Abolition of Standing Charges (Hansard, 18 January 1984)

§ Mr. John Cartwright (Woolwich)
I beg to move, That leave be given to bring in a Bill to abolish standing charges for gas, electricity and telephones.
I make no apology for returning to an issue that has occupied the House on a number of occasions in the recent past. Many hon. Members will know from letters and from their surgeries that this issue continues to worry many of our constituents. That is hardly surprising because standing charges are now a major source of income for the nationalised industries concerned. For gas and electricity they produce over £500 million a year, and for British Telecom the sum is over £800 million a year.
Standing charges have shot up rapidly recently. For example, in 1977 the standing charge for gas was only £1.50 a quarter. By 1982 it had reached £9.20, a sixfold rise in five years. A great many consumers are now paying substantial sums every quarter in standing charges. For gas, the figure is now £9.90, for electricity it is £7.45 and for telephones it is £16.27 a quarter.
These are charges over which most consumers have no control and in the vast majority of cases they are not related to the level of consumption. They are annoying for all consumers, but for those on small fixed incomes they are a nightmare. If we add to the basic standing charges that I have mentioned the standing charges for water and sewerage services, we find that a single pensioner is now paying about £39 a quarter, or over £156 a year, in standing charges. That represents one month's pension every year for a single pensioner going out in standing charges for which there is no tangible benefit; the costs of the services must be met over and above them.
The Government have reacted to the problem by seeking to limit standing charges for gas and electricity to 50 per cent. of the bill, and British Telecom has introduced a rebate for those who make a very small number of calls. I do not dispute that this approach has helped some small consumers, but they must be very small indeed. For example, anyone who uses more than 10 units of electricity a week pays the full electricity standing charge, and anyone who makes more than eight 3p telephone calls a week ends up paying the full standing charge to British Telecom. The rebate scheme has had some unfortunate side effects. Pensioners groups are already worried lest some pensioners try to cut down on consumption still further to evade the standing charge and, in so doing, over-economise on essential items such as heating.
We approach the problem against the background of substantial profits being made by the industries concerned. For example, in the last financial year the profits of the gas industry before tax and interest were over £500 million, and for electricity they were over £800 million. For British Telecom, after tax and interest, profits were £365 million. The Government have been requiring the gas and electricity industries to raise their charges over and beyond what is needed on a commercial basis and have then been taxing away an element of that profit. In that situation, standing charges are an insidious form of flat rate taxation which bears hardest on those who are least able to pay.
The original aim of the charges was to cover the basic costs of installation, metering, servicing and similar items, but the costs these days are no longer directly related to individual cases; they are purely flat rate charges. An 328 anonymous spokesman for the Electricity Council was reported in the Daily Mirror in October 1982 as having said: There is really no fair way of dividing it all up. If there is no fair way of doing it, we should stop doing it. It is time that we reconsidered our whole approach and moved towards the abolition of standing charges, although, clearly, that could not be done at one fell swoop and would not be the final answer to the problem.
If we were to replace standing charges by increased charges for units of gas, electricity and telephones, some consumers would gain and some would lose. About 60 per cent. of all consumers would pay less and 70 per cent. of all pensioners would pay less, but some large users would pay more. For example, families in all-electric homes would be worse off. However, we must face the fact that a great many people are already unable to afford a decent level of heating in their homes. The abolition of standing charges would remove a great deal of the present confusion and would concentrate attention on that problem.
The relief of poverty is a matter for the social security system. We should not make one group of poor consumers subsidise another, which we are doing by means of the standing charges. It is clear that the charges cannot be removed at a stroke; they must be phased out over a period. We should achieve that objective as part of a comprehensive attack on the whole problem of fuel poverty, and to do that will require sustained pressure. I urge the House to support my Bill as a contribution to that pressure and, even more important, as a gesture of sympathy and support for millions of pensioners on whom standing charges bear so heavily.

§ Mr. John Wells (Maidstone)
It is in sorrow rather than anger that I rise to oppose the Bill. I found the delivery, matter and sense of the hon. Member for Woolwich (Mr. Cartwright) all extremely attractive and 1 congratulate him on the start that he has made.

§ Mr. Cartwright
The Whips have got at the hon. Gentleman.

§ Mr. Wells
Certainly not; I have had to get at the Whips.
An unfortunate situation exists, not on the Floor of the House but in the Press Gallery. Day by day, members of the press pick up well-intentioned ten-minute Bills and blow them up out of all proportion. Many simple, honest, worthy and humble people completely misunderstand what is happening. The hon. Member for Woolwich knows, as we all know — even the much maligned Whips know—that this Bill has no chance of becoming law. However, the people to whom the press speak do not understand our procedure and are misled.
The hon. Member for Woolwich and I are personal friends, so I can oppose his Bill with no personal malice and with the greatest of friendship and good will. However, an even more disgraceful Bill in the name of the hon. Member for Dundee, East (Mr. Wilson) will come up next week, and over that measure every pensioner in Scotland will be shedding tears. I oppose the broad principle of hon. Members, via the press, misleading simple people. [Interruption.] That is happening, and therefore—

§ Mr. Speaker
Order. I think that the issue with which the hon. Member for Maidstone (Mr. Wells) is now dealing is more a matter for a procedure debate. He must concentrate on his opposition to this particular Bill.

§ Mr. Wells
There are two reasons for tabling ten-minute Bills knowing that they will not become law. [HON. MEMBERS: "Order."] There are two reasons why this Bill might have been put down. One is for the personal aggrandisement and publicity of the hon. Member concerned, and I acquit the hon. Member for Woolwich of that. The other is to put down a marker for the Government to take action. I hope that the Government will take action in furthering their 50 per cent. rule, to which the hon. Gentleman rightly referred, although, as he said, his Bill would not cover water and sewerage.

§ Mr. John Home Robertson (East Lothian)
On a point of order, Mr. Speaker. From time to time I have sat on a Committee that has been chaired by the hon. Member for Maidstone (Mr. Wells) and I seem to remember being pulled up for straying from the subject under debate. On this occasion, the hon. Member may be straying from the subject and may suffer from it when next he chairs a Committee.

§ Mr. Speaker
It is I who am suffering from it at the moment. I hope that the hon. Member for Maidstone (Mr. Wells) has concluded what he has to say about the Bill. I understand his general proposition, but it is not a matter for debate today.

§ Mr. Dennis Skinner (Bolsover)
Further to that point of order, Mr. Speaker. For this matter to be looked at completely in the round, should we not change the title of this Bill so that those in the Gallery and others can be fully 330 informed? In the last Parliament the hon. Member for Woolwich (Mr. Cartwright), who is now moving a Bill for the abolition of standing charges, was one of a group of Social Democrats that refused to join the Labour party in the Lobby to introduce a Bill to get rid of standing charges. The only hon. Member that we managed to get in the Lobby wandered in and out and found himself in the other Lobby as well. We do not know what was wrong with him. I suggest that the SDP changes the title of this Bill to the Abolition of Standing Charges (Change of Policy) Bill.

§ Mr. Speaker
It seems to me that the hon. Member for Bolsover (Mr. Skinner), rather than the hon. Member for Maidstone, should be opposing the Bill. I think that enough has been said. We have a long day in front of us.

§ Mr. Wells
I wish briefly to deal with the water and sewage problem. I am sorry that the hon. Member for Woolwich (Mr. Cartwright) did not include that in his Bill. This is one aspect that has slipped past the Government's 50 per cent. rule. In my area, the Southern Water Authority has not complied with this guideline. Therefore, I oppose the Bill.