Energy Bill [HL]

My Lords, we are now moving on to Chapter 5 of the Bill and the issue of smart meters. We have touched on it from time to time at earlier stages, and I have said that some of the issues that arise in relation to the Green Deal also arise in relation to smart meters. The Government will need to consider the implications of the two programmes. I should probably make it clear at the outset that I am in favour of a roll-out of smart meters, but there are a significant number of consumer issues which arise in relation to the installation of such meters which, if wrongly handled, will lead to some resistance and backlash against them. Smart meter installation is different from the Green Deal because the Green Deal is ultimately a voluntary scheme that the householder or landlord can take on board, and then he can decide whether it had been a good deal for his premises. With smart meters, the obligation is on the supply companies to install them. They are already beginning that installation, and some of them, particularly British Gas, already have a substantial programme under way. However, we should look at the implication for consumers. As colleagues will know, one of the problems in the energy market has been the ease with which people can switch and the potential cost of switching in terms of both the supply company and the method of payment. If we have a wholesale introduction of smart meters—which make it more difficult, more costly or more of a hassle for the consumer to be able to say, ““I’m fed up with the way this company is dealing with me; I want to switch to the next company””, or ““I’m fed up with paying by pre-payment meter; I want to go on to direct debit”” or whatever the choice is—and if the meter itself, the system under which the meter operates or the terms on which it is supplied make that more difficult, then we have significant consumer detriment. We must remember that the energy market is not one that is characterised by deep trust of consumers in their suppliers. Nor is it the case that the regulator has substantial powers over the peripherals: it has substantial powers over the supplier, but there is no real protection in relation to energy products or services in the same way. Installation of smart meters could lock people in to their current system unless we provide that the meters are reasonably interchangeable, compatible and available in a way that allows people to switch both method of payment and supply. We have to bear in mind that the introduction of smart meters is not so universally supported as it probably is in this Room. Research by Consumer Focus a couple of years ago, as well as evidence from Which?, showed fairly deep resistance to it, and some misunderstanding. So there is some mistrust at the consumer end, to put it at it mildest. We also know that in other countries where similar programmes have been adopted there has been some resistance—for example in some states of America and, on broader human rights grounds, in the Netherlands. So it is a delicate area. If we are to achieve introduction with minimum consumer resistance and minimum delay and challenge, we need to be able to reassure the householder that the meter that they are installing will not stop them switching should they wish to change tariff, company or the method by which they pay. So, Amendment 32C deals with the degree of compatibility. This is not just an issue of standards, because we have been talking about standards for smart meters for at least 10 years before we have introduced a single one, and we are still at a position where we do not have a common standard. It would obviously help if at this point we already had a standard, but the issue here is compatibility, which need not necessarily mean a single standard or specification. It is important that we can reassure consumers that installing a meter will not inhibit their choice. Amendment 32B deals with a slightly more ticklish issue. When the supply company or their agent is required to go into households and install a smart meter, how will it deal with trying at the same time to sell other products that are related to the smart meter, or that could be made to be related to it? Protecting consumers during the installation process is essential if we are not to meet with some resistance. On the one hand, there is the possibility of mis-selling in these circumstances; on the other, some devices are coming on to the market that would make it much easier for consumers, on the basis of the smart meter, to know what was causing their energy consumption to increase and how they could control it. The basic smart meter primarily gives the supply company that information, although it also tells the consumer at any given time what their level of consumption is and the cost of it. The amendment would allow information to be given to householders about other products that could help them to make sense of and use smart meters, but in a way which does not amount to hassle or to a situation where their mandatory presence inside the consumer’s house can be misused to sell particular products. The amendment effectively requires the marketing material to be in a written form so as to protect the householder from being misled or mis-sold a related product. I have no doubt that the Minister and his officials will have comments to make on the exact wording, as will the supply companies; but unless we recognise this as a potential problem, we could find ourselves in some difficulty. In one sense we are ahead of the game in that some installation programmes are going on and we know that there will be no standard design or specification before 2014 at the earliest. We could therefore already be locking people in. We need to ensure that, as the programme rolls out, we minimise the degree to which that can happen in future. I hope the Government can at least take on board these concerns and look at the best way of dealing with them in terms of the legislation and reassuring householders that smart meters will not inhibit their choice or lead to their being ripped off in some other way when the installation takes place. I beg to move.