Court Decision.

Episode 5

A 1.3 billion to one series of Unfortunate (written) Mistakes!

As has been established, British Gas, in a 1995 agreement with the then Secretary of State for Trade and Industry (Michael Heseltine) accepted it must treat all of its former tariff customers on “Piped Propane” Estates on the “same contractual terms” as its network gas customers on the UK mainland. Actually, it was a terrific deal for British Gas: treat your Propane Estate customers in Stornoway on the same terms as the rest of your customers and The Government will ensure the (huge) expense of delivering gas to that area would be free! Which it did. And still does (paid for by every gas user in the UK no matter the supplier). According to British Gas it held its side of the bargain by treating its Piped Propane customers in Stornoway on the same contractual terms as its mainland customers. According to Ofgem it didn’t because an unspecified number of customers were treated differently. According to the MP Angus Brendan MacNeil, it was over forty. And that was only those who had contacted him.

Not that it matters to an agreement between a private energy supplier and the UK Government, but the Island of Lewis and Harris has one of the highest rates of fuel poverty in Britain. It also endures, along with the Northern Isles the longest and harshest winters in the UK. So you might be forgiven for thinking that the least British Gas could do given the above, would be to adhere to an agreement it made with Michael Heseltine which would allow customers living in that area, access the same tariffs available to its mainland customers. Not according to Antony Pygram, the Director of Conduct & Enforcement at Ofgem it didn’t (cf. MP’s letter below).

Building an Abstract Energy Supplier.

Circa 2009 British Gas began to notice the spiralling wage bill it was having to meet for an army of youngsters marching round housing estates throughout the UK in an attempt to get householders to “switch” to British Gas. There had to be a better (cheaper) way of doing this. There was: Get these same potential customers to come to you.

“Build it and they will come” someone at British Gas remembered a ghost whisper. But what to build? A Baseball Diamond in the carpark at its Slough HQ didn’t, somehow, seem like the answer. No, but there must be some other way. There must be! There was.

What British Gas decided to build was scaled-up pasting tables and an “abstract company”, neither of which is a difficult process. Building an “abstract company” for example dispenses with the need for builders and building material and building regulations. And the tables? Knock up one for the entrance foyer of every large Sainsbury’s in the country – sitting behind which, would be a British Gas salesperson disguised as the brand new employee of the brand new company, Sainsbury’s Energy. Then what? Then as the grocery shoppers come in and are negotiating their way past the new Energy Supplier’s table they can be intercepted and offered an incredible energy deal – savings of up to 30% (Mr Sainsbury, of course, got a cut).

Those lucky Sainsbury’s customers – bacon, eggs, mushrooms and £500 cash back on their energy bills for £3.00! Not so much luck for existing British Gas customers who didn’t know that their own energy supplier was offering a far better deal to “new customers” under an assumed name. And no luck at all for the P. Forty-Fived army of young doorstop sellers.

The new Energy Supplying wheeze (selling energy under an assumed brand name from within the cosy confines of your prospective customers’ favourite supermarket) on the other hand, started out spiffingly for British Gas - if you discount The Times story from the 4^th of July 2014 which trumpeted: British Gas faces £1M after latest mis selling scandal, that is. But, not to worry, after an apology from British Gas Director Ian Peters who labelled the service issues “extremely disappointing” it was back to the shop-face to continue expanding its customer numbers as rapidly as possible. And continue to grow those numbers it did, although its cost-effectiveness was somewhat blunted by an unfortunate Ofgem ruling on June 3^{rd 2015} requiring suppliers like British Gas to inform its existing customers (on the front page of their bills would you believe!) of the savings they could enjoy by singing up to their “abstract companies”: In this case that meant Sainsbury’s Energy. Of course, this was an inconvenient financial blow. The hugely discounted energy tariffs offered through Sainsbury’s were designed to increase its customer base, not, for goodness sake, to lower the bills of its existing customers! But the growth of its customer base was clearly worth the cost, because the scheme continued.

So when gas customers in Stornoway - who previously knew nothing of the Sainsbury’s deal - saw on the front page of their bills, that they could save, in some cases, over a thousand pounds a year, many were keen to take advantage. I should know, I was one of them. According to the MP for the Western Isles there were over forty. He knew because those customers subsequently complained to him that they were told having called, like me, the telephone number advertised on their bills, that “Sainsbury’s Energy does not supply gas to Stornoway.” British Gas is adamant that not a single one of them was being truthful. Sorry, only a single one of them was. Me. That’s because I had been insisting for a number of years that all communications from British Gas be confirmed in writing. Unlike the forty plus Stornoway customers who had not, I was advised, in writing, that I could not access the Sainsbury’s deal. I was also told why not. Below are verbatim copies/extracts of the emails – you will notice I have protected the names of the agents. This is because I have no wish to reveal the names of British Gas agents below Executive Office level who were merely carrying out their tasks in accordance with information provided by their employer and not because, British Gas’ outside counsel incorrectly asseverates it would be illegal to do so.

November 10, 2016

Dear Mr McPherson

My name is Dan X and I’ll be your case handler from this point forward and I will be helping you resolve this issue as quickly as possible.

I apologise for the delay in response to your complaint, I’ve been working hard to get the full and correct information for you in regards to your complaint.

And here is the full and correct information Dan X worked so hard to get:

In regards to your question over the Sainsbury’s energy tariff, looking at previous contacts from yourself to us, it seems that Sainsbury’s energy can’t supply piped propane. I sincerely apologise that this was stated on your bill and I’ll feed this back to the relevant people to make sure these issues are looked into and updated so it doesn’t appear on customers bill [sic] that have piped propane supply.

Kind Regards

Dan X

Complaints Management team.

British Gas

Now wasn’t that kind of Dan X? Not only did he undertake all that hard work to find the “full and correct information” in order to explain why I could not get the Sainsbury’s deal, but he even went to the trouble thereafter, of getting in touch with “the relevant people” to make sure they removed the Sainsbury’s offer from the front page of the bills of Piped Propane customers. Yes, that would be the same offer British Gas had been ordered by the Industry Regulator, to put on the front page of all customers’ bills the previous October!

The chances of my getting Dan X on the telephone to erroneously advise me, was by the MP’s fag packet calculations, 1000:1 –  calls randomly forwarded to one of eleven Call Centres/average of 100 agents each (MP’s guestimate - but much higher in reality).

January 6 2017

Hi Mr McPherson

Just to confirm with you that Sainsbury’s Energy do not support piped propane gas.

Thank you very much for your call today.

Sophie Y

Sainsbury’s Customer Advisor

Creating Excellence

Sainsbury’s Energy

The chances of my getting Sophie Y on the telephone to erroneously advise me (When I called British Gas) was 1000:1 x 1000:1

January 7 2017

Dear Mr McPherson

 As you’ll remember, you’ve recently been in touch and asked me to look into an important issue regarding your previous complaint…

Following our conversation on 6 January 2017, I’ve phoned Sainsbury’s Energy and can confirm that they can’t supply customers that rely on piped propane gas…

I’m sorry that this wasn’t made clear to you in previous correspondence and hope this clarifies the matter.

As such, I wanted you to know that your complaint has been resolved…

Kind Regards

Rebecca Z

Complaints Management Team

British Gas

Another email from a considerate British Gas agent who had went to the trouble of “phoning” an abstract entity to be told by a fellow British Gas agent (abstract entities don’t have employees!) that Sainsbury’s don’t supply piped propane customers.*

The chances of me getting Rebecca Z on the telephone to erroneously advise me was 1000:1 x 1000:1 x 1000:1.

Cumulative odds = 1.3Billion to one.

*I was given the same information in a recorded phone call which will be revealed in the upcoming “Recorded Calls” Episode.

Be that as it may, according to British Gas the fact that I received the above emails was simply a 1.3Billion to one happenstance – although realistically the odds are actually far greater since British Gas has far more telephone agents than the MP’s guestimate – which only happened to me!

 Mrs X from MacKenzie Ave is a lying old crone. Apparently!

So how did British Gas get out of this? Easily is how? It’s the “why” that is troubling. Despite the MP’s letter to Ofgem explaining to the Industry Regulator that he expected it to “have imposed sanctions” on British Gas’s parent company in response to “Centrica’s mendacity regarding its dealings with both Ofgem and my constituents…” No such sanctions were imposed. Indeed the Ofgem Official, Antony Pygram to whom the MP wrote, thereafter simply sidestepped the MP by having another Ofgem Official respond to further correspondence. Thus began an attritional descent into inertia. And over time, Inertia morphs into innocence.

The only problem left to tidy-up then, was me. The solution: Easy, offer him the £1545.62 he “would have saved” along with another £500 as a “goodwill gesture” and he’ll leave the stage a happy man. I didn’t, I haven’t and nor have I the least intention of doing so. The fact is, and I want to be clear about this: I simply don’t believe British Gas. I believe all the decent Stornoway gas customers, many of them in fuel-poverty, who claim that they, like me, were told that “Sainsbury’s Energy doesn’t supply Piped Propane.” I’ve spoken to many of those customers (more than double the number who contacted the MP); all of whom assured me they had dialled the number printed on their bills next to the enumerated savings they’d achieve through the Sainsbury’s offer and that they spoke to a British Gas agent who assured them that “Stornoway customers can’t get the Sainsbury’s deal.” I believed them then. Every last one of them. So did the MP, once. I still do.

Let’s conclude this week’s Episode thus: In an email to me Friday last, British Gas’ outside counsel (of The Scarlet Letter fame), with specific reference to Episode 4 advised me thus: “In respect of Ofgem commentary, this goes further than the previous post and makes an explicit allegation. You attribute this to Angus MacNeil but that does not matter: it is not a defence to a defamation action to claim you were simply repeating what someone else said.”

Here’s what the Law says: If what you are repeating is true, Fill your boots (I'm paraphrasing!)

In Scots Law the defence of “It’s true” is Veritas Convicii Excusat (a true statement exonerates the maker from liability).

Nevertheless, he’s got me so terrified I’m not taking any chances by repeating discrete allegations contained in the MP’s letter. All I can do then, is publish the MP’s letter in full (it’s part of the Historical Record) and let you, dear reader, peruse the entire missive and any allegations which may be contained therein. Here it is:

Mr Anthony Pygram

Ofgem

5 January 2018

Dear Mr Pygram

                              I am in receipt of your response to the allegation that, Centrica/Scottish Gas deliberately withheld specific tariffs from its customers in Stornoway: In that letter, you express your hope that your findings would address the concerns I raised on behalf of my constituents. I am disappointed that it does not achieve that aim.

 I am troubled by a number of assertions in your letter: For example, you claim to have “…secured a number of positive changes for consumers in Stornoway, including challenging Scottish Gas to change their customer communications on the right to access all available tariffs in the region…” Clearly, this assertion is predicated on the assumption that my constituents were not being provided with the proper “communications” prior to your “securing a number of positive changes.” Given that Centrica assured Ofgem in December 2016 that my constituents in Stornoway were, and “always” had been, able to access its Sainsbury’s tariff even although it was advising some of my constituents weeks and even months later that “Sainsbury’s Energy did not supply Propane Gas to Stornoway...”, I would have expected Ofgem to have imposed sanctions on Centrica rather than “secure positive changes”. That Centrica’s mendacity regarding its dealings with both Ofgem and my constituents is clear and demonstrable, leaves me disappointed that you would assert Ofgem has “challenged” Centrica – as opposed to having “instructed” it - to comply with its statutory regulations, is in my estimation, an inappropriately lax response to such serious failures in Centrica’s obligations to its customers. Further, your declaration that, “…some Stornoway customers…” were given incorrect advice necessarily implies you are privy to specific information which supports this finding: It is not possible to declare, as you do, that some customers were given incorrect advice unless you have concrete evidence of such. I will, therefore, be grateful for a detailed list of all Stornoway customers, referenced in your letter whom you know to have been victims of this “incorrect information” be forwarded to my office either by Ofgem or by Centrica at Ofgem’s behest as soon as is possible.

Angus B MacNeil

MP Member of Parliament for Na h-Eileanan An Iar (SNP)

31 Bayhead Street, Stornoway, Isle of Lewis HS1 2DU

Tel: 01851 70 2272

angus.macneil.mp@parliament.uk

www.angusmacneilsnp.com

You go on to assert; “…Scottish Gas acknowledged to us that some of their agent guides were open to misinterpretation and that this may have resulted in some customers being provided with inaccurate information about their ability to switch their supply from Scottish Gas to Sainsbury’s Energy…” This statement necessarily implies that an unknown number of my constituents were prevented from accessing Scottish Gas’ Sainsbury’s Energy tariff. Can I rest assured, therefore, that Ofgem will insist on Centrica identifying these customers as well as instructing it to reimburse them the 30% savings they would have enjoyed had Scottish Gas adhered to the terms and conditions of its trading license?

In your letter you make two references to “Sainsbury’s Energy” as a discrete company: “…agents at both Scottish Gas and Sainsbury’s Energy…” and “[we]…found no evidence that it was Scottish Gas or Sainsbury’s Energy policy to refuse LPG networks customers access to their tariff…” There is a serious technical issue apparent in both of these assertions: “Sainsbury’s Energy” is not - despite the implication to the contrary in your letter - a discrete company. It is, as you must be aware, (Ofgem in a ruling from September 2014 ordered British Gas to refrain from excluding its Sainsbury’s Energy tariff from customer’s bills by claiming Sainsbury’s Energy was a separate company) nothing more than a marketing device of Centrica’s business model and as such, cannot have a “policy” on anything. Please acknowledge your understanding of this concords with my own.

Regarding your claim to have found “no evidence”: I am frankly astonished: You will recall, at our meeting in September, in Stornoway, my constituent, Mr Derek McPherson, presented you and your colleague Shona Fisher with two “holograph” copies of a Gas Bill he had received from Centrica which had had information - clearly printed on the original - removed. He also gave you a copy of a formal document containing clear and demonstrable falsehoods which British Gas had forwarded to Ombudsman Services: Energy with the mendacious, and successful, intent of stopping a legitimate investigation into Mr McPherson’s complaint; an electronic recording of a “Sainsbury’s Energy” agent assuring a Stornoway Gas customer that he was not entitled to recompense for a declined application to access the Sainsbury’s deal because “Sainsbury’s Energy only started delivering Propane Gas to Stornoway on 31/3/17”; a holograph copy of an online application - now in the possession of Stornoway Sheriff Court as evidence in an upcoming legal action - of another Stornoway customer, which had been submitted (and declined) in order to access the Sainsbury’s deal in June 2016, and a copy of an email dating from January 2013, in which he (Mr McPherson) was assured that as a “piped propane” customer, there was only one tariff applicable to customers, like himself, dependent on “piped propane.” In another email later in 2013, Mr McPherson was advised Scottish Gas was refunding him £102.00 for “…the discount [he’d] lost out on over the last year.” Given the above, it seems, in the absence of justification, extraordinary that you would tacitly dismiss the significance of the entirety of the evidence with which you were provided, with the declarative exclamation: “[you could] …find no evidence ”… that it was Scottish Gas’ policy to deny my constituents access to its Sainsbury’s tariff.” Additionally, according to your own figures, only 0.1% of my constituents accessed the “Sainsbury’s Energy” tariff which was clearly printed on the front page of their bills and would have saved them up to 30% annually: How does that figure compare with the uptake in the rest of the country? I will be grateful, therefore, if you would carefully consider the evidence Mr McPherson provided and weigh it against Scottish Gas/Centrica’s business practices with regard to Ofgem’s own rules.

Of all the points in your letter, however, that which I find most disturbing, and which will almost certainly require Parliamentary scrutiny, is your assertion that: “…the advice on tariff availability given to some Stornoway customers was not of the standard we would expect...”, but that whilst you are “responsible for making the rules” you are not able to investigate “individual complaints.” I am acutely aware of Ofgem’s role as the industry regulator, which is why I am so profoundly troubled by your declaration. My understanding (which accords with a number of my parliamentary colleagues) is that Ofgem’s rules are exactly that: Rules; not guidelines. And that Ofgem’s rules are imposed on the Utilities in order that those companies conduct their business with meticulous adherence to those rules and not to an abstract - and therefore inexact - standard, adjudicated by agents within your organisation. Ofgem rules to those companies subject to them are – as I and my colleagues understand it – the equivalent of laws to the citizen. If that is correct, a citizen failing to obey these laws is not guilty of “Failing to meet” a perceived standard: S/he is guilty of breaking the law for which s/he is subject to legal proceedings, criminal conviction and possible punitive measures. If my understanding is incorrect, please advise me so as a matter of urgency and I will raise this issue with the appropriate Parliamentary Office.

Re your advice that you would encourage “…customers who believe they were wrongly denied…with the Energy Ombudsman...”: I have previously publicised that advice and even although I, like many of my colleagues in Parliament, have grave reservations about Ombudsman Services: Energy’s commitment and ability to stop malpractice by the Utilities subsequent to Martin Lewis’s all-party parliamentary group (APPG) report on the “Shambolic “ and “Farcical” state of Ombudsman Services (published, Nov 1st), I have not withdrawn that advice. What I am most concerned about, however, is not the customers who “believe” they were wrongly denied, but those who, as your letter has clearly acknowledged, “were” wrongly denied. I would, therefore, in addition to that requested above, urge Ofgem instruct Centrica, to immediately contact these customers in order to arrange appropriate compensation.

I was also, most surprised your letter did not address the further evidence: (the “modified” call-recording) a copy of which, my office provided to your colleague Kersti Berge on Nov 7. On further enquiry, your colleague Ryan McFadden in your Glasgow office provided, on Centrica’s behalf, an explanation of how the recording it forwarded to my constituent, Mr J Macaskill had been “modified”. I have attached my response to Mr McFadden, which I would be grateful if you too, would consider carefully.

 Finally, given the likelihood of our correspondence being discussed at Ministerial level, might I suggest you apprise Dermot Nolan of our communications to-date, as well as providing him with a copy of all the evidence with which you were provided at our September meeting and your forthcoming response to this letter.

Thank you in anticipation of an early response.

 Yours sincerely

Angus B MacNeil MP

 Na h-Eileanan an Iar

Next Week: The Fighting MacNeil. MP.