Prioritisation of installation of smart-meters for vulnerable households and those in close proximity to a renewable energy generation facility

‘(1) A support scheme may make provision to prioritise—

(a) households in fuel poverty, and

(b) households in close proximity to a renewable energy generation facility, and

(c) such other groups as the Secretary of State may determine

for the installation of a smart-meter.

(2) The Secretary of State shall by regulation ensure, as far as is reasonably practicable, that all households are converted to smart-meters, in accordance with subsection (3) of this section.

(3) The Secretary of State may by order specify for the purposes of section (8) a period of not more than 7 years, beginning with the commencement day.

(4) In this section “commencement day” means the day on which this section comes into force.’.—(Charles Hendry.)

Brought up, and read the First time.

I beg to move, That the clause be read a Second time.

I hope that we can deal with the new clause briefly, to provide additional time for the remaining new clauses.

We have talked about the range of different approaches necessary for dealing with the challenges of fuel poverty, including some of the financial and social support mechanisms and energy efficiency. The new clause suggests an additional way to help some of those people who are in fuel poverty by ensuring that they are first to get the benefits of a smart metering roll-out.

The commitment to smart metering was incorporated in statements in the House of Lords on the Energy Act 2008. The Government had resolutely refused to agree to the changes made in Committee in the House of Commons, and this Bill may follow the same pattern. The Government have become enthusiastic in their words about smart meter installation and the need for a national roll-out programme, but there is great concern about the programme being very slow. Most people in industry believe that 2020 is a very unambitious target. The Minister may believe that it is ambitious, but everybody in industry believes that the roll-out could be done in three years, or perhaps sooner, with the right degree of commitment and enthusiasm from the Department and Ministers.

The case for the new clause is that smart meters will bring significant benefits. We can see from the roll-out in Northern Ireland that people on prepayment meters pay less for their electricity than those who are on ordinary tariffs. That is in stark contrast to the situation in other parts of the UK. The people who have the most to gain by being able to choose the tariff best for them and to opt for arrangements to minimise their charges are those in the greatest fuel poverty. Therefore, there is a case for saying that, in deciding how the roll-out should be done—and there are still decisions to be made—the Government should prioritise those in fuel poverty.

The people least likely to have access to the internet and least able to shop around for the best tariff, given some of the complexities of that approach online, will be some of those in fuel poverty. That is not to stigmatise them as people who are not best able to use the internet; it is to recognise that the households least likely to have broadband connections are those homes where poverty is greatest.

Through the installation of smart meters, those people can be given access to a wider range of tariffs and options for using power at times when the charges are lower. It may have the additional benefit of bringing broadband into their homes, as that is a requirement for smart metering. The scheme is a way of trying to do more to help the fuel poor and give an extra kick-start to the roll-out of smart meters. I hope that the Minister will accept the prioritisation.

This is clearly a good idea. Like the hon. Gentleman, I am troubled that the current plan will be executed over such a long period. I think that the Italians did it in three years, although no countries are exactly comparable. If that is possible in Italy, which is not always regarded as the most organised country in the whole world, we can do much better than 10 years. It is clearly important as a sub-process that the fuel poor, people in particular need, should have smart meters first.

Can I just make one other technical point? I understand that there has been a debate about who should receive the information that the meter displays. It is absolutely paramount that all the information is received, by not just the companies but the customer, in a way that is easy to read, understand and interpret, so that it is clearly visible for the individual in their home.

The new clause would enable the Secretary of State to require energy suppliers to give to  the fuel poor, those living close to renewable energy generators and any other group, priority in receiving smart meters. It would also allow the Secretary of State to specify a deadline, within seven years, for achieving full roll-out.

I am sure that members of the Committee are aware of the Government’s strong commitment to smart meters and our continued progress in implementing the comprehensive roll-out programme. As announced by Lord Hunt on 2 December, the Government have made a series of key decisions on the implementation of smart metering in Great Britain, and put in train a major implementation programme led by the Department of Energy and Climate Change and Ofgem.

The programme follows the taking of some broad implementing powers from the Energy Act 2008. Under the enabling powers set out in the 2008 Act, the Government already have wide discretionary powers to require energy suppliers to give priority to particular groups of customers, who might include those mentioned in the amendment, and also other groups. The first part of the proposed new clause would not, therefore, add anything to existing powers.

The second part of the new clause focuses on a deadline for the roll-out of all smart meters. There is a considerable amount of work to do before a formal mass roll-out of smart meters starts, covering the regulatory framework, market design, standards, consumer protection, data protection, access rules and other matters. Our current estimate is that the work under the implementation programme will take about three years. I really suggest to the hon. Members for North Southwark and Bermondsey and for Wealden that those issues, such as design, standards, consumer protection, access arrangements and data protection, are all things that every one of us would want to be done properly. We believe that the time is required to ensure that those factors are accommodated and considered properly, so that when we begin our roll-out it will be supported and welcomed by people, without lots of household conflicts.

On that basis, the start of the roll-out under the mandate would happen at the end of 2012. We remain committed to our target of completing the roll-out by the end of 2020. That target is based on previous experience of the complexity and time involved in delivering major change projects in the energy industry, and a detailed economic analysis of the costs and benefits profile of a range of options. Setting an earlier deadline for installing smart meters would be likely to lead to significant increases in costs and risks to what is widely recognised to be the largest and most complex energy industry change programme since the conversion to North sea gas in the 1960s and 1970s.

In conclusion, the power contained in subsection (1) is unnecessary, as the Secretary of State could already prioritise groups under section 88 of the Energy Act 2008. In relation to the remaining provisions, I do not believe that it would be appropriate to set a deadline in legislation for the achievement of such a complex undertaking as the roll-out of smart meters. Nevertheless, I am happy to confirm to the Committee that we are committed to delivering the smart meter roll-out as quickly as possible for a programme of this magnitude. For those reasons, I regret that I cannot support the inclusion of new clause 12 in the Bill. Within that roll-out, the Government will consider whether there can be targeting of the fuel-poor  and how the balance will need to be created between efficiencies, and therefore costs, and how the programme itself is rolled out. That is why we need to take great care over doing it, so that when we do it, we do it well and do not have to revisit it.

I am happy to continue to support the hon. Member for Wealden. I will not argue that technically the new clause is needed. Perhaps it is not, but the politics and the delivery is certainly needed, which I guess will be the burden of his song.

The hon. Gentleman has absolutely identified what I should focus on. I am grateful to the Minister for her commitment to try to ensure that the installation of smart meters will bring benefits only to those who are in fuel poverty. Her words will be welcomed generally. There are times, however, when one wants to shake the Department and ask it to get a grip on the emergency, the challenge and the opportunities that are there rather than just saying that it is really difficult and we are going to have think about it for another three years.

As the hon. Gentleman pointed out, Italy has done this; it has gone through those difficult discussions and completed the roll-out—primarily only for electricity rather than for dual fuel issues, but a great deal more energy has been directed there. Sweden will have completed its roll-out programme to 5 million homes in the next few months, and it has been done in Ontario in the last few months. Around the world other countries are grappling with the issue, but they have reached the stage of implementation and roll-out, rather than conversation, discussion and consultation.

The Minister talks about the consultation conclusions that were announced last December. What caused huge dismay in industry was the extra element of consultation that came from that. Rather than reaching conclusions and a delivery programme, which is what industry had hoped, the consultation said that we need to think more about a huge range of different issues.

What people want now is leadership. The way forward is to ask what we can agree on. There are a range of important issues. I do not in any way minimise the importance of the issues that have to be resolved, but which of them can we readily agree on? Let us get agreement and let us park them. Then let us focus on the ones where there is no agreement and put in place a rigorous time-constrained approach to try to sort them out.

I always thought the programme could be sorted out in the course of a long weekend. If the President of Europe can be chosen over dinner, it should be possible to sort out a smart metering programme over a few days. The Government should just lock the doors and not let people home until the detail has been agreed. A few long weekends might be needed to agree the different elements of the various sections, but there just is not enough drive and enthusiasm to make it happen.

The hon. Member for North Southwark and Bermondsey is absolutely right about information. The key issue in the roll-out of smart meters is that the public must trust the system. They will trust the system only if they have access to all the information their  electricity and energy companies have. If there is that proviso, they may not want to use it; however, they must feel that there is nothing about their consumption patterns that someone can access remotely but they themselves cannot see. That is a fundamental building block and I hope there can be early agreement on it.

I accept that the Minister has powers to prioritise within the existing powers and so the clause would not be necessary. We will not seek to push it to a vote but I wish we could get a greater sense of dynamism and urgency. What do we need to do to move things forward—from 2020 to 2017? How do we shorten the three-year consultation period to something that can be achieved much more rapidly? We are falling behind other countries. They have all managed to do it. They are ahead of us on the roll-out programme. There are issues that make it more complex in the United Kingdom than elsewhere but we are being unambitious. We hope that the Government will take away a strong message from this debate. We want greater drive and greater urgency to make the programme happen.

I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.