§
Lords amendment: No. 70, in page 49, leave out lines 18 to 21 and insert—
("(b) a person ("the initial contributor") has made a payment to the distributor in respect of those expenses, the line or plant having been provided for the purpose of making a connection to any premises or distribution system as required by that person."").
§ Dr. HowellsI beg to move, That this House agrees with the Lords in the said amendment.
Mr. Deputy SpeakerWith this it will be convenient to discuss Lords amendments Nos. 71, 101, 119, 120 and amendment (a) thereto, Nos. 159, 160, 161 and amendment (a) thereto, and Nos. 162, 163, 166, 172, 181, 184, 185, 189, 190, 192 to 196, 200, 202, 203, 205, 217, 229, 232, 233, 240, 242 and 243.
§ Dr. HowellsI congratulate you, Mr. Deputy Speaker, on getting every one right.
§ Mr. WilshireMore than can be said for you.
§ Dr. HowellsWell said.
1345 All the amendments are consequential on the decision to separate electricity supply and distribution. They make mainly minor adjustments to passages of the Bill dealing with connections, uniform prices in Scotland, pre-payment meter provisions, deemed contracts, determination of disputes arising from the duty to connect, billing disputes, standards of performance, transfer schemes, transitional arrangements for former tariff customers and miscellaneous provisions.
I understand that the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) wishes to move amendment (a) to Lords amendment No. 120 and amendment (a) to Lords amendment No. 161, which the Government will resist.
§ Mr. GibbLate in the Committee stage, among the many hundreds of amendments, new clauses and new schedules, the Government tabled a particularly unpleasant and authoritarian amendment to what is now schedule 4 and clause 83. The new measure gives gas and electricity suppliers the right to enter someone's property and home to install a pre-payment meter against their wishes.
Under the existing law, if customers fail to pay their bill and become problem customers they have a choice, if the supplier company finds it appropriate, between disconnection and accepting a pre-payment meter. If customers refuse to accept the installation of a pre-payment meter, they face disconnection. However, it remains their choice; a matter for them.
The new provisions, introduced late in the day by the Government, give the electricity and gas supplier the power to enter premises by force to install a pre-payment meter. That is an unacceptable power for one person to have over another, except in exceptional circumstances in which safety is an issue. It certainly should not be a power over future payments.
Aside from the issue of forced entry, pre-payment meters are extremely expensive for the customer. The Government's Green Paper illustrated how expensive they are. On page 34, it says:
A recent Offer study found that these generally range from approximately £9.50 to £27.50 per annum, although one company had a negative charge of around £4.50. The median surcharge is between £14 and £15 per annum.So the poorest customers pay the highest charges. The Government, who claim to be on the side of the fuel poor, are giving more powers to suppliers to enable them to install pre-payment meters.Pre-payment meters hark back to the dark days when the utilities were state-run monopolies—inefficient, unresponsive, uninnovative monoliths—that tried to force people to pay huge cash deposits simply to become one of their customers. I remember from my student days being forced to pay a £100 deposit before I could be supplied with electricity. Those days, thankfully, have gone and so too should pre-payment meters.
Throughout the proceedings on the Bill, Conservative Members have tried to put over the important principle that private sector competition in the utilities has led to falling prices—a 30 per cent, fall in real terms. That has done more to help the fuel poor with their bills than any mountain of regulations that the Government are intent on creating. That 30 per cent, cut would not have happened had Labour had its way in 1986 and 1988, when it opposed the privatisation. It is a result of privatisation that the proportion of homes with central heating has risen enormously since 1986.
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The truth is—a truth that those with a left-wing socialist approach still cannot bring themselves to accept despite all the evidence around them—that moving the gas and electricity industries into the private sector and opening up the markets to competition has delivered, and will go on delivering, huge benefits to society and to the least well-off in particular. The Government claim that the market and competition will not serve the least profitable customers, such as the poor or the elderly, but we have tried to explain that a fiercely competitive market with suppliers desperate for new customers and desperate to keep existing customers will develop new innovative products to enable companies to attract every last customer, including poor payers.
The Government said that that was nonsense and that massive intervention was needed. I am afraid that, yet again, the Government were wrong. When the industries were privatised, the Conservative Government put in place provisions for the protection of the elderly, the sick, the disabled and those living in rural areas as part and parcel of the process of mimicking competition. When competition arrives, that protection is not necessary.
For example, PowerGen has entered into an arrangement with Age Concern to provide a special lower-priced package for the elderly. The scheme is called "Better Deals for all Concerned" and it offers lower standing charges, cold weather rebates, free carbon monoxide detectors, free early warning hypothermia thermometers and free energy efficiency advice. That is just the start; there will be many such schemes in due course provided that the Government do not drive out the entrepreneurial spirit and capital from the industries.
Another example is the stay warm scheme introduced by TXU, the owners of Eastern Energy, in May this year. The Minister was at the launch of the scheme, which is specifically for households on low incomes, such as those on state benefit, the disabled, the long-term sick and the elderly. It provides fixed payments for unlimited use of gas and electricity, and those payments are £120 a year less than those groups would have had to pay before. It is an extremely innovative scheme and way of enabling previously unprofitable customers to become highly viable for the industry. For the company, the scheme cuts down on meter readings—it carries out just one meter reading a year—and on the cost of dealing with debt problems. For the consumer, it results in lower bills.
The scheme does away with the need for pre-payment meters and it could have never emanated from the industry had it remained under state control. It can not survive in the long run if the Government over-regulate the industry. It has happened only because of competition.
The new powers to enter premises to install old-fashioned, unfair, highly expensive pre-payment meters should not have been introduced by the Government. The amendment would add a safeguard to that power so that it can be exercised only if the customer has agreed in writing to have a prepayment meter installed. Competition and enterprise—and not draconian rights-of-entry powers—are the solution to helping the poor and to heating their homes. I urge the Government, at this late stage, to think again about this issue.
§ Mr. WilshireOn amendment No. 71, it seems that we are being asked to approve a draconian power. Clause 46(21)(b) refers to
any terms restricting any liability of the distributor for—this is the important point—economic loss resulting from negligence which it is reasonable in all the circumstances for that person to be required to accept.Action must be taken in such circumstances and I do not necessarily disagree with that.However, the other place has said that it is a technical provision. Therefore, it has asked us to approve the removal of all the references to restricting liability, economic loss and negligence. It ask us to accept an amendment in which any terms can be imposed that are
reasonable in all the circumstances for that person to be required to accept.There is no reference to economic matters, negligence or loss; the amendment refers only to any terms that are reasonable in all the circumstances. We are back to the old chestnut—defining what on earth is reasonable—and this provision relates not merely to some circumstances, but to all circumstances.The amendment is so draconian as to be worthy of comment from the Minister. He clearly thinks that it does not matter and that he can give people the power to do anything that they like and to impose any terms they like in any circumstances they like. We were offered no explanation whatsoever, and I should be grateful for one.
§ Dr. HowellsI shall try to give the hon. Member for Spelthorne (Mr. Wilshire) an explanation. Ostensibly he is right, and the amendment provides a very wide power, but it must be borne in mind that the provision will come within the scope of section 23 of the Electricity Act 1989, as amended by the Bill. Under that section, in the event of a dispute about the terms offered by a distributor for making and maintaining a connection, either party may refer the matter to the authority for determination. I hope that the hon. Gentleman will view that as the safeguard that he is seeking. In the end, the question of whether it is reasonable in all the circumstances for a person to be required to accept a particular term is likely to become a matter for determination by the authority, especially where the term is novel or unusually burdensome.
I turn now to amendment (a) to amendment No. 120 and amendment (a) to amendment No. 161, in the name of the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb). I agree entirely that it is fierce, fair competition that brings all consumers the greatest benefits, and I certainly do not believe that increased state intervention is the way to bring down electricity or gas prices. I agree also that excellent schemes are offered by companies such as PowerGen, which display a great regard for corporate responsibility. Long may that thrive—I am certainly doing all that I can to encourage it. However, we will resist the amendments.
The amendments provide that a customer in debt to his supplier could not be required to accept the installation of a pre-payment meter in place of his existing meter. The supply company would be able to install a pre-payment meter in such circumstances only if the customer had agreed to it in writing. That is strange because it would mean that the customer who refused or, worse, forgot—many of us have forgotten to send our returns to such 1348 companies as quickly as we should have done—would be almost certain to have his supply disconnected unless he agreed in writing to accept a pre-payment meter.
I am sure that the hon. Gentleman cannot intend to increase the number of disconnections that arise from non-payment of gas and electricity bills; but by seriously weakening suppliers' powers to replace credit meters with pre-payment meters when a customer is behind with payments, the amendments would achieve exactly that. I am sure that he is aware that it costs a great deal more to be reconnected than to come to an arrangement for the installation of a pre-payment meter.
§ Mr. GibbEssentially, the amendment would simply change the law back to what it was before the Bill was introduced so that suppliers would have no right to enter people's premises to install a pre-payment meter. Despite that, disconnections have fallen over the past few years.
§ Dr. HowellsThey have fallen over the past year by about 25 per cent., and I hope that they will continue to fall. However, it is important to remember that a supplier has to get a warrant before he can force entry to install a meter or to disconnect the supply. The existence of a power of entry to install a pre-payment meter does not necessarily mean that companies will use it. Like the hon. Gentleman, I welcome the innovative approach of some companies and the way in which they have sought to get around the problem.
§ Mr. WilshireIt sounds to me as though the Minister objects to the fact that somebody has to get a warrant before they force entry. Is that what he is saying?
§ Dr. HowellsI am not suggesting that at all. It is important that a company should get a warrant before it enters somebody's home.
§ Mr. David Winnick (Walsall, North)Before an application for entry is made—as my hon. Friend has explained, a warrant will be required—surely all the circumstances will be taken into account. Does my hon. Friend agree that it would be unfortunate if, as a result of disconnection, a household was left with no supply whatever? Children may be involved and the supply may be disconnected as a result of the parents' irresponsibility. There is therefore a case for ensuring that the household has some fuel connection—to either electricity or gas.
§ Dr. HowellsMy hon. Friend has expressed the essence of this provision beautifully. It is important that we do not have disconnections, but have pre-payment meters fitted wherever possible.
The hon. Member for Bognor Regis and Littlehampton will be interested to learn that one major gas supply company has told Ofgem that it estimates that some 80 per cent, of gas supply disconnections occur because the company cannot illicit a response from defaulting customers, despite oft repeated attempts to do so. How are such people to be persuaded to avoid disconnection by being made to write to their suppliers agreeing to the installation of a pre-payment meter, when they do not communicate in the first place?
§ Mr. GibbThose people are exercising their perfect right to refuse a gas company entry, and I believe that 1349 they should continue to have that right. The Bill removes people's right to refuse gas companies entry to their house to install meters.
§ Dr. HowellsI have tried to explain to the hon. Gentleman that the Bill contains a great many safeguards. We have confidence in the system. We certainly believe that it is a far better way to proceed than making children, innocent of the shortcomings of their parents, endure the cold, and then subjecting their parents to a hefty reconnection charge. We shall therefore resist the amendment.
§ Lords amendment agreed to.
§ Lords amendment No. 71 agreed to.