Gas and Electricity (Standing Charges) (Hansard, 31 January 1983)

§ 2. Mr. Durant
asked the Secretary of State for Energy if he has had recent discussions with the Electricity and Gas Consumer Councils to discuss standing charges of the gas and electricity industries.

§ 10. Mr. Greenway
asked the Secretary of State for Energy if he will make a statement on the implementation of his proposal that standing charges should be no greater than 50 per cent. for bills of £10 or less.

§ The Secretary of State for Energy (Mr. Nigel Lawson)
I am sure that the House will have noted with approval that the Electricity Council recommended just before Christmas that area electricity boards should adopt my proposal that standing charges should not exceed 50 per cent. of any domestic consumer's bill, and that two weeks ago the British Gas Corporation also decided to adopt the 50–50 scheme.

§ Mr. Durant
I welcome my right hon. Friend's statement. However, is he aware that many hon. Members are anxious that action should be taken fairly quickly so that the benefit from this measure will be felt next winter?

§ Mr. Lawson
I understand that the proposal for gas will not take effect until the first meter reading on or after 28 February, but that virtually all electricity bills that are issued from tomorrow will implement the 50–50 scheme, which will cover the current winter period.

§ Mr. Greenway
The nation, particularly pensioners and those on supplementary benefit, welcome the development and will be grateful to hear that the plan is to be speedily implemented, but will my right hon. Friend look again at the possibility of making it 100 per cent. for pensioners?

§ Mr. Lawson
About half of the beneficiaries of the 50–50 scheme will be pensioners—perhaps those pensioners who are in the greatest need. However, if there were no standing charges for all pensioner households, it would cost about £300 million a year, which would be unacceptable. I am sure that, on reflection, my hon. Friend would not wish that. What is important for all electricity consumers is that the industry has agreed that the average increase in electricity prices generally in 1983–84 will be zero.

§ Mr. Skinner
Is the Minister aware that out of more than 9 million pensioners only a small number will be affected by this new measure? Do not old-age pensioners have more right to the £300 million and more which over the next few years the Government will offset by means of tax relief to the banks, which send money to Argentina and other countries for the rescheduling of their debts.

§ Mr. Lawson
I sometimes think that it would be better if the hon. Gentleman were to go to Argentina. His response to this measure is characteristically churlish. It will benefit about 1 million gas consumers and up to 2 million electricity consumers who are particularly hard up. From the letters of complaint that I and my colleagues have received the preponderant issue concerns a standing charge that is higher than that for unit consumption.

§ Mr. Warren
I welcome my right hon. Friend's initiative on the standing charge limitation. Is he aware that the total income from standing charges to the electricity and gas industries is over £900 million? Therefore, will he organise an audit to find out exactly how the money is being used, because it is impossible to believe that that vast sum of money could be used just to maintain existing equipment?

§ Mr. Lawson
My hon. Friend has made a good point. Some kind of audit is needed. It was for that reason that I agreed with the industries last autumn that independent consultants should examine the justification for the levels of standing charges. Those reports are now with the industries and I am awaiting their comments on them.

§ Mr. John Smith
Is the Secretary of State aware that, despite his reference to no increases in electricity prices, since the general election domestic gas prices have risen by 97 per cent. and electricity prices by 82 per cent.? Is that not the most significant feature of energy prices and a disgraceful indictment of the Government?

§ Mr. Lawson
There is no disgrace at all. These matters have been debated in the House, but perhaps the right hon. Gentleman had other responsibilities at the time and was not in his place to hear the arguments. However, I assure him that there has been a sharp increase in energy prices generally over the past three years. Gas prices increased more because the Labour Government, of which he was a member, deliberately held down domestic gas prices to try to achieve some short-term electoral benefit.