Over the last two years, ORG has taken parts in discussions about data sharing with the Government, convened by the Cabinet Office. This included examining ways for low income households to get support with their energy bills.
ORG, of course, supports the idea of helping people lower their energy bills, but we are concerned that for this to happen, companies will be given sensitive information about their customers. During the discussions, ORG called for a solution that prevented data from being shared with companies. Unfortunately these demands have not been fully translated into the proposed Digital Economy Bill and the draft Codes of Practice.
As a result, the proposals that are currently in front of Parliament could see energy companies being given huge amounts of sensitive personal data about their customers.
Who gets energy discounts?
People who receive certain kinds of benefits are entitled to discounts on their energy bills. This could be because they are on a low income, receive support for a particular health condition and/or have young children.
However, to date government has refused to take full responsibility for deciding who is eligible to qualify for the discount, other than pensioners who get it automatically.
Each company has its own bafflingly complex criteria and asks for different documents to prove that you are eligible. For example, OVO and EON ask for Medical Exemption certificates but British Gas don’t.
As well as complicating the process, this system acts as a barrier to consumers getting the best price deal. The Government promotes switching suppliers to stimulate lower prices but having to provide personal documents to prove they are eligible for a discount every time they change supplier is likely to deter many people from switching.
The obvious solution is to simplify the process, using data sharing powers to extend the automatic discounts that are currently given to pensioners to other disadvantaged groups.
How would automatic discounts work?
In a meeting on 6 January 2016, Alan Clifford from the recently disbanded Department for Energy and Climate Change (DECC) presented their proposals to expand the automatic provision of direct energy bill support for citizens living in fuel poverty.
Clifford explained that the new data sharing powers would build on existing powers under the Welfare Reform Act 2012 to allocate benefits automatically. Data sharing would be mainly used to enable access to HMRC tax credits data and information on the housing stock that would tell which houses are the coldest (e.g. from the Valuation Office Agency).
In this model, this data would not be shared with companies. Government departments or a specific contractor would work out who was entitled to the discount.
However, this intention is not reflected in the wording of the Digital Economy Bill and the accompanying Code of Practice. Although these codes say that this is how it’s intended to work, the wording is not tight enough.
There is nothing restraining the types of data to be shared or explaining how the process will be automated.
The risks to customers
The worry is that the government may fail to unify the discount system, and feel obliged to share personal data with the companies so they can sort them out. As there is no legal barrier to direct data sharing, we believe there is a significant risk that the government will go back on its promises not to do this.
While energy companies only need to know that their customers are entitled to a discount, under the current proposals there is nothing to stop much more detailed data being shared. Tax credits and housing data could be shared with energy companies so that they can each continue to make discount calculations in their own way.
Each company would need different information, which means that they are likely to receive much more than they actually need to know about their customers’ health and economic status. It would also mean that the data belonging to people who do not qualify for the discounts could be accessed by companies, just in order to run the assessments.
One process, maximum privacy
It needs to be written into the Bill that the new powers will only be used to tell energy companies which customers must be given an automatic discount in their bill, nothing more and nothing less.
Given the advanced state of development of these proposals we should have more transparency from government on which organisation will carry out the data matching, how they will unify the eligibility criteria for all the energy companies and the exact datasets that will be used in the process. And it would not hurt to give households an opt out of receiving discounts, even if this is taken up by a small minority.
Without changes to ensure a clear, simplified process, run by an accountable organisation rather than energy companies, the Digital Economy Bill will undermine the privacy of millions of energy customers.