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Column 586intensifying and, as drafted, the Bill would increase the possibility of hardship. The amendment is reasonable, practical and workable, and I hope that the Minister will accept it.
Mr. Kevin Barron (Rother Valley) : First, I should like to comment briefly on the absence of Conservative Members. The hon. Member for Gordon (Mr. Bruce) will remember our debate in Committee on fuel poverty. From the beginning of the sitting at 10.30 am until 7 pm every Tory Back Bencher who spoke defended the code of practice, only to be wiped off the floor when the Secretary of State spoke later. Perhaps Tory Members are not too keen on having a re-run of that in this debate.
The amendments pursue a number of the issues that we raised in Committee and seek to ease the burden of fuel debt for badly off consumers and to ensure that no one's fuel supply is disconnected because he or she is unable to meet the fuel bill.
People are fuel-poor for several reasons. Obviously, income plays a major part. People on low incomes have great difficulty in providing themselves and their families with enough heat to keep warm and enough power for adequate lighting and hot water. Unfortunately, those whose bills are the largest and the most difficult to meet tend to live in homes with no insulation, damp proofing, double glazing or central heating. In the long term, it will be only through a policy of bringing all homes up to insulation standards, as well as ensuring that everyone has an adequate income, that we will make inroads into solving the problems of fuel poverty.
It is important to stress that now, because, as a result of changes in employment regulations, the different funding of projects through the Manpower Services Commission and the changes made to employment training, unfortunately many schemes that had been useful in helping people who live in poorly insulated homes to fight fuel poverty have had to be stopped in the past six months.
However, at least at the moment we can ensure that people do not have to live without heat or power. Living like that is a miserable experience which causes great stress to individuals and families, as well as depriving them of warmth and light. I am sure that in this day and age and in this country, which is energy-rich in coal, oil and gas, there should be no need for people to suffer fuel poverty. We are anxious to avoid the massive increases in disconnections that followed the privatisation of the gas industry. As the House knows, since that privatisation disconnections have risen by 30,000 per year.
In Committee, we were pleased that the Secretary of State finally agreed with us that the present voluntary code of practice, which had been defended by many of his hon. Friends, has not proved adequate and has not protected consumers who need protection. The Secretary of State told the Committee :
"there are good grounds for moving to the system that Mr. McKinnon"
--the director of Ofgas--
"is recommending for gas we shall add a similar clause to the licence. It will be a better arrangement."--[ Official Report, Standing Committee E, 31 January 1989 ; c. 607-8.]
It was on that basis that we withdrew all our amendments on fuel poverty to this section of schedule 6. The Secretary of State gave the Committee an assurance that the House would see the proposed clause. He said that he hoped that that could happen before reaching this stage of our proceedings on the Bill but, unfortunately, he has
Column 587notified us that that cannot happen because Mr. McKinnon is revising his proposals in the light of the consultations that he has held since the original publication of the modification for the licence.
The major weakness of the original proposals--I assume that the Secretary of State as well as Mr. McKinnon is considering this--was that the additional protection would be available only to those who made contact with British Gas. Advice agencies have expressed their worry that those who do not make contact--out of fear, because they are unaware of the need to do so, because of language or literacy problems or because they have no experience of dealing with bills--will fall into even greater debt and suffer disconnection. All hon. Members who have ever dealt personally with those who have been disconnected or who are in default with electricity boards will know that such people normally fall within the categories that I have outlined.
There has also been no clarification about with whom contact should be made or how, whether it should be in person, in writing, by telephone, to the accounts department or to a showroom. A customer may believe himself to have made contact, but that will not prove sufficient. For all those reasons, we would prefer that the additional protection that will be afforded customers will not be dependent on their making the contact. In any case, at least the "who" and the "how" should be defined and the administrative procedures explained.
The proposed modification still leaves the question of access to pre- payment meters rather vague. We were told by the Secretary of State that electricity consumers would have a new right to demand a pre-payment meter, but that appears to be only at the point of disconnection or in lieu of a deposit. It is absolutely right that pre-payment meters should be provided as an alternative to disconnection, but there is no reason why a consumer should have to reach that point before being able to make such a choice. Every consumer should have the right to choose to have supply through a pre -payment meter at any stage. Wider availability of such meters would help to prevent the build-up of debt. Problems arise when one cannot meet one's quarterly bill, and one way of avoiding that problem is to pay for one's electricity as one goes along, by means of a pre-payment meter.
We are pleased that the Government are at last making some moves on the issue of disconnections and are no longer simply asserting that the voluntary code is suifficient in either its content or application. However, it would be even better if a full and comprehensive code of practice were written into the Bill. We attempted to do that in Committee, but, of course, it was not accepted. Such a code of practice would make clear the rights and obligations of both consumers and suppliers and would enshrine the principle of a right to warmth and light. That is what we hoped would happen, but, unfortunately, the Government were not able to accept it. We hope that the measures that will be brought forward and written into the licence will achieve Mr. McKinnon's aspiration of making disconnections a thing of the past. We urge the Secretary of State to adopt our suggestions.
I do not know whether the hon. Member for Gordon will want to press his amendment to a vote. If he does, the official Opposition will support him.
Column 588Whether or not the Secretary of State meant to say what he did in Committee, we believe that he must take action so that even if a code is not included in the Bill, there will at least be a code in the licences to give direct specifications to the supply boards about how they should treat customers who have fuel debt and about the availability of pre-payment meters. Such meters should be available throughout the country, not just in some area or supply boards. We hope that the Minister will show some good will and that that will happen. We said in Committee that we did not wish to divide the Committee, and we do not wish to divide the House on this issue. However, as Mr. McKinnon said of gas, we hope that electricity disconnections will become a thing of the past.
Mr. Michael Spicer : The hon. Member for Rother Valley (Mr. Barron) is right that pre-payment meters will not be available on demand except as a substitute for a demand of security. However, under clause 21 the director will have powers to arbitrate if he thinks that there is any unfairness in any dispute where there is demand but where the company does not wish to give pre-payment metering, if he thinks that pre-payment metering would help people.
In answering both the hon. Member for Rother Valley and the hon. Member for Gordon (Mr. Bruce), I shall speak only briefly now because we have already had lengthy discussions on this subject. The number of disconnections has been falling, by and large, throughout the country over a three-year period. Therefore, although I do not think that the hon. Member for Gordon was relating disconnections specifically to weather conditions, I should like to put on the record that I do not think that it is right to do that.
On the understandable question that the hon. Member for Gordon asked me at Question Time and to which he has again referred, we have not yet been able to bring forward the licence conditions that will apply to the problem that he has outlined. I confirm what my right hon. Friend the Secretary of State told the Committee ; these codes will be the subject of licence conditions. There is no doubt about that. But, as the hon. Member has said, and as my right hon. Friend said in Committee, we want to make sure that they are absolutely on a par with the code that is currently under discussion between Mr. McKinnon and British Gas.
The problem that we face is that there has been a round of consultations between Mr. McKinnon and the industry, as a result of which he is making proposals further to strengthen the conditions. We do not want the conditions that we attach to licences for the electricity industry to be in any way weaker that those in respect of gas. The only issue at the moment is to make sure that the two sets of conditions are comparable--preferably indentical. The wait for the outcome of the gas discussions is all that is holding us up at the moment. That is why we have not been able to bring the conditions forward for this stage of the parliamentary deliberations. Certainly, we shall want to do so before the Bill receives Royal Assent. I hope that what I have said amounts to a substantive answer to the hon. Gentleman's legitimate concern about this matter.
Amendment No. 116 suggests that where there is some form of payment arrangement, that arrangement provides security. Manifestly it does not. It is not an alternative to prepayment as a form of security. Therefore we cannot accept amendment No 116. Nor,
Column 589I fear, can we accept No. 115, because the industry and the Government already accept the principle that if a payment arrangement allowing both the recovery of an outstanding debt and payment for future charges is entered into and is kept, disconnection should not be necessary. That is clearly set out in the industry's voluntary code of practice on the payment of bills. The public electricity suppliers will be required, as a condition of their licence to produce a code and to agree it with the director. Thus, I think that the spirit of amendment No. 115 is met.
In relation to amendment No. 152--indeed, this is implied in amendments No. 115--we cannot accept the idea that the existence of a pre-payment meter itself constitutes some sort of security that debt will be settled. Manifestly, that is not the case. The substance of amendment No. 152 was referred to in Committee. I think that it was I who pointed out that 15 working days are allowed for payment of bills and that this reflects existing practices within the industry. In England and Wales, some 166,000 consumers are billed monthly, so the 28-day condition is not appropriate for them.
The second part of the amendment leads me briefly to remind the House that, for the first time, the supplier will have to go through a formal procedure before he can disconnect a consumer. In any case, there can be no disconnection where there is a genuine dispute. In addition, under the licence, the public electricity supplier will be obliged to produce a code of practice on payment of bills, including arrangements, for people having difficulty meeting their bills. While I am unable, at the moment to give the details of the conditions, I can say that it is intended that a distinction shall be made between those who cannot pay their bills and those who will not pay their bills. That is a perfectly fair distinction to make.
I think that we are meeting what all sides of the House undoubtedly want, which is that pre-payment meters should be available as an alternative to security ; that where people want a pre-payment meter, but are not offered one by the supplying company, the director shall arbitrate ; and that there shall be written into the licences a code of practice that will ensure that all this is done fairly and in the best interests of consumers.
Given that that is the spirit behind the amendments, and behind the Labour party's pronouncements on this matter, I very much hope that the hon. Member for Gordon will not press the amendments.
Mr. Malcolm Bruce : I am grateful to the Minister for clarifying the position on the code of practice. It is a little disappointing, although I understand the reasons, that it is not possible to shed any more light on the nature of the code of practice that we discussed in Committe. The hon. Member for Rother Valley (Mr. Barron) has pointed out, quite rightly, that there was not much support from the Secretary of State's own side for his commitment to an improved code of practice. Possibly that is because he had not told his hon. Friends his view before he entered the debate at the end. There is a feeling that some Conservative Members are less than sympathetic to the need for this kind of code of practice. However, I accept that the Secretary of State and the Under-Secretary are not in that category that they are determined that the agreement in respect of gas should be applied to electricity.
Mr. Barron : We should not jump to too many conclusions. The hon. Member for Gordon (Mr. Bruce) will recall that the Minister said earlier that there was no question but that this would be written into the licences. Well, it was not in the draft licences. We can only assume that at that time the Government were going to let the industry draw up its own supply codes. It is because of what happened in Committee that a supply code will be written into the draft licence.
Mr. Bruce : The hon. Gentleman is absolutely right. It is very interesting that in Committee the Secretary of State was clearly somewhat stung by the attack--though perhaps that is an internal matter for those who were present. Perhaps he decided on the spot that the Opposition's arguments were correct. Perhaps he decided that the suggestion that there should be a worse code of practice for electricity consumers than for gas consumers was ludicrous and indefensible, and determined, at that point, to do something about it. I accept that he is still committed to that position, but he has not actually come up with the answer. Obviously, that makes the position a little difficult for us at this stage.
The Minister took issue with me on the question of security. I feel that the reference to security is a sufficient undertaking to the supplier. The amendment says :
" Security' means any arrangement in consequence of which a public electricity supplier may be assured of payment of money due to him and shall include a deposit in favour of such supplier." It seems to me that that is a pretty clear definition of "security"--meaning that the supplier will get his money, and that there is an adequately agreed method : by paying a deposit up front, or by going for a meter, or by some mutually agreeable standing order arrangement, both sides having the right to appeal to the director. As the Minister will appreciate, I do not claim total credit for the amendment or its contents. It has been thought through, and I believe that it would write into the Bill a specific defence for those who face the possibility of disconnection. I should like to give the lie to, or lay to rest, any suggestion that I or my colleagues, or any Opposition Member, is interested in enabling people who can pay their electricity bills to get away with failing to do so. I believe that the wording of the amendment takes care of that. People in that category could be forced to pay a deposit, or to set up an unbreakable standing order, or to provide some other kind of security. But people who cannot pay would have the option of a meter or a direct payment, such as is provided by the fuel direct scheme, from social security. That seems to me to be a very considerable improvement on the present arrangement, and will ensure that the supplier gets his money--which I think is quite reasonable, even though suppliers' charges are too high--and that the customer is able to keep up with payments because they are geared in a way enabling him to pay as he goes along and to monitor both the cost and the level of consumption.
I hope that the Minister will accept that I am not being churlish when I say that I wish to divide the House. I believe that we do not have a firm enough position on the record. If the amendment were included, it would improve the Bill considerably. It would in no way be incompatible with the code of practice, but rather it would help to stiffen the contents of the code of practice that we have not yet seen. The issue is sufficiently important to divide the House.
Column 591Question put , That the amendment be made :- -
The House divided : Ayes 146, Noes 226.
Division No. 147] [4.29 pm
Abbott, Ms Diane
Adams, Allen (Paisley N)
Archer, Rt Hon Peter
Banks, Tony (Newham NW)
Barnes, Harry (Derbyshire NE)
Barnes, Mrs Rosie (Greenwich)
Beith, A. J.
Benn, Rt Hon Tony
Bray, Dr Jeremy
Bruce, Malcolm (Gordon)
Buckley, George J.
Campbell-Savours, D. N.
Carlile, Alex (Mont'g)
Clark, Dr David (S Shields)
Cook, Robin (Livingston)
Cunningham, Dr John
Duffy, A. E. P.
Dunwoody, Hon Mrs Gwyneth
Evans, John (St Helens N)
Ewing, Harry (Falkirk E)
Field, Frank (Birkenhead)
Foot, Rt Hon Michael
Garrett, John (Norwich South)
Garrett, Ted (Wallsend)
Godman, Dr Norman A.
Golding, Mrs Llin
Grant, Bernie (Tottenham)
Griffiths, Nigel (Edinburgh S)
Griffiths, Win (Bridgend)
Harman, Ms Harriet
Heffer, Eric S.
Home Robertson, John
Howarth, G. (Cannock & B'wd)
Howells, Dr. Kim (Pontypridd)
Hughes, John (Coventry NE)
Hughes, Robert (Aberdeen N)
Hughes, Roy (Newport E)
Hughes, Sean (Knowsley S)
Hughes, Simon (Southwark)
Jones, Barry (Alyn & Deeside)
Jones, Ieuan (Ynys Mo n)
Jones, Martyn (Clwyd S W)
Kaufman, Rt Hon Gerald
Lestor, Joan (Eccles)
Macdonald, Calum A.
McKay, Allen (Barnsley West)
Mahon, Mrs Alice
Marek, Dr John
Marshall, David (Shettleston)
Michie, Bill (Sheffield Heeley)
Mitchell, Austin (G't Grimsby)
Morris, Rt Hon A. (W'shawe)
Orme, Rt Hon Stanley
Pike, Peter L.
Powell, Ray (Ogmore)
Quin, Ms Joyce
Rees, Rt Hon Merlyn
Roberts, Allan (Bootle)
Ross, Ernie (Dundee W)
Sheldon, Rt Hon Robert
Smith, Andrew (Oxford E)
Smith, C. (Isl'ton & F'bury)
Smith, Rt Hon J. (Monk'ds E)
Taylor, Matthew (Truro)
Thompson, Jack (Wansbeck)
Wareing, Robert N.
Welsh, Michael (Doncaster N)
Williams, Rt Hon Alan