Liberal Democrats

F11: Giving Consumers a Fairer Deal (Utilities Policy Paper)

Federal Policy Committee

Mover: Sarah Olney MP (Spokesperson on Business and Energy).

Summation: Neil Stockley (Chair of the Policy Working Group).

Conference notes the importance of utility industries and infrastructures – energy, water, telecommunications and rail:

  1. In the daily lives of everyone in the UK, as highlighted by the coronavirus crisis.
  2. To delivering Liberal Democrat aims of a lasting recovery from the coronavirus crisis and building an economy that is more balanced across the UK, more environmentally sustainable and more resilient to future shocks.

Conference believes that:

  1. The current system of utility regulation will not deliver the scale of investment needed to deliver our longer-term aims.
  2. Liberalised utility markets and the regulation of network monopolies do not work to the benefit of all consumers, particularly vulnerable and disadvantaged consumers.

Conference calls for reforms of utility regulation to:

  1. Give consumers, especially vulnerable consumers, a fairer deal.
  2. Ensure that utilities contribute to Liberal Democrats’ aims of establishing long-term growth across all the regions and nations of the UK and making the transition to net zero carbon by 2045 at the latest.

Conference therefore endorses policy paper 140, Giving Consumers a Fairer Deal, and in particular its proposals to:

  1. Create fair retail markets for consumers by:
    1. In energy:
      1. Enabling disengaged customers to save money by bringing in collective opt-out switching.
      2. Protecting consumers using energy management and ‘auto-switching’ services.
      3. Protecting customers from company failures by ensuring that the customers given a new supplier under Supplier of Last Resort (SoLR) receive a competitive tariff.
    2. In telecoms:
      1. Preventing mobile operators from applying roaming charges for calls to and from EU countries.
      2. Requiring companies to inform customers of the cost when they attempt to access bundled services, so that they can end the call without charge.
      3. Requiring telecoms companies to continue to provide a webmail service at a regulated price to customers who switch provider.
  2. Secure a better deal for consumers from network monopolies by:
    1. Eliminating regional differentials on consumer electricity bills.
    2. Bringing in a simpler fares structure for rail passengers.
    3. Ensuring that price reviews deliver a fair balance between promoting the interests of consumers, securing the investment needed to deliver net-zero and resilient networks and making sure there is a reasonable return for shareholders.
    4. Introducing outperformance sharing mechanisms to allow consumers to share in the benefits that equity investors achieve from high gearing.
    5. In telecoms, moving towards regulation of the service being provided, rather than regulating particular players in the market, as part of a package of measures to address the growing power of ‘big tech’ companies.
  3. Address the difficulties faced by vulnerable consumers, including elderly people, disabled people and people on low incomes by:
    1. In energy:
      1. Reforming the price cap, to target customers in vulnerable circumstances, with a new capped tariff set lower than the existing price cap.
      2. Ensuring that the Warm Homes Discount (and any successor scheme) is available to all customers in vulnerable circumstances.
      3. Ensuring that prepayment customers pay for their energy on the same basis as credit customers.
    2. In water:
      1. Asking Ofwat and the water companies to set minimum criteria for the value, scope and eligibility criteria for social tariff schemes across the country.
      2. Requiring water companies to put a share of their own profits into social tariffs.
      3. Encouraging water companies to work more collaboratively to raise awareness of priority services and to be more pro-active in identifying customers in need of temporary support.
      4. Expanding opportunities for customers to reduce their water bills.
  4. Reduce the ‘digital divide’ between different areas of the UK and different groups of the population by ensuring that regulation delivers:
    1. Telecoms services that are accessible to everyone, regardless of where they live or their socio-economic status, and remain available for as long as they are needed.
    2. Universal coverage and good performance of telecoms services to all consumers – our minimum standard will be access to broadband of at least 30Mbit/s downstream and 5Mbit/s upstream at an affordable price, and this will be reviewed as technology improves.
  5. Strengthen consumer redress and advocacy by:
    1. Pursuing a strategic re-design of regulation, to coordinate advice, advocacy, redress and regulation.
    2. Promoting improved coordination between the regulators, to develop common approaches on consumer protection.
    3. Giving Citizens Advice the statutory role to represent and support consumers in telecoms, building on its knowledge and expertise in energy.
    4. Ensuring that protection is extended to areas which are currently unregulated, such as electric vehicles, heat networks and heat pumps.
  6. Facilitate a more strategic approach by industries, government and regulators to future investment by:
    1. Issuing strategic policy statements for each of the regulated sectors, consistent with Liberal Democrats’ longer-term objectives.
    2. Establishing a new Railway Agency, responsible for the strategic management of the rail system and for planning new investments, working to a policy framework set by the government.
    3. Modernising the way price controls are conducted, to encourage innovation by enabling more competition.
  7. Ensure that regulators encourage companies and consumers to behave more consistently with our commitment to tackle the climate emergency by:
    1. Giving Ofgem, Ofwat, Ofcom and the new Railway Agency a primary duty to help deliver our net-zero target and to assist in building network resilience.
    2. Requiring the regulators to show how their policies and decisions are aligned with, and promote the achievement of, our emissions targets and climate adaptation policies.
  8. Make utility regulators more accountable by:
    1. Ensuring that Parliamentary Select Committees can scrutinise the regulators’ performance in respect of their statutory duties and public policy aims, as set out in the strategic policy statements.
    2. Improving monitoring and reporting, by requiring regulators to develop better and more accessible performance measures covering investment, quality of service, environmental protection and resilience.
  9. Promote a public benefit company model for electricity distribution, gas distribution and water companies, so that particular economic and environmental policy objectives must be considered explicitly in the running of the companies.

Applicability: Federal; except 3. b) (lines 68–79), which is England and Wales.

Mover and summation combined: 16 minutes; movers and summation of any amendments: 4 minutes; all other speakers: 3 minutes.

For eligibility and procedure for speaking in this debate, see page 6.

The deadline for amendments to this motion is 13.00, Monday 8 March see page 8. Amendments selected for debate will be published in the Conference Extra and Saturday Conference Daily updates to the Conference Agenda. The deadline for requests for separate votes is 09.30 Friday 19 March; see page 5.

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