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Energy Bill

I am grateful to all noble Lords who have spoken on this important issue. We recognise that the Government are under pressure to get on with it, but getting on with it is part of this legislation. If the noble Lord, Lord Jenkin, will forgive me, there is a difference between getting on with it and the Government’s ability to progress with this as rapidly as we are able, bearing in mind the difficulty of the task, and writing into the Bill time constraints that may not be entirely realistic. What my noble friend Lord O’Neill, said is absolutely right. There are real complexities and massive costs involved in this issue. I want to identify that the Government are at one with those who emphasise the potential gains from smart metering. We are able in certain instances to identify those gains and we intend to act on them forthwith. But we are less certain about some aspects of the wider propositions involved in these amendments, and we are asking the Committee to recognise the Government’s inevitable caution around some aspects that the Committee is asking us to consider under the amendments. The amendments specify in legislation a 10-year period for a smart meter rollout, including domestic customers—and of course this is a crucial issue. From the many contributions on the issue during Second Reading, we were clear that there was agreement about the potential benefits of smart meters for both consumers and energy suppliers. Of course, the government response indicated our awareness of that fact, which is why we set out our expectations in relation to smart meters in the energy White Paper last year. We have worked since towards a decision point. I am responding to those who in their contributions this afternoon have stressed the issue of urgency and that a decision is necessary. Later this year we will look at the issues of full rollout, including the domestic sector. But I hope that the Committee, following the speech of my noble friend and bearing in mind the points that I shall now make, will not underestimate just how complex, challenging and costly a rollout of smart meters to all energy consumers would be. Before I turn to the specific amendments, which I shall deal with in some detail, I shall respond to the point that the noble Lord, Lord Redesdale, made—that it is about time that the Government set out their position on the question of smart meters. As the noble Lord, Lord Jenkin, said, we have all been involved in some very intensive analysis ever since the consultation paper, to which he kindly referred in generous terms, was presented last year. Our analysis has confirmed that there is a positive business case for proceeding with smart metering for the medium-sized business sector. Of course, we made provision with reference to that in the 2008 Budget—that we would mandate the rollout over the next five years. We will consult on the draft modified licence conditions shortly. Once that process is complete, the Bill will underpin that rollout. That is action this year, taken on the basis of the budgetary position that we established for the medium-sized business sector. That involves 210,000 meters—a sizeable number. But the commitment is there.