HC Deb 13 February 1964 vol 689 cc541-3
19. Mr. Barnett

asked the Minister of Power when he expects to complete his inquiries on the question of the control of the price at which electricity supplied by area electricity boards is resold through privately operated meters.

Mr. Peyton

My right hon. Friend has received a letter from the Electricity Council explaining why area boards have not so far used their powers under Section 29 of the Electricity Act, 1957. I am arranging for it to be included in the OFFICIAL REPORT.

Mr. Barnett

Would not the Parliamentary Secretary agree that there is a very strong case for this provision in the Electricity Act, 1957, to be implemented? Is he not aware that I brought this matter to his attention a year ago, with considerable support from other hon. Members, because there are occasions when the much as 100 per cent. or even 200 per cent. on the original price? Does he not believe that there is a very strong case for resale price maintenance in electricity?

Mr. Peyton

I am very well aware of the interest that the hon. Gentleman and many other hon. Members have taken in this matter. I accept that it is a very serious and difficult problem and that there are abuses. I hope that he will read the letter to which I referred from the Chairman of the Electricity Council. The Council would be most willing to produce a system which would cope with these abuses, but it would be equally anxious in curing present ills not to produce even greater anomalies.

Following is the letter:


30, Millbank, London, S.W.1

5th February, 1964.


The Rt. Hon. Frederick Erroll, M.P.,

Minister of Power,

Thames House South,


London, S.W.1.

Dear Minister,

Maximum Charges for reselling Electricity Supplied by Electricity Boards

In response to your request, I set out below the main reasons why the Area Boards have not so far used their powers under Section 29 of the Electricity Act, 1957, to fix maximum charges at which consumers of electricity may resell the electricity to their tenants.

The main difficulties in fixing maximum resale prices in the Electricity Supply Industry are:

  1. (a) Most landlords will be purchasing electricity on tariffs which have either a fixed quarterly charge or a primary block of units at a relatively high price followed in each case by a low unit or running charge: this means that they may be paying widely differing average prices per unit depending on whether their consumption is small or large. To quote typical figures the average price which a landlord is paying may well vary from about 6d. per unit to a figure as low as 2d. per unit or even less. It is therefore extremely difficult to fix general maximum resale prices which will adequately safeguard the tenants and at the same time avoid injustice to many landlords.
  2. (b) Any attempt to relate the maximum resale price to the average price which the landlord himself pays, runs into difficulties because a high proportion of electricity resold to tenants is controlled by prepayment meters owned by the landlords, and these meters have to be calibrated at a predetermined price per unit. If maximum resale prices were based on the average price paid by the landlords (which would be variable this would inevitably involve 543 landlords in giving rebates or collecting supplementary charges to correct for the price collected by the meter. Such an arrangement would be difficult to work bearing in mind the many thousands of short tenancies where the occupants would have left the premises before the landlord was able to take the appropriate action. Frequent recalibration of prepayment meters is also impracticable.
  3. (c) If Boards were to fix maximum resale prices the Courts would doubtless require evidence of the accuracy of meters on which complaints were based. Meters owned by the Electricity Boards have, by law, to be certified but there is no such provision governing meters belonging to landlords—many of these meters are of older patterns which would not be capable of certification. The provision of modern meters in all cases would be a considerable task, the cost of which would presumably fall on the landlords in the first place.

The Council and Area Boards recognise that there are opportunities for abuse and they have examined a number of possible solutions, none of which seems wholly satisfactory. They are willing in principle to take action if a satisfactory solution can be found, and it would help them to gauge the size of the problem if cases of apparent abuse could be brought to their attention or that of the Consultative Councils.

The Area Boards and Consultative Councils will continue the practice of giving advice to tenants and landlords who refer the matter to them.

Yours sincerely,