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

My Lords, I apologise to the noble Lord, Lord Oakeshott of Seagrove Bay, because I sought to intervene before I should have. I hope that he will recognise that it was an honest mistake. The Minister has explained the purposes of this order very clearly and, like my noble friend Lord Freud, I welcome it. It is the first tangible, visible effort by the Government to solve a problem to which I drew the attention of the Grand Committee, and later that of the House, two years ago in January 2008—that is, the flaws in the CERT scheme, the carbon emissions reduction target scheme. I have alerted the noble Lord to the fact that I am going to refer back, very briefly, to those debates. I asked the Minister yesterday whether a DECC Minister would be supporting him, but he has got the best thing available with some extremely able DECC officials sitting behind him, whom I know well. The point of my argument in 2008—which is entirely relevant to this order, as the Minister explained, under paragraph 5—is that 40 per cent of the savings under the carbon emissions reduction target have to come from what is called the "Priority Group"—which, essentially, is a large number of different categories of people claiming benefits—which, under that order, included for the first time all pensioners. I immediately declare an interest as a pensioner. However, nothing was done at that stage to help the energy suppliers to identify the households that would be eligible for the various benefits available, notably the insulation of their homes. At the time, the noble Lord, Lord Rooker, who dealt with the order, firmly announced that if they did not meet their target of getting 40 per cent of their savings from the priority group, the suppliers would be liable to fines up to one-tenth of their total turnover. It was no small matter. The noble Lord, Lord Rooker, freely acknowledged that the problem of identifying the priority group households was a serious one. He said that it was being addressed through what I have to say were extremely small pilot schemes, to which I shall come in a minute. But we are grateful for this order, because it is the first tangible expression of being able to allow the energy suppliers to identify the people who should benefit. I understand that most of this order is dealing with the energy rebate scheme, and I listened with interest to the Minister’s remarks on that. Of course, we shall return to this issue on the Energy Bill, when we discuss what he called the social price support scheme. There are enabling provisions in that Bill to be supported later by regulations, which I am told are likely to be consulted on during the summer. I declared an interest a moment ago. I have had my house very recently insulated with loft insulation and cavity wall filling under the CERT scheme. It was perfectly clear that I was part of the priority group. I have to say that it has been a truly horrendous experience. The day when the firm turned up and did the work was not a problem, but I had to go through months of hassle to get this working at all. I tried to do it first through the Energy Saving Trust, having had a circular, which I was asked to fill in, on the nature of my house and what the current insulation was. The trust wrote back and said that I needed more loft insulation and more cavity wall filling; then it referred me to another government body called "Coldbusters", which then referred me to a firm of insulation contractors. When I heard nothing more from the contractors, I rang them up and eventually a surveyor came. Then I heard nothing more after that and rang them up again, and they said that they were very sorry but they had run out of money and could not do any more. At that point, I got in touch with the noble Baroness who deals with this in Defra. I asked her what was going on and how someone could run out of money for a scheme of this sort. She wrote me a very apologetic letter and said that it was perfectly clear that all the people that I dealt with in the Energy Saving Trust and Coldbusters did not understand the scheme. At that point, I washed my hands of it and started again and went back to my energy supplier, British Gas. Here, again, I had a very considerable problem, which I eventually had to resolve with the help of Ofgem, which was extremely helpful; it is responsible for administering the scheme. Eventually we got the work done, but it took months—and it has totally vindicated my belief that the biggest single barrier that DECC faces in taking this scheme forward is the sheer hassle faced by householders. I was lucky, because I could write to a Minister and got the answer that the problem was total incompetence, and that the people in the government bodies running the scheme did not understand the scheme. I had to write to Ofgem to put a bomb under British Gas to get on with it. In the end, I got senior people involved. But, my Lords, that sort of thing is simply not open to the ordinary citizen, certainly not to the elderly people who are probably the most reluctant to embark on having their houses insulated. It has been a very sobering reflection on how one has to deal with officialdom in cases like this. I hope that perhaps DECC will take this back to see what can possibly be done to improve the ordinary citizen’s experience. Most of this instrument, as the Minister said, deals with the voluntary energy rebate scheme, the details of which he set out very clearly. As I said, I welcome it because it means that for the first time energy suppliers are to be given the names and addresses of the people to whom they need to give this credit. The details of the eventual scheme will, as I said, be set out in secondary legislation and there will be a consultation in due course. We can of course return to this matter on the Energy Bill, but I hope that the Minister will be able to tell us when the consultation on the new social price support scheme is going to happen. It is sometimes referred to as a "mandated" scheme, but that actually means a "compulsory" scheme. It is all part of dressing up the scheme with the right words in the hope that that will make it more acceptable. At this stage, I say only that I will require some persuading that it is right to expect the energy suppliers, who are in competition with each other and are facing having to supply electricity in a competitive market, to subsidise some of their customers who may be fuel-poor. I say that merely because I think that we will need to discuss this issue. It may be the most effective way forward but, as the Minister said, we already have the winter fuel payment and the cold weather payment, which are social security benefits. They seem to be payable to everyone and mine goes straight to the Red Cross. It is a nice way of passing it on. We come now to Regulation 5 of this statutory instrument, which deals with the CERT scheme. Paragraph (3)(d) of that regulation indicates that the purpose of this data-matching is, ""to contact domestic customers who have received an automatic award with a view to … offering energy efficiency measures … delivering or helping to deliver energy efficiency measures"," and, as the Minister said, to place their names on the priority list. That is all under the CERT order of 2008, which I do not think has always been immediately obvious. One person from whom I took advice on this said, "Oh no, you shouldn’t raise CERT under these regulations; it has nothing whatever to do with them". So I wrote back to him saying that he was quite wrong; it does arise under these regulations, and there it is in Regulation 5(3)(d). Indeed, the Minister has explained why that should be so. I, too, have some questions but, unlike, I think, the noble Lord, Lord Jones, I gave the Minister notice of them. My first question is similar to his: how many consumers, or perhaps consumer households, will be covered by the regulations? I appreciate that the DWP cannot yet say how many will receive the automatic energy rebate because, as the Minister explained, many of them may already be getting a discount from their supplier. The intention is that that should not be duplicated but, as the Minister said, it may turn out that there is such a big overlap that that has to be the case. However, I am not asking how many people will get the rebate; I am asking how many consumers or consumer households are entitled to the guarantee pension credit and so come within the purview of these regulations. My second question derives from that and was, I think, asked by the noble Lord, Oakeshott: what proportion does that number represent of the 11.2 million priority households that are eligible for insulation help under the CERT scheme? The noble Lord, Lord Oakeshott, said that he had been advised by his colleague in another place that it might be 10 per cent. My guess is that the figure may be substantially lower than that but I shall await the Minister’s answer. I am sure the Minister will be briefed on my third question. Do the Government realise that electricity companies are still getting little or no help under any of these schemes to identify the rest of their consumers in the priority group who should be getting help with the insulation of their homes? What proposals do they have to deal with this problem? What progress has been made with the pilot schemes that I mentioned at the outset of my speech, which were referred to by the noble Lord, Lord Rooker? I refer to a brief that I received from the Equality and Human Rights Commission. Like the rest of us, the commission rightly welcomes the scheme as a contribution to solving the problem but, under a heading "Use of Data", it states: ""The Commission notes that the Regulations have been amended following consultation to allow suppliers to contact matched customers to seek consent for them to be added to the list for priority services - as the result of suggestions in the consultation"." I am not in the least surprised that those suggestions emerged from the consultation because it is a sensible thing to do. It goes on: ""Although we recognise and welcome longer-term measures such as increasing energy efficiency, we believe that the data in this scheme should only be used in order to process and apply the specific credit from the energy supplier. We are keen to ensure that data should not be used by energy suppliers for other purposes, such as direct marketing, without individuals pro-actively opting in"." How does the commission think that energy suppliers are going to reach these 11.2 million households unless they are given some information about which they are? I can tell noble Lords how they reach them at the moment. They have a variety of methods, some of which may be more effective than others. A lot depends on identifying an area of a town or city in which they might expect to find a higher than average proportion of these customers. They then knock from door to door, finding out who these customers are and whether they have had any help under Warm Front or whether they qualify for help under the CERT scheme. They have told me that it is still a very expensive operation because it is like finding a needle in a haystack. They knock on a large number of homes and find that they are not eligible for help under the CERT scheme for a variety of reasons. Two years after the original CERT order, and after we have complained bitterly about threatening the companies with fines if they do not reach their 40 per cent target, we are still not telling them who their target households are. All we have is this first—and I say again, very welcome—effort to try to tell them to whom they should be giving the rebate and whom they should be telling that they are entitled to help under the CERT scheme. What is happening to these pilot schemes? When can we hear something else coming out of that? Finally, I note that there has been a significant change in the scheme as a result of an amendment order passed last July. Among other things, the amendment order states that they were: ""to remove direct mail high efficiency light bulbs (CFLs)"." I had to ask what CFLs means: it means compact fluorescent lamps. Why can they not be called "high-efficiency light bulbs" or "low-energy light bulbs"? Why do they have to be given this fancy name? It is nothing to do with the Minister, but it is how these things sometimes get tangled up in jargon invented in Whitehall, which nobody understands. The main point I want to make about them is that in the last update of the carbon emissions programme, dated 6 November, very nearly 30 per cent of the savings achieved by then had come from lighting. Now those are illegal—they are not now allowed to be promoted by direct mail, as that has been banned, but can be through retail outlets. There is a clear recognition that there will be a very substantial fall-off in the proportion of the savings coming from lighting—the CERT makes that clear—and that that will have to be made up by increasing the savings got from other sources. I do not expect an answer to this at the moment, and certainly not from the noble Lord, Lord McKenzie, but how on earth are they to do that? They are working as hard as they can on everything else. This order will help them to a small extent with the credit pensioners, who get the guaranteed credit, but they are still left with that huge balance of the 11.2 million people from whom they have to try and get the savings. This whole scheme, worthy though it is in intent—to judge by the figures produced by Ofgem, it is certainly making some progress—is still making relatively little progress compared with the need of trying to get millions of older houses properly insulated and protected against the cold. We will no doubt wish to explore this point further when the Energy Bill reaches this House but my question, which is the same as that put by other noble Lords, is: how many are covered by this scheme? It is not about who will get the automatic rebate, but about the individuals or households covered by it. Also, what proportion does that represent of the 11.2 million?