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Baroness Hanham: My Lords, as always I am grateful to the Minister. I am always grateful, too, for sight of the documents. I am still waiting for the last one which we discussed a couple of weeks ago and for which I adjourned the House. Fortunately, I obtained a copy from the Library; it never turned up from the Minister's office. No doubt I shall still be waiting for this document also. Never mind. It is only a last point.

I thank the Minister for taking this matter seriously. It seems to me that where there is a plethora or diversity of organisations that are dealing with strategic and urban development and which have planning powers, it is not impossible to ensure that there is a statement of community involvement. In many cases they work on a very wide front, dealing with employment, housing, and infrastructure. There

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are large areas involved and there would be merit in them being able to say that they have a statement of community involvement which has been tested, even if it is a fast-track testing. I always believe there is merit in my amendments. I leave that with the Minister. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 70 to 73 not moved.]

Clause 19 [Preparation of local development documents]:

[Amendment No. 74 not moved.]

Clause 20 [Independent examination]:

[Amendment No. 75 not moved.]

Lord Bassam of Brighton: My Lords, I beg to move that consideration on Report be now adjourned.

Moved accordingly, and, on Question, Motion agreed to.

Consolidation Bills

A message was brought from the Commons that they have ordered the committee appointed by them to meet with the Lords committee on Monday, 1 March at half-past four o'clock, as proposed by this House.

        House adjourned at nine minutes past ten o'clock.

24 Feb 2004 : Column GC55

Official Report of the Grand Committee on the

Energy Bill [HL]

(Ninth Day)

Tuesday, 24 February 2004.

The Committee met at half past three of the clock.

[The Deputy Chairman of Committees (Viscount Allenby of Megiddo) in the Chair.]

The Deputy Chairman of Committees (Viscount Allenby of Megiddo): Before we commence business, the noble Baroness, Lady Miller of Hendon, wishes to speak.

Baroness Miller of Hendon: Simply for clarification, I had given notice to the Minister's office that I would ask him today whether there had been any progress in its investigations regarding the pressure that we felt had been put on some suppliers in giving us advice. I have had a very satisfactory answer from the Minister, which is that the Committee will get the full answer next Monday. I have not had any response, but I am quite content, as I am sure the Committee will be, to leave the matter until next Monday.

I wish to raise another point, which the Minister may feel he is not in a position to answer today, in which case he can do so on Monday, if he so wishes. During the eighth Committee sitting, on 12 February, the noble Lord, Lord Davies of Oldham, made a statement—that is fine. However, we were concerned that on the following Saturday a newspaper reported Sir John Mogg, the chairman of Ofgem, as saying that he heard those statements with regret, and that they were very misguided. We thought that that was quite a strong word to use about something that the Government were doing. Do the Government have any comments on that, or would they prefer to comment later, when they have looked into the matter themselves?

Lord Jenkin of Roding: No doubt Ministers will respond to my noble friend's first point, but I wish to comment on the second one. I have had a good deal to do with regulators over the years and was the Minister who published the White Paper that led to the creation of Oftel, the first of the new-style regulators. I cannot remember an occasion since then when there has been quite such an open, blatant disagreement between a regulator and a department of state. My noble friend said that Ofgem used fairly strong language, which it is. Sir John Mogg said:


    "To amend the Energy Bill in this way is unnecessary and misguided".

He went on to explain why.

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No doubt we will come to the matter when we debate the amendment, which I understand is to be moved on Report, to fulfil the undertaking given to the Grand Committee on 12 February about new subsidies for the transmission of offshore electricity. I do not know whether Ministers wish to comment on a row that has been very public and, I should have thought, very damaging to them.

The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty): The row may have been very public, but until I came into the Room I was not aware of it. Clearly, I need to consult my officials and those in the DTI to see quite what Sir John felt was out of order. We have indicated which amendments we propose to bring back, which I cannot think Sir John would have found unhelpful, but we shall see what he was talking about. I certainly do not think that we are in the midst of a major row between Ministers and the chair of Ofgem. I shall leave the matter until Monday, as the noble Baroness suggests, and come back with a full account to the Committee.

Clause 106 [Power to modify licence conditions]:

[Amendments Nos. 115 and 115A not moved.]

Clause 106 agreed to.

Lord Jenkin of Roding moved Amendment No. 116:


    After Clause 106, insert the following new clause—


"PRE-PAYMENT METERS
The Authority shall, within 6 months after the passing of this Act, review the rules about the use of pre-payment meters in order, among other matters, to determine whether it would be desirable to allow suppliers to offer concessionary energy packages to the users of such pre-payment meters."

The noble Lord said: With the amendment, we are discussing Amendment No. 132C. Perhaps I should say at the outset that my remarks will be primarily addressed to Amendment No. 132C, as we believe that it would more properly reflect the desires of those who wish to see changes in relation to pre-payment meters than Amendment No. 116. I hope that that will meet with the approval of the Committee.

Amendment No. 132C proposes to amend the Gas Act 1986 and the Electricity Act 1989 to allow the current restriction on the use of pre-payment meters to be relaxed or even removed where that would be in the consumer's interest and more consistent with the Government's overall social and environmental objectives for the energy sector. At the moment, it is not open to a supplier to extend to those who have pre-payment meters any of the special deals or arrangements that can be made in favour of normal gas and electricity consumers.

The ability of energy suppliers to provide a wider range of service through modern pre-payment meters is hindered by current statutory restrictions which prevent arrangements that would be beneficial to customers from being introduced. That stems from the Utilities Act 2000, which amended both gas and electricity legislation so that each industry is now permitted to use a pre-payment meter only to recover its own supply charges.

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At the time, that was welcomed by the consumer bodies but now, nearly four years later, it is widely recognised as too sweeping to work effectively in customers' interests. In particular, it prevents the provision of combined energy service and supply packages to those customers who have pre-payment meters. Surely it is within the experience of noble Lords throughout the Committee that, on the whole, pre-payment meters are used by those of limited resources, sometimes at their own choice and sometimes because that is felt to be the best way to ensure that the customer will actually pay for the gas or electricity that he uses.

There are two main reasons for looking for a change. Research has shown that a great many electricity pre-payment meter users are not in debt and not in fuel poverty but choose that method of payment for their convenience and for ease of budgeting. One can understand that. For people whose lives are mainly based round the use of cash, a pre-payment meter is one way of making sure that they will not go into debt for the supply of gas or electricity. Therefore, people who like to budget in cash are especially likely to benefit from energy packages.

The second reason is that, although fuel-poor consumers may in general be expected to qualify for free energy-efficiency improvement under the Warm Front or priority EEC schemes, either some such customers on pre-payment meters may fall outside the qualifying criteria or the energy package may not fall within the scheme. Again, it may well be in the customer's interest to allow payment for such services through the meter.

The current restrictions could therefore distort consumer choice and prevent the energy services market reaching its full potential. I would regard that as a missed opportunity, particularly given the forthcoming pilot agreed by the energy services working group, led by the Minister's department, to suspend the 28-day rule in relation to combined energy services offered under domestic supply contracts.

There may well be other broadenings of the use of pre-payment meters that would be in the consumer's interest. For example, when customers with pre-payment debt move to new premises they often ask the industry to put the existing debt on the new meter. In such cases the industry is currently required to refuse the request and to seek payment by other means. I can well understand that this may be confusing and inconvenient for the customer. Consideration should therefore be given to whether, when a customer requests the transfer of a debt, this should be allowed.

I started from the proposition that it is wrong in principle that innovation should be forbidden by law, without any possibility of exception, where that would be in the consumer's interest. A more positive framework would be consistent with the Government's social and environmental objectives for the energy sector. To repeal the restrictions outright is one solution. However, Amendment No. 132C adopts a more politically acceptable approach—that is, a

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simple regulation-making power for Ofgem, with the Secretary of State's consent, to relax or remove the constraint, with the detail to be settled after consultation. This could be achieved by adding the words in the amendment to the end of paragraph 12(2) of Schedule 7 to the Electricity Act. That is one way of doing it.

I have been given to understand that Ministers may be sympathetic to an amendment along these lines. I say straightaway that the amendment is not drafted in a form which the Minister could accept today. However, it would be extremely helpful if the Minister who is to respond could give an indication of whether such a relaxation of the restrictions currently imposed on those who have pre-payment could be lifted. I beg to move.


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