HC Deb 10 March 1980 vol 980 cc913-6
10. Mr. Winnick

asked the Secretary of State for Energy when he expects to meet the chairman of the nationalised fuel industries.

Mr. David Howell

I meet the chairman from time to time to discuss matters of common interest.

Mr. Winnick

Does the right hon. Gentleman recognise the hardship that will be caused to many people as a result or the revised electricity price increases? Is it not time that the Government gave information—either from the right hon. Gentleman himself or from the Secretary of State for Social Services—about a proper national scheme that would give genuine assistance to those on low incomes in protecting themselves against the never-ending increases in gas and electricity prices?

Mr. Howell

My right hon. Friend and I have made it clear that we intend to bring forward extra help for those in need who are faced with fuel hardship. It is common ground that it makes sense to move towards economic pricing for fuel in an energy-hungry world. That is a sane energy policy. Nevertheless, the needs of those in hardship must be met. We have made one move in that direction and have said that we intend to bring forward extra help. That is a sensible policy, recognised by the nationalised industries consumer councils as well and is a great improvement on the situation we found when we came to office, when there was no provision at all to help those in fuel hardship.

Mr. Bruce-Gardyne

Will my right hon. Friend make a point of meeting Mr. Glyn England very soon and point out to him that it would be unfortunate if, because of temporary difficulties over its cash limits, the CEGB was to postpone the AGR programme in a way which might threaten the dispersal of design and production teams?

Mr. Howell

The detailed capital and current cost programmes of the CEGB and the whole electricity industry are a matter for the chairman concerned, whom I meet from time to time. However, no doubt my hon. Friend's comments will be noted. The task of the electricity supply industry is to meet the financial targets that it has been set.

Mr. Stoddart

When the right hon. Gentleman meets the chairman of the CEGB, will he discuss with him the need for a 28 per cent. planned margin rather than an 18 per cent. margin, such as the industry was running in the 1960s, and the effect that that would have on a future programme? Will he also discuss with him smaller power stations which can be used with combined heat and power installations?

Mr. Howell

The 28 per cent., which I think is the long-term planning margin of the electricity supply industry, is of course discussed with the chairman of the boards of the industry, so the answer is that I do discuss these things. However, it has to be borne in mind that the price which is undoubtedly paid for maintaining a high planning margin is the price which is matched by the need to provide secure supplies at peak times on cold days. People expect from the industry regular supplies even at periods of peak demand and that inevitably involves large margins.

Mr. Alan Clark

Does my hon. Friend recognise that some of us are disturbed at this concept he calls fuel hardship? Hardship is hardship and it is the responsibility of the DHSS to deal with it. If every Department has to make provision for particular hardships arising out of its affairs will we not be in even greater difficulties with public spending than we are at the moment?

Mr. Howell

I have indicated that my right hon. Friend the Secretary of State for Social Services who has been giving attention to this question and that it is through social programmes that hardship of all kinds should be met, particularly hardship that arises from violent and sudden increases in something as basic as fuel costs.

Dr. Owen

Is not the hon. Gentleman aware of the inconsistencies in his reply to the question on the fall in electricity demand? On the one hand he gave an assurance that he does not wish to see an increase in the price of electricity yet on the other he gave an assurance to his hon. Friends that he wishes to see the AGR programme go forward and he wishes to give confidence to our nuclear industry? Yet he constantly reiterates that cash limits must be maintained. Does not the right hon. Gentleman accept that this is quite inconsistent and that he must relax the cash limits under which the electricity industry currently operates?

Mr. Howell

No, I do not accept that, nor do I accept that the right hon. Gentleman is correctly repeating what I said earlier. Nor do I accept that I said that all increases in costs should automatically be passed on in prices. There must be a vigorous search for economies to meet part of the rise in costs. It may be that some rises have to be passed on but I do not accept the doctrine that it is simply a question of passing on all increases in costs in increased prices to the consumer.