HC Deb 13 December 1982 vol 34 cc66-86

Motion made, and Question proposed, That the clause stand part of the Bill.

7 pm

The Second Deputy Chairman of Ways and Means

With this motion we are to discuss new clause 1—Disconnection of electricity supplyPart of the increased borrowing powers referred to in section 1 shall be used by the Scottish electricity boards to avoid disconnections of electricity supply to households where such disconnection would result in hardship.

The Under-Secretary of State for Scotland (Mr. Alexander Fletcher)

The purpose of the clause is to increase the statutory limit on borrowing of the Scottish electricity boards from £1,950 million to £2,700 million, with an interim figure of £2,300 million. As in the past, these limits have been fixed to meet the boards' needs for periods of about three years at a time, and the interim figure is subject to an affirmative resolution of the House.

The boards' capital investment programmes must be approved by my right hon. Friend the Secretary of State for Scotland, and his specific consent is required before expenditure is incurred on any new power station. All borrowing requires his consent and the approval of the Treasury.

Mr. Dennis Canavan (West Stirlingshire)

On Second Reading the Minister said that the increased borrowing powers referred to in the clause would be largely used up by the Torness power station, and he gave me a figure for the total budget for the power station of £1,097 million. But, of course, that figure is based on March 1980 prices, and obviously it must be updated. Hon. Members on both sides of the Committee will agree that that is a very large sum of money to be spending on one nuclear power station.

It so happens that on Friday of last week, between Second Reading and this debate, I and some of my colleagues in the Scottish parliamentary Labour group had an opportunity to visit Torness, where we discussed the project with the chairman of the South of Scotland electricity board and some of his colleagues. To be fair, I think that anyone who has visited the site must be impressed by what will be a tremendous achievement of science and engineering. But I could not help thinking of the great assistance that could be provided to many consumers of electricity in Scotland if even a fraction of the sum being spent on Torness power station was used to assist consumers either with their electricity bills or by way of lower prices for electricity or, indeed, by introducing a massive programme of home insulation in both the public and private sectors, which would have the useful by-product of providing jobs for many unemployed construction workers. Unfortunately, because of cuts in public expenditure, we are not seeing a home insulation programme of the size that we ought to have in Scotland.

Even before Torness is completed, there is an overcapacity of generation in Scotland, and the Minister has not explained adequately the Government's priorities on expenditure or how all the increased public expenditure referred to in clause 1 will be used. In the new clause I suggest that at least some of the increased expenditure proposed should be used to help the many families who have been disconnected or threatened with the disconnection of their electricity supply. It is a widespread problem in Scotland which is causing a great deal of hardship and misery, and the Government seem to be doing little if anything about it. I raised these matters on Second Reading. I did not get an adequate reply from the Minister, and I am grateful for the opportunity to discuss them in this debate.

To those hon. Members who thought that I was exaggerating about the extent of the problem in Scotland it must be pointed out that the rate of disconnection in the area of the South of Scotland electricity board alone is running at about 1,000 a month. I understand that the corresponding figure for the North of Scotland hydro-electric board is about 260 per month.

Mr. Norman Hogg (Dunbartonshire, East)

I am sure that my hon. Friend will agree that the figure for the North of Scotland hydro-electric board is significant when account is taken of the fact that that board provides electricity for only 2 per cent. of the nation's consumers. That makes it a high figure.

Mr. Canavan

My hon. Friend is right. We have to look at the figures in terms of the populations in the areas concerned and the number of electricity consumers there. I shall come later to a comparison between the Scottish boards and what is happening south of the border.

The number of households disconnected at any time in Scotland is considerably higher than the figures I quoted. The earlier figures related to the number of disconnections per month. To give an idea of the number of families remaining disconnected, I can tell the House that during December of last year 3,700 families remained disconnected during the coldest recorded winter this century. Of those, 80 per cent. had been without a supply for a month or more. The Policy Studies Institute pointed out that 90 per cent. of those disconnected were mentioned specifically in the code of practice but that, despite the existence of the code of practice, there appeared to be no real protection for many of those families. I know that the Government pay lip service to the code of practice and have even tried amending it to produce what they describe as slight improvements. However, the problem remains, despite the alterations in the code.

I have in my possession one of the most recent leaflets on the subject. It is quite a good one. It is fairly understandable. Some leaflets issued by the Civil Service and public corporations are difficult for ordinary people to understand. This one is fairly clear. But I suggest that some people reading it may be given a false sense of security.

Some of the categories in the code of practice include people receiving supplementary benefit or unemployment benefit. It also includes cases where all the people in the house are Old Age Pensioners". It also includes people who are blind, severely sick or disabled", and cases where there are children under 11 years old or where people in the house are receiving family income supplement. Those are all very deserving categories. They include people who are suffering from some disability, or people who are suffering financial hardship. Nevertheless, as I said, 90 per cent. of the people disconnected fell into the categories which were specifically mentioned in the code. Therefore, the code is hopelessly inadequate, and it is up to the Government to take much firmer measures, and to take them urgently, to deal with the problem of fuel poverty.

Mr. Russell Johnston (Inverness)

I am not sure what the hon. Member's criticisms of the leaflet are. He told us what was in the leaflet, but he did not tell us his objections to it.

Mr. Canavan

The leaflet says that it is "a code of practice". People looking through it may see that they fall into a special category and therefore assume that they will get protection. I shall come to specific cases later. There is nothing wrong with the leaflet in itself, but the code of practice should be toughened up and, if necessary, statutory protection should be given to the categories of people which are mentioned in the leaflet.

I am told that about 30,000 people are at present on the fuel direct scheme in the South of Scotland electricity board area alone. That, too, shows the difficulty that many families on low income now face in trying to pay their electricity bills. Those families have opted for, or been advised to go for, the scheme whereby their fuel is paid directly by the Department of Health and Social Security, by deductions from their benefits. It shows, too, the difficulties that many people are facing as a result of the escalating price of electricity. Since 1974, electricity prices have increased about four and a half times. Of course, the Minister will tell us that many other things have increased since 1974. However, even taking inflation into account, I am informed that electricity costs 47 per cent. more in real terms than it did eight years ago.

I come now to the comparison that I mentioned earlier between Scotland and England. It takes 20 per cent. more fuel to heat a house in Glasgow that it does to heat a similar house in the south of England. In the north of Scotland—for example, in Aberdeen—it takes 30 per cent. more fuel to heat a house than in the south of England. Clearly, for climatic reasons, the average consumption in Scotland is much higher. It works out at 5,500 units per annum in the South of Scotland electricity board area and 6,500 units per annum in the North of Scotland hydro-electric board area, whereas in England the average is only 4,000 units per annum. Thus, Scottish consumers have to burn more electricity to be reasonably comfortable in their homes, although there seems to be no Government compensation for the more extreme climatic conditions that exist in Scotland. It is not surprising, therefore, that the number of disconnections in Scotland is considerably higher than in most of the English areas.

Mr. William McKelvey (Kilmarnock)

It may assist my hon. Friend to realise that I wrote to the Minister about the climatic differences between England and Scotland and received a reply saying that there was no difference.

7.15 pm
Mr. Canavan

That is typical of the Minister. When he gets off the plane in Scotland, he does not seem to realise that it is a bit colder. However, perhaps he is so thick-skinned that he does not realise the difference. One does not need a thermometer to realise the difference.

I was speaking about the percentage of domestic consumers who had been disconnected. Unfortunately, I do not have the most up-to-date figures for the breakdown. The figures that I have are for 31 March 1981. They showed, that the percentage of disconnections in the SSEB area was .55, the North of Scotland hydro-electric board area was .49, whereas for the North-East of England the figure was .28, the North-West .27, South Wales .29, the South-West .18, the Southern area .13, and the South-East .16. So there are significant differences in the proportion of homes that have been disconnected in Scotland compared with south of the border. Unfortunately, my figures are not as up-to-date as I should like. I hope, therefore, that the Minister will give us the up-to-date figures to see whether the situation has improved.

I come now to some individual cases. On Second Reading last week I mentioned the case of a single parent in my constituency, with a young child, whose electricity had been disconnected. She came to see me and I managed to get the electricity reconnected later the same day. Why should people have to come to Members of Parliament? I do not mind helping constituents who are in difficulties, but it shows that there is something wrong with the system. In that instance, there had been a breakdown in communications between the statutory authorities, and I managed, through the fuel direct scheme, and so on, to get an arrangement to repay the debt by instalments. I suggest that it is often against the interests of the electricity boards to disconnect customers. It would often be more in the boards' interests to reach some agreement with the consumers to get debts repaid in instalments. Through lack of communications, often someone appears, armed with a piece of paper, and has authority to break down the door if the person is not in. There is something wrong with the system if that can happen. A local authority would not be allowed to treat its tenants in that way. We debated tenants' rights earlier this evening.

Mr. Tim Eggar (Enfield, North)

How many times has the electricity board normally tried to contact the non-payer before such action is taken?

Mr. Canavan

The electricity board would have the best people to answer that question.

I shall give some instances of disconnections. There are warning notices, and so on, but they may go astray or be misinterpreted. Sometimes people are so terrified that they are unwilling to tell the people in authority that they do not have the money to pay the bill. Many people are so poverty stricken that they are ashamed of it, and that is part of the problem.

In the recent case that I have just mentioned concerning my constituent I was able to have the electricity supply switched on again. However, there was no need to switch off the supply in the first place. The very fact that the board switched it on again at my intervention seems to show that at one level it agreed with me although at another level a man went out to disconnect the supply on the instructions of someone within the board.

That case is by no means unique. Strathclyde regional council gave me some similar documented cases which had been passed to it by its social work department. One was of a Mr. X, a landlord with four sub-tenants, operating a prepayment meter for their electricity supply. A bill of £770 accrued but Mr. X could not be found. The supply was disconnected in breach of the code leaving three pensioners and one student without lighting or electrical facilities. One pensioner died before the supply was reconnected on the Tuesday, following the Friday disconnection. The supply was reconnected when the attention of the SSEB was drawn to the fact that a new code of practice had been issued which prevented the disconnection of tenants for a landlord's debts.

Another case was of a Mrs. E, a recovering alcoholic. With social worker's support she intended to re-establish her family home after its disconnection for two years. She applied for a prepayment meter with suitable calibration in order to pay back the arrears but was told that she must pay £100 before it could be connected. She could not afford £100 so she did not get her prepayment meter.

The SSEB seems reluctant to install prepayment meters. We hear of it refusing to give prepayment meters in areas which it considers to be a bad risk because it is afraid that the house will be broken into and the money stolen. What right has the SSEB or the North of Scotland hydro-electric board to discriminate against tenants just because they live in a particular area? It would be in the better interests of the electricity boards if they could accommodate their consumer's choice of prepayment meters. I know of several cases in my constituency of people who are now managing to pay off debts by using suitably calibrated prepayment meters.

I want to deal with some of the options that have been mentioned. It is all very well criticising the existing system. I am sure many hon. Members will be getting to their feet and doing the same. However, I am not merely a negative critic. I always believe in looking at positive alternatives. One option which has been suggested is that there should be no disconnections without a court order. Earlier, I drew attention to the parallel between local authority tenants' rights and electricity consumers' rights. No housing authority in Scotland could evict a tenant without a court order, yet the electricity boards are apparently able to disconnect supplies without one. Often, the loss of an electricity supply can be almost as bad as the loss of a roof over a person's head. I hope that the Minister will comment on the possibility of introducing amending legislation in order to prevent disconnections without a court order.

Another suggestion is that there should be a statutory code of practice, not just a piece of paper, albeit an easily read and readily understood one. For some people, this code is not worth the paper it is written on because it does not give adequate protection to those whom it is meant to protect. Will the Minister consider the possibility of a statutory code of practice for the electricity boards? If the Department of Energy is too bone idle or unwilling to make the necessary provisions, why on earth cannot the Scottish Office for once be in the vanguard of progress instead of following in the wake of all the silly decisions that are taken by Departments here in London? I am sure that even the Minister, whom I have criticised on odd occasions, would be praised by people like myself if he were seen to be taking initiatives along those lines.

Another suggestion is that fuel-direct plans should be more widely available, not just for those receiving supplementary benefit but other benefits as well. I know that strictly speaking that is not within the Minister's remit, but in the light of collective responsibility I hope that he will have something constructive to say about that suggestion.

In some cases the debt which has been run up is so large that we must face up to the fact that it will be virtually impossible to repay it. I have heard of some cases where, under the fuel-direct scheme, it would take about 20 years to repay a debt. In such cases it would be as well to be realistic and write the debt off if there are special circumstances and give consumers a fresh start rather than that they should have such huge debts round their necks, perhaps for the rest of their lives.

As I have mentioned, prepayment meters are often not as widely available as they should be. The electricity boards say that they will be made available where it is safe and practicable to do so. Will they consider giving them to consumers on request unless there are absolutely compelling reasons why they should not—for example, the danger of break-ins or possible danger to the people living in the house?

So far, the Government have failed to give any constructive response on these matters. On Second Reading last week I, and several of my hon. Friends, put these points to the Minister, although perhaps more briefly. He has had the best part of a week to do his homework. Therefore, I hope that when he replies he will show that he is not only aware of the problem but that he will do something about it. I have frequently raised in the House and elsewhere the scandal of warrant sales. This matter is even worse because it affects thousands more families. We are now in the middle of another severe winter. The Minister must say that he intends to do something by accepting my new clause.

7.30 pm
Mr. J. Grimond (Orkney and Shetland)

I trust that none of the extra money that may be made available to the electricity boards under the Bill will be used for uranium mining in Orkney. We are as emphatically opposed to uranium mining as we ever were.

I congratulate the North of Scotland hydro-electric board on its experiment with wind power. I have no objection to the money being used for that purpose. Orkney's power supply is now joined to the mainland, but windmills on the outer islands could make an important contribution to providing power and lighting on those islands. Some of the islands may come to depend upon wind entirely. I do not exaggerate the ability of wind power to deal with Britain's energy requirements, but the experiments are important. I hope that they will be encouraged and kept at a practical level.

We have not heard much about wave power lately, but we can make use of experiments by other countries. Wave power does not seem as useful as once it did, but it could be a large source of energy. I hope that we are continuing our experiments or ensuring that we can take advantage of experiments elsewhere.

I support what the hon. Member for West Stirlingshire (Mr. Canavan) said about disconnections and the Scottish climate. The weather may be bad in Stirlingshire, but it is far worse in Orkney and Shetland. Apart from cold and wind, we have to beat the damp and our fuel bills mount year by year. Many houses these days are all electric. In Orkney and Shetland we have no gas except calor gas so that we are entirely dependent upon electricity. To be cut off is exceedingly serious.

The most useful step would be to keep down the price of electricity. It is extraordinary and shocking that the price of electricity and other fuels has risen at a rate that exceeds the inflation rate. My constituents are annoyed when they look out of their windows and see the night sky lit up by the flaring of gas at Sullom Voe and, to a lesser extent, at Flotta. They cannot help thinking that there must be a scientific way of using that energy. A little of it is used but year after year we are told that the position will improve and that more of the gas will be used, but it is still flared off in enormous quantities.

Hardship and danger result from cutting off electricity supplies. In my experience the hydro board behaves with humanity. Unlike the hon. Member for West Stirlingshire, I have received few, if any, complaints about the board's lack of humanity to people in difficulty. I hope that the Minister can give an assurance that the welfare services are in a position to assist people who find paying their bills difficult. I accept that some people deliberately avoid paying, but I hope that people in genuine difficulty will not be suddenly cut off and that the welfare services ensure that hardship is avoided or kept to a minimum.

Mr. McKelvey

I welcome the opportunity to support the new clause tabled by my hon. Friend the Member for West Stirlingshire (Mr. Canavan). I admire his initiative.

Scotland's electricity boards cut off 20,000 households last year. If the figures are anything to go by, they will cut off electricity supplies from even more households this year. Figures show that well over three-quarters of the people cut off are poor and suffer hardship. Fuel poverty and the inability to afford adequate warmth results in an important social problem that affects a growing number of unemployed, elderly, sick and disabled people and their families throughout Scotland.

The main reason for disconnection is poverty. The electricity boards still believe in the myth that people can afford to pay but choose not to. They claim that most people pay up after disconnection. That is true, but, since it is a matter of life and death, means of paying the bills have to be found. People go to the moneylender or skip paying other debts.

The code of practice aims to alleviate hardship among families. It is an easy document to read, but its key defect is that it contains no relationship between the people defined as suffering hardship—the blind, unemployed and disabled—and the financial help available through Government agencies. A family in the hardship category may get nothing from the DHSS and is unlikely to be treated differently from any other family. There is no guarantee that people will receive money from Government agencies to help with their fuel bills. It is cruel to dispatch the "offenders" to Government agencies to state their case when their hopes will be dashed and they will receive no assistance.

Only this morning a lady of almost 70 years of age contacted me. She lives alone and her total income is £37.50 a week. Religiously she puts £10 a week away to cover the cost of heating. She lives in an all-electric house and it takes £10 a week, not to heat the house, but to heat the one room to which she is confined. Apart from the cold that she suffers when she goes to the kitchenette from the living room to make a cup of tea, the lady fears the cost of heating the kettle. She can afford only £10 a week. She manages to pay her fuel bill but finds it difficult. She is confined to her home because of her disability and to one room because she cannot afford to heat any other rooms.

Beer, baccy and Benidorm are often blamed for fuel poverty. The myth is that low income people are feckless and reckless in the way that they manage their money. Whether disconnections or evictions are involved, some say that mismanagement and a frivolous attitude to money is to blame. The South of Scotland electricity board would argue that they are feckless. I have encountered that attitude on many occasions. I have had many cases referred to me, which I have referred to the SSEB. To be fair to the board, in many cases it has managed to reconnect the supply and come to some financial arrangement with the appellant. Not one of the cases with which I have had to deal has been due to mismanagement or feckless spending by the individual or family. It has been the opposite. They simply did not have the money to pay the debts they had accumulated in order to have an adequate standard of living. Most if not all are living under conditions that I and most hon. Members would consider inadequate.

I do not want to reel off thousands of statistics, because they can be not just boring but difficult to understand. However, it is worth mentioning some documents from which statistics can be obtained by any interested hon. Members. I recommend to the Minister that he should read, if he has not already, "Living in the Dark Ages" which is produced by Robert Edwards and Alistair Grange who are on the Scottish Fuel Poverty Action Group. It is an excellent document and some of the chapters are like reading "A Christmas Carol" by Charles Dickins. "The Human Cost of Fuel Disconnection" is a discussion paper that has been issued recently and is far-reaching in its analysis of the fuel poverty problem. There is an excellent document which, although produced in 1981, contains prophecies about fuel poverty. It is by the fuel poverty debts working party under the chairmanship of Arthur Long of the Strathclyde regional council. The prophecies contained within the document have borne fruit and all the horrible things that it said would happen are happening.

If there are to be between 17,000 and 20,000 disconnections at this time of the year the cost in human misery cannot be calculated in cash terms for all the families who, over the Christmas period, might find themselves without a light, and not just for the Christmas tree, if they had enough money to purchase one. The household might be in darkness and there would be no means of cooking a Christmas meal, if they could afford one. My hon. Friend the Member for West Stirlingshire pointed out that there is a case for a comprehensive fuel allowance to be considered and established by the Government.

I have written to the Minister about the climate and was astonished by the reply that I received. I do not believe that he could prove even statistically that the climate in the South of England is the same in the winter as the climate in the North of Scotland. I live in Kilmarnock, on the west coast where it is extremely damp. The dampness, added to the cold, gives most of my constituents a rather rough time. Due to the rising unemployment in the area, many of them cannot warm their houses adequately. The Select Committee on Scottish Affairs is about to probe the effect of dampness throughout Scotland. Dampness is a scourge and when it is investigated I have no doubt that the effects of inadequate heating during the winter will throw some light on the difficulties suffered by some of our constituents.

The most important point raised by my hon. Friend the Member for West Stirlingshire was the fact that the electricity boards have the right to enter homes in order to make disconnections. That power requires legislative change. It should be discussed in the House. Boards should not have the right to enter homes and disconnect the supply as they have at present. Even if that right were curtailed severely, we should need a third party to arbitrate before the disconnection was made.

7.45 pm

It is not always those in debt who are disconnected. Not long after I had raised the matter of disconnection in the House and had written to the Minister, I went home, after two days' holiday, to discover to my horror that my electricity had been disconnected. The electricity board did not need to gain entry to my home, but it was inconvenient to find one's all-electric home disconnected. It was a mistake because I had paid my bill. The SSEB was quick to apologise and send someone to reconnect my supply. Apparently my supply had been inadvertently disconnected in mistake for someone else's. Although it was in the spring, it was inconvenient and annoying to have no electricity. However, that experience pales in comparison with that of someone who, during the winter months, with perhaps a sick or disabled child, elderly person or young family, has to go through not just the humiliation and inconvenience of having their electricity supply disconnected, but the danger of suffering illness or hypothermia from such disconnections.

I applaud my hon. Friend the Member for West Stirlingshire who tabled the new clause. I hope that we are successful in having it added to the Bill.

Mr. Norman Hogg

The purpose of the Bill is to increase the statutory borrowing limit of the North of Scotland hydro-electric board and the South of Scotland electricity board. The Opposition support the proposal. Taken with the new clause in the name of my hon. Friend the Member for West Stirlingshire (Mr. Canavan), it would ensure that some of the money that the House is making available to the electricity supply industry would be used to remove a social problem. All of us who represent urban constituencies in Scotland are becoming more and more aware that it would make the electricity boards more aware of their social responsibilities.

We know that the large increases are required to meet new developments, in particular the Torness nuclear power station. The planning and building of that power station was controversial. It is now under way and will be completed and ultimately generate electricity. It is right, therefore, that we should make money available for it, but I was struck by the admission by the Minister on Second Reading on 7 December 1982, at c. 741 of Hansard that only the Government could find the money required for that kind of project. That makes a joke of another Bill that is going through the House, which talks about an element of privatisation of the electricity supply industry. In one case the Minister says that only the Government can find the money because of the scale of the project, but in another case we have a Bill that proposes privatisation. I am worried about what that shows us of the Government's attitude.

We are talking about £1,097 million for the Torness power station, which is a considerable sum of money. However, it is difficult to see what new projects on that scale will be developed by the South of Scotland electricity board and the North of Scotland hydro-electric board up to the end of the century. I understand why the limits are being increased.

A large section of Scottish opinion believes that our electricity supply industry already has surplus capacity, and that will be further increased when Torness comes on stream. In addition, we have de-industrialisation. If we were faced with the disastrous decision to close Ravenscraig, one spin-off would be additional overcapacity. Even if we save Ravenscraig—everyone in Scotland hopes that the Government will decide to retain it—the situation is bound to get worse. Every closure, large or small, causes problems for the electricity supply industry. Many industries use electricity as a primary fuel. As the closures continue, so does the overcapacity.

I understand that we are voting the extra money to meet existing commitments and for updating plant. In the foreseeable future the industry's main activity will essentially be updating and refurbishing existing systems. I repeat that I cannot see what major projects will take place before the end of the century.

I asked the Minister on Second Reading what major policy decisions on generation he envisaged for the electricity boards in Scotland for the immediate years ahead. I hope that today we shall have a better reply. Both boards are capital intensive, as is the whole supply industry. Manpower levels have constantly fallen, certainly since the introduction of productivity agreements in the early 1960s. I well recall all that happened then. Capacity and demand continued to rise, while manpower continued to fall. Although the industry has more capacity than is necessary to meet the economy's needs, it has gone some way to make itself an efficient organisation.

My hon. Friend the Member for West Stirlingshire argues that a financially efficient industry, given further moneys from the Government, could take a different line on disconnection. My hon. Friend shows great interest in the problems of poor people in Scotland and it is to his credit that he brings the matter before the House.

I hope that the Minister has read the report to which my hon. Friend the Member for Kilmarnock (Mr. McKelvey) referred. It was prepared by the social work department of Strathclyde regional council and is entitled: The fuel debts working party of Strathclyde regional council report. It was prepared under the direction of Councillor Albert Long, the convenor of the social work committee, and contains useful information about a worrying situation.

Many people faced with disconnection live in what are described as modern homes. They are often council properties and are heated by electricity or by gas that requires electricity to operate the system. A disconnection means that those people have no means to heat their home, cook or have hot water. The houses are often in smokeless zones and are frequently built of inferior materials, as the Select Committee on Scottish Affairs will undoubtedly discover. They are damp, have heating problems and consequently high fuel bills. The disappearance of open fires also brings problems. Poor people suffer the consequences of disconnection.

Cases are brought to my attention mainly by the unemployed workers centre in Cumbernauld. Councillor Eamon Monaghan has made a special study. One family came off the fuel direct scheme and the husband went on to invalidity benefit and ceased to receive supplementary benefit. The problem then arose.

Prepayment meters might help. I was a full-time trade union officer for the administrative and professional staffs in the electricity supply industry. I remember when we ran down the prepayment sections in the district offices of the South of Scotland electricity board. It was the board's policy no longer to install meters and to remove those already installed, but with the changing economic situation and rising fuel costs at the beginning of the recession it changed its mind.

Many people who would have benefited from the system do not have a prepayment meter. I know of the difficulties in my constituency of having prepayment meters installed. There are too few prepayment meters, and too few people who are likely to get into difficulties are identified early enough. More must be done for families whose fuel supplies are disconnected.

I hope that the Minister will respond positively to my hon. Friend's proposal. He has done the House a service by bringing the subject to our attention. He has also done a service by having the matter debated when these problems are becoming acute for many families. I hope that the Government will have something positive to say about what they intend to do about the unfortunate people who face a Christmas without heating or lighting.

Mr. Donald Dewar (Glasgow, Garscadden)

It has been an interesting, short debate on clause stand part and new clause 1 which has been conveniently combined with it. I do not intend to follow the knowledgeable remarks of my hon. Friend the Member for Dunbartonshire, East (Mr. Hogg) about the wider issues in the industry as we considered some of them well on Second Reading. On that occasion, my hon. Friend the Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) spoke for the Opposition.

The electricity industry in Scotland faces enormous problems. One of the most important is the external financing limit and funds that will be available for future development. I hope that the Minister agrees that considerable overcapacity is another. One of the prime reasons for that is the serious and dangerous recession into which the Minister and his colleagues have plunged the country by mismanagement of the economy in the past few years.

I have recently examined the South of Scotland electricity board's report for 1981–82. It dealt with the closure of Invergordon which, to use what used to be a fashionable Tory phrase, "at a stroke" reduced by 26 per cent. the output of Hunsterston B. I take the board's word for it—I have no reason not to—that that will reduce its coal requirement for a year by 750,000 tonnes. Although Invergordon is a spectacular example of the result of the Government's policies, there are many others. We are witnessing dangerous circumstances which affect almost every side of the nation's life. They have resulted in high unemployment and an increasing toll of bankruptcies. Another certain byproduct is that life has become extremely complicated for the electricity boards that operate in Scotland and other parts of the United Kingdom.

I shall not concentrate on clause stand part as it would be difficult to do so without rehearsing what we have already gone through on Second Reading. I should like to deal with the new clause of my hon. Friend the Member for West Stirlingshire (Mr. Canavan). Like many other hon. Members, I congratulate him on his ingenuity in drafting it and getting it selected. It is a peg for debate. There are some difficulties with some of the phraseology—I am sure that my hon. Friend would be the first to agree. If it reaches the statute book, I am not sure what parts of the increased borrowing will be allocated to the end in mind, although an adequate sum will have to be allocated. Nor am I sure about the definition of "result in hardship". As has been said by many hon. Members, disconnection from electricity almost invariably leads to hardship. Varying degrees of social crisis may be attached to the personal hardship—it may depend on the age of the person, the composition of the family, where children are involved and so on—but for almost everyone, suddenly to live without lighting and, often, heating or a principal form of heating will cause considerable hardship. It is something that goes beyond the normal definition of mere social inconvenience.

Perhaps as a result of the recession, the problem of fuel disconnection will sadly be with us for a long time. I shall quote some figures. They are a little out of date, but more recent statistics are not available. Between 1977 and 1979, the number of employed people living on earnings below the supplementary benefit level for families rose from 1.9 million to 2.1 million, and the number has almost certainly increased since then. The poorest 10 per cent. of employed male workers now earn 64.5 per cent. of average earnings.

Unfortunately, the type of people who are likely to get into trouble with fuel disconnections are, because of the Government, becoming much more numerous and a much more distinct group in society. We see, as will anyone who has examined the new earnings survey for 1982, that there is plenty of evidence to suggest that the gap between those in skilled jobs that involve overtime and substantial earnings and those who are at the bottom end of the wage-earning scale is becoming greater. That will produce increasing problems for the electricity boards.

It is fair to point out that there has recently been a considerable improvement. There is a long way to go but in terms of the number of people who have been disconnected by the South of Scotland electricity board, there is no doubt that the code of practice and the efforts that have been made by such groups as the Fuel Poverty Action Group in co-operation with the South of Scotland electricity board have improved matters.

Mr. McKelvey

Although there have been improvements, is my hon. Friend aware that last September there were 1,137 disconnections in the SSEB area, and that there were 1,166 this September? Does he agree that, despite the SSEB's good intentions, an increasing number of people will fall into the trap and that the number of disconnections will continue to increase?

Mr. Dewar

I am interested in what my hon. Friend has said, although I am not familiar with those figures. The SSEB's accounts for 1981.82 show that to the end of March 1982 3,522 people were cut off from the electricity supply as compared with 4,471 for the equivalent period the year before. That is a considerable reduction. I have seen figures from other sources that suggest that the range is even wider than that. I am told that the number of disconnections to the end of July 1981 in the SSEB area was 5,734. That is horrific and startling. In September 1982—the most recent figure that I have been able to obtain—the number is down to 3,450. I hasten to say that that is still a worrying number and it should not give rise to any complacency. Nevertheless, although in the year to September 1982 there were 12,063 disconnections in the SSEB area, that represents a significant drop as compared with the previous year. I should like that drop to continue. There is a crisis but we have witnessed some marginal improvement. It would be churlish if we did not recognise that and pay tribute to the board's efforts in that respect.

Nevertheless, an enormous amount of hardship is concealed in the figures. The problem is that long-term disconnection is becoming a major feature of the group. It is perhaps not surprising that 80 per cent. have been disconnected for more than one month, but at one point in the depths of last winter more than 1,100 consumers had been disconnected for more than a year.

That suggests a level of misery which, from our personal experiences, the Minister and I might find difficult to encompass. I am used to the conveniences of comfortable living, and it would be hard to cope with the elementary conveniences with which these people must live. They are often forced on them through no fault of their own, often through misfortune and perhaps through an inability to manage. However, as a co-operative venture, society should try to help.

There is still room for improvement. The point of the debate is to discover whether there is some way in which we can produce more improvements as well as a more sympathetic and supportive approach to these social problems.

A number of things have produced a slight improvement in the figures to which I have referred, one of which has been the introduction of prepayment meters. Every hon. Member in the West of Scotland—I have no reason to believe that Edinburgh is that different—has had long correspondence with the electricity board about the introduction of prepayment meters.

If, taken in isolation, I have some sympathy with the management's arguments because prepayment meters can produce problems in terms of security, what happens if the money is stolen and who is responsible for repaying it? I do not minimise these difficulties, and I can understand the electricity board's reluctance to move back to prepayment meters on demand. However, we have gone a long way towards that, and it has been of considerable help to a large number of families.

The SSEB says that it will install these meters if it is "safe and practicable" to do so. I still have some reservations about the way in which that phrase is interpreted. I am told—I record this with some concern—that in certain areas of deprivation, where social judgments are made by the board, perhaps on the basis of its bad debt experience, there is still a reluctance to install prepayment meters.

In some cases, there is the strange and sham performance of installing a prepayment meter that is fitted without locks. The idea is that 50p is put in the slot to activate the supply, but it is then taken out and the person gets a normal bill at the end of the period. There may be some slight psychological advantage in the fact that each time money is put into the slot it reminds the person that he is consuming electricity, but that does not have the desired advantage of a proper prepayment meter. The basis of such a meter is that one pays as one goes along and knows that the money is "in the bank". Such a meter ensures that a person is not faced with a substantial lump sum demand, perhaps on a precarious family budget, at the end of the quarter. Having moved a long way towards making prepayment meters freely available, it would assist if the board completed the job.

I also understand that in the SSEB area there has been a considerable increase in the use of the fuel direct scheme. As the Minister knows, this scheme is available to people who are on supplementary benefit and who are in arrears. Unfortunately, the number of people on supplementary benefit has risen sharply and is now about 6½ million throughout the United Kingdom. That is a further sign of the difficulties into which we have all been plunged by the economic mismanagement of this Administration.

According to the SSEB's annual report, about 25,000 people in the South of Scotland are now on direct payment compared with 17,000 the year before. I understand that that is a considerably higher proportion of users than in other electricity board areas. I welcome the fact that this scheme is available, and I am pleased that last April it was possible to arrange a relaxation of the old SSEB rule, whereby if a person had a debt above £150 he could not go on to direct payment. That was a sensible change, although I understand some of the reasons for the board's reluctance to agree to it.

One or two consumers in my constituency were not so impressed with the change in the regulations, which meant that the weekly deduction went up from £1.20 to £2.40 in order, as the Minister said, to facilitate repayment over a shorter period. Be that as it may, the change is a hopeful development.

We are all examining ways to improve the regulations. Would it not be better to allow people who receive supplementary benefit to go on to the direct payment system if they are not yet in arrears but if they feel that direct payment would help them better to manage their affairs?

8.15 pm

The South of Scotland electricity board still takes the view that arrears must be accumulated before the direct payment system is brought into play and arrangements are made through the Department of Health and Social Security. The direct payment system should be available to anyone on supplementary benefit who is genuinely fearful about his affairs and who wishes to avoid falling into arrears. The extension of direct payments in that way would be a minor but especially helpful step.

Although there are problems of definition in the code of practice, there is always room for improvement. The code has generally been a success and in that context I am grateful for the support of my hon. Friend the Member for Dunbartonshire, East. Although the code has been a success, some people have suggested to me that it should be put on a statutory rather than a voluntary basis. Today, I took the trouble to examine replies by a range of Ministers, mostly from south of the border, to questions about the implementation and interpretation of the code of practice. I found that many of the decisions are left to the individual boards.

That arrangement causes problems. Anyone who has examined the recent Policy Studies Institute report even in the cursory way that I have will see that there are wide variations in practice depending on in which board area one happens to live.

Social agencies and voluntary agencies would widely welcome a statutory framework for the boards rather than leaving the arrangements to voluntary guidance, which allows a great deal of come and go. I do not suggest that a statutory code would be revolutionary, but I suggest to the Minister that such a code is worth examining.

My hon. Friend the Member for West Stirlingshire spoke about disconnections. I notice that, in its latest annual report, the SSEB says There is no effective alternative to maintaining the power of disconnection. It may well be that, in extremis, disconnection will be necessary in some cases, although I wonder whether the social cost-benefit analysis would support such disconnections. In any event, as my hon. Friend the Member for West Stirlingshire said, we know that there will be a report. An article in The Scotsman on 5 November referred to it at some length. It will be entitled "Fuel Hardship—Towards a Social Policy". The report, which is being prepared by officials for COSLA, will cover the whole of the United Kingdom. A key recommendation will be that there should be no disconnection without a court order. There may be difficulties in that. I have some reservations because I can see the problems, but the proposal should be considered with interest, concern and some sympathy to see whether it would help.

When I was a legal apprentice I attended the small debts court in Glasgow, where hundreds of small debt actions were raised on behalf of the SSEB. Normally there is a disconnection, followed soon afterwards—very often when the family's finances are further strained by the expense of obtaining temporary methods of cooking and heating—by a court action to recover the money, with all that follows from that because of our archaic and long-unreformed laws on diligence. That is a typical picture, but what should happen is that where there will almost certainly be a summary cause action to recover the money disconnection should not be possible until a court has considered the matter and there has been certification that the proper procedures in the code of practice have been carried out. That may be clumsy, expensive and difficult. At the moment it is only a possibility, but we should consider it and I hope that the Minister will show an open mind about how we conduct such matters in the future.

The Opposition will try to keep the matter under review and to monitor it, because we are unanimous in our belief that it is a genuine social problem. The statistics that we have been discussing during the past few hours are the evidence of much misery and social hardship. The reasons for that—the Minister will not resent this because he is used to being told it, and he has developed a hardening of the skin—are the recession and the Government's fuel pricing policy, which has forced up electricity and gas prices artificially, far outstripping the increase in earnings and the increase in inflation. Perhaps he can think about those matters at his leisure and in private.

From the evidence of the past few days, Scotland will suffer yet another very hard winter. My hon. Friend the Member for Kilmarnock talked about the different climates in Scotland and in the south of England. I travelled on the morning flight with my hon. Friend today and it was a subject of conversation as we shivered our way to the aeroplane in Glasgow and arrived in London to a distinctly warmer reception. I watch the gripping frost in the west of Scotland, remembering what happened to our housing stock last winter, with some apprehension, but I am sure that if I go too far down that road, Mr. Dean, I shall find myself in some difficulty. Every disconnection would be a tragedy in such a climate.

I hope that the Minister will remember that in January 1982 there was an arrangement with all the British electricity boards that there would be no disconnections for only one week on the grounds that, in such severe weather, disconnection would be barbarous and grossly unfair to members of the public with financial difficulties. If we have the same appalling climatic conditions during the next few weeks, I hope that the moratorium on disconnections that was possible in early 1982 will be considered again, perhaps on an extended and much more generous scale. I saw what happened on the housing schemes in my constituency. The loss of the basic means of heating, lighting and power in severe weather can be a disaster, and it is a matter that hon. Members should never consider lightly.

Mr. Alexander Fletcher

The hon. Member for Glasgow, Garscadden (Mr. Dewar) made several points and he attempted to be constructive and helpful. Naturally, I wish my response to be similar. The hon. Gentleman mentioned overcapacity in the Scottish electricity system. I cannot deny that, but the main purpose of the Bill is to provide funds for the construction of the nuclear station at Torness. As the debate illustrated especially well, the price of electricity is of even greater importance. The Government believe that electricity generated by nuclear stations is cheaper than that generated by coal or oil. Hydro-electricity is cheaper, but there is only a limited volume. The Bill that provides capital to the Scottish electricity boards is before the House because of the essential need to finance the continuation of the construction of Torness.

Mr. Dewar

Will the Minister agree that one of the great disappointments under all Governments of recent years has been the failure of nuclear generating capacity to meet its price targets? Will he say how confident he is about Torness? At what price does he expect Torness to be able to produce electricity?

Mr. Fletcher

We expect Torness to improve on Hunterston B, and Hunterston B was a considerable improvement on coal, although it was a prototype station. That should give the House some encouragement and should give the boards' consumers in Scotland some encouragement for the future, bearing in mind the points that have been stressed by Labour Members during the debate.

The hon. Member for Garscadden mentioned the closure of the smelter at Invergordon—a matter that has been the subject of debate on previous occasions. I must correct him on one point. The prime reason for the closure of the smelter was not the price of electricity, important as that was; it was the absolute collapse of the aluminium price on world markets. That is what did the damage to the British Aluminium Company and to some other companies in that field.

With regard to disconnections, I do not wish to minimise in any way the importance of the considerations that lead the boards, the social work departments and the Department of Health and Social Services to deal with the problems of disconnection—and to deal with them as sympathetically as possible, as I shall endeavour to explain. The hon. Gentleman mentioned specifically prepayment meters and answered the question himself when he said that the policy of the boards is to install them whenever practicable. He was kind enough to mention some of the difficulties that the boards face in connection with prepayment meters.

The hon. Gentleman suggested that the trigger for fuel direct payments by the DHSS should not necessarily be the accumulation of debt by consumers. I appreciate the thinking behind that suggestion and would like to consider it further with my hon. Friends. I do not know how practical it would be to switch direct payments from the DHSS in the circumstances that the hon. Gentleman envisages, but I should like to consider it. Perhaps when I have done so I can come back to the hon. Gentleman and tell him what conclusions my right hon. and hon. Friends and I have been able to reach.

The hon. Gentleman suggested that the code of practice was working reasonably well. I would support that contention. It is working well on a voluntary basis. I shall take note of the hon. Gentleman's points.

I believe that disconnections have to remain as a last resort, otherwise people might say "Why should I pay my electricity bill if, at the end of the day, no action will be taken against me if I do not do so?" If any Labour Member has a remedy for the problem other than disconnection, I hope that he will tell me about it.

I hope that hon. Members will bear in mind the statutory responsibilities of boards to balance their books, to match their expenditure with their revenue, and not to discriminate unfairly to the benefit of any particular category of consumer. The boards must carry out their statutory responsibilities. They need some sort of deterrent against certain people. I hope that Labour Members will not suggest that in Scotland there are not some people who would dodge the payment of their electricity bills if there were no extreme remedy against them when they flagrantly abuse their responsibility.

Mr. McKelvey

I think that all hon. Members would accept disconnection if someone did not want to pay the bill and the matter went to arbitration. However, the Minister has to bear some responsibility for his Government's pricing of electricity over the past three years. They have doubled the price of electricity, even if we take inflation into account. It was in 1981 that the South of Scotland electricity board made a profit of £27 million, but it still put up the price of electricity. One remedy that the Minister could take is to make the electricity cheaper.

Mr. Fletcher

I repeat that the purpose of the Bill is essentially to finance the construction of a nuclear power station. The benefit of that should be cheaper electricity in Scotland in the years ahead.

8.30 pm

I should like to say a little more about disconnection policy so that there can be no misunderstanding about what the boards are trying to achieve. The Scottish electricity boards carry out disconnections in accordance with the industry's code of practice, as hon. Members are aware. The operation of the code of practice has been examined by the Policy Studies Institute, an independent body. Its report, which was published recently, confirms that the Scottish electricity boards adhere to the code and that breaches rarely occur. Of course, human nature being what it is, breaches may occur from time to time, but the independent review states that such breaches are rare.

Disconnections are carried out only after all attempts to make the customer come to an arrangement to pay all his debt over an extended period have failed. Various means are available to consumers to help them budget to meet their bills, including savings stamps and monthly payment schemes. The SSEB operates bi-monthly billing with the option of monthly bills. Those options are widely publicised, as the hon. Member for West Stirlingshire (Mr. Canavan) made clear in his speech.

The boards will also install prepayment meters, subject, as the hon. Member for Garscadden said, to those meters being safe and practical. The success of the board's efforts can be seen by the fall in the number of consumers off supply at the end of November when the figure was 3,525 compared to 5,379 for the same month last year. The total number of disconnections for the year ending 30 November 1982 was 14,903 compared with last year's figure of 17,889, a decrease of almost 3,000. For consumers in receipt of supplementary benefit there is a fuel direct scheme operated by the boards and the DHSS at the request of the consumer. There has been an increase of the numbers participating in that scheme from 23,332 in November last year to 33,652 at the end of last month. The trend, as has been acknowledged by at least one Opposition Member, reveals the willingness of the boards and DHSS to continue to seek better methods of tackling the problem, which has been brought to our attention by Opposition Members.

I say to the hon. Member for West Stirlingshire that Scottish consumers use more electricity, not so much for climatic reasons but because local authorities in Scotland, in their wisdom, gave tenants no choice on the installation of their central heating systems. In many areas of west central Scotland in particular, tenants were given houses that were all-electric, with underfloor heating. Not surprisingly, they found that the cost of the heating was well over the rents that they were being asked to pay. Because they could not afford to pay the full costs of electrical heating, many of them installed other means of heating their homes, and switched off the system that was supplied.

It is unfair to blame the problem entirely on the electricity boards. The hon. Gentleman must look to local authorities in Scotland, which are largely controlled by the Labour Party, which put up those houses, gave no choice to the tenants and took the steps that have created so many of the problems that he illustrated to the House.

Mr. Canavan

The Minister is making precisely the point that I made on Second Reading. As far as possible, tenants should be given a choice of the fuel that is to be used for heating their houses. Will the Minister or his colleague send an appropriate circular to the local authorities advising them, or even directing them, on this matter? Will he give them adequate funds to see that his recommendation is implemented?

Mr. Fletcher

The hon. Gentleman is suggesting that we spend money on all fronts. I am saying that some local authorities and many tenants have moved in this respect. The blame lies with the planning, the design and the decision to build the houses without giving any choice to tenants in the first instance. I suggest that the hon. Gentleman tries to draw too many conclusions from his constituency case. The action that he took was responded to promptly by the electricity board. He should bear that in mind when making his general complaint. Neither he nor Strathclyde's social work department needs to wait for a debate of this sort before raising the specific cases that the hon. Gentleman has produced.

Mr. Canavan

The Minister is not addressing himself to the constructive alternative that my hon. Friends and I have offered. The unfortunate instances to which I have referred would never have occurred in the first place if the onus were on the electricity board to obtain a court order before it disconnects someone's electricity supply. These disconnections should not happen. Consumers should not have to ask their Members of Parliament to intervene. There should be some statutory protection. The new clause will go some way towards meeting the need for that protection.

Mr. Fletcher

I know that the hon. Gentleman and his hon. Friends are anxious that the onus of a court order should be introduced. I am not sure whether the hon. Member for Garscadden, who knows something about these matters, takes the same view.

Mr. Dewar

It is worth looking at.

Mr. Fletcher

The hon. Gentleman says "It is worth looking at", and in so doing uses great political sense. There are many things that are worth looking at, but practicability has to be taken into account. It is not the boards' view, and nor is it the Government's, that it would be a practicable proposition to require a court order every time a disconnection was necessary.

Mr. Canavan


Mr. Fletcher

Evidence of non-payment is collected by the boards long before disconnection takes place. The boards make considerable efforts to try to help consumers to meet their requirements. They try to understand the nature of the problem in individual cases. When all that has been done, the boards feel that they have substantial evidence that insufficient effort has been made by the individual to pay his bills or to seek help from the appropriate quarter if he is unable to pay. For that reason the boards' advice—we support their view—is that the onus of a court order is unnecessary.

The hon. Member for West Stirlingshire emphasised—he has done so previously—the importance of a court order before disconnection takes place. The Government feel that there needs to be the sanction of disconnection. If there is not, why should anyone pay? We believe that the procedures that the boards employ, which have been verified by an independent study, make it clear that every effort is made in using the code of practice to try to help consumers long before disconnections are contemplated.

The right hon. Member for Orkney and Shetland (Mr. Grimond) mentioned a number of matters. I note his opposition to any suggestion that there should be uranium mining on Orkney. His constituents have also made representations direct to the Department of Energy and the Scottish Office. The windmill projects are very important and may provide a solution for some of the smaller recommendations in the outlying areas. The North of Scotland hydro-electric board is contributing to a consortium investigating the suitability of prototype wave machines on the west coast of Scotland, and that possibility is still in business.

I hope that I have met points that were made by the right hon. Member for Orkney and Shetland about disconnection. The price of electricity is not to be increased during the coming year. He mentioned the flaring of gas, and will know that the Peterhead power station has been converted and is now burning gas. The benefit of that, because of the new connection that we inaugurated between the North of Scotland and the Orkney Islands, will go to the islands in terms of gas being used. I hope that the right hon. Gentleman will agree that this is a proper and sensible purpose for the gas, instead of having if flared off shore. I am glad that the right hon. Gentleman has few complaints about the board and the services that it is providing, and that he welcomes the fact that the welfare services are making a big effort to assist.

Mr. Dewar

I am glad to catch the Minister's eye before he comes to a conclusion, which cannot be far off. I raised specifically with the hon. Gentleman what happened in January 1982, when, because of the severe weather, and with the approval and active concurrence of Ministers, arrangements were made to have a moratorium on disconnections. If we have another severe winter, I am anxious to have an assurance that such a policy would be considered and actively pursued by Scottish Office Ministers and the boards.

Mr. Fletcher

If a similar problem arises, we shall consider carefully that solution.

The hon. Member for Kilmarnock (Mr. McKelvey) again spoke of disconnections and I make no complaint about that. However, no genuine case needs to go to a monelender as he suggested, because the DHSS with its fuel direct scheme is more than willing to assist, as are the electricity boards. I am glad that he acknowledged the quick response that he received from SSEB when he found himself a disconnected consumer because of an error. We have here an example of a poor chap, who for whatever reason—perhaps the cheque was in the post or any of the other problems that can apply—was cut off. Nevertheless, the Committee will be glad to hear that when he was disconnected and made proper representations to the board, within a few hours he found himself back on the grid.

The hon. Member for Dunbartonshire, East (Mr. Hogg) wondered what new projects would require finance between now and the end of the century. The Bill looks to the end of the decade and essentially provides funds for the Torness construction project. Other requirements will arise, as the hon. Member acknowledged, such as capital spending projects for updating and refurbishing the existing system. This finance is included in the borrowings that are being sought. At present approval is not being sought for any major projects after Torness. No application has been made to my right hon. Friend for any further major power station projects. I am glad that the hon. Gentleman acknowledged that the industry is efficient.

These are the points that have been raised by Labour Members. I accept that the problems of disconnection are vexing and cause hardship, but I repeat, every effort is being made to consider the circumstances of each individual case. The last thing that the boards, the DHSS, the Scottish Office, or anybody else wishes to do is ride roughshed over electricity consumers. We are continually examining and re-examining the methods employed in all these circumstances with a view to being as fair-minded as possible, not just to those who find that they cannot meet their electricity bills, but to the vast majority of consumers who meet their bills whatever the circumstances.

Question put and agreed to.

Clause 1 ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

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