§ It shall be a condition of any grant made from the National Loans Fund to the Electricity Council, the Electricity Boards of England and Wales and the Scottish Electricity Boards that no statement of account for supplies of electricity shall be furnished to any consumer of any Board unless the charge made in that account is related to the actual consumption of electricity as recorded on the meter.—[Sir G. Nabarro.]
§ Brought up, and read the First time.
§ Sir G. Nabarro
I beg to move, That the Clause be read a Second time.
This Clause affects every one of the consumers of Britain, many of whom resent the size of their electricity bills. The operative words of the Clause arethe actual consumption of electricity as recorded on the meter".For the first time in this House I launched an attack on the nefarious and inhumane practice of many nationalised industry boards in deliberately inflating consumers' accounts for reasons best known to themselves, but generally because of the specious plea that they cannot gain entry to the electricity meter to ascertain the exact number of units consumed in any chargeable accounting period.
I have been working on this matter now for a month, ever since the unfortunate death of Mrs. Ann Hemingway in Coventry, who committed suicide as a result of anxiety arising from depression caused by the fact that she received an electricity bill for approximately £18.50 compared with an actual meter recording of about £1.50. It was no mistake. It was a bill deliberately inflated by a junior official, and it caused an old woman of 68 to take her life.
The Committee might be acquainted with what has been said and done in that period of a month, so grave is this case, and because apparently it is a practice which is prevalent nearly all over Britain not only on the part of electricity boards, but also on the part of other nationalised boards. I said during the 1703 Second Reading debate on 1st February that I had made a comment to the Worcester Evening News on 13th January as follows:It is simply monstrous that a public corporation can hound a woman to her death on account of a few pounds for her electricity bill.I concluded my speech with these words:I want to prevent other old ladies committing suicide on account of anxieties arising from the bullying and tyrannical behaviour of monopoly, nationalised boards, behaviour for which they ought to be condemned by every hon. Member.I resumed my seat at that point. That was the peroration of my speech.
I was followed by the hon. Member for Bristol, Central (Mr. Palmer), my companion in the Institute of Fuel. Although the hon. Gentleman is a Socialist and a strong supporter of nationalised industry as he has told us tonight, he opened his speech by referring to what I had said, and went on:… While some of us may doubt his economics, no one would doubt his humanity. As one who has had a long connection with the electricity supply industry, I agree with what he has said about this practice of overestimating meter readings. I can see no reason for doing so even if from time to time meter readings have to be estimated. They should be pitched on the side of underestimation."—[OFFICIAL REPORT, 1st February, 1972; Vol. 830, c. 354–6.]That is in contra-distinction to the deliberate policy of gross inflation and overestimation of meter readings for the purposes that I have described.
As this is such an important case, perhaps I should say what has occurred since I took it up first. On 17th January, the day that the House re-assembled after the Christmas Recess, I put the following Parliamentary Question to my hon. Friend the Minister for Industry:… having regard to the suicide of a lady in Coventry, who received a bill for electricity supplies, inflated by the electricity board to draw attention to her overdue account, whether he will issue a general direction to electricity boards to cease such practices forthwith.My hon. Friend replied, and a very unsatisfactory reply it was. My Question was set too low on the Order Paper to have an oral answer, so I had no chance to put a supplementary question. My hon. Friend's written reply was:I fully share the hon. Members' distress at the tragic death of Mrs. Hemingway. The 1704 East Midlands Board is investigating the case and will be submitting a report to me. Also, the East Midlands Consultative Council has confirmed that, as provided for in the statutory procedures, it is discussing with the board the problems arising from estimated accounts. It is open to them to make representations to the Electricity Council and to me. I doubt whether a direction would be appropriate."—[OFFICIAL REPORT, 17th January, 1972 Vol. 829, c. 14–15.]In my Second Reading speech I said that I took the opposite view and thought that a direction was exactly appropriate.
I tabled a further Parliamentary Question for 7th February, but in the meantime my hon. Friend had thought fit to make a Press statement. He was kind enough to furnish me with a copy before the Second Reading debate. He will remember that the time available was reduced by an emergency debate on Ulster to two hours and 18 minutes for the Second Reading of this important Bill. In order to shorten my speech on that occasion I decided to defer the quotation of my hon. Friend's statement until this evening, for strategic and time-saving reasons.
I quote it in full now in order to satiate my hon. Friend:The Minister for Industry, Sir John Eden, today met the Chairman of the Electricity Council, Sir Norman Elliott, and the Deputy Chairman, Mr. R. F. Richardson. The purpose of the meeting was to discuss the billing and collection procedures of the Electricity Boards. These procedures are the responsibility of the Boards, but the Minister wished to express his concern about recent Press reports linking them with the tragic deaths of two consumers. One of these cases had occurred in the area of the East Midlands Board and had been the subject of Parliamentary Questions on 17th January. The other case was in the area of the Midlands Board. The Chairman of the Council told the Minister that the Council and the Boards involved shared his concern. The industry was now carrying out a review of billing and collection procedures. The implications of this review, given added urgency by the recent cases, would be discussed at a meeting of the full Electricity Council on 9th February and at the Council's meeting the following day with the Chairmen of the Electricity Consultative Councils. The Minister would be kept informed of further steps.11.0 p.m.
In the vernacular I described that statement as "flannel" and of very little constructive value. I wanted this unauthorised practice banned altogether, and I therefore proceeded by asking 1705 further penetrating Parliamentary Questions. The next one was taken on 7th February in my name. It read thus:Sir Gerald Nabarro (South Worcestershire): To ask the Secretary of State for Trade and Industry, following the suicide of Mrs. Ann Hemingway at Coventry several weeks ago due to an inflated electricity Bill, submitted by the East Midlands Electricity Board, and his subsequent undertaking to discuss with the Electricity Council and other interested bodies the practice of submitting estimated accounts, what has been the outcome of his talks; and whether he will make a statement on his future policy.The Secretary of State for Trade and Industry then replied:My hon. Friend the Minister for Industry has discussed the boards' billing and collection procedures with the Chairman and the Deputy Chairman of the Electricity Council. They told him the industry was reviewing its procedures in the light of the unhappy death of Mrs. Hemmingway and of the recent report of the Select Committee on Nationalised Industries and Relations with the Public. These procedures are matters for the boards to settle in consultation with their consultative councils but I shall be kept informed of any changes resulting from the industry's review."—[OFFICIAL REPORT, 7th February, 1972; Vol. 830, c. 237.]I stigmatise that reply as double flannel and of no constructive or objective value whatever. Meanwhile my own researches found out that this practice is general nearly all over the country. Deliberately inflated electricity accounts are sent even when the meter reader has not called through illness of the meter reader, insufficient meter readers, the meter reader forgetting to go to a particular house or subscriber, or because of the inaccessibility of the meter, or for any one of 20 other causes I may name. The meter is not read and the board, at the behest of some little bureaucrats sitting in the fastness of their vast offices and showrooms, sends out a guessed or estimated deliberately inflated account.
As a result of the publicity I have gained and am continuing to gain this evening on this practice, which I describe as wholly nefarious, a vast volume of mail descended upon me from all over the country. I received nearly 300 letters. I will send the whole lot round to the Minister if he likes and he can have them analysed. I have read them all. So numerous are they that my replies had to be printed. I had a letter typed with the distinctive pica type of my typewriter, had it photographed and repro- 1706 duced, and I then topped and tailed the letters for speed. Every one of these aggrieved subscribers has received an answer with an insert of the Ministerial reply, which I then related as unsatisfactory. So all these complainants know that I am at loggerheads with my hon. Friend. This is a great grief to me. do not like being at loggerheads with him. But, in view of his humanity and deep-seated interest in the case and the sympathy that he has so far expressed, I think that we need something more than commiseration for our efforts this evening.
I do not propose to read 250 letters at this time of night, but I must read two, because it is important that the Minister should know what is going on. I do not think he knows what is going on. Neither does the Electricity Council. Those at the head of the Electricity Council are so remote from the affairs of ordinary subscribers in the provinces and towns of this country that they really have no idea of the suffering that they are causing by their inhumane and bullying tactics.
The first letter, from the area of the South-Eastern Board, comes from Robertsbridge, Sussex. It is written to me on 13th January: "Dear Sir,Thank you for taking up the matter of the widow overcharged by the electricity board and driven to suicide.Last March I received a bill for £12.72, to my horror, having never before had a bill for more than £9.50. No one had called to read the meter and I believe there was no mention of an estimated amount. They should not be allowed to charge more than has previously been used.For 10 years I have fought to keep my home going, against all corners, and even in this remote, almost independent spot, I am subject to attack from officialdom.I get no widow's pension, because my husband was ill too long before he died and consequently not enough stamps.I am 58 and fairly capable. I am always pleased to see you on television.That is signed "Mrs. Betty Penney." What a splendid letter—especially the final paragraph—to exemplify the case that I am putting to the Committee tonight.
The second letter is vastly worse, and I have selected it because it comes from the other end of the country. It is from 1707 the area of the Scottish Electricity Board, and it says:I am very glad to hear of your proposed inquiry into Electricity Board finances. Another point worth looking into is that the victims seem to be nearly always old people living alone. Do the Board officials specially select their victims from this group because they are less able to defend themselves? It will be interesting, also, to learn what happened to all the money which people paid, and which was not due at all.This bill inflation happens in Scotland, too, One victim was a friend of mine (whom I don't want to involve in any more worry) —a man in his late 70s who was recovering from a stroke which left his arm and leg affected. His normal bill was around £10, but in autumn he got a bill, for the same length of time, for £38. He protested, and requested a check to be made. He was sent a form to fill in, but no check was made, and next day his electricity was cut off. He was left stumbling around in the dark, cooking on an open fire (a fire risk, because the flames set his frying pan alight several times). His next bill, after payment and reconnection, was £13.I had been attributing these frequent errors in people's electricity bills to negligence, or computer fallibility; but when it is admitted to be deliberate policy, it becomes criminal. The person who authorised that policy should be tried for multiple murder and fraud. Perhaps you won't agree but I believe that in a welfare state all old people living alone, or old couples should have free electricity. (I have already written to some members of Parliament on this). With best wishes for your inquiry and your campaign, yours sincerely, J. G. McCabe.The address is 10, Airgold Drive, Glasgow, G15 7DX. The letter is dated 25th January. I will place it at the disposal of HANSARD to see that it is given the widest possible publicity.
The behaviour of the board is criminal and fraudulent. I underline the attack made by this consumer in Glasgow. It is for that reason that I am moving the New clause to put an end to these nefarious practices. As the hon. Member for Bristol, Central says, we do not mind estimated accounts when access to the meter cannot be achieved; but let them be estimated slightly on the low side, less 5 per cent. of the average over the preceding year. That would be civilised and humane—not the kind of thing that these bullying, tyrannical, monopoly, nationalised boards are at present carrying out, as hundreds of letters to me evidently testify.
I have not finished yet, and my hon. Friend the Minister will have the full 1708 treatment tonight, in spite of the hour. Not all boards do this. Nearly all of them do it, but not all. Those that are clean and capable I commend to the House, such as, for example, the London Electricity Board. Immediately the chairman, Mr. David Fenton, heard of my action in this matter he sent a letter to me at the House by hand, in which he said:I thought you would like to know that the London Electricity Board does not make a practice of deliberately inflating bills in order to obtain access to consumers' premises.I commend Mr. Fenton.
But compare that with the attitude of the East Midlands Board, that in spite of the suicide of Mrs. Ann Hemmingway, in spite of the huge volume of public criticism descending on the board, it issues the defiant statement, "We are going on with this practice." The East Midlands Board is tacitly defended and upheld by my hon. Friend the Minister, which in my judgment is wholly deplorable.
If Ministerial direction is inappropriate, if the acceptance of a Clause of the kind I have moved tonight is inappropriate, will my hon. Friend please do something better than saying "Passed to you, chum, as Chairman of the Electricity Council", because the electricity board chiefs consider that they are a law unto themselves, bereft of Ministerial influence or direction. I want them directed on this occasion to behave themselves in a civilised fashion.
There will be engineers who say to me, "But, Gerald Nabarro, meters sometimes cannot be read because the subscriber or consumer is on shift work and not at home when the meter reader calls", or, "The subscriber or consumer is sick and we cannot gain access to the premises", or, "The subscriber or consumer is away on holiday so the meter cannot be read." They can find any one of a hundred excuses. My answer to them is this. I have never asked a Question concerning fuel or power unless I have researched the answer first. The answer is this. Put an end to the antiquated and obsolescent location of electricity meters inside domestic hereditaments and locate the meters without—not within—the domestic hereditament with suitable coverage, in order that every 1709 meter reader who is competent and industrious may readily gain access to the outside meter.
The boards will say: "This will cost money"; the boards will say: "Where do we get the meters?" I will tell them. From Permali in Gloucester, specialists in the manufacture of electricity and gas meters for outside reading. I am not advertising. It is a firm in which I have no shares. I am not a director and I have no interest of any kind in the firm. It is just one company which makes outside-reading meters of the kind I wish to see installed.
It may take two or three years to achieve a changeover, but continental countries do it. Sweden, Norway and Denmark do it. I could name a dozen countries which have all their meters outside.
With the compact nationalised industry in this country under his direction my hon. Friend could do it. I do not want the prating reply that nationalised industries conduct their own day-to-day affairs. I know all about that, but my hon. Friend has the ultimate power and capability of issuing directions and can refuse to reappoint the chairman of a board which does not conform with his policies. He has all the power to do what I suggest and what I want done.
If the Minister says he has no power or influence to make this simple changeover, I remind him that unemployment is rising and that there are more than a million, including vast numbers of capable men who could easily be employed on the essential transpositioning of meters from within to without a domestic hereditament.
With those few words, highly emotional and not of a financial or economic character, but it is an emotive issue on this occasion, I commend this new Clause to the Committee.
§ Mr. Alan Williams
May I, as on Second Reading, support the hon. Member for Worcestershire, South (Sir G. Nabarro) and make absolutely clear that we equally deplore this practice. We are talking of deliberately over-estimating.
Like him, I am probably difficult to get at for meter reading, and I recognize 1710 that I have to put up with estimated bills. I am willing to recognise that if I am over-estimated I am in a better position to meet the over-estimated bills than many of my constituents. But if one board with a populous area, like the London Electricity Board, can manage without using this deliberate practice of creating fear in the minds of consumers, equally other boards can manage, and should be made to manage.
The hon. Member for Worcestershire, South, wanted meters to be put outside. We on both sides in the House of Commons want this practice of deliberate overcharging stopped. We will not accept that it cannot be done.
The consumer has no recourse against the board. He cannot say that he will get electricity from someone else. He is not in a position to say "You treated me badly as a supplier; I will find an alternative supplier". This kind of practice, where it is carried out as deliberate policy by a monopoly which should be showing due regard to the public interest, is more intolerable even than if it were carried out in a more competitive environment.
I therefore identify myself with the hon. Member's request that action he taken. It is astonishingly maladroit public relations by any of the boards that they should say that they intend to carry on with this practice. The hon. Gentleman says he has evidence that certain boards say they intend doing so. Nothing could be more damaging to the image of the industry than this type of impersonal, inhuman disregard for the feelings of people.
The hon. Member said that this overcharging was for an overdue bill of £1.50—an amount which suggests that this pensioner had already had to cut back on spending, if that was her indebtedness for a full period. Many pensioners have to cut back on their heating needs in this way to make their money go further. There must be many in a similar position who would find a bill of such magnitude frightening and disturbing.
Therefore, if the Minister feels that a direction is not appropriate, we shall expect him to exercise his Ministerial discretion when it comes to re-appointing chairmen who will not have regard to the public interest.
§ Sir J. Eden
I naturally share the feelings of concern which have been expressed about the case of Mrs. Hemming-way and what happened. It is not absolutely clear what happened. I should say in all fairness that, although one can make some assumptions, it has not been shown to be definitely the case in that instance that the inflated account, or higher estimated account, had been issued. After that, an appointment was made with Mrs. Hemmingway for a meter reader to call. Sadly, she took her own life on the day before that was due to happen. The exact circumstances in that case are still being——
§ Sir G. Nabarro
For the sake of accuracy, would my hon. Friend undertake, please, to send for a copy of the coroner's inquest statement, which makes it abundantly clear that this woman took her life because she was terrified that her electricity was going to be cut off because of this huge bill?
§ Sir J. Eden
I am only saying to my hon. Friend that in the case of one particular person there may be factors which have not been fully taken into account. But I am in no way detracting from the seriousness of the case. I absolutely agree that action of this kind, which can lead to a situation like this, is very wrong.
What my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) has asked me to do is to give a direction to the boards which carried out this form of estimating and inflating accounts to desist from this practice. This is where I find it difficult to go along with him and with the hon. Member for Swansea, West (Mr. Alan Williams), simply because I must have regard to the existence of statutory bodies whose job it is to make recommendations to Ministers on matters of this kind. I must allow for that.
The power given to my right hon. Friend the Secretary of State is the power of a general direction. If it were to be exercised in this way it would be a specific direction. I must therefore wait for the statutory bodies concerned—especially the consultative councils—to make representations to me or to my right hon. Friend, on the basis of which he would then be empowered to issue a direction.
1712 My hon. Friend was fair enough to remind the Committee that I had taken certain action to ensure that these practices were subjected to a close examination and that an opportunity was then given for there to be proper discussion of these matters between the area boards and consultative councils. As he knows, these have been taking place this week, and I shall shortly be receiving further reports on the matter.
I can already say that the Deputy Chairman of the Electricity Council, as a result of meetings which took place earlier today, will on Monday next, 14th February, be meeting the National Council for Social Services. This is one aspect of the matter, and I know that my hon. Friend is familiar with the magnitude of the operation in which the boards are engaged.
I underline the fact that I do not in any way minimise what has occurred. It is sad, tragic, unnecessary and wasteful, and the fact that it is one case—or the fact that, happily, one cannot produce too many cases of this kind—does not make it any the less to be deplored.
Against that I must set the fact that the boards in England and Wales alone are dealing with 16 million domestic customers. About 14 million of them are billed quarterly. In other words, 60 million bills a year are sent out, and many of those customers, like me, must be sent reminders practically every time, which means that about 20 million reminders go out. That is the magnitude of the problem. This is an extremely large and expensive exercise.
There are, arising out of that, about 800,000 threats of disconnection each year due to non-payment of bills, and about 127,000 actual disconnections take place every year. This is, therefore, a massive operation, and the boards must try to reach a reasonable and sensible balance between attending to each individual situation by directly employing a person for that purpose and by making certain assumptions which will enable them to arrive at what is, in effect, rough justice.
My hon. Friend said that he would rather they erred in doing this—and I think he recognises that they must do it—on the lower side and were marginally 1713 below rather than above the appropriate charge. That might be the right way to proceed, but I am worried about the situation where there has been a succession of under-estimated bills. The day of reckoning must come.
Assuming that in such a case there have been, say, seven consecutive attempts to read the meter and that, having failed to get a reading on each occasion, quarterly bills are submitted on an estimated basis, erring on the low side, when ultimately access is gained to the premises and the meter is actually read—and there may have been good reason why access to the premises had to be denied—the occupant may be in for a considerable shock because of a big backlog. After all, during the intervening period many additional electrical appliances might have been added without the local board being aware of that fact. There are arguments on both sides of the estimating practice which I think need careful consideration and which at the moment are the subject of discussion.
Area boards obviously always prefer to obtain actual meter readings, but in practice this is not always possible. I am told that in any given quarter something like 25 per cent. of consumers' meters cannot actually be read because of absence from home when the meter reader calls. One of the advantages of the publicity given by various means to this extremely unfortunate case is the attention which it has helpfully concentrated on hours in which meter readers are employed and the various practices between area boards and on the particularly important point to which my hon. Friend referred, the actual location of the meters in relation to the premises. I basically agree with him that if meters were outside premises an enormous amount of this difficulty and trouble would be avoided.
§ Sir G. Nabarro
I apologise for interrupting again, but these are pious sentiments about putting meters outside while nothing very constructive is being done. For example, of the order of 250,000 new domestic hereditaments are being created every year. Can the Minister say that at every one the meter is outside, where it should be? We should make a start at once with all 1714 Government building and new construction to see that meters are outside. That would be a beginning. Then we could have a policy statement within a few weeks from the industry saying that it is getting the transposition of meters from inside to outside buildings.
§ Sir J. Eden
I cannot say what my hon. Friend has asked me to say. All I can say is that the area boards are very anxious that meters should be on the outside of buildings for this very purpose. Local authorities are increasingly coming to recognise this in their building arrangements when there are meters on their premises.
A further point which is an interesting factor in all this is that the problem of bad debts to area boards run collectively at over £2 million a year. If the collection procedures became too relaxed, this figure could easily increase and obviously this would have to be taken into account when fixing electricity tariffs. Each day's delay in collection costs the industry £400,000 a year in interest alone. We are dealing with something which is very substantial as a problem. It is a problem which the industry would dearly like to cure. It has to watch the cost and it is going about this in a way which it hopes strikes a reasonable balance. When experiences and tragedies of this kind occur it is absolutely right that the whole range of practices should be urgently reamined. This the boards and consultative councils are currently engaged in doing. When I have the conclusions of their report I shall decide what action is appropriate for me to take.
§ Mr. Alan Williams
May I follow this discussion up with three precise questions? I know that it is not always possible to give precise answers, but I hope that they can be given on this occasion.
The Minister has made a lengthy and sound defence of the practice of estimating. This was not basically what we were attacking as the main cause of the trouble. We were attacking overestimating as a deliberate policy.
§ Sir G. Nabarro
Allow me to correct the hon. Member. What I am attacking is exorbitant over-estimating. I do not mind if a board sends a bill which is 1715 5 per cent. below the average of the preceding year, or 5 per cent. above. That is reasonable and rational and I shall not complain about it at all. What I object to is a £38 bill as in the Glasgow case in relation to £10 actual consumption, or in the Coventry case a bill for £18 in relation to actual consumption of £1 worth.
§ Mr. Williams
That is the point I hoped I was making but apparently was not making clearly enough. In estimating, inevitably there is a certain margin of error and I was allowing for 5 per cent. difference either way. The criticism that we are making is not of the possibility of a 5 per cent. error either way but the deliberate practice of overcharging by an exorbitant amount. Will the Minister categorically tonight condemn this practice of calculated exorbitant overcharging?
Secondly, will the hon. Gentleman undertake to draw to the attention of all the other board chairmen that the London Electricity Board—and London is not short of its fair share of debtors, speaking generally and not just about the L.E.B.—is able to operate without this sort of blackmail threat?
Thirdly, will the Minister state that he agrees with the point which I made, and which I believe the hon. Member for Worcestershire, South (Sir G. Nabarro) would support, that in the event of certain chairmen recalcitrantly saying that they intend to go ahead with the existing practice he will bear this fact in mind when it comes to considering their re-appointment?
§ Sir J. Eden
On the last point put by the hon. Member for Swansea, West, I would rather wait until these discussions have been concluded and I have had a chance to study the report or conclusions submitted to me. But I do condemn the practice of exaggerated and deliberate inflation of accounts in order to shock or frighten a person into facilitating the 1716 entry of the meter reader. I have already made this clear to the Electricity Council, and it is generally understood. This is why I am anxious to allow for the proper processes to be carried through. Discussions are taking place. We are dealing with extremely responsible people. The chairmen of the area boards have a very high regard to their duties to the public; they are very sensitive to the interests of their customers and consumers; they are very concerned about the proper management of their business. I rely on them for the proper discharge of their duties, and I must give them a chance to answer me as a result of their discussions.
§ Sir G. Nabarro
I can only speak a second time by leave of the Committee, and I beg that leave for a moment, Miss Quennell.
I warmly thank my hon. Friend the Minister for Industry for his diplomatic and tactful and intelligent answer in this very complex problem. I do not propose to withdraw the Motion. I propose, in order to demonstrate my grave and deep concern about this practice to allow the Motion to be negatived. In 22 years in this House, I have never had on a single Bill all the Amendments and new Clauses I had set down selected. All those that I set down to this Bill have been selected, and I want to thank the Clerk, Mr. Bradshaw, who drafted them for me.
§ Question put and negatived.
§ Schedule agreed to.
§ Bill reported, without Amendment.
§ Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
§ Bill accordingly read the Third time and passed.