Power Supply (Compensation for Erroneous Transfer) (Hansard, 27 January 2004)

§ David Cairns (Greenock and Inverclyde) (Lab)

I beg to move, That leave be given to bring in a Bill to require electricity and gas suppliers to compensate customers whose supplier is erroneously transferred; and for connected purposes. May I begin by making the joke that is customary on these occasions and say how pleased I am that so many hon. Members have turned out for this important debate? I thank in particular my right hon. Friend the Member for Newcastle upon Tyne, East and Wallsend (Mr. Brown) and my hon. Friend the Member for Leeds, East (Mr. Mudie) for doing a terrific job in getting such a good turnout for me—those e-mails certainly worked.

Up and down the country, tens of thousands of people have had their gas or electricity switched from one company to another either without their consent, or after strong-arm or blatantly dishonest sales techniques on the doorstep. It is extraordinary that that ongoing outrage does not generate the sort of media coverage or political interest that certain other matters do. Perhaps that is because many of the worst victims of that mis-selling are among our elderly constituents, or it might be because most people simply do not pay that much attention to the details of their gas and electricity bills.

By means of comparison, I ask hon. Members to reflect for a moment on how they would feel if, for example, they opened their front door one day to find that during the night, Nissan had come along, taken away their Ford and left a Nissan in its place? How would they feel if they were to switch on their mobile phone to find that T-Mobile had switched their Orange service to them without so much as a by-your-leave? Even worse, how would my hon. Friends feel if they woke up one morning to discover that the Liberal Democrats had switched their party membership to that party without their consent? Parliament would be recalled! However, thousands of our constituents endure such distressing experiences each month.

Energy-watch, the consumer watchdog, is currently recording around 500 monthly complaints. However, hon. Members should be under no illusion, because that is just the tip of the iceberg: the problem is far greater. I am sure that all Members have heard about the matter in their constituency surgeries. One case was that of an 80-year-old lady in Greenock who specifically told a nice young woman on her doorstep that she was perfectly happy with her electricity and that she did not want to switch. "Not to worry," she was told. "Can you just sign this bit of paper telling my boss that I've explained the benefits to you, that's all?" My constituent signed—she was trying to be helpful—and, needless to say, her supply was switched.

That case is at the shallow end of the pool. At the extremes, we have heard of cases of forged signatures, salespeople entering homes under completely false premises and people being told blatant lies about potential benefits. Some companies have even been caught forging the signatures of the recently dead so that the electricity supply could be changed before a new owner moved into the home.

164 Let me make one thing perfectly clear: I fully accept that the deregulation of the market has by and large been good for the consumer, and that changing one's supplier can deliver lower fuel bills. I also accept that people generally do not go out to shop for a new gas or electricity supplier; they need to have it sold to them. The industry maintains that the most effective way to communicate the advantages of switching supplier is by doorstep selling. Well, that may be so, but the industry needs to understand that aggressive—[Interruption.]

§ David Cairns

I am indebted to you, Mr. Speaker.

The industry needs to understand that aggressive and fraudulent behaviour by its doorstep agents is completely unacceptable and must be stamped out. There have been recent welcome moves to end to such practices. An industry-wide code of conduct has been adopted, which aims to provide a clear framework within which responsible companies will conduct their face to face activities". A great deal of credit for that important development must go to my hon. Friend the Member for Cunninghame, North (Mr. Wilson), who, as the Minister for Energy and Construction, did so much to force the industry to face up to its obligations.

In addition, the regulator, Ofgem, has begun to flex its muscles and has levied some massive fines on the worst miscreants. Most recently, London Electricity has had to stump up a fine of £2 million. To its credit, the company has responded with some reforms to its selling practices. That is a very welcome move. However, the money generated from such fines currently goes directly into the Consolidated Fund. Let me say right away that I have every confidence in the ability of my right hon. Friend the Chancellor to spend that money wisely—not least because he is sitting two rows in front of me—but let me also say that I have every confidence in the ability of the Great British consumer to spend their own money wisely too.

My Bill would ensure that those who suffer the distress, inconvenience and uncertainty of having their supply switched should be the ones who benefit from the fines. Therefore, I propose that anyone who has their power supply switched against their wishes or without their knowledge should be awarded £100 in compensation. It is only right that those who suffer are the ones who gain. They would be up-front fines, and they would not be deferred or related to the ability to pay.

Obviously, in the compensation culture in which we live, companies will need safeguards to protect them against frivolous claims. An easy way to do that would be to require a positive confirmation by the customer that they wished to switch supplier. So an individual would simply have to confirm to the company—perhaps a week or so after the doorstep agreement—over the phone or in writing, that they wished to move to it. At a stroke, that would protect companies from frivolous claims. It would ensure that contracts signed under false premises were not acted upon and give peace of mind to 165 the consumer that the final decision is up to them, and them alone. Good companies that practise respectable selling techniques would have absolutely nothing to fear from that. In fact, the opposite is true. I believe that they would welcome the opportunity to show that not all gas and electricity suppliers resort to hoodwinking elderly citizens on their own doorsteps to win new business.

It is vital that we bolster customer confidence in the domestic energy market, and to do so, I propose one further reform. Energywatch currently compiles a league table of complaints against each company. I would compel every power company to print that table on every quarterly bill that they send to every customer. I, for one, want to be reassured that my power supplier is not guilty of inflicting distress upon some of the most vulnerable and elderly members of our society.

I will draw my remarks to a close, as I understand that there may be other items of interest on the agenda today, but it remains, quite simply, a disgrace that thousands of people have had, and continue to have, their power supply switched against their will or without their consent. It is a stain on the industry that needs to be removed. If the industry cannot or will not do that, the House must take a stand. My Bill would force companies that cause distress to make amends. It would compensate those who have been affected. It would offer protection for business against frivolous claims. It would allow all consumers to monitor the behaviour of their own supplier. It would bolster confidence in the domestic energy market, and I commend it to the House.

Question put and agreed to.

Bill ordered to be brought in by David Cairns, Kevin Brennan, Mrs. Irene Adams, Mrs. Lorna Fitzsimons, Mr. Mark Lazarowicz, Laura Moffatt, Mr. Russell Brown, Siobhain McDonagh, Kali Mountford, Rob Marris and Sandra Osborne.