WINTER FUEL DISCOUNT SCHEME

HC Deb 16 May 1979 vol 967 cc368-80

Motion made, and Question proposed, That this House do now adjourn.—[Lord James Douglas-Hamilton.]

10 p.m.

Mr. J. W. Rooker (Birmingham, Perry Barr)

I had not realised, until I walked into the House this evening, Mr. Deputy Speaker, that you had assumed your exalted position. I offer you my congratulations. I know that you will serve the House with distinction. I do not take personally the fact that my colleagues are walking out on me, because this is a rather mundane subject. However, I humbly submit that this type of subject is the stuff of which majorities of 491 are made. That is why I am raising the matter of the operation of the winter fuel discount scheme in the Midlands during this last winter.

I will be honest and say that I am not too happy to see the hon. Gentleman who will reply on that side of the Chamber. However, it would be churlish if I did not offer him my congratulations on his Government appointment—though I hope that it will not last for long and that he will soon be back on this side of the Chamber.

I have here a leaflet published by the Department of Energy entitled "Help with your electricity bill this winter". It is aimed basically at those who receive supplementary benefit, family income supplement, rent or rate rebate or rent allowance. By and large it covers the overwhelming majority of pensioners, as well as other members of the community. The leaflet explains how they get 25 per cent. off the winter quarter electricity fuel bill £25 per cent. off the amount over £20.

The opening page of the leaflet makes it abundantly clear that the bill which counts for the discount is the one for the electricity meter reading between 1 January and 31 March. It is that bill that is taken to the Post Office and enables the discount on the amount over £20 to be obtained.

The scheme has worked reasonably well. I confess that I am not in favour of this kind of scheme, as I have said before. I prefer pensioners and others who qualify to have proper benefits in order to pay charges as does every other member of the community. I am against butter tokens and energy tokens.

Nevertheless, we have the scheme and it has been widely advertised. Millions of pounds have been spent advertising it. Over the past three years, the take-up has not been enormous. Money is left over, certainly from the last three years. But something happened in my constituency—. I have reason to believe that it has happened in other constituencies also—that requires ministerial action. The present Government are not responsible for this position. It is a decision taken by the faceless bureaucrats of the Midlands Electricity Board and probably other electricity boards. I do not want to defend such people when in Opposition because I did not defend them when I was on the Government Benches.

Certain of my constituents who were due to have their electricity meters read in January had them read last December. They did not get their next meter reading until April. That meant that they did not get an electricity meter reading taken between 1 January and 31 March. No meter reading took place during the crucial three months.

The Midlands Electricity Board, in its wisdom—because it claims to know best—gave a discount on the bill received by my constituents last December, which was an earlier bill than would normally have been acceptable. As everybody knows, October, November and December were much milder than January, February and March. I am not arguing on the basis that other people had their meters read in January or towards the end of January. That is the luck of the draw. Nothing changed for those people. However, the MEB brought forward the meter reading for a certain group of my constituents. and I will quote three examples of what that meant.

I have a constituent whose meter was read on 21 December and who got a bill for £25. His discount on that bill was £1.25—that is, 25 per cent of the amount over £20. His next bill on 2 April was for £41, and his discount should have been £5.25p. But he had already received a discount of £1.25, and he cannot get the other £4. That is the problem.

The case of another constituent is even worse. Funnily enough, all the meter readings are on the same date—21 December. The bill was for £16, and there was no discount because it was not over £20. The next bill, on 2 April, was for £38. The discount should have been £4.50. But no discount was payable to a 77-year-old pensioner living alone.

In another case, the first reading on 21 December produced a bill of £33, with a discount of about £3. As a result of the 2 April reading, the bill was £63, and the discount should have been £11. That pensioner had already received a discount of £3, and in a way he deserved the other £8. But he will not get it.

The Midlands Electricity Board wrote to one of my constituents, a Miss Ganderton, who received a bill for £16. It said: Your previous account was, of course, well below the level of £20.00 and we regret, therefore, that we are unable to take any action to enable you to obtain a discount under the terms of the scheme. But the MEB changed the terms of the scheme. The scheme, as printed in the leaflet, was based on the reading taken between 1 January and 31 March.

I believe it was fairly simple to change what has now become a lottery or a lucky dip, depending on whether one lived in an area where the electricity board took the view "we shall go and take some early meter readings". Perhaps because of bank holidays, the weather or even staff shortages, the electricity board decided to even out the work. I understand that. But in fairness and natural justice I believe that the board should now at least equalise the two bills, average the two and pay the discount on the basis of the two bills.

That is a simple matter. It would not cost an enormous sum of money, because not all that many people are affected. I know of only six constituents, although from press reports I understand that there are many more. All the constituency cases about which I know are in the same area. Clearly, this was a case of one or two meter readers' walks being brought forward.

I have talked to colleagues who saw the subject of tonight's Adjournment debate listed, and they asked me about the problem that I was raising. I told them, and they said that they have also come across this problem in other parts of the country. They did not know the reason, but people told them either "Something went wrong with my discount. I did not get the full amount." or "When I produced the bill I was told that I was not entitled to a discount". As we know, the bills are printed by computer, and it states in the corner whether the bill is one on which discount is given. Many people who had a small bill for the three months before Christmas did not get a discount at all, and they feel that they are justifiably entitled to a discount on the next bill. Of course, they do not understand why all this has happened. It is clearly happening in other parts of the country.

I do not know whether the Minister, in the short time that he has been in office, has been able to find out what the take-up has been. I know that we are in the middle of the period and that bills are still going through. Perhaps it will be possible to say how much has been spent on publicity and what the Department estimates will be the take-up. I know that about two years ago we may have spent more on publicity than we spent on take-up. I may be exaggerating, but it was very close. That was ludicrous—a view expressed on both sides of the House.

The scheme was then made more flexible. But it must be made even more flexible now, because it has gone out of the control of this House and into the control of a few civil servants at local level who are working for a nationalised industry, which is not a pillar of public ownership. It is just another State bureaucracy which has no human face. When people see this sort of thing happening, it only further justifies their claims and fears about the operation of these organisations. I say this in no party spirit. I made the same remarks, as did many of my hon. Friends, when I sat on the other side of the House.

I hope that the Minister will take a grip on this problem, because I am sure that it is within his control and competence to put matters to right. This is a wonderful opportunity for the Minister, since he comes to the Dispatch Box for the first time tonight, to show that he has a grip on his own civil servants and that he will not be, pushed around by faceless bureaucrats who tell him to come to the Dispatch Box and tell me that that is the scheme, that my constituents had better like it or lump it, that they missed out on the discount, and that it is tough luck.

I do not think that the poor people of this country, the working poor who are on family income supplement, the millions of pensioners who are receiving rent allowance, rate rebate and supplementary allowance, deserve that kind of treatment from any Government of either of the major parties. It is up to hon. Members of this House and to Ministers, of either of the major parties, to take a grip on the Civil Service and to make sure that it is known that these changes in the scheme have taken place. I hope that the civil servants will get due notice tonight that this House will not stand for it.

I hope, therefore, that the Minister will be able to explain why this happened, and if, perhaps, any other electricity boards took the same decision, what the cost implications are, and how soon we can put matters to rights. It is all on computers. It is very easy to compute it and find out the Bills that were brought forward deliberately. It concerns only those that were brought forward because of what I have explained on behalf of those of whom I am speaking. Everyone else must be treated in the same way. Those are the rules of the scheme.

If the Minister could explain and give a good answer to me and to my constituents, I think that the short time that we have spent at the end of today's main debate will have been time well spent.

10.11 p.m.

The Under-Secretary of State for Energy (Mr. Norman Lamont)

The hon. Member for Birmingham, Perry Barr (Mr. Rooker) is always well researched when he comes to this Chamber. He is always extremely assiduous in pressing the interests of his constituents, and he has been very energetic in raising cases in the past for consumers who have the heavy burden of increasing electricity bills. He has raised this matter on a number of previous occasions, and we all respect the way in which he brings the subject to the House.

Right at the beginning, perhaps I may deal with a number of very specific points that the hon. Member raised. He asked, first, about the take-up of the scheme. If I may also include, under the heading of the take-up of the scheme, the £5 payment which goes to those below a certain level, as the hon. Gentleman knows, virtually all the 3 million people entitled to the £5 payment have received it. Take-up of the discount itself is uncertain, because the number of people among those eligible receiving bills over £20 is not known. On the latest figures available, it is expected that nearly 2½ million discounts may be claimed. This compares with 700,000 in 1977–78, when half as many people were eligible, and 1.6 million in 1976–77.

The hon. Member also asked about the cost of the scheme. This will not be known precisely until the scheme is over. As the hon. Member may recall, £45 million was allocated to it, and it is expected that most of this will be used. This includes administration costs of about £4 million.

The hon. Member also asked about advertising costs. I am advised that this year they will be about £250,000 and that last year the cost was about £160,000.

This is a rather complicated matter. I want to deal fully with the very serious points that the hon. Gentleman has raised. It might help to put it in perspective if I outline matters for the benefit of all the hon. Members attending this debate and for the benefit of those who will read the reports of the debate. We want the debate to be read and we want the problems to come to light. That may help us to deal with some of the difficulties that have arisen.

The hon. Member will know that the electricity discount scheme has now operated over three winters. A number of changes have been made both to the benefits offered by the scheme and in relation to those benefiting from it. But the main features of the scheme have remained unchanged. It was originally introduced with the sharp rise in electricity tariffs between 1973 and 1976, which was obviously causing very considerable problems for poor consumers. Many of them were elderly and many lived in all-electric homes and had absolutely no alternative source of heat.

Under the arrangements for last winter, the scheme offered help to three main categories of consumer who could be identified as having low incomes—that, is about 3 million recipients of supplementary, benefit, some 80,000 to 90,000 families receiving family income supplement and a further 3 million people receiving rate or rent rebate or rent allowance. The scheme was extended to this last category for the first time last winter.

The help offered by the scheme is in two forms. The first is a lump sum payment of £5, but that goes only to recipients of supplementary benefit and family income supplement. They are generally regarded as among the worst-off groups helped by the scheme.

Secondly, all those eligible can claim a discount on one winter quarter bill exceeding £20 received from an electricity board. As the hon. Gentleman said, the discount is 25 per cent. of the amount over £20. The bill on which the discount can be claimed is one for a three-month period of consumption ending between 1 January and 31 March. These set the main operative period of the scheme. Whether or not a bill is eligible for discount is determined by the date on which the meter reading on which it is based is due to take place. I would emphasise the words "due to take place" because that is at the core of the problem that the hon. Member has raised.

In effect, these operative dates of 1 January to 31 March mean that consumers may claim the discount on a bill for a three-month period of consumption falling between 1 October and 31 March. As the scheme was set up, by the last Government, it is unfortunately an inherent feature that the consumer who is entitled to benefit has no choice as to the period within those limits that the bill will cover. That will depend entirely on when the meter is read, and consumers do not have their meters read at a fixed date: that in turn will depend on the individual's position in the hoard's meter-reading cycle.

There are, of course, practical problems that have to be overcome in order to make the scheme work smoothly and fairly. That has involved close co-operation with area electricity boards and the Post Office in setting up the scheme and in its day-to-day operation. We are grateful for help given by them and their staffs, notwithstanding that the Government of course pay for their services in operating the scheme.

I shall not dwell on the £5 payment that was made automatically with their benefit to those eligible in the week beginning 22 January. However, the method of operation of the discount side of the scheme bears a closer examination in view of the points raised by the hon. Member.

As I have said, the bills eligible for discount are those for a three-month period of consumption ending between 1 January and 31 March. Area electricity boards' computers identify these bills, calculate the discount and automatically print the discount on the bill in a simple coded form. That code enables an eligible consumer to know which bill he can claim on and how much discount he can claim. He takes the bill to the post office together with proof of his eligibility for the scheme. The code then confirms the eligibility of the bill to the post office staff and tells them the amount for which to make out a discount voucher.

Clearly, therefore, the correct identification of the eligible bill is very important. That has to be done automatically. Area boards do not know which consumers are eligible, so all 19 million or so domestic bills are coded for the operational period of the scheme. The computer is able to identify the eligible bill by the date on which the quarterly meter reading is due. That is sometimes incorporated in the consumer's reference number on the bill. If that falls between 1 January and 31 March, the discount is calculated and the bill coded. That procedure was agreed with the industry to ensure that each consumer received one coded bill and one only.

That brings me directly to the point that the hon. Gentleman raised. There are two aspects of this which are somewhat intertwined. The first is the action of electricity boards—the hon. Member referred specifically to the Midlands Electricity Board and I do not know of other examples—in reading some meters early. The hon. Member has pointed out that this has denied some of his constituents a part of their discount.

The second problem is the more general one of the rough and ready nature of the scheme and the fact that it gives some consumers discounts on their bills but does not automatically guarantee discounts on those bills which reflect the worst periods of cold in the winter—in this case, the cold spell of January and February.

I shall try to separate those two issues. First, I shall deal with the question of when the boards read the meters. One must recognise that there is a genuine problem in superimposing a scheme of this kind on the day-to-day operations of the boards. They cannot always read meters precisely on the due date used in identifying the bills in question. Changes in the meter-reading programme can occur because of staff shortages or sickness or because of an influx of people from a new housing development—people who must then be incorporated into the scheme. There are changes in mind to make it easier to deal with the latter problem. When such programme changes occur, it would not be easy to take corrective action by the computer in the way that the hon. Member has suggested.

In the great majority of cases falling within the period of the scheme, a delay of a few days in reading a meter does not cause problems. However, problems can arise for a minority of cases on to be read either shortly before or shortly the margins—those whose meters are due after the start of the scheme. Obviously, this can produce uncertainties as to whether the correct bill was actually coded. This is referred to in the Department's leaflet which the hon. Member quoted and which points out that bills read in December and arriving in January are not, as a rule, eligible and will not be coded.

The hon. Member has drawn the attention of the House to a number of cases which do not appear to fall within those rules. I know of one particular case because I have been in correspondence with the Midlands board about one of the hon. Member's constituents whose meter was read on 21 December but who was still coded for a discount. I understand that the due date was actually meant to be on the first working day in January.

I am informed that this unusually early reading was brought about by a combination of the circumstances to which I referred earlier, plus the prolonged Christmas and New Year holiday period. Because of substantial new developments in some of their districts, the board's staff have had to begin their meter readings at an early date in order to complete them in time. Of course this could have the effect of denying an eligible consumer of part of his or her discount.

I will look at the other cases that the hon. Member has quoted but it is not my understanding that this situation would rob them entirely of their discount unless those discounts were very small sums. One must compare the discount with what that person would have got had the meter been read on the due date and not with what the discount would have been had it operated in another quarter.

Mr. Rooker

I realise that there is this problem caused by bringing the meter reading forward about three weeks because of the long Christmas holiday. I am not saying that these people should have the discount on the next bill, but I should point out that this means that the quarterly electricity bill that these people received was not even for a full quarter—in some cases it was only a 10-week bill covering a mild part of the year. The fact that the meter reading was brought forward two or three weeks to 21 December for those whose due date was early January meant that these people received a bill that was not even for a quarter's electricity. In my opinion, that makes the matter much worse.

Mr. Lamont

I see the force of the hon. Gentleman's remarks, namely, that it may not be a full quarter. I shall see whether it works in that way, because that certainly adds to his argument.

I return to the point I was making. In general, I do not think that it would cause many people to lose all the discount. In one case which I have studied there was a loss of the equivalent of 12 days' discount. This problem has not previously been drawn to the Department's attention. I understand that three people have written to the Department, and, following the hon. Gentleman's notification of his intention to raise this subject tonight, I have been in touch with the Midlands board about these cases, including the one which I have studied. I intend to have discussions with the board to find ways of seeking an answer to this problem as it has operated in the past. Furthermore, tomorrow I shall be meeting the chairman of the Electricity Council, Sir Francis Tombs. This problem will be very much in my mind and I shall discuss it with the chairman. I hope that the hon. Gentleman will let me have the details of the other cases he has mentioned so that I may examine them.

I hope that a solution will be possible. I have tried to explain how the problem arises, but I understand that those who lose part of their discount in this way feel a sense of grievance and do not see why they should lose money because their meter was not read on the due date. Should any remedy prove possible in these cases, I wish to emphasise that it would apply only to a loss of discount between the date of the meter reading in December and the due date for the reading in January.

I turn to the point that consumers do not always benefit from a discount on the highest bill of the winter. I think that the hon. Gentleman understands the nature of the scheme as it was set up and the rough and ready way in which inevitably it has had to operate. There are a number of ways in which this problem could be tackled. One could allow consumers to claim on whichever of their bills covered the higher of the winter periods, but I am told that that could have considerable administrative and practical problems. Both bills would have to be coded. Consumers would have to hold or record both before pursuing the discount, and the complications to those involved in operating the scheme would be very considerable. The other alternative of extending the period of the scheme to cover two quarters would add considerably to its cost.

I do not believe that it would necessarily help if the timing of the scheme were changed. The first scheme operated over the three months February to April in 1976–77. This was changed to a January start when the £5 payment was introduced in 1977–78. It was felt that this money should be in the hands of those entitled to it as early as possible in the winter period. Operation over February-April last winter might have helped consumers whom the hon. Gentleman has in mind. If, however, the cold spell had occurred in February-March, the same problem would have arisen for the minority of consumers whose meters were read in early February. I am afraid that neither electricity boards nor Governments—not even a Conservative Government—have any control over the vagaries of the weather and the timing of the coldest spells.

I should like to say a few words about the future of the scheme. It has operated in a variety of forms over the past three winters. It has played a part. Obviously rising fuel costs are of greatest importance to people on low incomes, and especially to the elderly. We are in a period when there is great pressure on energy prices, and it is important that the Government should have this problem in mind.

I assure the hon. Gentleman that we recognise the importance of the issues involved and are very mindful of our obligations to the elderly. The hon. Gentleman will not expect me to indicate the Government's intentions. We have not had time to consider the scheme, but we are determined to ensure that those who have most to lose by rising energy prices are properly protected.

Question put and agreed to.

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