The
Committee consisted of the following
Members:
Chairman:
Dr.
William McCrea
Baron,
Mr. John
(Billericay)
(Con)
Beresford,
Sir Paul
(Mole Valley)
(Con)
Eagle,
Angela
(Minister for Pensions and the Ageing
Society)
Hodgson,
Mrs. Sharon
(Gateshead, East and Washington, West)
(Lab)
Howell,
John
(Henley) (Con)
Mactaggart,
Fiona
(Slough) (Lab)
McGuire,
Mrs. Anne
(Stirling)
(Lab)
Meacher,
Mr. Michael
(Oldham, West and Royton)
(Lab)
Moffatt,
Laura
(Crawley)
(Lab)
Morgan,
Julie
(Cardiff, North)
(Lab)
Prosser,
Gwyn
(Dover)
(Lab)
Redwood,
Mr. John
(Wokingham)
(Con)
Rowen,
Paul
(Rochdale) (LD)
Strang,
Dr. Gavin
(Edinburgh, East)
(Lab)
Waterson,
Mr. Nigel
(Eastbourne)
(Con)
Webb,
Steve
(Northavon)
(LD)
Anne-Marie Griffiths,
Committee Clerk
attended
the Committee
Ninth
Delegated Legislation
Committee
Wednesday 13
January
2010
[Dr.
William McCrea in the
Chair]
Draft
State Pension Credit (Disclosure of Information) (Electricity
Suppliers) Regulations
2010
2.30
pm
The
Minister for Pensions and the Ageing Society (Angela
Eagle): I beg to
move,
That
the Committee has considered the draft State Pension Credit (Disclosure
of Information) (Electricity Suppliers) Regulations
2010.
It
is a pleasure to serve under your chairmanship, Dr. McCrea.
Fuel costs can still have a big impact on household budgets,
particularly in cold winters such as this, which is why we want to be
able to identify, and target support effectively on, those households
that need most help. The regulations are made under section
142 of the Pensions Act 2008. They facilitate data sharing between the
Government and energy suppliers, and enable the Government to pilot
their energy rebate
scheme.
The
new scheme builds on a voluntary agreement negotiated between the
Government and energy suppliers in 2008, under which energy suppliers
agreed to increase the amount of assistance offered through social
programmes to vulnerable customers. The energy rebate scheme will be an
important part of those programmes, and it represents a new way for the
Government and energy suppliers to work with the data that we already
have. It will deliver help with fuel bills to the poorest of
pensioners. The aim of the scheme is to provide those pensioners over
the age of 70 who receive only the guarantee credit element of pension
credit with a one-off rebate, through their fuel bill, worth
£80.
Steve
Webb (Northavon) (LD): On a point of clarification, I am
slightly puzzled by what the Minister has said about the scheme
applying to people who receive only the guarantee credit element. I can
understand why she would want to exclude people who receive only the
savings credit element, because by definition they are better off, but
will she clarify a point on which I am genuinely uncertain? If I were a
pensioner with a basic pension and £1 or a few pounds of a
company or private pension, and received a few pence or pounds of
savings credit, would I be excluded from the scheme? Is that her
intention?
Angela
Eagle: I was going to discuss that later, but I am more
than happy to answer the hon. Gentlemans question. When one is
trying to define a group of pensioners and deliver help in a focused
way, there are always criteria that have to be applied. In that
scenario, certain individuals will inevitably be very close to meeting
the criteria, but will be on the wrong side of them. He is right to say
that there are people close to the criteria who will not be included in
the scheme.
The
scheme is a rough and ready way of targeting those who we feel will be
the most vulnerable. However, I recogniseas will anyone who is
familiar with the way in which one must focus assistancethat if
one sets criteria, there will inevitably be people close to the edge
but on the wrong side of the criteria who will not qualify. The hon.
Gentleman is right to make that point, but it is hard to come up with a
way of dealing with the issue that does not involve setting the
criteria a bit further on and discovering a range of other people on
the wrong side of the new
criteria.
As
I was saying, the aim of the scheme is to provide pensioners over the
age of 70 with a one-off rebate, through their fuel bill, worth
£80 if they receive only the guarantee credit element of pension
credit. That will be funded by the big six electricity suppliers under
their voluntary agreement with the Government. That represents a
significant additional contribution towards fuel costs, even for
households that receive winter fuel payments and, in periods of very
cold weather, a cold weather
payment.
For
the scheme to work, people who meet the criteria need to be identified
and linked as customers of the various big six energy suppliers. That
will be done through a data matching exercise, which will be carried
out by a trusted third party, namely HP Enterprise Services, the
recognised and authorised information technology provider for the
Department for Work and Pensions.
Accordingly,
the regulations permit the DWP to share the names and addresses of
people aged over 70, and of their spouse or partner, if they have one.
We shall do that in cases where a person, or one person in a couple, is
in receipt of only the guarantee credit element of pension credit on
the qualifying date of 26 March 2010. To enable matching, the
regulations permit the energy suppliers to share the names and
addresses of their domestic electricity customers. They may also
indicate whether a customer is receiving a social tariff. If there is a
match between the two sets of information, energy suppliers will be
notified and will automatically award a rebate of £80 to that
customers electricity account. If we believe that a person
should qualify but their information has not been matched, we will do
our best to ensure that they still receive the
rebate.
We
expect most people to receive the rebate without needing to do
anything. Those who qualify should begin to receive their rebates in
the spring, which should be in time to impact on this winters
energy bills. We understand that the security of data is paramount and
we take that matter very seriously, which is why we have scrutinised
all aspects of the data-sharing exercise to ensure that it is legal and
proportionate. In particular, we have worked to ensure that it complies
with the Data Protection Act 1998 as regards data security, retention
and destruction. That is why the regulations set out an offences regime
for unlawful disclosure of informationto help ensure the
security of data handled and
transferred.
Further
details about the scheme and how it is intended to work, including
safeguards, can be found in the scheme policy document, which is
available from the Library. Sharing and matching data in such a way is
a new frontier for Government and energy suppliers; it has not been
done before. We are developing our pension credit payment pilot, which
is designed to test the feasibility of using existing data sources to
identify those people who may be entitled to
pension credit, but
who do not currently claim. That automatic method of
looking at data may be a way in which we can take away some of the
burden of claiming in
future.
Paul
Rowen (Rochdale) (LD): Will the Minister give the
Committee some indication of how many people are likely to benefit from
the scheme? I appreciate that the number will be only an estimate at
this
stage.
Angela
Eagle: Yes, I am more than happy to do that. I emphasise,
though, that the number will be an estimate until we do the data
matching. We think that there are 335,000 people in the categories that
I have mentionedthat is, people who receive only the guaranteed
minimum pension and are over 70. By making broad assumptions, we
estimatewe will not know until we have done the data-matching
exercisethat 225,000 people will probably benefit from the
scheme.
There will be
a test phase, using live data, before the full data-matching exercise
is conducted. That test phase will enable us to test the data-matching
process and make any technical adjustments that might improve the match
rate. In addition, the test phase will help us to make decisions on who
exactly should qualify for the rebate. We want to reach people who are
responsible for paying their own fuel bills and who do not already
receive help, through a discounted tariff, with their electricity
bills. It is our intention to exclude people who receive a discounted
tariff from the scheme, but that may depend on the numbers involved. We
cannot make detailed final decisions on that until the data match has
happened. We are working with energy suppliers to set up a
communications strategy to ensure that people who might be affected are
aware of the scheme and its
benefits.
Information
will be made available, both on the internet and to customer
representative groups, before the scheme comes into operation. We will
also write to people after the matching exercise to help ensure that
they receive their rebate and understand what it is. The energy rebate
scheme will last for one year only. However, the lessons that we learn
should be invaluable when it comes to designing the mandated scheme,
which is due to be set up and running from 2011. I commend the
regulations to the
Committee.
2.39
pm
Mr.
Nigel Waterson (Eastbourne) (Con): It is a pleasure to
serve under your chairmanship, Dr. McCrea. I hope that we will not
detain the Committee for very long; I am sure that hon. Members are
already worrying about starting the long trek through the snow to get
back to their constituencies, particularly as this Government seem to
be running out of grit in every sense of the
word.
On
behalf of the official Opposition, I should like to welcome the
regulations. In fairness, the Minister has made it clear that the
scheme takes a fairly rough and ready approachshe might even
have used that very phraseand that it is perhaps a start, but
unless we embark on the process, it is difficult to see how it can
later be improved and widened.
It is
particularly relevant that we are meeting at a time of
extreme weather. A large number of households are in
fuel poverty; Age Concern and Help the Aged refer to 2.7 million older
households living in fuel poverty. We can all subscribe to
the notion that those people
should not have
to choose between heating and
eating,
as
those bodies put
it.
We
support the concept of disclosing information about people aged 70
years and over to electricity suppliers. However, it is important to
remember that the projected figures quoted by the Minister are
presumably based on the number of people currently claiming pension
credit. As a backdrop to this debate, we must remember that something
like 1.7 million or 1.8 million people entitled to pension credit do
not claim it. They will presumably have no access to the
scheme.
As I
understand the way the system is to work, suppliers can give those who
qualify an automatic rebate on their electricity bill, offer them
energy efficiency measures and put them on a priority list. The purpose
of the regulations is to allow the sharing of information between the
Department for Work and Pensions and the suppliers, to allow matching
against suppliers records and to ensure that the right people
qualify for a rebate. I understand that the point of the data-sharing
exercise is to act as a pilot for the proposed future mandated social
price support scheme, which would provide assistance with energy bills
to customers thought to be vulnerable to fuel poverty, as is set out in
the White Paper, The UK Low Carbon Transition
Plan.
Clearly, the
current system of voluntary agreement is not enough to support those
who are living in fuel poverty. The Government have said that they will
bring forward legislation, under the low carbon transition plan, to
place social price support on a statutory footing when the current
voluntary agreement ends in March 2011. It is important to say that the
Government have a very poor track record in this area. They pledged to
eliminate fuel poverty in vulnerable households by 2010, and in all
other households by 2016 to 2018, but they are now almost certain to
miss that target. We are, after all, at the beginning of
2010.
We had a
useful briefing on the regulations from the Equality and Human Rights
Commission, which makes some important points worth dwelling on. First,
it makes the point that around 3.25 million vulnerable households are
fuel-poor, based on the last figures; that is an increase on the
previous year. In 2008-09, there were 37,313 excess winter deaths among
those over 65 in the UK; that was up by nearly 50 per cent.49.8
per cent.on the previous year. There is clearly an appalling
problem. If the regulations have the effect of saving some of those
lives in future, we will have done good work here today.
The
commission acceptsfairly, I thinkthat the qualifying
group, namely recipients of guarantee credit aged over 70, is a good
place to start. It works on an estimate of 2.25 million older
households living in poverty. It goes on to say that its aspiration is
to ensure that other groups of people living in fuel poverty benefit
from targeted support, regardless of age. It talks about research on
children acquiring respiratory problems due to living in cold homes,
and it notes that damp and mildew also cause health problems for
children. Of course, it also mentions the well-proven link between
disability and poverty. A report by Leonard Cheshire Disability shows
that, on average, disabled people spend a significantly larger
proportion of their income on fuel and spend a longer time in the home
than non-disabled people.
A
crucial point, which I have already touched on, is the
commissions concern that
the low take-up
of means-tested benefits means that some of the older people with the
lowest incomes may be excluded as people may be eligible forbut
not necessarily in receipt ofa
benefit.
I
wonder whether, in her projected figures, the Minister has made any
kind of calculation, or estimate at least, of the number of people who
need the help offered by the scheme, but who will be excluded from it
simply because they have not got round to claiming the means-tested
benefits, particularly pension credit, that would make them eligible
for that
help.
We
see the seriousness of the issue. We have published our own policies,
including proposals for tough new rules to make it illegal to charge
unfair price premiums on prepayment meters, and for a requirement on
every energy company to offer social tariffs. We need to go further to
improve energy efficiency, especially in the homes of the old and the
vulnerable.
There remains
a concern, which the Minister touched on, about data sharingnot
a part of the Governments record about which they could
justifiably feel proud. I see that the issue has been taken reasonably
seriously. Paragraph 28 of an accompanying document, the draft scheme
policy document, says rather baldly:
Electricity
suppliers must destroy any lists received from HP Enterprise
Services...within 18 months of
receipt.
Presumably,
there will be a huge bonfire of all the details in due course, which, I
guess, is exactly as it should be. However, we have had a series of
problems causing millions upon millions of records to go missing. The
current Chancellor admitted in November 2007 that Her Majestys
Revenue and Customs had lost two discs containing the personal details
of 25 million people. Later that year, other discs containing the
names, addresses, and bank account and national insurance numbers of
every child benefit claimant in the country were posted in the internal
mail and then failed to arrive. They were not encrypted. Child benefit
data had previously been given to the National Audit Office by HMRC,
and I think that we all remember the stories.
A record 37
million items of personal data went missing in 2007,
according to research. Those data included names, addresses, passports
and so on. I referred to the biggest single lossthe two compact
discs that went missingbut it emerged, for example, that
80 passports are routinely lost in the post every month.
Shortly afterwards, it emerged that the details of 45,000 people
claiming benefits in west Yorkshire were lost by the Government. Even
now there is concern that staffthis is from a report from
January 2009are still able to copy unencrypted information from
internal databases on to USB sticks. The Department of Health, the
Department for Transport and the Driver and Vehicle Licensing Agency
have failed to make encryption mandatory, despite the recommendations
of a Cabinet Office report back in
2007.
In
her final remarks, will the Minister give the Committee further and
more detailed assurances about how the data sharing will be dealt with?
It would be a tragic blunder if, as part of this attempt to help
elderly people living in fuel poverty, we ended up with another scandal
over lost personal data, particularly as many people in the group that
I am talking about will be highly vulnerable to confidence tricksters
and the like.
The
regulations make unauthorised disclosure of information a criminal
offence, and that is absolutely right. I hope that if anyone comes to
have their collar felt, it will be senior civil servants, or even
Ministers, who ultimately take the blame for any such blunder. That
apart, and subject to those safeguards, we welcome the regulations, and
we will certainly not vote against
them.
2.49
pm