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Division No. 2

CONTENTS

Addington, L.
Alton of Liverpool, L.
Avebury, L.
Blaker, L.
Bradshaw, L.
Chalfont, L.
Dholakia, L.
Eden of Winton, L.
Ezra, L.
Falkland, V.
Forsyth of Drumlean, L.
Goodhart, L.
Greaves, L.
Harris of Richmond, B. [Teller]
Howe of Aberavon, L.
Howe of Idlicote, B.
Livsey of Talgarth, L.
Lucas, L.
Maclennan of Rogart, L.
Methuen, L.
Miller of Chilthorne Domer, B.
Newby, L.
Northover, B.
Norton of Louth, L.
Oakeshott of Seagrove Bay, L.
Plummer of St. Marylebone, L.
Razzall, L.
Reay, L.
Rennard, L.
Renton, L.
Rodgers of Quarry Bank, L.
Roper, L. [Teller]
Russell-Johnston, L.
Shutt of Greetland, L.
Smith of Clifton, L.
Southwell, Bp.
Taverne, L.
Thomas of Gresford, L.
Thomson of Monifieth, L.
Tordoff, L.
Trumpington, B.
Wallace of Saltaire, L.
Walmsley, B.
Williams of Crosby, B.

NOT-CONTENTS

Acton, L.
Ahmed, L.
Amos, B. (The Lord President of the Council.)
Ampthill, L.
Andrews, B.
Archer of Sandwell, L.
Ashton of Upholland, B.
Bassam of Brighton, L.
Berkeley, L.
Bernstein of Craigweil, L.
Blackstone, B.
Blackwell, L.
Bledisloe, V.
Borrie, L.
Brooke of Alverthorpe, L.
Brookman, L.
Campbell-Savours, L.
Carter, L.
Christopher, L.
Clark of Windermere, L.
Clarke of Hampstead, L.
Clinton-Davis, L.
Cohen of Pimlico, B.
Condon, L.
Cooke of Islandreagh, L.
Crawley, B.
Davies of Oldham, L. [Teller]
Dearing, L.
Denham, L.
Desai, L.
Dixon, L.
Donoughue, L.
Dubs, L.
Evans of Temple Guiting, L.
Falconer of Thoroton, L. (Lord Chancellor)
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Filkin, L.
Gale, B.
Gibson of Market Rasen, B.
Golding, B.
Goldsmith, L.
Gould of Potternewton, B.
Grocott, L. [Teller]
Harrison, L.
Hayman, B.
Hilton of Eggardon, B.
Hollis of Heigham, B.
Howells of St. Davids, B.
Hughes of Woodside, L.
Hunt of Kings Heath, L.
Irvine of Lairg, L.
Janner of Braunstone, L.
Jay of Paddington, B.
Jordan, L.
Lea of Crondall, L.
Lipsey, L.
Listowel, E.
Lockwood, B.
Macdonald of Tradeston, L.
McIntosh of Haringey, L.
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
Maginnis of Drumglass, L.
Marsh, L.
Masham of Ilton, B.
Massey of Darwen, B.
Mitchell, L.
Molyneaux of Killead, L.
Monson, L.
Morris of Manchester, L.
Murray of Epping Forest, L.
Patel, L.
Pendry, L.
Pitkeathley, B.
Ponsonby of Shulbrede, L.
Rea, L.
Rees-Mogg, L.
Rendell of Babergh, B.
Richard, L.
Rooker, L.
St. John of Bletso, L.
Scotland of Asthal, B.
Sewel, L.
Simon, V.
Slim, V.
Stone of Blackheath, L.
Strabolgi, L.
Symons of Vernham Dean, B.
Tanlaw, L.
Temple-Morris, L.
Tenby, V.
Triesman, L.
Turnberg, L.
Walton of Detchant, L.
Warner, L.
Warwick of Undercliffe, B.
Weatherill, L.
Whitaker, B.
Wilkins, B.
Williams of Elvel, L.
Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.

1 Apr 2004 : Column 1505

3.29 p.m.

[Amendment No. 218B not moved.]

Lord Ezra moved Amendment No. 218C:


    After Clause 162, insert the following new clause—


"GAS AND ELECTRICITY DISCONNECTIONS
The Authority shall with the passing of this Act, and in consultation with relevant agencies, review, and within six months publish its findings, of—
(a) the rules surrounding the disconnection of domestic premises from the supply of gas and electricity for debt in order to minimise the level of disconnections for debt;
(b) as far as is reasonably practicable disconnections in error;
(c) increase protection for vulnerable groups; and
(d) expand the definition of what constitutes a vulnerable group."

The noble Lord said: My Lords, Amendment No. 218C concerns gas and electricity disconnections. Currently disconnections run at the rate of 20,000 a year. In Grand Committee my noble friend Lady Miller of Chilthorne Domer and I tabled an amendment that would have ended the right of companies to disconnect in these circumstances because of all the social problems that can be created. None the less, for various reasons there was opposition to the move. However, it was agreed that the number of people being disconnected each year remained alarmingly high, as did the number of those cut off in error, and that something needed to be done about it.

Amendment No. 218C does not take away the right of energy companies to disconnect consumers for debt. Therefore, we had regard to the views expressed in Grand Committee. However, it ensures that the regulator Ofgem reviews the rules surrounding disconnections in order to minimise disconnections for debt and ends, as far as reasonably practical, disconnections in error. The amendment will also ensure that the regulator looks to increase protection for vulnerable groups in the disconnection process.

1 Apr 2004 : Column 1506

I was very pleased to receive a communication from the Energy Retail Association after the amendment had been tabled. It told me that it has assumed responsibility for the disconnection issues raised in the amendment. On behalf of the energy suppliers the Energy Retail Association is conducting a consultation to agree a definition of vulnerable groups that can be applied to all work streams designed to help vulnerable customers. Its intention is to work with government agencies, Energywatch, citizens advice bureaux and charities to identify how current billing and debt prevention procedures can link up with support offered by social services.

At the end of the exercise it hopes to have proposals for new processes and a list of early action to prevent disconnection that can be taken before the winter months. It states that it shares the aim to end all disconnections of vulnerable customers and believes that identifying them early and providing a range of support is the best way to achieve that.

I regard that as very valuable support for the proposals in the amendment. In those circumstances, I hope that we can give further support to the endeavours of the Energy Retail Association by agreeing to the amendment. I beg to move.

Lord Jenkin of Roding: My Lords, everyone must have sympathy with the problems faced by households who find themselves with energy bills that, for one reason or another, they are unable to pay. The temptation is to argue that—the noble Lord, Lord Ezra, has not done so—if it is right to avoid disconnecting such households from the water supply for non-payment of debt, surely it is right to avoid disconnections in the case of energy.

The argument from the water industry is quite conclusive that when the law was changed and it was not allowed to switch off a person's water supply for non-payment of bills, bad debt rose in the sector by 17 per cent and debt recovery costs rose by 28 per cent. So, I am glad that this time around the amendment does not suggest that we should avoid disconnection.

However, one must look at the context. There is no doubt about it that the retail price of electricity is going to go up. Ofgem has warned us about that. All the pressures are now in that direction. People must become used to the fact that over the next few years power supplies to their homes and offices will become more expensive. I do not want to go over the ground of a previous debate, but that is much the best way to encourage people to save energy. To have energy that is artificially cheap is not a good incentive to save it. However, if electricity is going to become more expensive, as we are being warned that it will, the number of people on low incomes facing difficulties in paying their bills may well increase.

I have knocked about a bit in politics. My earliest memories of taking an active part—although not in the Palace of Westminster—were in relation to the Churchill government of 1951. That government came into office facing a very substantial bill for food subsidies inherited from their predecessors, the post-war Labour government. The argument was, "Well

1 Apr 2004 : Column 1507

you cannot possibly cancel the food subsidies because that would be a great hardship to the people on the lowest incomes". R A Butler—later Lord Butler in this House—as Chancellor of the Exchequer, over a period of two or three years very skilfully phased out all the food subsidies and used much of the money saved to increase social security payments to the people who might otherwise have suffered.

Therefore, I argue in this case that if, indeed, there are categories of people who find paying their energy bills difficult, it makes no sense to keep the price down for all of us in order to protect them. The price for electricity and gas should be the proper economic price that produces a return for the companies that generate and the companies that transmit the supply. That has not happened in the past two or three years. The effect of the NETA—the new electricity trading arrangements—meant that prices were driven right down; several substantial generators were driven out of business; and the British Energy problem made life extremely difficult for the Government because they were unable to maintain their payments without government support.

It seems to me that the Government should now be looking to do what R A Butler did 50 years ago and recognise that we are going to face higher energy costs. It makes no sense to try to keep them down artificially and protect everybody. They should be looking at ways in which vulnerable households can be helped. That could be done through any number of channels in the social security network. I find it quite ridiculous that both my wife and I are going to get 100 to help to pay our community charge. Perhaps I may say that that is absolutely barmy. Why not concentrate that help on the people who really need it? The Government seem to be terrified of doing that. However, I am sure that it is the right answer for dealing with the issue.

I have difficulty with the last two paragraphs of the amendment, which contain the requirement to,


    "increase protection for vulnerable groups; and . . . expand the definition".

The noble Lord, Lord Ezra, has been quite unspecific as to what that means. I certainly could not support an amendment with those very general and vague phases. There are other ways that vulnerable households could be helped. I hope I have said enough to indicate what I think they should be.


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