HC Deb 03 April 1957 vol 568 cc415-27

(1) An Area Board, or either of the Scottish Electricity Boards, may publish a notice fixing maximum charges in consideration of which electricity supplied by the Board may be resold by persons to whom it is so supplied, or by any class of such persons specified in the notice.

(2) Any notice under this section shall be published in such manner as in the opinion of the Board will secure adequate publicity for it; and the maximum charges fixed by any such notice may be varied by a subsequent notice published by the Board in accordance with this subsection.

(3) Different maximum charges may be fixed by a Board under this section for different classes of cases, whether by reference to different parts of the area or District of the Board or to different tariffs under which electricity is supplied by the Board or to any other relevant circumstances.

(4) If any person, in consideration of the resale of any electricity supplied by an Area Board or Scottish Electricity Board, in circumstances to which a notice published by the Board under this section applies, requires the payment of charges exceeding the maximum charges applicable thereto in accordance with the notice, the amount of the excess shall be recoverable by the person to whom the electricity is resold.

(5) So much of section eighteen of the Gasworks Clauses Act, 1847, as incorporated with the Electric Lighting (Clauses) Act, 1899, as provides for a penalty to be imposed on persons who supply persons with electricity supplied to them shall cease to have effect —[Mr. Maudling.]

Brought up, and read the First time.

The Parliamentary Secretary to the Ministry of Power (Mr. David Renton)

I beg to move, That the Clause be read a Second time.

This clause deals with the maximum charges for reselling electricity supplied by the electricity boards and it is brought forward by the Government in pursuance of an undertaking given during the Committee stage discussions, when my hon. Friend the Member for Clitheroe (Mr. Fort) drew attention to a somewhat similar provision in the Gas Act. He said that there were abuses in the reselling of electricity, especially on the domestic tariff, and suggested that we should have a similar provision for the electricity boards.

We now propose that the electricity boards should have the power to fix maximum charges at which electricity may be resold and that they may exercise that power in such a way as to have different maximum charges for different types of consumers. I should remind the House that the complaints of overcharging on resale which have come to light have not been received from all area boards, but only from certain boards, particularly in the north-west and in the south-east of the country and London. Those are the three areas where the complaints have been most notable. We feel, therefore, that it is unnecessary to have a provision which obliges every board to have maximum charges for resale or to require any board which is empowered to fix maximum charges to fix them for all types of consumer, because it is mainly domestic consumers who are concerned.

If I may briefly describe the new Clause, subsection (1) enables the board, merely by the publication of a notice, to state the maximum resale charges, and, as I say, these charges apply either to all persons supplied by the board or to any class of such person. Subsection (2) requires notice to be published in a manner which the board considers will secure adequate publicity for it and the maximum charges which it fixes may be varied by a subsequent notice. Subsection (3) refers to different maximum charges for different classes of user whether by reference to the locality where they occur or to other relevant circumstances.

Mr. Gerald Nabarro (Kidderminster)

May I ask what my hon. and learned Friend means by "adequate publicity"?

Mr. Renton

That will be a matter for the board to decide in the light of circumstances. We do not consider that is a matter for which we should legislate in detail in a Statute.

Subsection (4) says that the amount of the excess charge, if any, which is obtained by, say, a landlord from a tenant, may be recovered in a court of law by the person who has paid the excess charge. Although I am advised that it is not necessary to put it into the Bill, it also follows that supposing a landlord should sue a tenant for charges which are in excess of the maximum charges, it would be a good defence for the tenant to say that they were in excess. So there is a sanction both ways.

Subsection (5) points out that Section 18 of the Gasworks Clauses Act, 1847, as incorporated with the Electric Lighting (Clauses) Act, 1899, or so much of it as provides for a penalty to be imposed on persons who resell, shall cease to have effect. Although it was not illegal up to the present for people who bought electricity from area boards to resell that electricity, they did incur a penalty by doing so, a penalty of £ 5 for the offence and 40s. for every day the offence continued. That, of course, is an obsolete piece of legislation which we propose should be cleared out of the way by not applying it to these electricity board sales.

With that explanation, I hope that the House will accept the new Clause.

Mr. Alfred Robens (Blyth)

We are obliged to the hon. and learned Gentleman for bringing this new Clause before the House. It is a concession which he promised us when we were discussing the matter during the Committee stage. Subject to what may be said by my right hon. and learned Friend the Member for Newport (Sir F. Soskice), it seems to me that this meets the case raised both by the hon. Member for Clitheroe (Mr. Fort) and myself.

I am a little uncertain about whether the protection to the tenant is good enough. The hon. and learned Gentleman will probably recall that I produced a case which, I admit, was an outstanding case—in fact, one which had gone to the North-Western Consumers' Council—in which the bill for electricity supplied to particular premises amounted to £ 7 17s. The landlord recharged for that electricity to various tenants and received £ 37 5s. 10d.

I think that that probably was an exceptional case, but it is true, particularly in London where there are so many houses divided up into separate tenancies, that there are many cases where overcharging of one kind and another occurs. I recognise that the landlord possibly has meter rent to pay and something in respect of wiring and matters of that kind. I do not take the view that he should charge his tenants exactly the same amount as the electricity board charges him for the supply. His additional charges obviously must be met.

The case I referred to was one of blatant overcharge and could not be justified in any circumstances. If a tenant is overcharged in that way, it is difficult for him to take his case to court to get the money back. My right hon. and learned Friend the Member for Newport knows about these matters very much better than I do, but I suppose that the court procedure would be costly or inconvenient, and, in any case, difficult for the ordinary citizen, who, generally, has no desire to go to a solicitor or to incur expenses by going to court, with all the problems and inconveniences that that would mean. The ordinary individual is occupied with doing his work from early morning until reasonably late at night. His wife usually is also unwilling to get herself involved in these proceedings.

Is this the only way in which people who overcharge for electricity can be dealt with? Could not the onus of taking action be put upon the board which supplies the electricity? Could it not protect the consumer of whom I am speaking, the person living with his family in a few rooms in a large house? Would it not be sufficient for this consumer to say to his electricity board, "This is the bill that I have received from my landlord. On the basis of the unit charge it is obviously greater than it ought to be", and could not the board then take action to protect the consumer? Is that course too difficult? Would it involve the board in too much expense? We are trying to protect the consumer who is exploited by an unscrupulous landlord. I am not sure that the consumer can protect himself.

I am thinking of millions of very ordinary people. We are saying to them, "If you are overcharged you can go to the court and claim all these overcharges. I do not think that the average person wants to go to court and go through all the legal process, but instinctively holds back. Therefore, the proposed new Clause does not provide adequate protection. This is obviously a legal matter and there may be legal arguments about it. I do not profess to have any experience of that sort. All I am concerned about is the blatant overcharging by unscrupulous landlords.

There has been a very large influx of Jamaicans and other people into the country. These are the sort of tenant who will be exploited by people who take large houses and overcharge in every possible way, depending on their tenants' ignorance of the law. We should protect consumers by a body more powerful than an individual who goes to court. That would be the right way to do it. I say this subject to the opinions of those who are well versed in the law and know whether my suggestions are practicable.

Will the Minister see that the consultative councils are made well aware of their duty to protect the consumers of electricity? They should not necessarily wait for consumers to complain. Many of them are aware of the practices that go on, and it would not be unreasonable for them to ask the area boards to check what is happening in the case of resale in some of the houses which have been turned into apartments. The boards and the consultative councils should be energetic about this and take upon themselves the responsibility of seeing that protection is given in these matters. They should make use of the powers which the right hon. Gentleman proposes to give to the boards for the protection of the tenant and they should see that the powers are efficiently exercised.

4.15 p.m.

I conclude as I began. The average person is not likely to be advantaged very much by the fact that he can go to court to recover an overcharge. Suppose that the excess is only £ 1. Is it worth going to court to recover it? Who is to pay the court costs and the solicitors. to recover that £ 1? Could not a system be devised for the consultative councils or the boards to take action on behalf of consumers who are being exploited? I leave that point with the hon. and learned Gentleman. I have no doubt that some of my right hon. and learned Friends will deal with the legal points that I have raised, but I hope that we have the principle right: it is protection of the consumer. That is what we are anxious to secure.

Mr. S. Storey (Stretford)

As I am responsible for instigating the action which was taken in Committee by my hon. Friend the Member for Clitheroc (Mr. Fort) on behalf of the consultative councils, which has led to this new Clause appearing on the Notice Paper, I thank my right hon. Friend and the Parliamentary Secretary for placing the proposed new Clause before us.

The need for the Clause was made out fully in Committee and was acknowledged by the Parliamentary Secretary. I shall, therefore, not take up the time of the House by dealing with it. The consultative council for the north-west area appreciates the action taken by the Government. This is probably the answer to the right hon. Member for Blyth (Mr. Robens), who thought that consultative councils should be active in this matter. It is entirely because of the action taken by the North-Western Electricity Consultative Council that anything has been done.

I hope that the proposed new Clause will be the means of dealing with the kind of landlord whom no hon. Member on either side of the House can defend.

Mr. William Warbey (Ashfield)

We are glad that the Government are providing some form of protection for the consumer against exploitation, but we are not satisfied that they are doing enough to meet all the possibilities.

My right hon. Friend the Member for Blyth (Mr. Robens) referred to certain defects; I want to call attention to another, which is that the Clause is only permissive and not obligatory. I believe that the hon. Member for Clitheroe (Mr. Fort) desired to make it obligatory in the Amendment which he moved in Committee.

In justifying the drafting of the proposed new Clause and its departure from the obligatory principle, the Minister tried to say that this matter affected only a few areas. In Committee, he at first suggested, if I remember rightly, that complaints had come only from one area board, the North-Western Electricity Board, but he has since conceded that complaints have come from other areas, particularly the south-east area and the London area.

I would be extremely surprised if there were any areas in which this type of abuse is not practised. It would be surprising if the type of morality which permits this kind of exploitation were confined to a few areas. If the general experience of hon. Members in their constituencies were brought together, I am sure that many examples would be found to show that the practice extends widely over the country.

Nor is this abuse confined to the landlords of private dwelling-houses. It is a form of exploitation which is also practised by the landlords of public hotels. All hon. Members have to travel about the country in the exercise of their Parliamentary and political duties and have the experience—pleasant or otherwise—of having to stay at a number of hotels.

I have stayed at a number of hotels in the Midlands and elsewhere, outside the areas covered by the boards which were referred to by the hon. and learned Gentleman, where I sought to obtain heating for my bedroom by putting coins into a slot meter. I have been astonished at the variety of coins one needs to have at one's disposal and the amount of electricity supplied in return for any given coin. The slot meters vary from I d. to 6d. or Is. and the quantity of electricity delivered in return for a coin also varies very considerably.

Mr. Nabarro

Is not the hon. Member neglecting to observe that a part of the cost charged in the form of the coin put into the meter is specifically for the purpose of reimbursing the owner of the appliance for providing that service and a part of it is in respect of the amortisation of the appliance itself?

Mr. Warbey

I am not neglecting that in the least, but I am pointing out that there is a tremendous variety in the charges made by the proprietors of hotels. If I am asked, as I have been in some cases, to put a ls. in the slot to get one unit of electricity, I say that I am being grossly exploited, but that happens in many cases. Sometimes I may desire only half an hour's supply of electricity—half a kilowatt would be quite sufficient to meet my needs—but, because the slot takes only ls., I have to put in a ls. to get ½ d. worth of electricity. I might be lucky and find that some electricity has been left over by a previous occupant of the room, hut, unfortunately, that rarely happens.

This form of overcharging goes on in very many parts of the country in private houses and public places. Power to put an end to it ought to be made obligatory on all the area boards.

Mr. Richard Fort (Clitheroe)

I have more confidence in the consultative councils than has the hon. Member for Ash-field (Mr. Warbey). If those councils in other parts of the country are not reporting abuses such as we have heard of in the north-west, I very much wonder whether such abuse has spread outside the north-west because, if the councils are doing their jobs at all, by this time they should have heard of any cases in their areas.

I thank my right hon. Friend for having introduced this Clause in conformity with his undertaking in Committee when I moved the original Clause, which laid compulsory duties on the area boards. As the complaints seem to be limited to the north-west, I suggest that we should leave it to the area boards to deal with the situation as they find it in their areas instead of trying to give a flat order to cover the whole country.

There is one point of which I hope the area boards will take notice, on a matter which was raised by my hon. Friend he Member for Kidderminster (Mr. Nabarro) in an intervention. In determining the different maximum charges under subsection (3) of the new Clause, allowance should be made for charges which landlords are entitled to make for equipment with which they have supplied tenants—such as refrigerators and electric stoves. To try to leave that consideration out of account would be as unfair to landlords as the present arrangements are to tenants.

I believe that if they will take notice of this the courts are the best places to determine whether there has been overcharging in conformity with the list of maximum charges which the board can lay down if it wishes. I hope it will take account of the need for a charge for hire of equipment. With that qualification, I wish to thank my right hon. Friend for having carried out his undertaking in a way which certainly gives me satisfaction and which, I believe, will also give satisfaction to the North-Western Electricity Consultative Council.

Mr. Nabarro

I wish to say a word or two on the subject matter of the intervention which the hon. Member for Ash-field (Mr. Warbey) was kind enough to allow me to make in his speech.

This is a very complicated matter. The tenor of the speech of the right hon. Member for Blyth (Mr. Robens) seemed to be a general attack on landlords and profiteering by landlords. In fact, the case which was quoted in Committee by the right hon. Member, as reported in the OFFICIAL REPORT, in column 605, to which the right hon. Member alluded briefly this afternoon, was to the general effect that a landlord had bought electricity at seven-eighths of Id. a unit and sold it to tenants of fiats at 5d. a unit.

That seemed to be an extraordinarily wide margin. In fact, the case was lifted verbatim from a brief circulated, I understand, by the North-Western Electricity Board. It is quite possible that the margin in that case was much too wide—

Mr. Warbey

That is the point.

Mr. Nabarro

—but I should not like hon. Members to believe that there should not be a margin, or not even a substantial margin, because in certain cases a landlord provides an electric refrigerator, an electric fire, or several electric fires. He might well provide several electric lamps and other electric appliances, all of which he has to purchase. In respect of all those appliances he has made the investment and is properly entitled to demand a modicum of amortisation upon any unit of electricity which he sells.

I say, therefore, that as, quite clearly, conditions in a matter of this kind vary a very great deal up and down the country. I should dislike seeing area boards trying to take account of the amount of amortisation that a landlord should be allowed to collect in respect of all units of electricity he resold in what my hon. and learned Friend the Parliamentary Secretary said was so largely a matter concerning domestic consumers. In that respect, it is a matter of special difficulty.

It might be a matter of controversy between the two sides of the House as to how a landlord should recover in respect of amortisation or depreciation of electrical appliances he has properly provided as part of the tenancy agreement. Should he seek to collect the sums involved as part of the weekly rent, or as part of the resale price for the electricity? I am not sure which is properly the statutory method of doing that. If my right hon. Friend. or whoever answers from the Treasury Bench, cares to enlighten me I shall be grateful. They are the alternatives. In the country I have discovered that both recourses are employed by landlords, but that does not necessarily signify that there is overcharging.

I have one final short point to make. I think that my hon. and learned Friend the Parliamentary Secretary gave me short shrift when I intervened to ask him what he meant, in subsection (2), by … secure adequate publicity … What does that mean? Does it mean a two-line classified advertisement in the local paper or a 9 in. treble-column advertisement? Does my hon. and learned Friend wish to intervene?

Mr. Renton


Mr. Nabarro

My hon. and learned Friend mumbled something and I thought that he was giving me the answer.

I should like to know what is meant by adequate publicity for it I am very inexperienced in the matter of the statutes, but in my very limited experience I have not come across this form of words before. My hon. and learned Friend, with his extensive experience of these matters, will no doubt be able to quote respectable precedents for the employment of these words and, if so, I should like to know what they are.

Mr. Hayman

I am glad that the hon. Member for Kidderminster (Mr. Nabarro) suggested to the Minister that he might take into account not only the amortisation charges for gas and electric meters, but also the fact that hotel proprietors and others may very well include those items in their charges.

4.30 p.m.

Mr. Renton

If I may have the leave of the House to do so, I will reply to some of the points which have been raised. I think that perhaps the most fundamental one was that raised by the hon. Member for Ashfield (Mr. Warbey) in which he pointed out that this Clause is only permissive, and suggested that the abuse which it is designed to cure is to be found throughout all the area boards.

There is a conflict of evidence about that. The hon. Gentleman maintains that it is found everywhere, whereas we maintain that it is found in a few areas. Quite candidly, I do not think that it matters very much because there will be power to cure the defect wherever it is found, so that if all the boards choose to use their powers and the whole of the country needs to be covered, well and good. If it is not found necessary for all the boards to use their powers, then only those boards which find it necessary to do so will do so.

Mr. Palmer

Was not this power made compulsory in the Gas Act?

Mr. Renton

It was compulsory in the Gas Act, I understand. I hope that it will not be out of order to discuss the Gas Act to a limited extent. It was compulsory in the Gas Act partly because the habit of domestic resale prevailed throughout all the areas of the country, whereas that has not to anything like the same extent been the case with regard to electricity. In any case, hon. Gentlemen opposite, when considering the Electricity Act, did not deal with this matter at all. We at least are filling in that gap.

The right hon. Member for Blyth (Mr. Robens) asked how the consumer could best be protected and said that he was anxious about that, as I am sure we all are. I concede that there are several ways of protecting the consumer. We could have criminal penalties against the landlord but that would not give necessarily very much satisfaction to the tenant, although it might act as some kind of sanction against the landlord. We could cut off the landlord's supply but that would hit them both and not give any satisfaction at all to anybody.

I suppose that when the right hon. Gentleman said that the area boards themselves might take some sort of action he was contemplating that they should all the time be going round to their domestic consumers, undertaking inquiries and checking abuse wherever they found it. That seems to me to be rather an unnecessarily complicated process. We have followed the much more simple and direct, and, as I say, effective solution of saying that if a tenant is overcharged by his landlord, then he might recover the excess in the county court —because that is where it would be recovered—and if the landlord puts him into court he has a good defence to the extent that he has been overcharged.

The right hon. Gentleman asked for enlightenment about this business of going to court. I should remind him that the county court scale of charges is not very high. In the case of amounts small enough for the registrar to hear the case, they are even smaller; the successful party recovers costs; and the legal aid scheme has now been extended to the county court. So I do not think that anyone need fear that he would be unable to enforce his remedy in court.

My hon. Friend the Member for Kidderminster (Mr. Nabarro) asked whether there was a precedent for the use of the words "adequate publicity". He will be interested to know if he turns to Section 37(2) of the 1947 Act that he will find the same words used there.

Mr. Nabarro

That is not respectable. Section 37(2) of the 1947 Act refers to the Central Authority, and says that it will secure adequate publicity for them. We are not talking about the Central Authority, we are talking of a host of area boards. That is a very different proposition.

Mr. Renton

I must confess that I cannot point to the exact Amendment at the moment, but my hon. Friend will find that there is an adaptation to Section 37 of the 1947 Act which should put that matter right. At all events, he was asking me for a precedent for the use of those words and that precedent is in the 1947 Act. Indeed, I think that if the area boards pursue the policy that they have done in the past for the publicising of their charges, which, so far as I know, has given satisfaction, and uses the same method of publication in regard to these types of charges, my hon. Friend's point will be met and his fears, such as they are, will be allayed.

Mr. Nabarro

I thank my hon. and learned Friend very much.

Mr. Renton

The hon. Member for Kidderminster also asked whether in those cases in which the resale charge was included in the rent, the matter could be adequately covered by this Clause. As I see the position, it will work out in this way. If a landlord decides that instead of making a separate charge for the resale of electricity he is going to include it in an inclusive rent and the tenant takes him to court for charging an excess on electricity, the landlord would be put to the burden of proof in the court that that part of the rent which represented electricity charges was not excessive. After all, the courts are not unaccustomed to having to disentangle various items in rent and in this case that would not be especially difficult for them to do.

I hope that, these points having been answered, the House will feel disposed to accept the new Clause. May I say how grateful I am to the hon. Member for Stretford (Mr. Storey) for inspiring my hon. Friend the Member for Clitheroe (Mr. Fort) to put this matter forward and fill in a gap in the old Act.

Question put and agreed to.

Clause read a Second time, and added to the Bill