We have already discussed some of the issues that I want to raise, but I would still like to cover them briefly. Clause 18 covers the power of the Secretary of State to modify gas and electricity supply licences. The amendment would remove subsection (2), which, according to the explanatory notes, limits those powers so that they may be used only
“for the purpose of making provision for: the steps that must be taken by the holder of the licence following a bill payer’s failure to make green deal payments; the circumstances in which a licence holder may disconnect the supply to a green deal property; and enabling, in certain circumstances, a licence holder to use a security deposit paid by the bill payer to pay green deal payments to the green deal provider.”
Amendment 112 would replace that subsection and deals with the interests of individual consumers who are disabled, chronically sick, of pensionable age, on low incomes, or with one or more resident children aged 16 or under. It would also prevent the disconnection of the supply to a green deal property where the bill payer is in financial difficulties and complying with an agreed reduced repayment plan, of which the green deal is part. I will not go through the proposed new subsection in detail, but the purpose of the amendment is to ensure that the Secretary of State cannot amend the licensing conditions to allow energy companies to disconnect vulnerable customers for failing to keep up their green deal repayments.
At present, suppliers can only disconnect a household for failure to pay the charges associated with the supply of energy and metering costs, such as standing charges. It has been long established that debts for which one might lose one’s home, liberty or supply of essential goods and services, such as energy, should be prioritised over other debts. To allow disconnection for the non-payment of green deal repayments simply as a result of the mechanism through which the loan is repaid would subvert that principle.
Consumers may face situations in which they cannot afford to pay the green deal charge, but can afford to pay for their ongoing energy consumption, or they may wish to dispute elements of the green deal package, which we have already discussed. I am particularly concerned that, although disconnection is rare, the National Association of Citizens Advice Bureaux has evidence that indicates that customers, including those vulnerable customers whom I have already listed, may be threatened with disconnection for fuel supply arrears. Where customers are in financial difficulty, threats of disconnection can lead them to make repayments at an unaffordable or unsustainable rate, or behave in a way that is contrary to their best interests, for example by seeking loans through less formal arrangements than usual. I am particularly concerned about that.
The Energy Retail Association, which is made up of the six largest energy suppliers, offers a self-regulatory framework. ERA members state that they will not knowingly disconnect vulnerable customers, including older people, sick people and disabled people and their carers. They also have arrangements for those with young children. However, the energy supply licence conditions with which all energy suppliers must comply prohibit suppliers from disconnecting households occupied solely by people of pensionable age, or those people and children, only during the winter months. They also require suppliers to avoid disconnecting households that include any occupant who is disabled, has a chronic illness or is of pensionable age, but only during the winter.
Although those conditions were strengthened recently to ensure that suppliers take all reasonable steps to examine their customers’ circumstances before disconnection, if suppliers are permitted to disconnect households for failing to pay green deal charges, those mandatory protections must be strengthened further, for example by extending them to families with young children. I am particularly keen for the Minister to clarify that the secondary legislation will cater for that.