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Lord Ezra: With debate on Clause 68 I should like to speak also to Clause 97. These two clauses deal with help for disadvantaged groups of electricity and gas consumers and therefore touch on the question of fuel poverty.

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Fuel poverty affects some 4 million to 5 million households out of a total of 22 million. It is, therefore, a major problem. It arises from a combination of inadequate housing and low incomes. The Government have taken a number of measures to improve energy efficiency at the lower end of the housing spectrum. The new home energy efficiency scheme aims to insulate 250,000 houses a year.

The energy efficiency standards and performance scheme, which is dealt with in the Bill, will add further to energy efficiency, especially in low income households. But, as stated in the latest report of the Royal Commission on Environmental Pollution, to which much reference has been made today, there is a pressing need for a further expansion of government programmes for raising energy efficiency and increasing warmth in low income homes. At the present rate, it would take some 20 years to deal with the problem, assuming that it gets no larger. We need to have an objective of dealing with the problem in not more than five years.

While much needed home energy improvement has been carried out, the low income aspect of fuel poverty also needs to be dealt with. All pensioner households are now entitled to £150 fuel payment each winter. While that is helpful, something more fundamental is required. At Second Reading I referred to the law recently introduced in France to provide disadvantaged consumers with specially low-priced fuel. I was advised by the Minister that that was not possible in Britain.

However, I believe that there is another way of achieving this result. TXU, which was formerly Eastern Electricity, has produced an imaginative scheme for assisting pensioners and persons on income support. This is known as the "Staywarm" scheme and has been piloted in the Barnsley area, where it has been estimated that some 300,000 people are in receipt of income support.

The basis of the scheme is to guarantee to those who sign up gas and electricity at the lowest price in the area. An estimate would be made of their likely annual requirements based on the size of the house and the numbers in the family. A weekly payment would be calculated and would be paid irrespective of the amount of fuel actually used. Thus, if there were a really hard winter there would be no need for these low income households to deprive themselves of warmth. They could use as much as was necessary to keep them warm and pay no more for it.

TXU estimates that such a scheme could save users approximately £120 on the typical energy cost of £500 a year and there would be a guarantee of warmth whatever the weather. They consider that they can achieve this desirable result through reducing the debt risk as a result of regular payments.

At a meeting which I had with them, they advised me that the prices charged under the scheme could be still further reduced if the DSS could be persuaded to deduct the weekly payment from benefit and transmit it to the company. That would eliminate all risk of bad

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debt and substantially reduce the costs of the operation, generating savings which TXU would be ready to pass straight on to the user.

It seems to me that this is a very imaginative scheme which needs to be encouraged. There is a way in which the DSS, without adding any government expenditure, could help. TXU realises that other supply companies would want to follow the same scheme in other parts of the country and it is quite prepared to accept the competition. Therefore, I suggest that the scheme should receive serious consideration in order to overcome the problem of households on low incomes freezing in winter.

11 p.m.

Lord McIntosh of Haringey: Once again, the noble Lord, Lord Ezra, has approached the Committee stage in a constructive way. He has expressed general support for Clause 68 and therefore I shall not embark on a general defence of it. The noble Lord advocated a particular project, the TXU "Staywarm" tariff and made a suggestion about it and it is that to which I shall respond.

It is correct that it is an innovative approach both to energy retailing and to providing assistance to the fuel poor with their energy costs by offering them a very low tariff. The pilot of the "Staywarm" scheme was launched on 17th May by Helen Liddell, the Minister for Energy and Competitiveness in Europe, and therefore our involvement with it is well established.

Because the noble Lord has done so, I shall not set out the details of the scheme, except in so far as the payment is concerned. Ideally, customers will pay by direct debit but a weekly or fortnightly cash facility will be available via post offices. The pilot, which is taking place in Yorkshire in an area between Leeds and Sheffield, is intended to find out what are the best methods for attracting customers.

The noble Lord, Lord Ezra, now suggests that there should be direct payment by the DSS in developing the new scheme. The problem which we have not resolved at present is that that would involve considerable manual processing by the Department of Social Security. There is a DSS scheme called Fuel Direct, which presently is used as a last resort for benefit claimants who are in need of protection against disconnection or court action. It is available only to people who receive income support and jobseeker's allowance (income-based).

Fuel Direct is a manual addition to the benefits payments system. If it, or direct payment to TXU Staywarm, were to become a standard feature, it would involve substantial costs to the DSS, particularly in new computer systems. The DSS would also be obliged to make the facility available to others. Clearly, it could not be for TXU's exclusive use.

Staywarm offers assistance to a wide range of low-income households, many of whom are on benefits which are not paid by the Benefits Agency and would not be included in the Fuel Direct payment arrangements. Ofgem has a specific working group as part of its follow-up to the Social Action Plan whose

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remit is to consider whether and how Fuel Direct might be simplified and extended. That work will feed into the ministerial group on fuel poverty, which includes a DSS Minister.

I suggest that the additional evidence given by the noble Lord, Lord Ezra, in his suggestions should be fed into that ministerial group. I shall undertake for that to be done in the hope that the difficulties that I have outlined can be overcome at some point in the future.

Lord Ezra: I thank the noble Lord for his positive response that my suggestion will be taken forward. With that, I beg leave to withdraw the Motion.

Clause 68 agreed to.

Clause 97 [Help for disadvantaged groups of gas customers]:

[Amendments Nos. 261 and 262 not moved.]

Clause 97 agreed to.

Clause 69 [Energy efficiency requirements for electricity distributors and suppliers]:

Lord McIntosh of Haringey moved Amendments Nos. 263 and 264:


    Page 69, line 20, leave out ("specified in or determined") and insert ("to be determined by the Authority").


    Page 69, line 28, leave out from beginning to ("must") in line 29 and insert ("Where the Secretary of State specifies in an order under this section an overall energy efficiency target in relation to electricity distributors and electricity suppliers on whom obligations are imposed under the order, the Authority shall determine energy efficiency targets under the order in the manner it considers best calculated to result in the achievement of the overall energy efficiency target so specified.


(3A) The energy efficiency targets determined by the Authority for the purposes of an order under this section").

On Question, amendments agreed to.

Clause 69, as amended, agreed to.

Clause 98 [Energy efficiency requirements for gas transporters and suppliers]:

Lord McIntosh of Haringey moved Amendments Nos. 265 and 266:


    Page 103, line 21, leave out ("specified in or determined") and insert ("to be determined by the Authority").


    Page 103, line 29, leave out from beginning to ("must") in line 30 and insert ("Where the Secretary of State specifies in an order under this section an overall energy efficiency target in relation to gas transporters and gas suppliers on whom obligations are imposed under the order, the Authority shall determine energy efficiency targets under the order in the manner it considers best calculated to result in the achievement of the overall energy efficiency target so specified.


(3A) The energy efficiency targets determined by the Authority for the purposes of an order under this section").

On Question, amendments agreed to.

Clause 98, as amended, agreed to.

Clauses 70 and 71 agreed to.

Clause 72 [Maximum prices for reselling electricity]:

[Amendments Nos. 266A and 266B not moved.]

Clause 72 agreed to.

[Amendments Nos. 267 and 267A not moved.]

Clause 101 agreed to.

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[Amendment No. 268 not moved.]

Clause 75 [Gas transporters]:

[Amendments Nos. 269 to 273 not moved.]

Clause 75 agreed to.

Clause 76 [Restriction on use of certain pipe-lines for providing a supply of gas]:

Baroness Buscombe moved Amendment No. 274:


    Page 74, line 34, at end insert ("having regard to any guidelines drawn up by the Authority from time to time in consultation with gas transporters and to the provisions of section 7(8)(b)").

The noble Baroness said: The aim of Amendments Nos. 274 and 275 is to clarify the provisions of Section 10 of the Gas Act 1986, which applies to the laying of pipes by owners or occupiers of premises. That area of the gas connections market has become known in the industry as the self-lay market, providing consumers with an alternative to the gas transporters supplying and laying the pipes. Gas transporters are required to connect such pipes to their system, provided that they are satisfied that the pipe laid is fit for the purpose.

Section 10(6) of the Gas Act 1986 provides a swift transfer mechanism for the ownership of the pipe and rights and liabilities relating to it by vesting the pipe in the transporter at the time of connection. That reduces the costs involved in otherwise transferring legal ownership.

In many cases, the owner or occupier will not lay the pipe himself, but will engage a self-lay contractor. The aim of the amendments is to make it clear that the vesting provisions apply equally to a pipe laid by a self-lay contractor on behalf of the owner or occupier. I beg to move.


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