Previous SectionIndexHome Page

7.15 pm

The Minister for Energy and Competitiveness in Europe (Mrs. Helen Liddell): I congratulate my hon. Friend the Member for Waveney (Mr. Blizzard) on securing the debate and on raising these very important issues. I also congratulate him on his success, because his constituents are already seeing the benefit of his activity on these matters. I will ensure that the regulatory authority, Ofgem, receives a copy of his comments so that it can take into account the sound common sense contained in his speech.

I share my hon. Friend's disdain for rogue salesmen. Sometimes the rogue salesman is regarded in this country as a bit of a lovable Arthur Daley figure when, in reality, he gives Arthur Daley a bad name. I feel strongly about mis-selling. Indeed, I began my ministerial career dealing with the mis-selling of personal pensions. I discovered that there is nothing quite so powerful as publicity. My hon. Friend has gone a long way this evening to drawing to the attention of consumers the activities of some companies.

I share my hon. Friend's anxiety about rogue salesmen, but my disdain is even greater for their managers. The existence of rogue salesmen means that people managing companies either knowingly fail to get a grip on what is going on or do not have the competence to know what is going on in the company's name, thereby blackening its name and reputation.

I am aware of continuing instances of company representatives using unacceptable sales practices. I fully share my hon. Friend's concern about the existence of such practices. I join him in the campaign to ensure that such practices are stamped out. Indeed, because of the Government's concern about such practices we introduced the Utilities Act 2000 to enhance the powers of Ofgem and give it a primary duty to protect the consumer and establish a new, stronger body--the Gas and Electricity Consumer Council, or Energywatch--to represent the consumer interest. That made a major change in the regulation of the energy sector in this country. Previously, the shareholder was all. To those who think that the shareholder should take precedence over the consumer, I say that consumers are shareholders, too, and vice versa. Any company that cannot look after its consumers will not fare well in today's aggressive, competitive business environment.

My hon. Friend asked when the order under the Utilities Act to give Ofgem the power to fine is likely to be introduced. That serious power will be vested in the regulator. I assure him that the necessary consultation period that was promised in this House before such a serious measure is introduced will begin within days. We will be in a position to lay the order very shortly. I know that he will wish companies to recognise that it is for them to pull up their socks and behave responsibly, rather than to have those powers used against them.

Resolving these issues is a difficult task and it will require a concentrated effort by Ofgem and the Gas and Electricity Consumer Council. I am sorry that my hon. Friend has had difficulty in getting timely responses from

11 Jan 2001 : Column 1338

Energywatch. I am sure that that will be noted by its new staff and new chair and that they will ensure an improvement in those targets. I shall certainly keep an eye on the situation--as indeed will the Minister for Competition and Consumer Affairs, my hon. Friend the Member for Pontypridd (Dr. Howells).

In mitigation of the present circumstances, I point out that, since the introduction of supply competition, 5.7 million customers--29 per cent. of the total--have switched their gas supplies from British Gas; 4.4 million--18 per cent. of the total--have switched electricity supply from their local public electricity company. Transfers continue to run at a high rate--280,000 gas transfers per month over the six months to September 2000, and 450,000 electricity transfers per month over the same period.

My hon. Friend has exposed some extremely nasty practices, but in September 2000 complaints about gas transfer process--including sales practices--stood at three per 1,000 registrations. That sounds like a small figure, but, Madam Deputy Speaker, if you were one of the three, I am sure that you would feel deeply aggrieved. Constant pressure must be exerted to ensure that those complaints are reduced.

Complaints about electricity were running at two per 1,000 registrations. The message is clear: there is a continuing problem, and we take it seriously, but we must not lose sight of the fact that a competitive marketplace has meant significant benefits for consumers--in choice and in lower energy bills.

My hon. Friend referred to people with pre-payment meters. My anxiety is that such people have been less able to benefit from the price reductions. As we learned recently, in too many cases they still pay more for their electricity and gas because they cannot afford to set up direct debit arrangements, standing orders and so on to gain access to the reduced tariffs. I am well aware of those difficulties and was troubled to hear about examples of mis-selling to prepayment customers.

Although there is not much evidence that the situation is getting worse, my anxiety is that it is not getting better. We must constantly push for real progress. I agree with my hon. Friend that not every dissatisfied customer complains to the consumer bodies or to the regulator, but it is difficult for us to find out when complaints have been made to companies.

The regulator and the consumer council have the necessary powers to set conditions governing sales practices; Ofgem has taken those powers as part of its marketing licence conditions. It applied specific conditions to individual companies that failed to resolve problems in parts of their operations. However, one of the most powerful means of ensuring that companies behave themselves is to expose publicly what has been going on--as my hon. Friend has this evening--so that hon. Members and all members of society can make choices based on their knowledge of the practices of those companies.

Under the Utilities Act, there will shortly be powers to fine companies. Indeed, the GECC has the power to obtain and publish information about the quality of service, which it will use to encourage best practice; it will go back to my old favourite--naming and shaming poor performers. Those and other powers were the subject of intense scrutiny before and during the passage of the

11 Jan 2001 : Column 1339

Utilities Bill, in which my hon. Friend took quite an interest. Ofgem and the GECC have the tools, the resources and the commitment to do their job. Their powers go beyond those available in other sectors, because the provision of energy is so central to us all.

My hon. Friend makes the important point that when a light is shone on companies they improve their performance, but we must make sure that their performance continues to improve over time. Consumers must have knowledge of the redress available to them. That is a responsibility for Ofgem and the GECC, but a good company that is concerned about its consumers will ensure that they know how to complain and obtain redress; it will take those complaints very seriously indeed. Ofgem and the Gas and Electricity Consumer Council will be working with the companies to promote this enlightened self-interest, because that is what it is. It is about best practice--best standards in sales practices. This enlightened self-interest should be promoted by improving a range of the aspects of company performance, from sales practices to administration. I believe that that will benefit all consumers.

I know that my hon. Friend has already had, today, a meeting with the regulatory authority. I know that he has made his points to it very forcefully, because I have had a read-out of that meeting. However, unlike the dreadful cases that he has outlined today, there is much that is good in terms of ensuring that those who can least afford to pay for their energy get it at a more acceptable rate.

My hon. Friend has worked well with his trading standards department, because trading standards officers play an important role in seeking to resolve many of these issues.

11 Jan 2001 : Column 1340

I am in no way complacent about the scale of the difficulties that are to be encountered by consumers confronted by mis-selling practices. Through this House, I call on the industry to raise its game. I know that many of the responsible companies and managers in the industry recognise that there is a significant difficulty that affects the good name of the entire industry, and that it must be improved. I want the full panoply of conditions and constraints to be used to raise the game in relation to doorstep and telephone mis-selling.

It is important in general to get across the message that, under trading standards legislation, where there is doorstep selling, consumers have a seven-day cooling-off period when they are buying goods or services worth more than £35 during an unsolicited home visit or, as my hon. Friend pointed out, a telephone call. It is one of the blights of modern society--you, Madam Deputy Speaker, like myself, probably discover that every time you want to put a meal on the table the telephone rings, and it is usually someone trying to sell you something that you already have. The seven-day cooling-off period is not just for the temper of those whose dinner has been ruined; it is also to allow people to step back from any contract that they may have sought to sign.

I congratulate my hon. Friend. He has raised many very important issues, which the Government are aware of and concerned about. The Utilities Act contains new powers that allow the regulator and the consumer council to tackle these matters, but the ultimate responsibility must be with the companies to ensure that they have a standard of service that is second to none, because informed consumers will make their choices about where to buy their energy, based on the quality of the service that they get from the company to which they are contracted.

Question put and agreed to.

 IndexHome Page