HC Deb 09 November 1937 vol 328 cc1735-42

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. James Stuart.]

11.4. p.m.

Mr. G. Strauss

I desire to bring to the notice of the House a matter which is causing widespread and bitter complaint in the poorer parts of South London, particularly in Lambeth, Southwark and Bermondsey, namely, the extortionate charges made to thousands of householders in these areas for the supply of electricity. There is a company operating in this area called the Fixed Price Light Company, which carries on its business in a peculiar manner. It buys large supplies of electricity in bulk from the authorised undertakers at a cheap price, and peddles out the electricity it buys to consumers at a high price. This is the only way in which the consumers in some areas are able to obtain electricity, because the Fixed Price Light Company makes arrangements with landlords owning large blocks of property, flats or cottages, to supply all the households within that area with electricity, to put in the necessary fittings, and to sell current to the consumers in question on the following principle. They do not charge for the amount of electricity used, but they make a fixed price for each electric bulb which the consumer has in his premises, and they make that price whether that consumer uses much electricity, or little, or none at all.

It works out that the price these people have to pay is exceedingly high—if my calculations are correct, at least double the amount which the consumers would have to pay if they obtained their current in the ordinary way from authorised electricity undertakings. I can supply the Minister with numbers of examples. I would just like to give two examples to the House. One consumer has one 15watt bulb and one 60-watt bulb. He has also one wireless plug. The amount of electricity he consumes cannot be very much, yet he has to pay 2s. a week all the winter, whether he uses much electricity or not, and in the summer a fixed lesser charge even when he is away on holiday and uses none. Another man has three bulbs of 15-warts and one of 60watts and one wireless plug; he has to pay 2s. 7d. a week all the winter. Those charges appear to work out at fully double what is paid by neighbours who get their current from the authorised electricity undertakings.

There has been a smouldering discontent in these areas. Recently, it has developed into a blaze of revolt, because the company in question has sent out a circular saying that it will have to raise the price of current to all consumers who have wireless plugs. I think most of them have wireless plugs. They will in future have to pay up to 8d. a week for these, whether they use the wireless much or not at all. The company charges, for installation of the plug, £1. Many consumers are so angered by the situation that they are telling the company that they may take their whole installation away, that they are not going to be exploited in this manner any longer, and that they will light their premises by gas. Many others are threatening to do the same. It will, I am sure, be contrary to the wishes of the Minister of Transport and this House that any consumers, particularly poor consumers, shall be deprived of the use of electricity through the exorbitant charges of a supply company. The extraordinary thing is that this company is under no statutory control whatever. Neither the Electricity Commission nor the Ministry of Transport has any control over the price the company charges to the consumers it supplies.

There appears to be a loophole in the Act of Parliament. It is a situation which apparently was not envisaged when the Acts of Parliament were passed by this House. It is quite clear that this company, which operates on a very big scale, is evading the intentions of Parliament in so far as its charges are not controllable by the Ministry of Transport or the Electricity Commission. I ask the Minister of Transport, who, I am sure, will agree that this state of affairs is extremely unsatisfactory, to make the necessary inquiries and take the necessary steps to put an end to it. I would ask the Parliamentary Secretary to the Ministry of Transport whether it is not possible for him to use his influence immediately with this company by asking them, at any rate, not to raise their prices any higher, and not to enforce the additional charge of 2d. for wireless plugs which they put into operation on 1st November. I further ask him to make a full inquiry into the situation, and that if he finds, as he will find, that the facts which I have put before the House are correct in every detail, he will incorporate a provision in the Bill which he is going to introduce—

Mr. Speaker

The hon. Member is not entitled to suggest anything that requires legislation.

Mr. Strauss

Then I ask him whether he will be able to take any action in the future to bring this company—and there may be similar companies acting in the same way in different parts of London or in other parts of the country—under some form of public control, so that the public may be fully safeguarded and this unfettered exploitation of electricity consumers stopped.

11.12 p.m.

Mr. Naylor

I would like to supplement what my hon. Friend the Member for North Lambeth (Mr. G. Strauss) has said in respect of this grievance, which is held by a very large number of consumers in South London. This fixed price electricity company is rather badly named because the price is anything but fixed. It has been in existence as a company for something like 30 years and has had a very long experience in regard to the cost of supply and the charges that are made and the profits, which, we must assume, it has been able to make in connection with that supply. The present position is that a notice has been sent out indicating that there are to be certain increases in the charges for the users of electricity in connection with wireless sets. The company has several different rates of charges. It has a 6d. rate which it proposes to increase to 8d. per week, it has a 4d. rate which it proposes to increase to 6d. per week, and the lowest price of all, which is 2½d., it proposes to increase to 5d., and it is making the charge of 5d. a minimum charge which is to be permanent throughout the system.

The company not only applies its business to South London, it supplies a large number of districts, and it carries on under the rather unsatisfactory system of charging according to what it thinks is necessary to supply the profit required. It may be that the Minister, if he is going to institute an inquiry, will discover that the company is under the impression that it is losing money at present prices, and that these increases have been imposed in order to make it possible to carry on the business. That may or may not be the fact. I hope that, as a result of this matter being introduced to-night, the Minister will be in a position to institute some inquiry as to the character of the charges, and especially as to their justification. For instance, the increase in the case of those who are to pay these increased charges of 8d. per week is not so high as the increase to those who are now paying 2½d., and in future will be called upon to pay a rate of not less than 5d. It is understood that once the installation is made in those large blocks of buildings, there is no escape for the consumer. He has to accept, apparently, any increase of price that is made, otherwise the installation is of no use to him and he must ask the company to disconnect the electricity supply, and possibly he would be unable to substitute any other source of supply, because the fittings of the Fixed Price Light Company remain there. There is a large field of inquiry, and I hope the Parliamentary Secretary will be in a position to say that he has sufficient evidence to justify inquiry as to the justice of these charges, and, if the company are experiencing any difficulty in regard to profit or loss, to ascertain whether or not it might be a question of proper management of the supply, and whether the consumers under this system, in pledging themselves to take this installation, are properly treated in having these increases put upon them without notice.

11.17 p.m.

The Parliamentary Secretary to the Ministry of Transport (Captain Austin Hudson)

I should like to thank the hon. Member for North Lambeth (Mr. G. Strauss) for giving me ample notice that he was going to raise this question, and also for communicating some time before with the Electricity Commissioners on the matter, in order that we might try to clear up the grievance of his constituents. As far as we know, there is only one company which does this kind of business. It is known as the Fixed Price Light Company, and I would draw the attention of the House to the fact that this company started in business as long ago as 1909, so that it is not any new thing which is being brought to our notice. In addition to Lambeth they carry on their business in districts as far apart as Poplar, Barking and Willesden and as far south as Gillingham, in Kent. I am informed that the company is supplied with electricity by authorised undertakers, both municipal and company, and the scope of its operations is of considerable magnitude. In 1935, I am told, it supplied about 11,000,000 units to its various consumers.

The company works in the following way: It instals one meter at a selected point, and then it provides and maintains the necessary extensions, wiring and fittings for the supply of small users who use one, two or three lamps. These consumers are probably in a building, or in a number of buildings in the same street. I am told that the premises supplied are mainly short-term tenancies, where neither the landlord nor the tenant would be likely to incur the cost, ordinarily, of providing supply. The charge made, according to the information I have obtained, includes the installation, the wiring and the complete upkeep of the equipment. It is small equipment, because they are small consumers. It is rather difficult to compare the charge with that made in ordinary circumstances.

Mr. Benjamin Smith

Will the Parliamentary Secretary look at it from this angle, that this Fixed Price Company are joining with landlords by agreement and eliminating a competitor who would do the service at much less cost?

Captain Hudson

I am trying to be perfectly fair to the House and trying to show the scope of the activities of this company. In the past the company has supplied electricity in streets and localities where authorised undertakers have been unwilling to supply it, and in that they have supplied a public need. I must also point out—I think the hon. Member for North Lambeth realises it—that there is nothing illegal about their activities. I am informed that neither the Minister nor the Electricity Commissioners have any control over the charges, as this company is not an authorised undertaker.

Mr. G. Strauss

These are ordinary working-class houses, and not the poorer type of house to which the Parliamentary Secretary has referred.

Captain Hudson

I understand they are mostly small consumers living in houses the landlords of which would not consider it worth while to put in electricity, and the tenants have not the money or the inclination to do so. That is the present position. All I can say is that I will take note of what the hon. Members have said to-night and that I am going to ask the Electricity Commissioners to discuss the matter with authorised undertakers from whom the company obtain their supplies and see whether any further steps could or should be taken. Hon. Members know that on the Motion for the Adjournment it is out of order to discuss future legislation, but legislation has been announced in the Gracious Speech—an Electricity Distribution Bill—and all I can say now is that we propose in that Bill to take certain steps which will include power for an authorised undertaker to take over a non-statutory company such as this if it is thought desirable to do so. I think these steps will meet the point. We are making immediate inquiries, and if we propose legislation to deal with this matter I think it will meet the very genuine anxiety of hon. Members opposite. If when that inquiry takes place we find that steps are justified, we shall try to remedy this state of things in the shortest possible time.

11.24 p.m.

Mr. Herbert Morrison

I am sure my hon. Friends will appreciate what the Parliamentary Secretary has said, and I only want to add one or two points. I hope the Government will take the view that this company is one which really ought not to exist, for they are functioning merely as a middleman between the consumer and the authorised distributor. I will not say that it is illegal, but it clearly must be to some extent an evasion of the intention of Parliament, which was that the only people who could supply consumers were the authorised distributors. The advantage of that is clearly that the authorised distributor is subject to the control of the Electricity Commissioners, the Minister of Transport and, in the end, of the House of Commons. If this position continues and this company can charge any price it likes, there is no remedy on the part of the Commissioners or the Minister of Transport. Therefore, I beg the Parliamentary Secretary to turn his mind to the point that the Minister has the duty to get rid of this company and to clear it out of the business as soon as possible. This; is no way of handling the distribution of electricity and the supply of consumers.

I am glad that there are to be conversations with the supply companies. I do not know how long the contract between them and the company lasts, but the supply companies ought to determine that contract, and themselves take on the responsibility of supplying the consumers. There are now free wiring schemes, hire-purchase schemes and all sorts of devices for solving the problem of the small consumer, and there are plenty of municipalities and some company supply undertakings which are solving the problem of the limited consumer by those perfectly sensible methods. The companies or municipalities should face their responsibilities, terminate the contract of this company, get it out of the business, and do the thing themselves. At this time it is really unsatisfactory that there should be this sort of middleman company between the supply undertaking and the consumer.

As you, Mr. Speaker, have reminded my hon. Friends, we cannot on this occasion discuss legislation, and we must respect your Ruling on that point. Nevertheless, I may be allowed to say, in connection with the remarks of the Parliamentary Secretary, that we are glad to know that this point will not be overlooked. I urge the Parliamentary Secretary to convey to the Minister and the Electricity Commissioners the feeling that there is here an evasion of the intentions of Parliament and that the grievance to which my hon. Friends have drawn attention ought to be remedied. Fundamentally, what is wanted is that this middleman concern should be gently but firmly pushed out of the business as soon as possible, and the supply undertaking which is subject to the control of the Minister and the Electricity Commissioners, should be in a position to function freely, to protect the consumer and see that he gets fair play.

Adjourned accordingly at Twenty-seven Minutes after Eleven o'Clock.