr. Bailey was guilty, and told him that it calculated that he had stolen gas from it to the value of £189. To be reconnected, he would need to repay that amount, as well as paying a reconnection charge of £39.

Hon. Members can imagine the exasperation felt by my constituent. He had been arrested, charged and taken to a police station; no evidence had been found. The Crown Prosecution Service had said, "Don't take it any further," but British Gas Trading decided to charge him, try him and find him guilty, without any evidence worth talking about.

This has been going on for nearly 12 months. The incident happened in January. Hon. Members should bear in mind the great distress caused to my constituent and his disabled wife.

Mr. Bailey engaged a solicitor to take on the case, but with no success. The gas company simply cited its decision, and justified it under its powers to protect its revenue. I do not oppose such powers; it is right and proper for the industry to be able to protect its revenue. I merely ask it do so in a proper and sensible way, by referring as fully as possible to evidence that it may have.

My own correspondence on the matter has produced no better result. I have written, on behalf of Mr. Bailey, to every big noise in each of the companies—Transco, Centrica, British Gas Home Energy, British Gas Trading and the Gas Consumers Council—to no avail. The defence of the gas companies was repeated like a mantra, ad nauseam, by the chairmen and their understrappers. I believe that the chairmen should take the blame for not responding to a reasoned and sensible series of letters from a Member of Parliament, and should have taken it on themselves to investigate the matter properly and thoroughly. They knew all the circumstances; they were left in no doubt of the position. None the less, they chose merely to repeat the mantra, "We have the powers; we will protect our revenue."

My constituent has two killer pieces of evidence on his side. First, he has retained all his gas bills for the 20 years during which he has lived in the house—gas bills relating to when the meter was first read, stating "zero, zero, zero". He also has his rates bill, his water bill, his electricity bill and all the household bills that so many of us always manage to mislay somewhere or other. He is the perfect book-keeper. They show a consistency in the use of gas over the years, and the gas companies in a better light in the past four years, when the increase in gas bills has been relatively stable because of the falling gas price. The gas companies knew he had all those bills. I believe that the Gas Consumers Council saw the bills.

When my constituent said to me, "I have all my bills," I said, "I am sure you do. I believe you." He was not satisfied that I believed him. The next week, he brought the gas bills to my surgery for me to see, so he was determined to show me that everything that he had was above board and available for any one to inspect any time they wanted.

The second piece of killer evidence is that the chap who has been reading my constituent's gas meter all these years lives a few doors away. He said to my constituent in the local social club, "I have seen your meter over all the years. I can swear on oath that that is the gas meter that has always been there."

Bearing in mind that my constituent had perhaps up to half an hour to change his gas meter on the first call, and perhaps another half an hour when he returned from work, it stretches credibility to believe that he would change the gas meter, but, there we are, the chap who has been reading the meter for years lives close by. He and my constituent socialise anyway, meeting occasionally in the local social club. He would say under oath that this is the meter that he has always been used to reading.

The gas authorities know both those things, but even that has not moved British Gas Trading—that is, hon. Members will be pleased know, until my Adjournment debate was announced. I am sure that it is an absolute and total coincidence that an offer has now been made—an offer that, frankly, is almost as bad as the initial problems that British Gas Trading has caused for my constituent.

The offer calls for my constituent to make a deposit of £250, which is more than it would have cost him to have the thing reconnected, but of course he would have been accused of being guilty had he met those unjust and unjustified bills. I assure the authorities that he will not settle for that. He needs to have the thing settled properly: to have an apology, with the whole thing reconnected without any further charges.

Much of this has been caused by the nature of the organisation and the apparent continual reorganisation that it has been undergoing. There has also been an element of stubbornness not to recognise that this was a matter that could have been resolved by someone visiting my constituent, looking at the evidence and understanding that, almost certainly, when the Transco engineer looked at the meter, there was a haze: a simple, honourable mistake, none the less compounded in the engineer's mind by the fact that my constituent, having left Birmingham and arrived in Wolverhampton, then wanted to return to his work—that was reasonable and fair in the circumstances—and did not want to open the garage the second time.

Ofgas has powers to intervene, but they are not sufficient. My constituent and his disabled wife could say, "Please investigate my case," but, in the meantime, his gas would remain unreconnected; it would probably be unreconnected well past Christmas while investigations took place. Indeed, it may be a difficult case to investigate, but the whole raft of difficulties could have been resolved by an early intervention.

When reviewing these matters, the Minister may consider whether a duty should be placed on gas companies—more than one is involved throughout the country—to refer to, and consult with, Ofgas to avoid what has become a Winslow Boy-type affair, which none of us wants, and which has deprived my constituent and his disabled wife of the fuel that they need to heat their house. I ask that the matter be investigated properly and thoroughly.

I hope that British Gas Trading—having heard the matter articulated in this debate, not simply reading about it—will understand that it is incumbent on it to make a proper, sensible and final offer that will absolve my constituent Mr. Bailey and reconnect his gas supply.

10.55 pm
The Minister for Energy and Industry (Mr. John Battle)

I thank my hon. Friend the Member for Wolverhampton, North-East (Mr. Purchase) for raising his constituent's case. Although some may say that it is inappropriate to deal with individuals' problems in the House, I do not agree with them. Quite often, we discover in our constituency cases and surgeries how laws, Budgets and the practices of private companies impact on individuals. It is certainly appropriate that we should stand up in the House for those whom we feel have been treated unjustly, speak out for them and raise their cases. I therefore welcome the fact that my hon. Friend has dealt with his constituent's case, and the way in which he has done so.

My hon. Friend said that his constituent kept careful accounts and old bills. How often do people do so? Nevertheless, I should say that generally—I shall comment in a moment on the individual case—many of our constituents do their homework, have been conscientious in dealing with matters and deserve to be treated with the utmost respect and seriousness. If the word "customer" is to mean anything, customers have to be treated with absolute respect and be treated as companies' first priority.

The purpose of the Government's proposals in our fair deal for consumers is to renew and refresh regulation and to put consumers at the heart of the process, so that they really do come first. The law states that not people but establishing competition should be the first priority, but competition should benefit people. If it does not work for people, why have it?

I cannot go into the details of the individual case raised by my hon. Friend. It would be inappropriate for me to do so, especially as the case between the parties is unresolved. The case went to the Gas Consumers Council, which did not refer it—as, perhaps, it should have—to Ofgas, as the case was to go to court. The council perhaps felt that it should not act further on the matter.

Mr. Purchase

The case did not get to court.

Mr. Battle

Perhaps the appropriate course would have been for the Gas Consumers Council to have referred the case to Ofgas. Those at Ofgas were seemingly unaware of the case until my officials alerted them to it, because of this debate. It does seem a bit odd that, before Ofgas would take the case seriously, my hon. Friend had to go to the effort of writing to Madam Speaker to request an Adjournment debate. There seems to be a gap in the system.

We shall fill that gap by giving power to the Gas Consumers Council to be the sole point of contact when we change the regulatory rules, so that people know clearly where to go, and so that the council will champion cases right the way through the system and take on the companies.

I hope that the case will be resolved by a revised offer by the supplier. I have been informed that the parties will be meeting, when the matter can perhaps be resolved. Ofgas can use its formal powers to resolve such disputes. Gas companies and suppliers are obligated to use their licences to ensure that customers' domestic properties are supplied with gas. Should Ofgas—having considered the evidence from all parties in a dispute—decide that a disconnection is unjustified, the Director General of Gas Supply, the regulator of Ofgas, can use enforcement powers to require a reconnection. Mr. Bailey could have asked—he still could ask—Ofgas to use those legal powers.

Gas competition was opened up under the previous Administration and the process was completed on 23 May. There has now been a roll-out of 10 other suppliers which compete with British Gas. In the past year, that has resulted in consumer-related problems, including doorstep selling. I raised the matter with the Director General of Gas Supply last year, soon after taking office, and insisted on the introduction of a marketing licence condition that regulates the practices of companies involved in doorstep selling.

There is now a clear code of conduct and companies risk losing their licences and being fined if they abuse their customers—our constituents—in that way. We consider improper marketing tactics and doorstep sales unacceptable and we will not tolerate them. The Department is currently consulting on modifications to strengthen the Consumer Protection (Cancellation of Contracts Concluded Away from Business Premises) 1987 Regulations.

It is clear that some consumers continue to experience problems when they switch gas supplier. In that respect, some gas suppliers are proving worse than others. Problems can range from delays in transferring to a new supplier to disputes about billing. We should be aware of the distress caused to consumers, particularly the elderly and disadvantaged, if they are billed wrongly and suddenly receive a huge bill. They are then told that they are in dispute with their supplier. When they dealt with one nationalised company, consumers did not face the difficulties that inevitably arise now that there are more than 20 companies. Ofgas is aware of the switching problems and is working with the industry to get it right.

Customers are also experiencing erroneous transfer because of doorstep selling or administrative problems. They can be switched to a new supplier without having requested a transfer. That is unacceptable and Ofgas is tightening up the transfer procedures.

Since April 1996, the number of competing suppliers has doubled to about 20 and some 3 million out of 19 million households have switched supplier. There is great turmoil in the marketplace. The introduction of competition on such a scale and in such a time scale has been a considerable achievement and problems were inevitable.

Following my expressions of concern, the Association of Energy Suppliers has put together a code of practice revising the practice of doorstep selling so that companies have to hand over clear written information about their tariffs—they can no longer sign up people on the doorstep. We hope that the practice will now be jettisoned. All members of the association have signed up to the revised code and I have made it clear to the gas and electricity regulators that I expect them to take action in respect of companies that do not adhere to the new code.

All gas suppliers have a duty to establish procedures to handle disconnection complaints. If a consumer cannot resolve a problem with a gas supplier, the first port of call should be the Gas Consumers Council. If the GCC cannot resolve a problem on behalf of a consumer, it should be referred to Ofgas for arbitration.

It would be wrong and misleading to pretend that the regulatory framework was perfect when we took office. The hon. Member for Daventry (Mr. Boswell), the shadow spokesman on energy issues, is in his place and he would concede that.

Our Green Paper "A Fair Deal for Consumers: Modernising the Framework for Utility Regulation" proposes changes to utility regulation. We want to put consumers at the heart of regulation. We set out many proposals, including the merger of Offer and Ofgas, new powers for Ministers to issue statutory guidance on social obligations and environmental objectives and measures to improve the transparency of regulation of the energy industries and decisions to replace energy and telecoms regulators with small boards. We propose a new primary duty on regulators to protect and promote the interests of consumers wherever possible, through promoting competition but ensuring that the Government establish consumer councils for each of the utilities. A consumer council for energy will be established on a fully independent and statutory basis, backed up by resources. We envisage that consumer council playing a key role in articulating a strategic and independent view of consumer interests to the regulators, companies, Parliament and the media. It will be the single point of contact for people and it will have to take action.

We also want to strengthen the position of consumers by ensuring that all the regulators have the powers already held by some to impose financial penalties on companies for breaches of overall and individual customer service standards. Companies will be fined in retrospect if they get it wrong. That should strengthen the system.

We plan to encourage stronger links between customer service standards and the price caps on energy and directors' pay, to tie it in more rigorously than has been the case. We did not inherit a perfect system. We have had to overhaul the regulatory framework. We have put forward proposals on that and are looking for support to take those proposals that require legislation through the House. The new regulator will be the first energy regulator to bring together gas and electricity and build in our new guidelines.

The independent regulator will have a statutory duty to investigate and take enforcement action to prevent licence breaches. Ofgas is already working closely with the industry to solve the problems that consumers are experiencing and to tighten up the codes of practice and the licence conditions. The Gas Consumers Council, which is an independent statutory body set up to deal with consumer complaints, will be strengthened as the first point of contact. We are also reviewing utility regulation with the key aim of building into law that the consumer should be at the heart of the regulatory framework and should take precedence. The law that we inherited says that setting competition in train should be the primary duty of the regulators. That will be changed to make the primary duty protecting the consumer. If consumers do not like the service that they receive, they can and should demonstrate their concerns. They can change to other suppliers, but it is important that their supplier delivers the right quality of service.

Price is important in regulation and people naturally want lower bills, but they deserve quality and back-up in their service. That is paramount. If gas companies talk about consumer service, they ought to take their customers seriously and treat them with ultimate respect. We shall ensure that the law backs that up.

There will be a single point of contact. There is a competitive market for energy, but we shall ensure that the marketplace is regulated. We shall ensure that the poor are not priced out—that is imperative—that environmental responsibilities are taken seriously and that when there are breaches of licence conditions, action is taken against the companies concerned.

I thank my hon. Friend for raising the subject. The individual case that he has mentioned shows that we have to ensure that the structure exists to deal with future cases so that people get full justice.

Question put and agreed to.

Adjourned accordingly at eight minutes past Eleven o' clock.