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Energy Bill

The noble Lord was not being offensive. I have never known him to be offensive and I am sure he never would be. I just slightly resented the comment. That was all. I make it clear that it is a real problem and an existing problem. It was a problem when the last Government were in power and it is a problem for us now. It is important to say that the figures, which I thought were agreed, are as I have stated them. I congratulate the noble Lord, Lord Jenkin, because it is an achievement to have got this amendment on to the Marshalled List at all. No doubt, it is absolutely rightly on the Marshalled List and it gives us a chance to discuss what is clearly a very important subject, which becomes more important for exactly the reason mentioned by the noble Lord, Lord Palmer—that this is a time of rising prices and global financial uncertainty. The impact of those factors on the most vulnerable in society is clear. This is an interesting amendment. I think the second part, rather than the first, concerns the noble Lord, but I shall deal with both parts. The amendment appears to seek to add an additional consumer protection element to the Secretary of State’s existing powers to impose carbon reduction obligations on energy suppliers. It also provides for a duty on the Secretary of State to make regulations enabling the provision of information to help suppliers identify particular consumers. It is that last point about which the noble Lord, Lord Jenkin, is most concerned. The Committee will be aware that the Secretary of State’s powers to impose carbon emissions reduction obligations on suppliers is the power which underpins the delivery of the carbon emissions reduction target, CERT, which is bolder and wider than its predecessor, the energy efficiency commitment. Starting this year, the CERT scheme effectively doubles the carbon reduction objectives we are imposing on suppliers and we believe will significantly increase the number of customers benefiting from the scheme. As has been said, the scheme already contains an obligation to achieve 40 per cent of its target carbon savings from defined groups of vulnerable consumers, who are very much the groups identified in the noble Lord’s amendment. When combined with Warm Front funding the CERT scheme will result in spending on energy efficiency and other measures in low income, elderly and disabled households of around £2.3 billion in the period 2008-11. By anyone’s standards, that is a large sum. I was grateful for what the noble Lord said and for his support for the voluntary agreement. The first part of the amendment seeks to add further to the Secretary of State’s powers in relation to carbon reduction obligations. It would enable him to amend licences in order to require licensees to take further steps to protect consumers. It is not immediately clear from the amendment text what form these consumer protections may take. What is clear is that this power is intended to be used in relation to orders made under Part 1 of the Gas Act or Part 2 of the Electricity Act, which impose carbon reduction obligations on energy suppliers. This suggests that any consumer protection measures would therefore also need to be related to carbon reduction, so this could involve activities such as improving the insulation in a consumer’s home. As I have said already, under the CERT scheme the Government already have powers to ensure that a large percentage of the carbon reduction activities within that scheme are targeted at vulnerable groups of consumers. We would argue that the first part of the amendment is not strictly necessary, as we do not believe that it would add to existing requirements for suppliers to target carbon reduction measures at a priority group of vulnerable consumers. Finally, on the first amendment, in addition, this kind of power may well also cut across existing voluntary action by suppliers outside of their CERT obligations. The second part of the amendment relates to the sharing of information—the targeting that the noble Lord insists on—to assist suppliers in identifying the particular customers specified. This is obviously an issue of particular and lasting interest to the noble Lord—I pay credit to him for his role in this—particularly in relation to the targeting and delivery of the CERT scheme. Ensuring consumers receive the support to which they are entitled is, of course, an ambition which the Government fully share. Which person of good will could not share that desire? Members of the Committee will be aware, because, not least, the noble Lord, Lord Jenkin, told them, that improving the identification and targeting of measures aimed at vulnerable consumers was one of the main themes of the Ofgem fuel poverty summit in April. The attendance at that summit of several government Ministers, representatives from the European Commission and the major energy suppliers, plus a wide range of groups from the voluntary sector, is an illustration of just how seriously this issue is being taken. However, the very fact that this issue required such a high-level discussion by that group also illustrates that while intuitively sharing data to identify the vulnerable feels right, obvious and straightforward, when it comes to finding practical ways to deliver this, things immediately become a good deal more complex. Identifying and reaching vulnerable consumers requires information on the individual circumstances of each customer. This can often involve understanding the state of their housing, their income levels, the benefits they receive and the fuel prices they are paying, and some of those are dynamic factors that change frequently. No single organisation holds that breadth of information on an individual consumer. That is why finding an effective method of identifying significant numbers of vulnerable consumers requires a joined-up approach within and across government departments, suppliers and other agencies involved. That work is well under way, but it involves complex legal and human rights issues that need to be worked through—to use the noble Lord’s own expression, there have to be safeguards. These are legitimate privacy and data protection concerns. Any action to share data held by government departments or suppliers must be justifiable in terms of the Data Protection Act—the noble Lord, Lord Teverson, referred to that Act—and the European Convention on Human Rights. Any large-scale action to identify vulnerable groups would potentially involve sharing the personal details of hundreds of thousands of individual consumers. Data sharing on that scale must be justifiable and proportionate. That presents difficulties because, as noble Lords will be aware, in order to identify vulnerable consumers, we need to use proxies, such as being in receipt of certain benefits. However, these proxy tests are an imperfect means of targeting and, as a result, can capture a very wide group of consumers, many of whom may not be eligible for government or supplier support schemes. Therefore, in many cases, this level of data sharing would not be considered proportionate or justifiable, and we do not feel that it would be appropriate at this stage to take broad legislative powers in relation to data sharing before we have worked through some of these complex issues. We must be sure that any sensitive information being shared can deliver the outcomes that we are looking for, is appropriately protected because the safeguards are in place and can be delivered in a way that is consistent with data protection and human rights legislation. The DWP, BERR and Defra are committed to exploring how data held by DWP may best be used to ensure that appropriate help is targeted on vulnerable groups. We will continue to keep the case for large-scale legislative data-sharing provision under close consideration. However, there are a number of other legislative and non-legislative actions, some of which have been referred to in the debate, which we are already taking forward in the short term to try to improve the identification and targeting of vulnerable consumers. I believe that is a demonstration of our good faith and of the Government’s commitment to this important issue of effective targeting. The amendment to the Pensions Bill has been referred to. It is currently being considered in this House and provides a power to enable data sharing between the Government and energy suppliers regarding elderly consumers. The noble Lord, Lord Teverson, asked about that. That amendment will allow that department to share data with energy companies to allow them better to target the range of help available, including access to social assistance programmes for pensioners most likely to be fuel poor. However, I have to tell the noble Lord that the precise details of the future arrangements are still being considered and discussed with supplier companies. It will be important to ensure that there is a beneficial outcome for the great majority of customers whose data are shared and that, as far as possible, it is awarded automatically.