Domestic Electricity Charges (Hansard, 4 July 1983)

§ 1. Mr. Straw
asked the Secretary of State for Energy what has been the percentage increase in standing order and unit charges for electricity, since May 1979.

§ The Under-Secretary of State for Energy (Mr. Giles Shaw)
The standing charge for electricity supplied under the standard domestic tariff has increased by 127 per cent. since May 1979 and the unit rate by 80 per cent. but smaller consumers benefit from the standing charge rebate scheme. Standing charges have not increased since April 1982, and domestic unit prices have not increased on average this year.

§ Mr. Straw
Does the Minister accept that these are quite disgraceful figures which show that as a direct result of the Government's policy the standing charge for electricity has gone up by almost three times the rate of inflation and the charge for electricity unit prices by getting on for double the rate of inflation? Will he now give an undertaking that not only will there be no increase in standing charges for the rest of this Parliament, but that he will use every endeavour to get a reduction in standing charges?

§ Mr. Shaw
The hon. Gentleman will be aware that my right hon. Friend the Chancellor of the Exchequer, when he was Secretary of State for Energy, introduced an examination of standing charges through the Electricity Council. The report is now available in the Library of the House, and discussions on that will no doubt continue within the industry, looking for ways of improving the situation.

§ Mr. Greenway
Notwithstanding the excellent effort of the last Administration in reducing standing charges on bills of £9 or less to 50 per cent. of the bill, does my hon. Friend accept that pensioners in particular face hardship in the standing charge that they pay for electricity and gas —and, indeed, water—and will he do all that he can to mitigate that hardship?

§ Mr. Shaw
I entirely accept what my hon. Friend says. It is true that many people on smaller incomes, particularly pensioners, suffer substantially because of the high standing charges. That was the reason for the benefits that were introduced by my right hon. Friend the Chancellor of the Exchequer when he was Secretary of State for Energy.

§ Mr. McNamara
Is the Minister aware that standing charges are a cause of great concern, not only for pensioners—understandably so—but for all other people who receive any state benefit, whether unemployment or otherwise? Does he accept that if unemployment benefit is cut by the Government the standing charge will be an increasing burden on those people? Would it not be a good idea for the Government to take a lead in abolishing the standing charge and go back to proper price fixing for the nationalised industries, instead of the artificial prices fixed by the last Government?

§ Mr. Shaw
The hon. Gentleman is incorrect in suggesting that somehow the standing charge is a wholly false charge. Many of the costs incurred by the board have to be passed on, including capital charges, interest charges, and the cost of the connection itself, as well as the costs of metering and billing. Those charges have to be correctly assessed and costed. The Deloittes inquiry looked into those matters, and I suggest that the hon. Gentleman examines the report, which is in the Library.

§ Mr. Ward
I do not, of course, wish to pre-empt anything on which the inquiry might report, but is my hon. Friend aware of the considerable satisfaction that was felt at the reduction in standing charges for electricity and gas during the last Parliament, which was a great help to many elderly people? Will my hon. Friend proceed with caution before abolishing those charges, because he may well find that the cost per unit will go up, and that will inflict hardship on the very people whom he is trying to help?

§ Mr. Shaw
My hon. Friend is right. All hon. Members should realise that if the standing charges correctly convey the charges which the board incurs are removed, the money would have to be found from elsewhere in the system. My hon. Friend is right to draw attention to the steps taken by the last Administration, which have already brought substantial benefits to consumers.

§ Mr. Rowlands
We have been reviewing this matter endlessly. When can we expect the results of the Government's conclusions on the review, which has now been made available to us?

§ Mr. Shaw
The report itself is a matter for the electricity supply industry, and I strongly urge it to make early recommendations based on the findings, which have only just been made available.