Draft Social and Environmental Guidance to the Gas and Electricity Markets authority

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Mr. Stunell: Well, there certainly are more issues than just two-way metering. If the problems were that simple, we could have solved them a while ago. I certainly agree that we must ensure that the supply network is safe for two-way flows of electricity. That is a significant problem, and we discussed at length how it might be tackled when the 2000 Act was in Committee. The technical solution is not that difficult to find and is already being implemented in significant parts of the United States and in Germany, but I may be taking the Committee further than it wants to go.

Mr. Adrian Flook (Taunton): The hon. Gentleman said that £3 million would be a small amount to pay for the solution. What would be the cost of a solution that involved changing the network so that it could take two-way meters?

Mr. Stunell: The cost depends on whether one deals with specific localities or the whole network in one go. The technical solutions are not particularly expensive, but there are important health and safety issues relating largely to maintenance procedures. The problem is not the running of the network, but ensuring that when the branch is turned off for maintenance work no one is putting in electricity anywhere else. Those issues are not primarily about expense, but protocols for the system's operation. They have been successfully overcome in other countries.

I began by saying that the guidelines were motherhood and apple pie—full of good intentions and smooth words but lacking in substance or effect. The Minister intervened on me to say that that was not

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the case. However, I have brought to the Committee evidence to support my view; I hope that the Minister will offer some evidence to support his. Even in the Government's eyes, the guidelines are not as good as all that: they plan to scrap them next year when they produce the results of the energy review.

The Liberal Democrats will not oppose the guidelines today, but we implore the Minister to take his responsibility for this matter much more seriously than he has until now, and to produce some revised guidelines that are coherent, explicit and effective, which give the regulator unambiguous duties to protect the most vulnerable in society and which play an active part in cutting CO2 emissions across the United Kingdom. Will the Minister accept that challenge? I should like specific answers to specific questions. Does he accept the strictures of the Energy Saving Trust and the criticism from the performance and innovation unit? Is it wrong for Energywatch to say that the guidelines fail to safeguard the most vulnerable, or for the Combined Heat and Power Association to say that

    ''its contents are bound by so many caveats that it has little practical effect''?

Can the Minister prove them wrong by announcing today that the cost of installing two-way meters is below the significance thresholds in the guidelines and that it would therefore be within the competence of Ofgem to propose and implement them?

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Mr. Henry Bellingham (North-West Norfolk): First, I should like to tell the Committee that my hon. Friend the Member for Reigate (Mr. Blunt) should be the Opposition spokesman today, but he is visiting a British Energy plant, then BNFL.

It is a pleasure to follow the hon. Member for Hazel Grove (Mr. Stunell), who is obviously an expert on the subject. I particularly enjoyed his comments on two-way metering. It is a pity that more of his party are not here to hear him because it was an important speech.

We broadly welcome the guidance; we did not pray against it. However, we should like clarification of a few aspects. The hon. Member for Hazel Grove mentioned the fact that the White Paper is promised for later this year, but that the guidance measures are being produced now. Perhaps there is an argument for waiting until the White Paper is published. I am not certain what the priorities are that set the time scale. When the Minister answers the Liberal Democrat spokesman, perhaps he will address that point.

Mr. Thomas: The hon. Gentleman asked why the guidelines were being produced now. Perhaps it is because the Environmental Audit Committee report on renewable energy stated that the guidelines were missing and should be available.

Mr. Bellingham: I am sure that the Minister will comment on that shortly.

As I said, we broadly welcome the guidance. Yes, the regulator must take the guidance into account, but it is for the regulator to decide how much weight to give it. That is as it should be. As the Minister said in the House only the other day, Ofgem is guided

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primarily by its statutory duty to maintain a fair and competitive regime and to protect the interests of the consumer. Although the Government have come up with several worthwhile and imaginative schemes to bear down on fuel poverty, it is the market initiatives brought in by Ofgem that have removed hundreds of thousands of consumers from fuel poverty—maybe as many as 1 million.

Let us look at the draft. The Opposition would like the Minister to comment on one or two areas of qualification.

Gregory Barker: On the point that my hon. Friend has just made, in the draft it states:

    ''The Government regards fuel poverty as a major priority''.

Does he find strange the written answer that I received today from the Department for Environment, Food and Rural Affairs? It stated:

    ''My right hon. Friend the Secretary of State has not contacted any local authorities regarding underperformance against their targets under the Home Energy Conservation Act 1995.''

A separate written answer confirmed that authorities are likely to massively undershoot the Government's targets, but the Government have not even contacted them to see what measures they can take to help those authorities.

Mr. Bellingham: That is very interesting, and I am grateful to my hon. Friend for raising that point. Perhaps the Minister would comment on that. I am rather intrigued as to why it was DEFRA that replied to those questions rather than the Department of Trade and Industry. I am slightly bemused by that.

Mr. Wilson: I am happy to clear up the hon. Gentleman's bemusement. Some areas of energy efficiency are DEFRA's responsibility. It is as simple as that. There might be a case for an energy Department, but that is the way that matters are divided at the moment.

Mr. Bellingham: I am grateful to the Minister for that clarification. Paragraph 1.2 of the draft refers to a clear rationale in explaining the reason for initiating policies or projects. How will that be set out? Will it be done on a case-by-case basis, or will it be part of the annual report?

Paragraph 2.4 of the draft welcomes annual updates by the authorities. Will the annual updates referred to in paragraph 2.4 be purely internal updates to the Minister or part of a wider publication that will be part of a document from The Stationery Office?

Paragraph 2.6 refers to demonstrably sharing the benefits of competition. Will the Minister explain how that will be recorded and measured? What mechanism will be put in place to lay down criteria by which it will be measured? Bullet point 2 of the paragraph refers to sustaining improvements in the clarity and accessibility of information, and bullet point 3 refers to ensuring that clear and acceptable procedures are in place to govern interruptions of supply.

The Opposition are concerned about the problem of doorstep salespersons who tout great new deals with new suppliers. The Minister will be aware of the

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number of horror stories that MPs receive from their constituents. One of my constituents told me of a salesperson arriving on the doorstep, and a contract being signed by an underage child in that house.

There is an interface between Ofgem and the Gas and Electricity Consumer Council, but to what extent will the authority be an organisation to which consumers will be able to complain about that problem? Maybe the Minister could also spell out exactly how the interface between the two organisations will work, because there is some mention of that at a later stage of the draft.

I direct the Minister to paragraph 2.6, bullet point 3 and paragraph 2.15. Paragraph 2.6 refers to interruptions of supply, and paragraph 2.15 refers to vulnerable groups of consumers who may have problems with security of supply, especially in winter months. That is particularly relevant to what has happened over the past week or so. I know that the Minister is concerned, particularly about East Anglia, because he said so in the House the other day, and I should like to raise some of the points that were made on that occasion. The service company 24seven only reconnected electricity supplies to 250 people in East Anglia yesterday; 7,000 people were without power last Friday.

The Minister knows that there is a particular problem with the 0800 BT platform which 24seven and a number of other utilities were using, because it broke down completely under the pressure of calls. The postcode information retrieval system also broke down, and I am pleased that 24seven has put in place a review of its performance in the emergency. The gales from which this country suffered 10 days ago were not as severe as those in 1987: this year's gales caused roughly £80 million of damage; those in 1987 caused roughly £1 billion of damage.

At the weekend, I saw the Minister talking about compensation on a news programme. Although I welcome 24seven's putting in place a full review, he is also carrying out a departmental review of the performance of various utilities, and I should be grateful if he would comment on that. How will the draft help him in his inquiries and what will be the authority's role?

Paragraph 2.12 talks about energy suppliers taking

    ''every opportunity to promote energy efficiency in their marketing, and to develop energy services in the market''.

How will Her Majesty's Government measure and assess the steps that the utilities are taking?

The hon. Member for Ceredigion (Mr. Thomas) raised a point about paragraph 2.13, which concerns the extension of gas supplies. I share his concern because a number of villages in my constituency currently do not have mains gas. On the other hand, the villages clustered around the main town in my constituency, King's Lynn, do have mains gas. Of the villages further afield from King's Lynn, some have mains gas and some do not, and there does not appear to be a rationale behind that. I am particularly interested in paragraph 2.13, which mentions

    ''opportunities to facilitate communication between parties where that may advance such proposals''.

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Will that include parish councils, district councils and community groups? Perhaps the Minister will elaborate on that. Will he tell us how those different groups, which are very concerned about the need to extend mains gas supplies, can feed their views and aspirations into the equation?

I have said that we support the guidance, and there is a great deal here about which the Minister is rightly pleased. We would not have prayed against it because we think that the Government are going in the right direction. We particularly welcome the work that Ofgem has done, and we will support it in future.

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