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Delegated Legislation Committee Debates

Draft State Pension Credit (Disclosure of Information) (Electricity Suppliers) Regulations 2010



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. Gentleman’s 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 recognise—as will anyone who is familiar with the way in which one must focus assistance—that 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 customer’s 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 winter’s 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 information—to 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 mentioned—that is, people who receive only the guaranteed minimum pension and are over 70. By making broad assumptions, we estimate—we will not know until we have done the data-matching exercise—that 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 approach—she might even have used that very phrase—and 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 accepts—fairly, I think—that 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 commission’s 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 for—but not necessarily in receipt of—a 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 sharing—not a part of the Government’s 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 Majesty’s 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 loss—the two compact discs that went missing—but 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 staff—this is from a report from January 2009—are 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
 
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