Schemes for reducing fuel poverty: supplementary

Question proposed, That the clause stand part of the Bill.

I will try to ensure that we make significant progress in the remaining time available. In subsection (6), the Secretary of State has the power to exclude a supplier from participation in the scheme. Will the Minister give us greater guidance as to the meaning of that provision? What sort of people might be excluded and on what grounds? Will they be excluded from part of the scheme or from the scheme in its entirety?

In the pre-Budget report, the Government indicated that the value of the support schemes would be about £300 million. The Minister has referred to that figure but it is not set down in the Bill. Is that figure set in stone, or is there room for movement? Finally, when we listened to witnesses last week, there was talk about whether funding for the scheme should come from profits, from reducing costs elsewhere or from charging other consumers. Does the Minister have an approach as to what method he feels is appropriate?

The clause supplements clause 8(4) and 8(6) by allowing the Secretary of State to define eligible customers and the benefits to which they are entitled.  The Secretary of State can specify the arrangements to be put in place to help suppliers find eligible customers, through data matching for example. The Secretary of State can also specify that suppliers must let their customers know what particular benefits are available, and how to apply for them.

It is important to ensure that customers are not discriminated against simply because the suppliers have to pay them a benefit. I am sure all would agree that we would wish to avoid such a perverse outcome, given that our policy seeks to help vulnerable households. Splitting the suppliers’ contribution to the mandated social price support scheme according to their market share, and having provisions for a reconciliation mechanism—to which I will return later—will prevent any such behaviour. In addition, subsection (2) allows us to include a specific provision in the regulations, preventing suppliers from discriminating against eligible customers.

Suppliers offer an array of services under the current voluntary agreement. Over the coming months, we will assess which contributions under the voluntary agreement should count under the legacy spending element of the mandated scheme. It is therefore vital that the clause allows for the continuation of the different elements currently included, and subsection (4) does just that. Of course, with exclusions, there might be an element of saying that something worked well under the voluntary agreement and should be grandfathered through, or that something did not work well, and should therefore be stopped. The Secretary of State would have the ability to exclude something, which I hope answers the hon. Gentleman’s first point.

The subsection will also allow suppliers to provide different benefits, or amounts of benefits to different customers. That will, for example, allow suppliers to continue giving their company-specific social or discounted tariffs to households currently receiving help, even if they are different from other suppliers’ offerings or the social price support under the mandated scheme.

The voluntary agreement transition arrangements will be part of the consultation in summer 2010. At that point, we will be able to discuss what suppliers will be obliged to do going forward. That could include whether the existing tariffs and benefits that suppliers offer under the voluntary agreement will be included in the mandated scheme. Subsection (4) also covers the continuation of pre-existing arrangements, which means the continuation of work under the existing voluntary agreement. Examples of that work include non-direct benefits, such as benefit entitlement checks and energy efficiency advice for the fuel poor above and beyond suppliers’ obligations through other schemes.

We want the schemes set up under these clauses to do a variety of things, from grandfathering activities in the voluntary agreement to creating a new kernel group entitled to receive a benefit. It is therefore important that any scheme that we define can cover a range of different things. Subsection (6) therefore allows the Secretary of State to apply or disapply elements of the scheme to different suppliers if appropriate. For example, only the big six are currently involved in the voluntary agreement. If a decision were taken to include smaller suppliers in the scheme, the Secretary of State might not wish the requirements about grandfathering to apply to them.

In conclusion, the clause provides the Secretary of State with essential options when making social price support schemes to reduce fuel poverty. That includes ensuring that customers get the appropriate benefits, that suppliers do not discriminate against the vulnerable people we are trying to help, and that we are able to grandfather elements of the voluntary agreement. I appreciate that that does not deal, as the hon. Gentleman said in his second question, with the amount of money available to the scheme. That has been announced by the Chancellor in the pre-Budget report, and that is the background against which we must fit the scheme to the amount of money available.

Question put and agreed to.

Clause 9 accordingly ordered to stand part of the Bill.