HC Deb 14 February 1963 vol 671 cc1619-28

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

Sir Donald Kaberry (Leeds, North-West)

I wish to turn the attention of the House away from the consideration of contracts between employers and employees towards a consideration of matters which exist between the Yorkshire Electricity Board and the Yorkshire Electricity Consultative Council. I do so because something like an electric shock was administered to all users of electricity in the area of the Yorkshire Electricity Board at the beginning of January this year.

Electricity tariffs were to be increased for all consumers, and I think it is right to say that there has been widespread resentment at the timing and the manner in which this action has been taken. I believe that most of my hon. Friends who are representative of constituencies within the Yorkshire Electricity Board's area have been inundated with correspondence from angry victims. I therefore raise the question of the part played by the Consultative Council in the planning of this increase.

The Consultative Council is established in this way. Section 7 of the Electricity Act, 1947, as amended by Section 7 of the Electricity Act, 1957, authorised the Minister to appoint consultative councils within the area of every electricity board and in appointing the consultative councils the Minister was directed by the Statute to have regard to those recommended as having both adequate knowledge of the requirements of the interests to be represented and also the ability to exercise a wide and impartial judgment on the matters to be dealt with by the council.

They were charged with the duty, among other things, of … considering any variation in tariffs and the provision of new or improved services, and of considering generally all matters which are the subject of representations made to them by consumers of electricity in the particular area "…

It being Ten o'clock, the Motion for the Adjournment of the House lapsed, without Question put.

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

Sir D. Kaberry

The direct question I want to ask my hon. Friend is a very simple one. If the consultative councils are to be the watchdogs of the area electricity boards, who is to be the watchdog of the watchdogs if they do not appear to be taking care of their charges? It is in this dilemma that I turn to the Minister and to the Parliamentary Secretary, because I suppose they stand in the nature of chief kennel masters.

I direct my particular attention to the Consultative Council within the area of the Yorkshire Electricity Board. There is a chairman who, I think, has been chairman for several years, and is a member of the main Electricity Board. There is a deputy chairman, and some 26 other members who come from various towns and cities spread across the whole of the Board's area. There are seven area district committees, with 83 members in all, so that there is a very large body of people representative of all elements within the Board's area.

In page 46 of its report for the year ending 31st March, 1962, the Consultative Council stated: For once there is in this report no reference to a revision of tariffs but the Council are fully cognisant of the fact that tariffs will occupy a good deal of their time in the near future. They accepted the proposition that there would he a necessity to increase electricity charges. It went on to state: The Council will scrutinise very closely any proposals for increases to see that these are fairly shared among the different classes of consumers. I ask my hon. Friend to pay particular regard to those closing words inset … to see that these"— the increased charges: are fairly shared among the different classes of consumers. I should like to know how closely the Consultative Council scrutinised the proposals that were put before it in the concluding months of last year by the Yorkshire Electricity Board, and how it dealt with the matter so that those increased charges could be fairly shared among the different classes of consumers.

I should like to know, for example, why it was apparently the Consultative Council which took the initiative in requesting the Board to abolish the old idea of making the basic amount payable for electricity dependent on the number of rooms in the house, although I will readily accept from my hon. Friend an argument that some changes had to be made.

I have had, as I suppose other hon. Members have had, a considerable correspondence with the chairman of the Yorkshire Electricity Board, and I want to acknowledge the courtesy he showed me in giving me the utmost detail in answering the complaints I received from many disgruntled consumers. I was given a copy of the Board's Press statement which, amongst other things, said, All the new tariffs have been the subject of long and detailed discussion with the Consultative Council, its Tariffs Sub-Committee and its seven Area Committees over the past two or three months. We were told that the Consultative Council made a number of suggestions for amendment of the Board's original proposals, which the Board agreed to accept.

At the last meeting of the Consultative Council a resolution was animously approved that a letter of appreciation should be sent to the Board for the closer liaison with the Board than had appertained hitherto. I am somewhat concerned about the full implication of this phrase, "closer liaison". We certainly want it, but I wonder how close it has really become. I begin to wonder whether the Consultative Council has, to quote the words of one of my constituents, become a cosy and complacent little crowd who were very happy to follow the orders of the Area Board. I have been assured by the chairman of the Area Board that it was only after long debate that the Consultative Council decided to rectify the anomalies which the previous charges were alleged to involve. But I want to know at what point of time the Consultative Council was finally—I quote the words of the chairman of the Area Board— reluctantly persuaded that there was no preferable alternative. How hard was the fight put up by the Consultative Council as watch-dog for the consumers throughout the Board's area? Did it tell the Area Board that it could cut out a lot of the spending which has been a matter of controversy throughout the Yorkshire area for some years, that it could cut out unnecessary advertising urging people to "Go electric", that it could cut out unnecessary expenditure on the setting up and maintenance of showrooms and displays urging householders to "Go electric" while tariffs are low, not mentioning that the tariffs would go up when people had made the change?

I do not want to go in detail into matters of day-to-day administration, nor do I wish to trepass upon a matter which is at present the subject of investigation by the Select Committee on the Nationalised Industries which is now examining all the implications involved in the nationalised electricity undertakings. I am a member of the Select Committe, and, prior to his high preferment, so was my hon. Friend the Parliamentary Secretary who is to answer tonight. We shall await its report with interest. In the meantime, however, the unfortunate users of electricity in the Yorkshire area, having been persuaded by the Board, by the subtlety of its advertising, to "Go electric", now find themselves afflicted by substantially increased tariffs.

No doubt, many consumers relied upon the belief that the Consultative Council was their watch-dog and would prevent such a course of events. What would have happened if the Consultative Council in Yorkshire had refused to accept the tariff increases proposed by the Area Board? Would the charges have remained as before? Will the Consultative Council now have regard to the present mood and feelings of consumers?

I understand that there are about 1,400,000 domestic consumers in the Board's area and it is estimated by the Board that of these about 76 per cent. will have increases under the new tariff of, we are told, not more than 1s. a week. Nobody accepts that statement. No consumer who has written to me or to any of my colleagues believes that their watch-dog members on the Consultative Council could believe such to be correct.

I shall refer now to some of the complaints I have received about the increased charges. I have heard from retirement pensioners, people with low incomes, from a blind person who had changed to electricity for heating because he dare not risk oil heaters. Many wrote to say that they had never heard of the area Consultative Council. Some said, "What a time to make increases, when the weather is so bitter", Others had gone to small new houses which were all-electric. One of these people wrote to me and said that he was just a silly fly drawn into the electricity spider's web to be entangled and then stung". Many could not understand how it could be alleged that the burden of the increases had been spread fairly over the differing classes of consumer while, they feel, so many economies could be made by the Board. Most ask why the new charges could not be levied in stages so as to soften the blow for many people who will be penalised by this sudden decision.

I ask the Parliamentary Secretary whether the Consultative Council will meet again and consider all the objections to the increases which have been made. In this regard, I hope quite sincerely that it will have the closest liaison with the Area Board. I hope that the Council will demonstrate that it is not, in fact, a cosy and complacent little crowd prepared to have its objections readily and easily overcome.

How are members of the Consultative Council recruited? Where does the Council meet? Wilt the Press be allowed freely into its chamber so that its deliberations may be published? Can the public go and have a look at the Council at work? It may be that, in theory, according to Statute, the Council is the watchdog of the consumer. But I want it to be so in actual practice. I want it to do more than bark. I want it to have a bite. and, if it can neither bark nor bite in Yorkshire, I ask the Minister to give us a new pack.

10.12 p.m.

The Parliamentary Secretary to the Ministry of Power (Mr. John Peyton)

My hon. Friend the Member for Leeds, North-West (Sir D. Kaberry) has raised the subject of electricity prices, particularly those in Yorkshire. I think that he expects some comfort from me. I wish to make it clear that he will not get it. He said that all Yorkshire had had an electric shock. Obviously he has had one himself. From some of the things which he has said, I should like to hazard at least the suspicion that it has upset his judgment slightly—I hope only temporarily.

My hon. Friend asked me some simple questions, such as who will be the watchdog of the watchdog? Presumably my hon. Friend will volunteer for this task. I can think of no one more suited for it, and, of course, my right hon. Friend and I will be very happy to welcome him in his various appearances in this capacity in the near future.

I wonder whether my hon. Friend did either the industry or the public a very great service, even though he was good enough to acknowledge the courtesy of the chairman of the Yorkshire Electricity Board, in questioning what the Consultative Council meant in referring to a "closer liaison with the Board" and then quoting this remark about a "cosy and complacent little crowd". It is so easy to quote rather abusive and offensive remarks about voluntary organisations such as this.

It is worth spending a moment in considering the people on the Council. There is a chairman, who is paid because he is a part-time ex-officio member of the Board, and there is a deputy-chairman. There are eleven local authority representatives, seven of whom come from municipal boroughs, two from urban districts and two from rural districts. There are fourteen representatives of other interests—five industrial and commercial, one agricultural, two trade unionists, four women's organisations and two professional people. I hazard a guess that all these people have one thing in common, namely, that they are all domestic consumers of electricity. They are ordinary people and they are not highly rewarded. Except for the chairman, none of them is paid. They try to do their best to safeguard, as is their duty, the interests of the user of electricity.

My hon. Friend has said how hard was the fight put up by the Council, and he brought in the question of unnecessary advertisements, which I do not want to go into at great length. He referred to the fact that he was a member of the Select Committee on Nationalised Industries. I had the privilege of being a member of that Committee for some time before I reached my present position. During that time, I may not have learned much, but I learned something of the problems of nationalised industries and I learned a little of some of the difficulties which they face. I very much hope that my hon. Friend, during what, I am sure, will be his distinguished and successful membership of that Committee, will see something of the difficulties with which these people have to deal.

My hon. Friend asked, among other questions, whether the Consultative Council will meet again. I can he categorical and say that, despite my hon. Friend's onslaught tonight, the Council will certainly meet again. I very much hope that it will maintain close contact with the Board, and, through that contact, will maintain an influence on the Board, which in the past, it has been able successfully to employ.

My hon. Friend asked what sort of part was played by the Council in this matter. Of course, there was full consultation on all these issues. Some of the suggestions that were put forward to the Board were accepted. Despite the initial plans and intentions of the Board, a uniform first block of higher priced units was put forward by the Council and was accepted by the Board as being sensible. The Council also objected to the acceptance of the mere size of a house as being a suitable criterion upon which to base electricity prices and the Board accepted the Council's view, I think rightly.

My hon. Friend asked what sort of resistance was put up by the Council to these proposals which have communicated this horrid shock throughout Yorkshire. What is the Council expected to do in these circumstances but to look fairly and uninhibitedly at the proposals which are made? This the Council did. Examining, as it was bound to do, the financial position of the Board, it came to the conclusion, which I believe was inescapable, that there was no preferable, or, indeed, possible, alternative and that the old rate of 9d. per unit was wholly uneconomic.

The Council adopted instead the tariff, which is now general in the North, of 1.3d. per unit. I remind my hon. Friend that the general tariff in the South is much more like 1.5d. per unit. I shall not go through all the details of the tariffs, but the off-peak tariff remained at 725d. per unit.

I wonder what my hon. Friend is saying in raising this complaint tonight.

Sir D. Kaberry

May I help my hon. Friend by referring again, because he does not seem to have grasped the point, to the very words of the Consultative Council about seeing that the increased charges are fairly shared among the different classes of consumer? That is the point that I am making.

Mr. Peyton

I am coming to that. My hon. Friend's first point is that this immensely steep increase should not have happened at all. One possible view that I would commend to him as worthy of attention is that the reason why the increases were so sharp is that they should have happened before and had been too long postponed.

My hon. Friend asked me what other action would have been possible had the Council not conceded that the view expressed by the Board was the right one. The answer, as I think my hon. Friend knows very well, is that under Section 7 of the Electricity Act, 1947, representations could have been made by the Council to the Electricity Council, which thereafter would have been free to advise. Alternatively, the Council could have made representations to my right hon. Friend, and I want to make it clear that he is not free to act in such matters unless representations are made to him. But in this case the Council, I think very reasonably, decided that there were no grounds on which it could adopt either of those courses. So, convinced that it was the right and proper thing, the Council decided, having made certain recommendations, some of which were accepted, to endorse the Board's decision.

My hon. Friend has told us quite plainly that none of his constituents who has written to him is prepared to accept the figure which has been put about by the Board, that 76 per cent. only of the users of electricity will be paying more than 1s. a week. It is probably true to say that only those people who will be paying the exceptionally larger increases have been moved sufficiently to write to my hon. Friend and to other hon. Members on both sides of the House to complain about the matter.

I want to go at some length into the reasons which led the Board in the first place to promulgate the increased tariffs and the Consultative Council to agree to them. First, there was the usual one, that labour and material costs have increased. Then there is the White Paper which set out the Government's views on the financial obligations of nationalised industries. I know that my hon. Friend is very well aware of its contents, but I must just weary him and the House with a repetition of its main purposes.

The first purpose, as my hon. Friend knows, was to secure the, so I should have thought, desirable objective that users of electricity should themselves provide a reasonable contribution in terms of capital to meet the demand which they themselves have had and are having a large part in creating. The second purpose was that the level of earnings in a nationalised industry, particularly the electricity industry, should be a little nearer the average earnings of industry on the capital invested.

Even under the present price increase, against which my hon. Friend has raised such a very sharp complaint, the Board will be earning a surplus of only £4.6 million per annum in each of the next five years. That is quite a modest return on the capital invested. It will still be obliged to borrow 42 per cent. of its capital requirements. He and the House must face this. It is always a disagreeable choice. No one likes to be asked to pay increased prices for any commodity, let alone one so essential as electricity.

On the other hand, if a customer is not to pay for what he is using, if he is not to produce some share of the capital required by this rapidly expanding industry, who is to provide it? We are faced with only one alternative—the taxpayer. Here we have the bewildering and extraordinary fact that again and again a customer is unable to identify himself with that same person, the taxpayer. The customer who objects to paying wishes to place the whole burden on the taxpayer. In this case the taxpayer is still going to provide 42 per cent. of the capital required by the Board. It does not seem to me unreasonable to ask the user of electricity to provide the rest.

My hon. Friend referred to the distribution of these extra charges. It is easy to make a great deal of this. The trouble under the previous dispensation was that a great many people had been getting their electricity too cheaply. It was not their fault, but it should have been remedied before. That is no comfort to them, however. Equally, I think that the Board was right in concluding, and the Council was right in endorsing, that there was no excuse for perpetuating a situation in which a few had, at the expense of the many, an unreasonable rate for their electricity.

Certainly some sections of the people are faced with a sharp and painful increase. I accept without qualification that nobody likes that. My hon. Friend has at least got behind him the indignation of a great many people who have been surprised by this unpleasant turn of events. But I think the Board was entirely justified in this instance and that the Council, looking at the facts, and moved not by a desire to make a noisy agitation and a steaming complaint but by a desire to protect the public as a whole by ensuring that the burden of charges is evenly spread, was abundantly justified in endorsing the Board's decision.

I should like Ito say how conscious my right hon. Friend and I are of the very valuable and far too often wholly unthanked work done by those councils, and in particular by the Yorkshire one.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes past Ten o'clock.