§ Mr. John Spellar (Birmingham, Northfield)I beg to move,
That leave be given to bring in a Bill to regulate the standing charges to pensioners of public utilities.It is appropriate that we are discussing this Bill on the shortest day of the year at the start of the coldest period of winter when most of Britain is already shrouded in a considerable amount of snow. The problems of fuel costs and standing charges have exercised the House considerably over the past few years, even as recently as an Adjournment debate on 13 December.The background to that concern is simply that, while the retail price index between May 1979 and September 1982 increased by 49 per cent., gas charges increased by 94 per cent., and electricity charges by 82 per cent. We are also aware that while fuel costs have exceeded the average increase in the retail price index, standing charges have increased even more quickly than fuel costs generally.
When my hon. Friend the Member for St. Pancras, North (Mr. Stallard) introduced his Bill earlier in the year, a member of the public wrote to my hon. Friend describing the increased bills that that person had had since 1980—not even since 1979. The cost of electricity increased from £3.20 in February 1980 to £7.28 in August 1982—an increase of 127 per cent. The cost of gas increased from £2.16 in March 1980 to £8.00 in March 1982—an increase of 270 per cent. His telephone quarterly rental charge had increased from £6.12 in January 1980 to £14.50 in May 1982—an increase of 137 per cent. It is significant that the gas increase is far and away the greatest. Hon. Members from all areas of Britain will know that that has been a uniform increase which has been much resisted in many areas as far apart as Scotland and the South-West.
It is often said that we have always had standing charges, so why should there be such a fuss at this time. The principle of standing charges has been accepted over a long period. The reason for the present widespread public outcry is the dramatic increase in standing charges in the major utilities—a major shift in the burden of fuel and telephone bills from the usage charge to the standing charge. Those fixed charges, as we are all aware, bear most heavily on the poorest sections of the community, and, regrettably, a considerable section of that poorest group are pensioners.
For the electricity industry the standing charge is effectively a meter tax because nearly every household in Britain is supplied with electricity and, unlike the other utilities, there is an obligation on the electricity authority to provide supply. In that sense there is a difference between the various bodies. Given the almost universal use of electricity, we are effectively dealing with a meter tax for the supply of that fuel. It is a deliberate act of policy by the Department of Energy through the utility authorities to move towards the fixed charge as opposed to the variable charge. The main effect of that is to raise the profitability of supply to domestic consumers compared with industrial and commercial consumers. Government 971 reports have shown that they are concerned about the profit differential between those two sectors. If it is the Department of Energy's intention to adjust the balance of profitability between domestic consumers and industry, it should say so openly rather than argue about the theoretical justification for standing charges—the need to provide plant and supply. As I have said, that is particularly the case in the electricity supply industry.
One of the major inequities of the increase in standing charges has been drawn to the attention of the House only recently. It seems that we are on our way to achieving a resolution of that despite the rather roundabout announcement and the unclear signals coming from the Government—the 50–50 solution with regard to the gas and electricity industries. That will obviously be extremely welcome because about half a million gas consumers and 375,000 electricity consumers are pensioners whose standing charges are currently more than 50 per cent. of their bill. However, we must enter a couple of caveats.
The university of York's social policy research unit has made some inquiries on the impact of the 50–50 proposal and has estimated that in winter months the change would have modest general consequences and that only 12 per cent. of pensioners on supplementary benefit would gain. Therefore, while there will be an improvement in the summer months and benefit to some pensioners during the winter months, we should give a cautious welcome to this proposal.
If the proposal is adopted by the electricity boards—I hope they will follow the recommendation of the Electricity Council—the units of electricity used by pensioners, who are watching every last penny, in the early stages will cost them double the usual price. We all know of pensioners who come to our advice bureaus for help. Very often we see people who represent pensioners who are ashamed to come to our advice bureaus. They say that one of their relatives is in severe difficulty because he is always watching how the gas and electricity meters are going. If every extra unit costs double under this system, that tendency will increase. We should be concerned about that.
We should welcome any change that benefits those pensioners who have a small company pension and are therefore rendered ineligible for a wide range of other benefits. They have major problems. I am glad that the proposal will be of general application.
972 While attention in other debates has concentrated mainly on fuel, my Bill deals with public utilities generally. I should like briefly to refer to telephone bills. The standing charge on telephone bills is substantial. Because of social changes the telephone is far more of a vital link for many old people than perhaps it was before. As a result of widespread movement of families, often because of transfers to housing estates some distance away, and regrettable social changes, many old people are afraid to go out at night. In recent times two hon. Members have been attacked late at night. We know of the dangers in our streets. Therefore the telephone is very much a lifeline for many old people for keeping in contact with the world and their families. Even if they are only receiving telephone calls, they experience the problem of the major standing charge.
I do not have time to deal also with the rapid increase in standing charges for water which, being based on the rateable value of the property, have also increased dramatically for many pensioners over the past few years. Many hon. Members have drawn attention to the matter. The solution of metering, given the initial installation cost, is not applicable for them.
With that background it is no wonder that earlier this year 1 million signatories argued for the abolition of standing charges. Fixed charges always bear most heavily on the poorest sections of the community which means that many millions of pensioners are in that category. Fixed charges become a major issue of policy because of the deliberate policy of the Department of Energy to reflect the cost of energy in this manner. What the Government and the Department of Energy have done through the boards, they can undo. The Bill is one means of doing it. The full support of the House for the Bill would be a welcome Christmas present for the countless pensioners who are worried about their bills this winter.
§ Question put and agreed to.
§ Bill ordered to be brought in by Mr. John Spellar, Mr. Thomas Cox, Mr. David Stoddart, Mr. A. W. Stallard, Mr. Andrew F. Bennett, Mr. Frank Dobson, Mr. George Foulkes, Mr. Frank Haynes, Mr. Derek Foster, Mr. Frank R. White and Mrs. Ann Taylor.