§ Mr. Stanley Orme (Salford, East)
I beg to move,That this House condemns the Government for increasing gas and electricity prices merely to raise revenue for the Treasury and for ignoring the increased hardship this will create for millions of pensioners, one-parent families, low-income households, disabled people and the unemployed; and calls upon the Government to introduce both a home insulation programme and a comprehensive system of heating allowances to protect all vulnerable groups from high fuel costs and the risk of fuel disconnection.
§ Mr. Speaker
I have selected the amendment in the name of the Prime Minister.
There is a long list of right hon. and hon. Members who wish to take part in this important debate and I appeal for short contributions, in view of our late start.
§ Mr. Orme
The Government amendment does not show the name of the Minister of State. I mean no disrespect to the right hon. Gentleman, but I note that the Secretary of State will not be opening the debate for the Government. We are debating an important issue and I feel sure that the House will take note of that absence.
The Opposition believe that fuel supply is a major issue affecting millions of people. It is one of the basic commodities to which all of us have a right, together with food and housing. Bad housing, poor nutrition and lack of heating are direct causes of ill health and, in extremes, death, yet the right of people to fuel is regarded as a novel idea by many and its importance has not been recognised.
The latest Government statistics for England and Wales show that 466 people over 65 years of age died of hypothermia in the winter months of 1982. Other statistics put that figure at 646. Whatever the real figure, increasing numbers of elderly people and very young children are clearly at risk each winter because they or their families cannot afford the necessary fuel to keep warm.
Evidence shows that elderly people spend less on heating their homes in winter than many families spend on heating in the summer. Unfortunately, Government policies will increase that tendency. The recently introduced limits on standing charges, which were designed to prevent charges on small users becoming too high, are of more benefit to the owner of a country cottage than to an old-age pensioner, who may be encouraged to keep his or her electricity or gas consumption as low as possible. At the same time, fuel prices have risen at a rate that has made a critical difference to consumer ability to pay.
When the gas and electricity price increases were announced last November we called them a hidden tax. It is no longer hidden. The Chancellor has promised that next year, or the year after, the money received thereby will be used to reduce the standard rate of income tax at the expense of fuel consumers who can ill afford it.
The report of the Select Committee on Energy is a damning indictment of the Government's energy policy, and it sums up its view in paragraph 53, where it says:We would summarise our conclusions on the proposed electricity price increase as follows. It is not justified on the 1067 grounds either of the industry's Financial Target or the Government's economic pricing policy. The only plausible reason for it is the Government's desire to raise additional revenue for macro-economic purposes. This being the case, the Treasury should have the honesty to say so, rather than retreating behind a smokescreen of economic pricing.That is not a quotation from the Labour party manifesto. It is from the unanimous report of a Select Committee of the House of Commons on the proposed gas and, especially, electricity price increases. It noted the veiled criticism of the tax and levy extracted from the British Gas Corporation. In 1982–83 that levy amounted to £732 million.
Once again the consumer is paying an indirect tax to ease the Government's expenditure commitments, yet in the same year the BGC's annual report admitted:For many people 1982/83 was a tough year. The continuing recession affected customers' ability to pay their accounts … Those regions with high unemployment were particularly hard hit … A total of 162,000 cases were discussed with the welfare authorities … compared with 113,000 in 1981/82…67,000 prepayment meters were installed specifically to help those customers who were having problems in paying quarterly accounts.In the Budget the Chancellor removed the tax on domestic paraffin, but because of that hidden tax on gas and electricity it was a cosmetic exercise and will be of no benefit. In 1984 it is an insult to tell people who require proper heating to use paraffin lamps in the home, because they are especially dangerous for old people and children who should be provided with proper heating by gas or electricity. That is an implication of the Government's policy and I am sure that the electorate will see it as much.
§ Mr. Gordon Wilson (Dundee, East)
Will the right hon. Gentleman note that, apart from the dangers to which he has referred, outpourings of moisture from paraffin lamps cause condensation and further difficulties for low-income families?
§ Mr. Orme
I agree with the hon. Gentleman that condensation is a major problem with paraffin lamps. Many hon. Members must have visited constituents who use paraffin lamps. They use these lamps day in and day out and do not realise how much condensation is caused by them. Consequently, it is a negative approach for the Government to remove the tax on domestic paraffin. It is ridiculous to put that in the Budget as though the Government were giving something away.
In recent months we have urged the Government to adopt the proposals in the report on electricity prices by accountants Coopers and Lybrand, which would cut prices and immediately freeze them for several years. That would go some way towards reducing the appallingly high number of disconnections. Every year about 120,000 households lose their electricity supply and 35,000 households lose their gas supply. More than one fifth remain without a supply for a month or more and many gas customers are never reconnected. It is estimated that 12 per cent. of disconnections affect households with a child under 1 year old, so about 10,000 babies were in homes without electricity at some time in 1983. Of the thousands of households whose supply is disconnected, 50 per cent. have no earned income, so their chance of paying off the debt is extremely slight. The code of practice agreed between the fuel boards and the Government has not limited disconnections to non-hardship cases. Nine out of 10 have a hardship problem as defined by the code.
1068 The Select Committee report takes the Government to task on the electricity price increase. We know that the Secretary of State opposed the increase and that there was an argument in the Cabinet, but the Chancellor won the argument at the expense of millions of people who need help, not hindrance, in this regard.
§ Mr. Rob Hayward (Kingswood)
The right hon. Gentleman cites the Select Committee report. If it is such a great justification for the Opposition's case, why is no Opposition Member of the Select Committee present?
§ Mr. Orme
Before the hon. Member for Kingswood (Mr. Hayward) arrived, I commented on the absence of the Secretary of State. If we are to have that kind of argument, we should start at the top. A number of my hon. Friends will come in later.
Concrete proposals relating to the code of practice could sensibly be adopted to limit the number of disconnections. First, the code must be overhauled so that there is no doubt about its intentions. Some parts of it need amplification and clarification and phrases such as, "a reasonable period" need to be more explicit. Secondly, it should be a statutory code so as to equalise regional disparities which are all too clear when one compares the situation in London with that in areas such as the northwest. Thirdly, the code should incorporate an independent appeal mechanism so that consumers can appeal against proposed disconnections or undue charges.
In addition, a comprehensive energy advice system must be developed to ensure that households are not unnecessarily disconnected and to secure their maximum entitlement to heating allowances. My hon. Friend the Member for Oldham, West (Mr. Meacher) will have more to say about.
Fuel poverty is caused by bad housing, expensive and inefficient heating systems and poor insulation, as well as by fuel prices themselves, and inadequate pensions and benefits.
§ Mr. Peter Rost (Erewash)
Has the right hon. Gentleman studied the Right to Fuel campaign's interesting publication. "The Cost of Warmth", which highlights the fact that fuel poverty is due not so much to a 2 per cent. increase in electricity prices after a two-year freeze as to the fact that the needs of the poorest members of the community are not being met? As the variation in needs is much greater among the poorest, because of the homes in which they live and the type of heating that they have, the assistance available does not go to those most in need.
§ Mr. Orme
I believe that the cause is a combination of both factors, but I shall refer to the proposals in that excellent pamphlet later.
In November 1983 the supplementary benefit fuel allowance covered just 19 units of electricity or three therms of gas per day. The weekly heating addition, which is paid at two rates, is sufficient to run a two-bar electric fire for either two hours or six and a half hours per day. People forced to remain at home because of unemployment, retirement or the need to care for the elderly spend far more of their income on fuel than the average family, but they purchase only 50 per cent. of the amount of fuel consumed by the wealthier members of society. Benefit levels rise according to the general price index, so beneficiaries are not compensated for the faster increase in fuel prices. 1069 The most lasting benefits will accrue from a vastly increased programme of energy conservation. We urgently need a policy for warmth, beginning with a massive conservation programme, led by insulation for council housing, the expansion of grants for private sector housing and incentives to industry to save energy. As yet the Government have not made a direct link between energy conservation and fuel poverty, although it is profoundly obvious that the efficient use of fuel will, in the long term, lead to lower fuel bills. It has been proved that 60 per cent. of fuel can be saved through energy conservation, and slightly more in newly built properties. Yet energy conservation has always been a low priority, especially in the present Government's energy policy.
In 1979 it was reported that 37 per cent. of households on supplementary benefit depended on electric heating and were least likely to benefit from insulation grants. In 1983, 23 per cent. of homes with accessible lofts had no insulation at all and 80 per cent. had less than that laid down in current building standards. Meanwhile—I have checked this figure many times—in 1981 only £15,000 was paid out for draught-proofing materials to 4 million supplementary benefit claimants.
§ Mr. Dennis Skinner (Bolsover)
There is plenty of insulation in here—and at Buckingham palace, no doubt.
§ Mr. Orme
As my hon. Friend the Member for Bolsover (Mr. Skinner) will appreciate, those who most need insulation cannot afford it.
Many local authority and housing association properties are in very bad repair due to dampness, condensation and mould resulting from a lack of energy conservation in both rehabilitated and newly built properties. I represent an inner city area. The multi-storey blocks of flats pushed on us by planners in the 1960s and the 1970s are insufficiently insulated, difficult to heat and costly to live in. The people who designed them, of course, do not live in them.
Grants to individual households for home insulation are currently about £27 million, with special priority for lower income pensioners and disabled people, but the provisions apply only to those with no loft insulation at all, so those who followed previous Government advice cannot top up to today's higher standards.
§ Mr. Max Madden (Bradford, West)
Does my right hon. Friend agree that to combat fuel poverty effectively the often conflicting policies of the Department of the Environment, the Department of Energy and the Department of Health and Social Security, not to mention the Welsh Office and various other Departments, must be co-ordinated to produce a coherent, comprehensive and truly national effort? Does he also agree that reducing the amounts available for home improvement and introducing a new tax on home improvement is no way in which to help combat fuel poverty?
§ Mr. Orme
The co-ordination of the Departments concerned is, in my view, a matter of urgency and I shall have something to say about that shortly.
Dealing with conservation, last year's Select Committee on Energy stated:We were dismayed to find that, seven years after the first major oil price increases, the Department of Energy has no clear 1070 idea of whether investing around £1,300 million in a single nuclear power plant is as cost-effective as spending a similar sum to promote energy conservation.That goes right to the heart of what my hon. Friends and I are saying.
§ Mr. Paddy Ashdown (Yeovil)
Is the right hon. Gentleman aware that the Astronomer Royal has recently produced figures to show that if a similar amount of money as would be spent on a nuclear power station were to be spent on insulation, up to one third more energy would be saved than a nuclear power station would generate?
§ Mr. Orme
The hon. Gentleman is underlining the point that I have made, and I appreciate it.
The Select Committee went on to recommend a shift from investment in supply to investment in conservation. We welcomed the establishment of the energy efficiency office. Unfortunately, the publicity distributed by the office has had no back-up. Grants for insulation and local authority initiatives have been undermined by the Government's public expenditure cuts. During the office's pilot programme in Wales, the Welsh Office quite independently told local authorities that the annual sum for grants had been spent and that no more could be sanctioned.
Local authorities must, therefore, play a leading role in this with their own housing, in grants to the private sector and by identifying those who would most benefit from the insulation of their homes. To do so they need the wholehearted support of the Government, and increased finance. At the moment there is no established indicator of fuel poverty. Support has been based on income maintenance alone.
Coming to the point raised by the hon. Member for Erewash (Mr. Rost), the national Right to Fuel campaign has drawn up a seven-point index, a cost of warmth index, which, if applied to individual households, could determine the amount of fuel needed, its cost and the improvements in insulation and heating efficiency required. This work is a valuable contribution to discussions of possible solutions of fuel poverty.
We call on the Government, therefore, to sponsor a pilot scheme on the basis of the cost of warmth index so that we can more clearly assess the needs of both the community and individual households. Included in such sponsorship should be the Department of Health and Social Services, the Department of the Environment, the Welsh Office and, of course, the Department of Energy. The efforts of all these Departments should be pooled, as my hon. Friend the Member for Bradford, West (Mr. Madden) suggested.
Furthermore, there are countless jobs to be created from the manufacture and installation of insulation in all its forms. Thousands of people could be given a new trade. If nothing else, surely the reduction of unemployment is a compelling incentive for the Government to act. It has been estimated that 150,000 jobs could be created in work that would be invaluable at the present time.
At the moment we waste a great deal of our energy resources. That is why the use of combined heat and power systems in the context of district heating schemes should be considered as an essential part of conservation policy. We are still waiting for the Government to pronounce on the lead city scheme. I urge the Secretary of State to bring 1071 the proposals to the House without further delay. Perhaps the Minister of State will have something to say about this today.
Rather than taxing everyone with fuel price increases, we need the positive investment of resources in energy efficiency measures for low-income households. Will the Secretary of State ensure, therefore, that his officials complete and publish their review of new policies of energy conservation which we understand they are carrying out at the present time?
Many of the issues raised in this debate form part of the People's Right to Fuel Bill, a private Member's Bill introduced by my hon. Friend the Member for Falkirk, West (Mr. Canavan), which deals with disconnections, extending the fuel direct scheme, the installation of prepayment meters, the improvement and extension of fuel allowances and a freeze on fuel prices. We cannot realistically expect the Government to support such a Bill, which will come up for a Second Reading in a few weeks' time, but their lack of support will only indicate what is already obvious, namely, that, as with all other policies, the primary intention of the Government is to improve the lot of those who are wealthy at the expense of those who are poorer.
The Budget is a classic indication of that. If one is white, middle-class and working, one is doing very well under the Government, but other people are not doing half as well and are, in fact, being penalised. We are talking in this debate about the very people who have been overlooked by the Government. The Budget reinforced this view. Time and again the policies of the Government make the well-off better off. As we saw in The Sunday Times of 18 March, an unemployed family can have lost to the extent of £13.44 a week, while the company director is nearly £160 better off.
§ Mr. Skinner
Does my right hon. Friend know that there is a better example than that? Is he aware that, as a result of the changes in the Budget relating to taxation, capital transfer tax, capital gains tax and the rest of it, the Duke of Westminster and his family will benefit to the tune of £300 million? What could my right hon. Friend do with that £300 million if he were sitting on the Government Front Bench? He could distribute it to those poor and needy who will otherwise die of hypothermia. He could do a lot with that kind of money. This is a stark example of what the Tory Government are up to—looking after their friends.
§ Mr. Orme
My hon. Friend has made a good point. Such a sum would be a very good start to the kitty that we need.
We have introduced this debate today because we think that the time is opportune. Although we are at the end of the winter, fuel bills are still coming in. We have 4 million people unemployed. They are experiencing difficulties and problems. We consider that an overall approach is needed, and that is the reason for our motion. I am sure that my right hon. and hon. Friends will support it. What is more, we must carry the argument not only in the House, but outside, and convince the prople that there is a real alternative.
§ The Minister of State, Department of Energy (Mr. Alick Buchanan-Smith)
I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:welcomes that increases in the prices of the nationalised energy industries are now below the rate of inflation and that the Government has maintained and improved the real value of social security benefits, particularly for the neediest members of the community.".May I say straight away that we feel every bit as much the concern that has been expressed by the right hon. Member for Salford, East (Mr. Orme) about the problems of the less-well-off members of the community in relation to fuel costs and other such causes of hardship. However, I would have more respect for the motion that he has proposed if it had been more accurate in its terms. This is why I ask the House to reject it. It calls for the introduction of a home insulation programme. We already have a home insulation programme. In 1978–79 it had an expenditure of £9.36 million; in the financial year 1982–83 the expenditure had risen to £32.7 million. Thus, we begin with an inaccuracy in the motion.
At the heart of the motion is a call for a system of heating allowances. I hope that the right hon. Gentleman and his hon. Friends will bear in mind that, for example, in the last year for which he was responsible for these matters at the Department of Health and Social Security expenditure on heating allowances amounted to £124 million. This year, expenditure on heating allowances under a Conservative Government amounts to £380 million—three times as much as when the right hon. Gentleman had responsibility for these matters.
§ Mr. Buchanan-Smith
I have only just started, and this is a short debate.
Therefore, the motion should be rejected, if only on those grounds.
The Government are doing a great deal, and will continue to do so, to help those with particular difficulties with the costs of energy. The supplementary benefits system is designed to meet the costs of the person receiving benefit, and that includes heating and other costs. Those rates are increased annually in line with the retail price index.
As I have said, under the social security system, this Government are spending far more on heating allowances than did the previous Government. In fact, in real terms the level of that assistance is now higher than it has ever been. The rates were increased last November by 8 per cent.—well beyond the actual increase in heating and energy costs.
In the period from November 1978, the rates of assistance have gone up by 140 per cent., whereas fuel prices have risen by 100 per cent. In other words, the help provided by the Government is 40 per cent. more than the amount by which fuel prices have risen.
§ Mr. Winnick
Why does the right hon. Gentleman ignore the fact that many people must claim benefit because of mass unemployment and what has happened in the last four or five years? One problem, which is causing great anxiety to those affected, is that some people are not eligible for supplementary benefit, perhaps because they have savings of just over £3,000 or their income or small 1073 private pension prevent them from doing so. They receive not a penny of assistance with their fuel bills. Does the right hon. Gentleman consider that to be right and just?
§ Mr. Buchanan-Smith
I shall shortly come to fuel prices and the best way of giving help. I am merely pointing out, contrary to what the motion says, that over the past five years this Government have operated the system effectively and have increased the amount of assistance. In addition, we have increased the rates of help available beyond the amount by which energy prices have risen.
Quite fairly, the right hon. Member for Salford, East mentioned the problems facing old age pensioners. If they are on supplementary benefit, as well as receiving the old age pension they automatically receive heating allowance and the heating addition. I have met representatives of that group on a number of occasions in recent months. The amount now being spent on that group is more than £200 million a year. Here again, the Government are spending a considerable amount of money.
Heating additions are automatically given to members of households over the age of 70 who are on supplementary benefit or who have dependants over the age of 70. As a result, 2.5 million households in the United Kingdom now benefit, compared with only 1.5 million in 1978.
As well as help under the social security system, specific help is also given under other schemes. I have already mentioned the home insulation scheme and the amount that is spent on that. Under that scheme, help is specifically directed. For old age pensioners and the disabled, 90 per cent. of the cost of basic insulation is paid under that scheme. Special one-off payments are also available to assist supplementary benefit recipients.
The home insulation scheme has advanced enormously in terms of the resources devoted to it, and there will be provision for assistance for basic insulation to be topped up.
It comes ill from the right hon. Gentleman to decry what the Government have done on conservation. No Government have done more. The scheme that my right hon. Friend launched at the end of last year includes a publicity campaign throughout the length and breadth of the United Kingdom. It is being conducted at 40 different centres and is being led by my right hon. Friend and Ministers in my Department. That campaign gives to energy conservation an importance that no Government have given previously. The right hon. Gentleman should at least give us credit for that. He may still want to give more, but the assistance that we are now providing is more than that given by any previous Government.
§ Mr. Orme
I appreciate that the Secretary of State and Ministers are going around the country speaking to industrialists, having breakfast meetings and so on, but that campaign is not backed up by statutory powers. It is only exhortation. However, where does the domestic consumer figure in that campaign?
§ Mr. Buchanan-Smith
We are dealing equally as well with the domestic scheme. Neighbourhood energy action is another area in which the Government and my Department are directly helping voluntary organisations. But the energy conservation scheme is not related solely 1074 to industrial conservation. If the right hon. Gentleman doubts that—perhaps that is why the motion is worded in the way that it is—I shall be happy to send him details of the campaign, including the work that is being done through local authorities and other local voluntary organisations. In that and in many other ways, we are doing a great deal.
§ Mr. Eadie
The right hon. Gentleman is trying to impress on the House how much the Government have done for energy conservation, but it is more a policy of exhortation than money. Does not the right hon. Gentleman recall that prior to 1974 the Conservative Government had never even heard of conservation? The Labour Government in 1974 introduced the concept of conservation, and the right hon. Gentleman is merely saying that this Government are trying to build on it.
§ Mr. Buchanan-Smith
I am relating my remarks to the motion before us. What matters is what we are doing now and what we plan to do in the future. The hon. Gentleman is normally fair about these things, and I am sure he will accept that the money is not merely being spent on publicity. A major part of it is spent on actual energy conservation schemes, and directly helps people with insulation and so on. These are facts, and as the hon. Gentleman knows as well as I do,Facts are chiels that winna ding.Those are the facts. They may make the hon. Member for Midlothian (Mr. Eadie) uncomfortable, but the fact that we are achieving more than his party has done is no reason for deriding what is being done to help.
Successive Governments have realised—indeed, the right hon. Gentleman referred to this point in passing—that where help to the needy is concerned, the important thing is to direct that help to the areas where it is needed. The right hon. Gentleman referred to standing charges. I cannot help being aware from Question Time, from my correspondence and from delegations I meet that many people feel very strongly about standing charges, changes in tariffs and so on. However, the matter is one that must be examined very closely. Many of the suggestions that have been made for the abolition of standing charges or for changes in the tariffs would mean that the available help would have to be spread very much more widely. At the end of the day, someone has to pay. If a charge is abolished for one group of consumers, others will have to pay.
Many people who are disabled, sick or elderly, or who are caring for a large or a young family, are not wealthy and have very high energy costs. It is better to help those in need directly through the social security system, through the various heating additions. That is the most effective way of providing help.
I was interested to read a report published by the Labour Government in 1976. It was entitled "Energy Tariffs and the Poor". The foreword was in part a summary of the report. I quote:After considering the group's report, the Government have concluded that none of these possibilities"—changes in standing charges or tariffs—offers a satisfactory way of helping poor consumers with their fuel bills.1075 That foreword is signed by the right hon. Member for Chesterfield (Mr. Benn). That was the conclusion of the Labour party when it was in power. It ill behoves Labour Members now to call for the very measures that they rejected when in government, when they considered those possibilities and realised that they were not a sensible way of giving help.
The specific question of fuel disconnections has been raised. It is a question that gives me cause for concern. There is a code of practice, and it is worth remembering one or two of the guidelines in that code. No old age pensioner can be disconnected between October and March. That seems to have been forgotten in some of the reports that we have read. The code of practice was revised as recently as July 1982 after the independent report from the Policy Studies Institute. The working of the code of practice in relation to disconnections is at present being monitored by the gas and electricity consumer councils. Both those councils will shortly report to the Government on the results of their monitoring.
We must think hard before we consider the introduction of the statutory code which some people have called for. One of the advantages of the present system is flexibility. I speak as a constituency Member. Like other hon. Members, I have to deal with disconnection cases. Very rarely are two disconnection cases alike; there are always different circumstances and a different background. I therefore believe there are advantages in flexibility. The Government have an open mind and will consider what the consumer councils may recommend in a constructive and positive spirit.
The right hon. Gentleman referred to the report of the Select Committee. The Government will reply to that report in the proper way, but I must ask the right hon. Gentleman to put the report into perspective. It is a valuable report and a great deal of work went into it, but what we are talking about is an increase of less than 2 per cent. in electricity prices. The Select Committee had no criticism to make of gas prices but the right hon. Gentleman took care to ignore that fact.
§ Mr. Buchanan-Smith
No. Time is short and there have already been several interventions.
The right hon. Gentleman also forgot that the actual price increase, which has still to be endorsed by the electricity boards, was not imposed by the Government. The Electricity Council, after consultation with the Government, decided to recommend the increase to the electricity boards. There was no question of the increase being forced by the Government on the electricity industry. There have been times when energy prices have risen rapidly. When that happens we are right to be concerned about the problems created. However, let us consider the present situation, and our main energy costs. The increase in coal——
§ Mr. Buchanan-Smith
As usual, there is a Pavlovian reaction from the hon. Member for Bolsover (Mr. Skinner). In November last year coal prices increased by 3.8 per cent. That increase was below the rate of inflation, as previous increases had been. Gas prices were increased by 4.3 per cent. in January this year. That was the first increase for 15 months and was well below the rate of 1076 inflation. With electricity prices, an increase of slightly less than 2 per cent. is proposed, to take place in April. That is the first increase for two years and, again, it is below the rate of inflation. If we compare prices for the final quarter of 1982 with those with the final quarter of 1983 in real terms—in terms of what money will buy—we find that coal prices are constant, that domestic electricity prices have fallen by 5 per cent. and that domestic gas prices have fallen by 2 per cent.
The right hon. Member for Salford, East was a member of a Government who raised electricity prices by 2 per cent. every six weeks during their period of office. For him to complain about the record of the present Government, under whom electricity prices are to be increased by 2 per cent. after two years, shows what nonsense the motion is and how right the House will be to reject it. I urge my right hon. and hon. Friends to vote for the amendment.
§ Mr. Allen Adams (Paisley, North)
There were three things wrong with the Minister's speech: he read it, he read it badly, and it was not worth reading.
I read in The Times this morning that it was 21 March. It might get a few things right. The date reminds me that 428 years ago Archbishop Cranmer was burnt at the stake at Oxford. On the way to the stake the previous October, Archbishop Latimer said:Be of good comfort Master Ridley and play the man. We shall this day light such a candle by God's grace in England, as shall never be put out.Five hundred years later the Government have put that fire out, or at least had a damn good attempt at putting out the fires in many homes in the country.
Three weeks ago I introduced a Bill on the method of paying fuel bills and asked that a commission be set up to examine the methods by which domestic consumers must pay their monthly or quarterly fuel bills. Remarkably the Government let that Bill have a First Reading. I assume from that that at the eleventh hour of the eleventh day of the eleventh month they will overwhelmingly support its Second Reading. Perhaps it would be fair to say that when the Bill received its first Reading the Government were too busy with Cheltenham to bother with it.
The essential fact behind my Bill is that it is clearly ridiculous in the northern hemisphere to imagine that life can be sustained without heat. We have all noticed that from time to time it gets a little chilly. Yet many citizens, especially those who need heat most—the old, the sick, the disabled and the unemployed—because they are in their homes day in, day out, are least able to afford it. That is the kernel of the problem.
We all know from constituency experience that such people sit in cold, darkened rooms, although they have given a lifetime's work. They sit with their coats on, the curtains drawn and, at best, huddled over a single bar of an electric fire. Is that the manifestation of a land fit for heroes, when people have given their all for 40 or 50 years? In winter, many such people die. We do not need to trot out statistics to prove that. We all know that the death rate in January and February is double that of June and July. At the bottom of our hearts we all know why. It is because the over-70s cannot afford to pay for gas or electricity. Moreover, they sit shivering with fear as, every two or three months, a little bill comes through the letter box saying that they must pay £50, £60 or £70. The old 1077 grandmother stoops down, picks up the bill, takes it out of the envelope, and often the shock is too much for her. That problem is increasing.
As with many other problems, we merely tamper. We turn on the television and see a district council representative talking about putting carpets in old people's lofts, another talking about putting foam into walls and someone else talking about insulation in roofs. They are not striking at the core of the problem. There are two issues: how do we generate fuel, and how do we pay for the generation?
Tom Johnston, who was Secretary of State for Scotland in the Attlee Government, had the hydro-dams built in the highlands of Scotland. The great slogan of the time was "Power in the glens." I suspect that that slogan translated in his mind to "Power to the people." He had those dams built because they could generate power infinitely. There is no limit to the amount of electricity that can be generated from nuclear power either. We are probably the best endowed country in the world for fuel. We have finite fuels in gas, oil and coal and infinite fuel from hydroelectricity generation and nuclear energy. If we do not use nuclear or hydro-power, where does it go? It is the same as asking: if one does not use one's voice, where does it go? It has no limit. We should be able to generate enough electricity to enable everyone to walk around with neon lights on their heads. There is no limit to the amount of power that we can produce, so why are we not producing it? The immediate answer is that the Government are using electricity generation as a method of raising tax rather than as a service for the people. It is as simple as that.
Many ordinary people are fed up with the crocodile tears that are wept in the House year after year. We constantly say how sorry we feel for the poor and the unemployed and how sorry we are about the old dear who dies behind her door in February. We are all desperately sorry until July, when we forget about the issue until we become sorry again in November and December. I suggest that we put up, pay up or shut up.
The electricity generating service should be regarded as an extension of the National Health Service. Without fuel and heat, people die. When people did not have medicine in the 1920s and 1930s, they died. The introduction of a national insurance stamp to pay for health care has increased longevity remarkably, reduced infant mortality and made our people's health incredibly better in a short time. We should regard electricity in the same light. If we believe in helping the poor, the needy, the old, the infirm and the sick, we should provide the heat that is needed in our northern climate. If we are to do that, we must take from each according to his means and give to each according to his needs.
The solution is to introduce a system of payment similar to that which we all agree is good in the NHS. We should pay according to our means so that everyone is ipso facto entitled to the heat that is generated as a national asset. I suspect that the Government will not welcome that proposal with open arms because electricity is regarded no longer as a national service but as a method of raising tax. If we mean what we say about helping the poor and the old, we should all agree to pay according to our ability to pay.
§ Mr. T. H. H. Skeet (Bedfordshire, North)
I do not intend to pursue the arguments advanced by the hon. Member for Paisley, North (Mr. Adams) but I shall refer to what my right hon. Friend the Minister of State said. In 1982–83 the Exchequer paid £1,417 million for heating bills of one fifth of all households that depend on benefits, whereas Government expenditure on insulating the homes of such low-income families amounted to only about £18 million. I pay tribute to the Government's work on insulation, and I accept that expenditure cannot be raised to astronomic heights, but if we are to get value for money it is probably a good idea to spend more on insulation and less on meeting heating costs.
I should like to raise a point with my hon. Friend the Minister for Social Security as he is present. A person on the social service ladder who gets supplementary benefit gets a lot of consideration, but a person who happens to be more than 80 years old and has more than £3,000 is told to run down those savings to come under the umbrella. In other words, at 85, with only £3,050, a person gets nothing by way of heating assistance. If my hon. Friend can devise any scheme that will do something for many of the old constituents who have talked to me about such problems, I shall be glad to learn about it.
I am primarily concerned, however, not merely with people on low incomes, but with consumers generally. It may be useful to refer to the Electricity Act 1947. Section 1(6)(b) of that Act says that electricity boards shallsecure, so far as practicable, the … cheapening of supplies of electricity".Section 36(1) says that it is the duty of the central authority tosecure that the combined revenues of the Central Authority and all the Area Boards taken together are not less than sufficient to meet their combined outgoings properly chargeable to revenue account taking one year with another.It is extraordinary that in the charter Act of the electricity industry there is no compulsion on these bodies to produce a profit. If this were a private enterprise, it would probably distribute a lot of this by way of dividend, in this case to the nation at large. The electricity supply industry has been given a financial target of 1.4 per cent., which is obtainable on its existing profits. External financing limits have been given minus figures for 1983–84 of £418 million and for the ensuing year of £740 million.
I believe that there is no need to raise prices for electricity this year. This would help consumers in general and the poor in particular. In fact, in paragraph 36 of its report the Select Committee says that there is areasonable prospect of achieving the EFL without a tariff increase".My right hon. Friend says that the 2 per cent. increase in domestic prices from 1 April has not been imposed on the industry but has been won by consent. I should have thought that it was a sword of Damocles hanging over the head of the industry.
What is even more interesting is that we have three types of legislative control. One is quite apparent—it is by Act of Parliament; the second is obvious to most—an Order in Council; and third is a decree by White Paper. What legislative framework is behind the setting of financial targets, EFLs and performance objectives—none and I am fortified by the fact that the Department of Energy 1079took the view that the real price of electricity should be allowed to fall.That is in paragraph 27. If that is the case, why is the Secretary of State increasing it on this occasion? My right hon. Friend the Secretary of State, in a speech reported in one of the papers to the Select Committee, EP3, said:Present and expected capacity in the industry is more than adequate to meet forecast demand over the next few years at least. The cost to the industry of meeting marginal increases in demand is thus likely to be lower than was expected.That is on the basis of capacity, but it can also be seen on the basis that the price of coal is not expected to shift markedly in the near future.
We have been told in the course of this debate that electricity prices went up by 391.7 per cent. between 1974 and 1983. However, speaking in real terms it is only 50 per cent.
What troubles me—and this is a point which is apparent on reading some of the statements in the Select Committee report—is that the debt of the ESI of £4,337 million will be repaid by 1988–89. It will then be a debt-free industry. Is the industry then to be expected to build up large cash surpluses? If so, what is to happen to them? Will not the result be that there will be a levy on the electricity industry comparable to that on the gas industry? Is it not one of the great faults of nationalised corporations that the public—the people supposed to benefit, the consumers—are never allowed to receive the benefit of a commercial windfall? It must go to the state for other purposes quite alien to energy purposes.
It is perhaps ironic that while the Government are arguing in the European Council against the energy tax proposals of the EC, they should be falling victim to their own proposals here in putting up the price of electricity. I do not blame the Government so much as the civil servants and the Treasury who have wrought these changes. They say that they want to maintain prices at economic levels to reflect the continuing cost of supply, including an adequate return on the capital employed.
Let us see what the Electricity Council says, because that is the body established for the industry and its members are the people who speak on these matters. The chairman of the council said, according to paragraph 35 of the Select Committee's report, that the proposed increase of 2 per cent. was not necessary on economic grounds in order to meet the ESI's financial target. And in paragraph 41 it is stated that the industry believes that current prices areequivalent to a broadly mid-point view on Long-Run Marginal costs under a surplus capacity situation.Then we come to the report of the consultants, Coopers and Lybrand, on electricity bulk supply tariff which was prepared at the instigation of the Department of Energy. Paragraph 6.33 says:In the present circumstances of the CEGB, with substantial and persistent excess capacity, it is perhaps not surprising that economic reasoning should lead to the conclusion that since the nation has paid for the capacity already it is appropriate to set tariffs which encourage its use.In other words, we should drop prices to increase consumption.
I shall not support the Opposition motion tonight. I am arguing for the whole body of consumers, who are fed up with the nationalised corporations putting up prices. The sword of Damocles hangs over this particular industry and, whereas the price could come down, it has gone up, even if only by 2 per cent. The argument may be that the rate of return on investment is something like 2 per cent., but 1080 I can give the figures for the rest of manufacturing industry, which are also low at this time. In manufacturing industry, the rate of return in 1982 was only 3.3 per cent., and it would be expected that in utilities it would be a low figure anyhow.
§ Mr. Bernard Conlan (Gateshead, East)
I cannot follow the logic of this argument. Everybody knows that the CEGB was forced to put up its prices against its will because of Government policies.
§ Mr. Skeet
If the hon. Gentleman is wise enough to have read the Select Committee report, as I hope he has, he will see that the Committee is suggesting that it is because of the persuasiveness of the Treasury that the Government, or the Ministers, had no alternative. I refer him to paragraph 49, which says:Despite the strenuous denials of the Treasury witnesses, we cannot avoid the conclusion that the only plausible motivation for the large increase in the ESI's negative EFL for 1984–85 … was the Government's wish, on grounds of macro-economic policy, to raise additional revenue in order to reduce the Public Sector Borrowing Requirement.Who talks about the public sector borrowing requirement? It is not the Department of Energy, but the Treasury. The Department of Energy probably has never heard of it. It is the Treasury that has laid it down and has determined this. The significance of what I am saying must be quite apparent. It has been determined by a Government Department, the Treasury, the continuity boys who were there when the Labour Government were in office and we were in opposition. It does not make any difference which party is in office, the Treasury maintains its position.
I have quoted the report of the consultants, Coopers and Lybrand, which was commissioned by the Department of Energy. It gave its view that a reduction was called for. The Select Committee report does the same. I have racked my brains to try to find out whether there is an energy reason for increasing the cost of electricity, and I can find none.
I can see why the Government are concerned about public expenditure and want to have some impact on the nationalised industries' claims on the PSBR. It may irritate many that in Europe there is VAT on electricity and gas and that the United Kingdom has none. In Belgium there is 6 per cent. VAT, in Luxembourg 5 per cent., in Italy 6 per cent. and in the Netherlands 18 per cent. It may be that because we do not have this the Treasury considers that there should be some compensation through the 2 per cent. increase from 1 April. It may be that the energy tax that was adumbrated from Europe is another way of securing it locally.
I know that this is a short debate, so I shall not take too long or comment on too many different things. However, I pay tribute to the Select Committee for getting together the facts. There is no justification for an increase in electricity prices. I have made no comment on gas price increases, because they are justified. If we are to have an increase in the price of electricity in a good year, I dread to think what will happen in a bad year. Can one ever envisage in future years circumstances in which the prices of electricity could fall?
It is argued that as inflation is 5 per cent and this increase is below the rate of inflation, we should not complain. I do not hear any company chairmen arguing the point that because the rate of inflation is 5 per cent. prices must go up by that amount. The market consideration should apply. If one fiddles about with the EFLs, target 1081 performances and so on, one can so organise the figures that ultimately the price must rise still further. In other words, my argument is for the consumer. The 1957 and the 1947 Acts lay this down specifically. They do not tell the electricity supply industry that it must build up accumulated profits that cannot be distributed to anybody except the Government.
§ Mr. Gordon Wilson (Dundee, East)
What the hon. Member for Bedfordshire, North (Mr. Skeet) said is even more remarkable in relation to Scotland. At least in England and Wales people know what the price increase will be. A figure of 2 per cent. has been quoted. However, in Scotland, where there is an over-capacity of 80 per cent., the rumours are that the announcement from the electricity boards will be of an increase of 4 or 5 per cent., which would be lunacy if it were to take place.
It is no coincidence that the three Bills on this subject that have been introduced under the ten minutes rule, by the hon. Members for Falkirk, West (Mr. Canavan) and for Paisley, North (Mr. Adams) and by myself, come from Scottish Members. In Scotland, we have to put up with climatic differences that cause considerable problems for those who are ill, the unemployed and the elderly. Those are the categories of folk who are in difficulty and who have been dying because of lack of heat.
I am glad that the hon. Member for Oldham, West (Mr. Meacher) is in his place, because I have a copy of a statement printed in The Observer on 16 December 1979. He reported that, as a Minister at the DHSS in 1976, he had wanted to answer a question about the numbers of hypothermia deaths, but his Department overruled him, giving the reason that, if he were to reply as he had wanted, showing up to 35,000 deaths a year caused by lack of heating, according to an independent survey, that would affect large numbers of old people and be used to bring pressure on the Government to improve heating provision for old people.
I can see why the release of that information would run counter to the Treasury, which has just been attacked by the hon. Member for Bedfordshire, North. There would be two savings from coverinig up on hypothermia. First, there would be no need to give an adequate allowance for heating provision; and, secondly, if people died prematurely, the national insurance fund would be helped because pension payouts would be reduced. Over recent years many more deaths—although fewer than the true figure—have been registered as being due to hypothermia.
Surveys have shown that in the winter months in the United Kingdom the number of elderly people who die goes up by 20 per cent. The number of babies under one year old who die in winter months has increased by 40 per cent. We must remember that we are talking not just of elderly people who are kept in their houses, but of low-income families. These families with young children have great difficulty in resolving whether their money should be spent on food, clothing or heating. This is true of many parts of the United Kingdom, but it is especially true in the north, which suffers from climatic severity.
1082 Fuel poverty exists and it is accentuated by several factors. First, it is accentuated by low incomes, and with the increase in unemployment and the increased numbers of elderly there is now more of a problem.
Secondly, as has been said, fuel prices are, relatively speaking, far higher now than they were 10 years ago. We all know why. There has been not just general inflation, but fuel inflation. However, the statutory monopolies are not allowed to make better use of their capacity by reducing prices. Any private firm faced with over-capacity would try to dispose of the product by advertising and price-cutting, and it would be encouraged by the knowledge that the more it sells, the more efficient the enterprise and the more overheads decline in terms of overall finance.
The third factor is the type of housing that we have. We have had 20 years of building houses that are a disgrace to housing standards. We have multi-blocks. Indeed, those spread out are apparently worse than the high rise blocks. We have houses that do not even have sound insulation, never mind insulation to keep in heat. In my constituency, I have an area of high unemployment—the Whitefield housing estate. One part of it, the Skarne housing development, was built on a prefabricated basis to a Swedish design. The first thing that happened to it was that the specified triple glazing was taken out. There are now holes in the fitments of the windows where the draughts can come in and the heat can escape. The insulation of the walls was progressively reduced to fit Government financing. These are mistakes of the past, but people still live in and have to heat those houses. Lack of insulation affects much of our housing stock.
The 20 per cent. increase in the deaths of elderly persons and the 40 per cent. increase in the deaths of babies does not happen in Scandinavia, partly because there are higher heating allowances, but partly because the housing quality is better and therefore less heat is lost through the walls. We provide statutory heating provision for those who work here. If the temperature in this place—although I do not think we are affected by the Factories Acts—or in an office block or factory were to go down, there would be a legitimate walk-out because people were having to work in low temperatures.
However, there is no such protection for those who have to stay in their homes because of illness or unemployment. The figures speak for themselves. The poorest 20 per cent. of the population pay 11 per cent. of their income on fuel and the richest 20 per cent. pay 6 per cent. The rich will have better heating provisions in their houses and larger houses to heat. However, compared with their income, the overall impact is less.
We have had a bad winter in some parts of the country. In fact, I wrote to the Government about it. When the DHSS found it unnecessary, according to its criteria, to set off the trigger points for the exceptional heating allowances, many people in Scotland were amazed. People were trapped in their houses for weeks. It was not the coldest winter in terms of temperatures, but in terms of snow it was a remarkably bad winter, and people were trapped in their houses. Crieff, for instance, had 2 ft of snow for about three to four weeks, and it was difficult for elderly people to get out of their houses.
The Minister for Social Security should do something about these exceptional allowances, because at present they constitute a fraud. One sees from the figures that, in the very cold winter of 1981–82, there was an increase of 1083 32 per cent. in the number of degree days, but there was only 1 per cent. increase in the amount that was paid by the Government in allowances. Indeed, recent figures show that in the north of Scotland about 2,903 degree days were sustained, compared with south-west England with 1,906 degree days. I have been quoting figures of 30 per cent., but according to the latest information that I have, I have been under-estimating that. According to one calculation, the figure should be 48 per cent.
As time is short, I shall not speak at length, particularly as, on 25 January, when I launched my Social Security (Cold Climate Allowance) Amendment Bill, I had an opportunity to describe fuel poverty in some detail. I have the opportunity to meet the Minister next week, together with the sponsors of the Bill, to discuss the need to revise the fuel allowances to take account of severity of climate. I shall put the arguments to him on that occasion. However, according to the figures that I have about the amount of fuel that is consumed, Scotland, in both cash and percentage terms, is very much above the rest of the United Kingdom. Yorkshire and the north-east of England come close behind, so I do not make a peculiarly Scottish point here. I know from discussions with hon. Members of all persuasions from Northern Ireland that, although they might not qualify in the same category as the north of Scotland, their heating costs are so ferociously high in the Province that there is a considerable degree of fuel poverty.
We must deal with the problem in a number of ways. First, we must improve the housing stock. That point has been made by a number of hon. Members, so I shall not expand on it. It is common sense that, by improving the amount of insulation, we can reduce the amount of fuel that people have to burn to get an adequate degree of warmth.
§ Mr. Rost
I have followed closely what the hon. Gentleman said. He referred to Scandinavia and said that the higher insulation standards there are the main reason why fuel poverty does not exist there. No doubt he is also aware that the other reason is that in Scandinavia people do not waste hot water from power stations but pump it into buildings to heat them, whereas we throw away two thirds of the fuel used in producing our electricity.
§ Mr. Wilson
The hon. Gentleman is pushing at an open door there. His problem is to persuade his own Government, or any Government, to take account of his arguments. We both agree that insulation is necessary.
Secondly, if electricity and gas prices can be restrained or reduced, poorer consumers will automatically benefit.
We should accept, therefore, that cash aid is necessary now. It is the quickest way to alleviate the problem and to curtail the misery that many of us encounter when we see people living in cold and chilly houses—conditions that we would not tolerate for ourselves or our families.
Hypothermia does exist. We cannot sweep it under the carpet. People die because of lack of heat, and illness is caused by lack of heat. The best way to solve the problem is to have a new and comprehensive system of fuel allowances that will match the nature of the problem. Compassion demands that. I hope to continue the argument on Wednesday next when I meet the Minister.
§ Mr. Deputy Speaker (Mr. Paul Dean)
Order. The winding-up speeches are expected to begin at 6.30. There are still seven hon. Members who hope to speak from the Back Benches. I therefore appeal for brief speeches.
§ Mr. Tony Speller (Devon, North)
We all know where the energy deprivation battleground is, but I suspect, as is usual in energy matters, that we are using wrong weapons and outmoded tactics.
I was more interested than entertained when one hon. Gentleman said how much had been spent in 1979 compared with what was being spent in 1984. The truth is that we spend our time in the House arguing which side should spend more or did spend less. That has no effect on the people of whom the hon. Member for Dundee, East (Mr. Wilson) spoke, although he made that unfortunate remark about kicking open doors, which only lets the draught in. When we speak about our constituents being cold, it is quite immaterial on which side of the House we sit.
I always seem to get the rough edge of time having to limit my speeches to the final five minutes, but I shall do what I can. The first matter I wish to stress is that we should use existing energy sensibly and efficiently. We are not short of energy. We generate vast amounts of it, but we do not distribute it to those who need it—not even those who need it and are prepared to pay for it. The wastage is vast. If one lived in the sunnier clime of California, for example, the privately-owned local utility companies would do an energy audit on one's property. They would point out how, for a very low price, one could keep heat in a house. Many of our buildings allow the heat to leave as quickly as it is produced, but there one is told it is most important to conserve the heat within the building. Once that happens, each person can be given, for less money, a great deal more comfort. I suspect that hypothermia is not known in that part of the world, not because of the climate, but because they have a sensible approach to making each house energy efficient.
I know that we have an energy efficiency campaign going on, and I am delighted about it, although I should have been happier with one Government office controlling it instead of three offices in competition. I suspect that, as in so many cases, the cost of administering the schemes is rather more than the benefit they produce.
I do not believe for a moment that a discussion in the House about fuel poverty need divide us on party lines. Mention has been made of the Select Committee, and three or four hon. Members now present are members of that Committee. We appear able to debate fiercely, and yet to bring in logical unanimous comments. Energy is not a party political matter when it reaches the stage of personal fuel poverty—or, if it is, it should not be.
Mention has been made of the cost of fuel. The hon. Member for Bolsover (Mr. Skinner), who made a couple of quick interventions, wishes us to use more coal. I wish that we used less coal, much less oil and much less gas, because they are all finite resources. We should start to look more sensibly at renewable energy that comes back again and again—the wind that never ceases to blow, I think I am happy to say, in my constituency of Devon, North, and the tide that rises and falls 30 ft. at Ilfracombe. I am talking about the things that nature provides. They 1085 contaminate neither the atmosphere with sulphur fumes nor, at a later stage, our grandchildren's land with some form of waste.
If we were sensible, we would give tax advantages—not grants—to people who build energy-efficient houses. Too many grants are given and things built simply because they have been made grant-worthy. We should give a tax advantage to the builder and architect who produce an energy-efficient house. We could give advantages in the form of tax concessions—again, not in grant—to people who install energy-efficiency measures which do not use the normal fossil fuels on which we all depend or, if they do, use them wisely and moderately. Let us do things which conserve for our grandchildren those resources with which we seem to be so profligate today.
I find it sad that, according to a parliamentary reply yesterday, the DHSS has doubled its fuel bills in the past five years. I doubt whether one patient is one jot warmer for that vast increase in cost. We do not build to the conservation of energy standards that we should, and until we do that we are wasting our time here as we have wasted
§ 6 pm
§ Mr. Tom Pendry (Stalybridge and Hyde)
I disagree slightly with the hon. Member for Dundee, East (Mr. Wilson). Happily, we are coming to the end of a relatively mild winter. Unfortunately, it has not been so comfortable a winter for some as it has been for hon. Members in this warm House. The shocking fact of life in Britain today which cannot be disputed is, as has been said, that thousands of elderly people and babies die every year because their homes are too cold. We know that that is mostly the result of energy prices that are held artificially high by the Government or the Treasury. I do not know the difference between Treasury and Government policy—the policies are the same.
We all know the absurdity of raising gas and electricity prices when both industries have made fantastic profits in the past year. That is the kind of insane policy that one has come to expect from the Government. They have sought to raise prices at a time when over 2.25 million people are given fuel subsidies. It is patently obvious that the poor and elderly are once more the Government's targets. One thing that is certain is that those who suffer will not be those in the income brackets which the Chancellor helped so generously in his Budget last week. I shrewdly suspect that not too many of them will figure among the 120,000 disconnections undertaken by the gas and electricity boards in a year. Nor will many of their number be among those who die as a result of cold homes. Instead, the Budget measures on building alterations and double glazing have made it much more difficult for those in real need to gain the warmth that they seek.
In December it was estimated by the national Right to Fuel campaign, which has done so much work in this field and should be complimented by hon. Members who speak in the debate, that before the spring is out there could be as many as 44,000 deaths among those over 50 years of age and over 500 deaths of babies under a year old. As I have already said, it was a relatively mild winter and we do not know whether those estimates have been realised. None the less, the fact remains that at the end of the day many will have died as a result of those hardships. All hon. 1086 Members have surgeries and can well imagine the particular hardships of disconnection. In my area in the north-west they run into thousands. Many know how difficult it is, even when the debt is paid, to be reconnected. Maladministration often causes great hardship.
That brings me to the bureaucratic nightmare that has followed the housing benefit scheme. The picture across the country has been a dismal one of huge backlogs, long delays and unnecessary suffering for those least able to cope with it. The scheme has been so disastrous that even the Government have recognised that they must have a thorough review.
In my constituency, the Tameside welfare rights organisation has furnished me with some disturbing facts, especially about pensioners and the chronically sick who are not taking up their entitlements to heating costs, largely through ignorance. Welfare rights organisations in Britain are doing a great job. It is clear that people well below the poverty line are not heating their homes properly if they are not claiming extra help for heating. Indeed, a recent survey commissioned by the Electricity Consumers Council found that, on average, elderly people spend less on heating their homes in winter than most families do in the summer. My right hon. Friend the Member for Salford, East (Mr. Orme) made that clear.
The Government's continued indifference to the appalling consequences of fuel poverty is a scandal. We noted with interest the launching of the £100,000 advertising campaign by the Minister for Social Security to encourage people who were illegally underpaid supplementary benefit to claim the money that they are owed. I am glad that he responded to the Child Poverty Action Group's pressure on that matter, although he may think that he acted on his own initiative.
Is it not about time that we had a similar campaign to encourage people to take up their entitlement to supplementary benefit, upon which heating allowances depend? Too high a percentage are not even within that scheme. The Minister is talking to known claimants in that campaign. We are talking about those many thousands of people who are not identifiable. It is clear that the DHSS can identify only its own claimants. We need to target those who are not getting heating allowances since they are not claiming supplementary benefit. We desperately need such a campaign, although so far the Minister has increasingly preferred to spend his money on the social security inspectors chasing people suspected of fraud. Much more important is the need for that money to increase the staffing levels in local authority and DHSS offices to deal with the problems of fuel poverty.
The problems do not seem to go away over the years. I spoke in a debate in the House on a subject close to this in 1971. I referred then to many disgraceful incidents of pensioners in my constituency who had to stay in bed until midday because they could not afford to turn on the heating. The then Minister, the right hon. Member for Leeds, North-East (Sir K. Joseph), did not believe what I was saying and asked me to furnish him with the facts. More importantly, the Daily Express, equally disbelieving what I was saying, sent a representative to spend two or three days in my constituency. In a major article it concluded that, if anything, I had underestimated the problem.
1087 This morning I received a number of letters on the subject, as I suppose has every hon. Member. One was a letter from a lady who said:At the moment it is 2 pm. I am sat in the house with all the curtains shut to try and keep warm as I can only afford to heat the house in the evenings. This is heart-breaking after a lifetime's work and thrift. Perhaps Mrs. Thatcher would like to share our life-style for one month. She would be very welcome if it would do any good but being so cold-blooded she would not feel the cold. I am normally an optimist but I find I am getting very pessimistic about the future. Perhaps the bomb would be a blessing.She concluded ironically by saying:I write on the blotting paper because I am not a wasteful person.That letter spells out much of what the debate is all about. One could go on, but I shall not. I shall adhere to your stricture, Mr. Deputy Speaker. I hope that the Minister will reply positively. If he does, he can only conclude at the end of the day that he must march into our Lobby.
§ 6.8 pm
§ Mr. Ian Lloyd (Havant)
I am sorry that the hon. Member for Stalybridge and Hyde (Mr. Pendry) should have referred in such disparaging terms to my right hon. Friend the Prime Minister who came to the Dispatch Box this afternoon after a tremendous battle in Brussels to save the real resources of Britain for a variety of other policies, one of which must surely be the resources that are spent on energy.
The Select Committee on Energy is grateful to the House for an opportunity to debate the second of our reports to be published in a comparatively short space of time. The debate is turning largely into one on the consequences of hypothermia and how policies should be adapted to avoid it. That is a legitimate objective and one which enjoys the sympathy of every hon. Member. However, energy policy is a much larger issue altogether when compared with that narrow, if important, segment of social policy. The difficulty is whether our energy policy should be as strongly influenced by that as some hon. Members have suggested this afternoon.
I shall give one example of how dangerous that can be. Northern Ireland has been quoted. I believe I am right in saying that there the average figure of energy expenditure per household per week is more than £12 compared with the national average of £8.35. I believe that one of the reasons, into which we need not go now, is the fact that a very large segment of the community in Northern Ireland refuses to pay any energy bills at all. That means that the rest of the community, naturally and inevitably, has to pay a higher energy bill. That could be a national problem.
§ Mr. Roy Beggs (Antrim, East)
Electricity in Northern Ireland is expensive because it is produced from imported oil. We depend 90 per cent. on oil for electricity generation. We need a new strategy from the Government. Indeed, electricity charges are pegged to the level of the highest rates charged on the mainland.
§ Mr. Lloyd
I am obliged to the hon. Gentleman. I do not think that that necessarily disqualifies my argument. I am aware that other special energy considerations apply in Northern Ireland.
The hon. Member for Dundee, East (Mr. Wilson) suggested that a substantial segment of the housing stock in the United Kingdom should be improved. No one would 1088 quarrel with that generalised argument. One could pick out houses in almost any community which are examples of poor insulation and design when considered by energy criteria. In the interesting pamphlet produced by the national Right to Fuel campaign, it is stated that 5 million dwellings—28 per cent. of the total—need essential repairs to make them wind and weather proof, generally at a cost in excess of £2,500 each. One does not need a computer or a calculator to work out that the national cost of that possibly desirable suggested policy is £12.5 billion more than the whole of the yield of the North sea for one year. That gives some perspective on what right hon. and hon. Gentlemen are arguing in terms of the improvement of our housing stock. These ideals should be considered carefully, but we cannot escape the consequences of such policies.
It is important to distinguish between what the Select Committee on Energy said and what it did not say. I refer to page xii of the report, "The purpose of the enquiry", where, in eight subsections, the precise questions to which it endeavoured to find answers are stated. While I would be the first to admit that we criticised the Government on their electricity price increase, we did not substantially criticise the Government on their gas price increase, and at no time did we take into consideration—this is carefully stated in a report—the rate of return on capital in the two industries, except in so far as the financial criteria, which were applied at an early stage in the calculations, implied a rate of return, but we did not examine that.
Opposition Members say that these industries made "great profits". I always find that term as wide as it is long. It is seldom related to the return on assets. As regards these two industries, if we had enlarged our inquiry to consider that aspect—which for various reasons we did not—we night well have had further to qualify our conclusions.
It is helpful, and sometimes informative, to distinguish fuel poverty from poverty in general. I suppose that an absolute can be defined in the sense in which the national Right to Fuel campaign has endeavoured to define an absolute. I suggest that we may go down many puzzling roads in this respect. I was in Nepal recently. I am sure that the definition of fuel poverty in Nepal would appal the House. Nepal was running out of timber, which was the sole source of fuel in many areas. I am sure that a large proportion of the Nepalese population experienced a degree of discomfort in winter which, by comparison with the worst standard in the United Kingdom, would seem almost a paradise. Let us be careful about defining these matters so rigorously lest we set standards that others might envy.
When one refers to fuel poverty, one might refer equally to food poverty, clothing poverty, transport poverty and housing poverty. In the family expenditure survey of 1982 some figures stand out starkly. I suggest that the prime causes of fuel poverty—if, indeed, it exists—are as follows. The basic fuel cost is the most significant element. Secondly, the high cost of building power stations in the United Kingdom makes a substantial contribution. There is the high cost of mining coal, which the House debated recently, and the high cost of oil and gas, for all sorts of reasons that hon. Members understand, not least of which is the high taxation imposed by producers and consumer Governments, regardless of the energy or social consequences of that taxation. That criticism can be applied to producer and consumer 1089 Governments on a broad front. Heavy taxation plays a not inconsiderable part in fuel poverty, or the proportion of all incomes taken by the consumption of fuel in a normal household.
Another aspect is revealed by the family expenditure survey. The right hon. Member for Salford, East (Mr. Orme), opening the debate, said that those who need insulation cannot afford it. I wish to draw the attention of the House to certain figures. The level of fuel expenditure can be exaggerated. It has never exceeded 6.3 per cent. of the average household over a long period in this country, as shown in a graph in the family expenditure survey. It does not exceed 14 per cent. of one-adult households where the householder is dependent on state pension—the narrowest segment to which I know the Opposition attach so much importance. It does not exceed 11 per cent. in households occupied by single women over 60. It accounts for 5.2 per cent. of all households' disposable income. We are therefore considering one twentieth of the average household expenditure in the country.
Fuel expenditure appears to be not elastic to income. If I may explain that somewhat ambiguous term to the House, it means that as incomes increase—and this is different from prices falling—one would expect, if all these arguments apply to the extent that Opposition Members have argued, the first priority would be an increase in expenditure on fuel, but that is not so. If one considers the figures from incomes under £40 at one end of the range to incomes of £400 at the other end of the range, the increase in fuel expenditure is from £5 to £20, but the increase in food is from £11 to £54, alcohol £2 to £17, tobacco £1.50 to £4.50, clothing £2.50 to £38, durable goods £2.20 to £34, transport £3.40 to £61, and services £3.90 to £76. Nobody would attempt to deny that, for certain important segments of the population, significant social problems are attached to the price of fuel. However, this is not a general problem for the vast majority of citizens, and that is a credit to the energy policies of successive Governments who have handled a difficult problem in a difficult area under constant criticism.
This suggests the directions in which policies should be driven. I put them in this order. The first is conservation and insulation, where it can be made capital efficient, and the criterion is all-important. Secondly, there should be energy price redistribution up to the point at which it is an acceptable social policy which we can afford. It should also be taken in conjunction with any other social redistribution policies that we may wish to pursue. Thirdly, there should be income redistribution by taxation. However, fuel policy must also take into consideration all the other matters that need to be taken into account when such changes are made.
Hon. Members talk of the people's right to fuel, but where there is a right, there is an obligation. In this Chamber we hear a lot about rights and very little about obligations, or meeting those rights. As Kennedy once said, they always require real resources.Enough is a function of what else is important.We forget that time and time again. Whose obligation is it? Is it that of the state, the energy industries, or the fuel industries? Obviously, the obligation is shared by all three. However, for the country as a whole, prices must 1090 cover costs. The bigger the exemptions, the higher the prices in the unsubsidised sector. That conclusion is wholly inescapable.
§ Mr. Speaker
Order. There are 10 minutes left before the concluding speeches begin. Perhaps I could ask the two hon. Members who wish to take part in the debate to speak for five minutes each.
§ Mr. Paddy Ashdown (Yeovil)
I shall try my best to accede to your request, Mr. Speaker. Although I do not wish to waste the time of the House, I should not wish to lose this opportunity of paying tribute to the man who single handedly established—and it took great effort and personal commitment to do so—that hypothermia is a major problem in Britain. I refer to my predecessor as Liberal candidate for my constituency, Dr. Geoffrey Taylor, who, I believe, sadly died last year. His commitment to that cause brought it to the forefront of the public's imagination.
Our support for the motion depends on both of the clauses within it. Despite what the Minister said, we believe that the Government have used fuel prices as a mechanism for raising revenue by stealth, and have sought to do so in a manner that does not come within the tax balance. I wish that the Minister had been in his seat to hear the speech of the hon. Member for Bedfordshire, North (Mr. Skeet), who completely demolished his idea that it was not the Government's fault, that the Government were not twisting the arm of the electricity board and that the board was making its own decisions freely. That is a fig leaf behind which the Minister cannot hide his nakedness, either inside or outside the House.
Everyone recognises that the increased electricity prices that have placed such a burden of misery and deprivation on those least capable of bearing it are a mechanism by which the Government seek to raise revenue. Nothing that the Government have recently done has more clearly demonstrated their total lack of compassion and the fact that they are out of touch with the reality of those increases for the poor and deprived, about whom they seem to know so little.
Nevertheless, we must also blame ourselves. All Governments have taken a wrong view of energy policy. The Ronan Point disaster led us to withdraw gas from flats and to put in, instead, electricity. The installation of underfloor central heating has meant that there has not been a sufficiently flexible heating policy to allow for shutting off heaters in particular rooms, and so on. The lack of drive on insulation is particularly important.
As the hon. Member for Havant (Mr. Lloyd) said, it is important that the debate should range a little more widely than hitherto. We believe that the new burden of fuel costs cannot be carried within existing supplementary benefit provisions. In addition, the additional heating allowances are woefully inadequate for the task. The problem is much greater than that. As the hon. Member for Erewash (Mr. Rost) said—although he is not now in his place—we must look at it on a much broader scale.
The Government seem to be missing a great opportunity. We must provide short-term urgent and immediate assistance to enable people to bear their heating costs and, twinned with that, there must be a major 1091 programme of insulation. The Minister was right to say that the Government have put more revenue and resources in than the Labour Government did, but they are still hopelessly inadequate to the task. The hon. Member for Bedfordshire, North exposed the Minister's figure by saying that it was about one third of the total cost paid in short-term heating bills. As has been rightly pointed out, that cost is paid now and gone tomorrow.
Instead of making a major investment in insulation, solving the long-term problems, and making investments that will assist industry, help employment and provide a long-term resource for the people of Britain that will allow them to have adequate heating, the Government's fuel policy has exposed the compassionless heart of the Tory party as well as its lack of touch with the reality of life for the poor, old and disadvantaged. That is where the Government are most indictable. Their policy has caused a great tide of misery for those least able to cope. The Government have missed a great opportunity to help our economy, drive down unemployment and invest in the future of Britain in a way that would provide great returns and banish for ever from houses in Britain the misery and danger of cold.
§ Mr. Sean Hughes (Knowsley, South)
It has been said that it is a minority who are suffering the most. However, it is precisely because they are a minority, and a minority who seem to get the wrong end of the stick every time, that I wish to raise a few points.
The clear, unchallengeable fact is that those at the bottom of the earnings scale pay more proportionately for fuel, light and power than those who are better off. I shall use some figures, the first of which was mentioned, I believe, by the hon. Member for Dundee, East (Mr. Wilson). Households on about one third of average weekly income spend 11 per cent. of their income on fuel, light and power. Households on between 50 and 60 per cent. of average weekly income spend between 7.5 and 9.5 per cent. Those households on the average weekly income spend between 4.7 and 5.5 per cent. on fuel, light and power, while those on twice the average weekly income spend between 2.9 and 3.5 per cent. on those items.
What makes matters worse is that the cost of fuel has risen faster than other prices or incomes, thus exacerbating the original inequality. If the retail price index stood at 100 in January 1974, it stood at 342.6 in January 1984. However, the figure for fuel and light was 469.3 and for electricity alone 492.1. Thus, the worst off are even worse off. Of course the Government can respond, as they did in the debate on low pay, that average earnings have increased and that it is only sensible that fuel prices should rise realistically in relation to that rise in income, but, as my school headmaster used to say, the point about an average is that 50 per cent. are above it and 50 per cent. are below it.
Since the Conservative party took office, a family of four on average earnings has seen a 6 per cent. improvement in income, while a similar family on five times average earnings has enjoyed an improvement of 22 per cent. and those on 10 times average earnings have enjoyed an improvement of 54 per cent. Therefore, to accommodate the above average pay increase for the well off, there has to be, by definition, a below average pay increase for the badly off. So at every turn those at the bottom are further disadvantaged. They have to spend 1092 more of their income on fuel, the price of that fuel is rising faster in comparison with other goods, and they get fewer income increments to meet it. It is a new law of diminishing returns—those with least will receive less than the average percentage wage increase, while paying out the largest percentage in price increases.
Of course, that mathematical formula of deprivation applies even further. As has been mentioned, it is the worst off in our society—the old, the sick, the unemployed and the single parents—who spend most of their time at home. They often live in homes that are damp, badly insulated, if at all, or draughty. They live in precisely the conditions that demand more money being spent on fuel—money which they do not have.
In an article in The Guardian on 1 February Robert Davies wrote:Fuel poverty is endemic to Britain. Good King Wenceslas would be struck by the irony of a society whose Parliament finds time to legislate for multi-channel cable television to reach several million homes, yet which cannot supply adequate heat for 3 million of the poorest people.It is a political decision to increase these prices and it would take only a little political courage to introduce the sort of measures proposed in the Opposition motion.
§ Mr. Michael Meacher (Oldham, West)
There could scarcely be a starker illustration of the disinterest of the Government in fuel poverty than the Chancellor's Budget a week ago. By abolishing the investment income surcharge, he gave a tax handout of £360 million to the tiny number of very rich people with share capital in excess of £100,000 and at the same time he halved the stamp duty on share transactions. That is giving a gain of something like £1,300 per person per year in this elite category while at the same time the 9.5 million pensioners who are struggling to keep warm were almost totally forgotten. For them it was not so much the fish and chip Budget as the kerosene Budget. That was a measure of such footling triviality as to be more an insult than a concession to the elderly.
Fuel poverty is one of the most tragic disfigurements of our society, as my my hon. Friends the Members for Paisley, North (Mr. Adams), for Stalybridge and Hyde (Mr. Pendry) and for Knowsley, South (Mr. Hughes) pointed out so eloquently and forcefully. Like poverty itself, which is increasing sharply in Thatcherite Britain, the problem is getting steadily worse because all the component causes of fuel poverty—low incomes, deteriorating housing conditions and the high relative cost of fuel—are all intensifying under Thatcherite policies. As hon. Members have said, fuel is the third most important component of the budget of the poor, after food and housing. When there are 9 million people living on the official poverty line and the Chancellor is so supremely indifferent to this group, as he showed in his Budget, it is scarcely surprising that this has become a major political issue.
I ask the Minister to pay attention, because in his opening remarks he showed a blithe indifference to what it is like to live in fuel poverty. At the root of the problem is the fundamental and incontrovertible fact that income support arrangements for households living in poverty—on the Government's own figures that means one in six of the population of Britain today—are patently inadequate. I do not know whether the Minister realises it, 1093 but in the current supplementary benefit single household rate the amount set aside for fuel is £6.05 per week. I ask the Minister a simple question: does he believe that he could live on that total fuel expenditure for a week? I do not think I could; I wonder whether he could. If he has any doubts about it, he should consult his hon. Friend the Member for Derbyshire, West (Mr. Parris) because he tried to live for a week on that level of income and he was unable to keep warm.
Fuel makes up a larger proportion of the budget of the poor than of others, as my hon. Friend the Member for Knowsley, South has pointed out. Although it is true that benefit rates go up in line with the general price index, this means that poor families are not being compensated fully for the faster rise in fuel prices. That is the significance of fuel poverty as opposed to other forms of poverty. In the last five years under this Government gas prices have risen by no less than 116 per cent. and electricity prices by 66 per cent.
There is no way that the army of fuel debtors, which numbers 1.5 million, can be fobbed off by allegations of lack of thrift or lack of prudence. Only one adequate explanation stares one in the face—that there is now an under-class whose incomes are so low that they cannot, with existing heating aids, afford adequate fuel at today's prices. There is no other explanation for the size of that figure. That is the incontrovertible fact at the heart of the debate.
It is no use the Minister going through, as he did, all the clever paraphernalia about strengthening the code of practice, tilting the tariffs, reducing standing charges, easing debt repayments or making the disconnection procedures less arduous; all those are peripheral to the central point—that, under Thatcherite policies, low incomes have been reduced so much and fuel prices have been raised so much that fuel poverty is a major political issue.
No amount of tinkering with the system of benefits can offer a remedy. As my hon. Friends have pointed out far more eloquently than I could, the result is clear. My hon. Friend the Member for Stalybridge and Hyde said that there are thousands of elderly people who, because they are physically vulnerable through age and disability, will die from cold-related conditions because they cannot afford on their low incomes to heat their leaking homes.
§ Mr. Alistair Burt (Bury, North)
Will the hon. Gentleman acknowledge, as none of his colleagues has done, the role of the high price of coal in the cost of electricity? Will he also acknowledge that, if the CEGB could import coal at prices some 25 per cent. lower than it has to pay for coal in this country, electricity prices could be lowered by 10 to 15 per cent.? Every time an uneconomic pit is kept open, the cost of grandmother's electricity goes up.
§ Mr. Meacher
I am sorry I gave way, if that is the best the hon. Member can do. Perhaps he should realise that coal is subsidised significantly in all our competitor countries but that does not happen here. That is what makes the difference to the figures that he quoted.
The Minister repeated today that the Government have spent more on supplementary benefit additional requirements for fuel. The point he did not make is obvious: the number on supplementary benefit because of mass 1094 unemployment has risen rapidly under the Government; in fact, it has risen by 70 per cent. since the Government came into office.
The Government made a great song and dance about the home insulation programme that they inaugurated two or three years ago. In principle this is an excellent idea, and we fully support it, but the results have been pathetic. As the hon. Member for Bedfordshire, North (Mr. Skeet) pointed out so forcefully, expenditure last year was £18 million, which is only a drop in the bucket compared with what is needed.
I am glad that the Minister for Social Security will be replying to the debate because he has to answer directly for the disaster area of housing benefit. That has had a seriously damaging knock-on effect on heating. The poor take-up of housing benefit supplement, which has not improved according to the latest figures, has meant that many claimants no longer get the additional payments for fuel to which they should be entitled. Perhaps the hon. Gentleman will address himself to that point. The whole area of fuel poverty is a mess, with a steadily rising toll of hardship and cold-related deaths.
Fuel pricing has been based on principles of strict long-run costs, which is perfectly reasonable. Conservation policy has also led to high fuel prices, yet the response of the DHSS has been so piecemeal and disjointed that it has failed completely to stop a fast increase in fuel poverty.
In the face of that desultory and tragic fragmentation of Government policy towards those afflicted by fuel poverty, two fundamental reforms are needed. The first requirement is a genuine home insulation policy. I mean a genuine policy, not the one in name only that exists at present. Such a policy would save fuel, create jobs, improve the housing stock and reduce the risk of debt, disconnection and discomfort among many poor families. One can think of few reforms which for so little money would achieve all those excellent objectives.
We need a comprehensive, direct insulation programme on the lines of the North sea gas conversion project. If that could be done, an insulation programme could also be successful. Not only would that be good social policy; it would make sound financial sense.
The specialist groups have been mentioned in the debate. I pay tribute to the work of the national Right to Fuel campaign and the National Association of Citizens Advice Bureaux, which are united in the view that financial aid for heating costs is too fragmented. I hope that the Secretary of State for Social Services, who has joined us, will accept that.
We need a national rebate scheme for fuel, on the lines of the rent rebate scheme. It should be flexible enough to take account not only of income levels, but of the size of family, the numbers of elderly people and young children in the family, house size, the condition of the house and conservation.
The Minister will be tempted to ask how much that will cost. Government is about determining priorities. This Government showed their priorities a week ago when they gave away £520 million to the richest 1 or 2 per cent. of the population by abolishing the surcharge on unearned income and by halving the stamp duty on Stock Exchange transactions. The same Government over the last five years have given tax handouts amounting to about £2,700 million to the same tiny group of rich people. We totally reject such values. We assert that the growing and ugly problem of fuel poverty could and should be overcome.
§ Mr. Meacher
I suggest that the hon. Gentleman addresses his question to the Minister, because I am not giving way now.
§ Mr. Meacher
We assert that the growing and ugly problem of fuel poverty can and must be overcome, given a Government with the will, at a fraction of the cost of the tax largesse that has been wilfully showered on a tiny number of idle and unproductive rich over the last five years. Because we are committed to the poor and not to the rich and because we assert that this Government with their priorities will never have the will to overcome the problem of fuel poverty, we seek the support of the House for our motion.
§ The Minister for Social Security (Dr. Rhodes Boyson)
We have had a good debate. The right hon. Member for Salford, East (Mr. Orme) said that we were discussing an important issue, and he is right. It involves energy and its costs and what one can do to ensure that the least affluent in our society have sufficient money in their pockets to buy the necessary fuel.
The hon. Member for Stalybridge and Hyde (Mr. Pendry) said that he hoped that I would reply positively. I shall take him up on that and reply positively. The motioncondemns the Government for increasing gas and electricity prices … ignoring the increased hardship this will create for millions of pensioners, one-parent families, low-income households, disabled people and the unemployed".The motion is tabled as if the Government have done nothing but bury the faces of the poor in the frost by hugely increasing the price of energy and doing nothing to help people pay for it. I have to reply positively to that in terms of what the Government have done and what the country knows we have done. I must speak the truth. I am always guided at times like this by people who lead me morally.
There are two sides to the argument, as there are two sides to the Chamber. There is a right and wrong, and obviously I am on the right side. In a mixed economy, one must have a form of pricing which serves both the producer and the consumer. That is the way that money should operate. If one does not have that, one operates a totally Communist system, directed from on high.
We live in a compassionate society. I do not bow to the Opposition when it comes to compassion. We share compassion.
§ Dr. Boyson
The hon. Gentleman displays an arrogance like the Pharisees of old. I certainly do not bow to him. Compassion exists on both sides of the Chamber. What can we do with the money available to ensure that people's basic needs are met? That is what the debate is about.
§ Dr. Boyson
No. The hon. Member for Walsall, North (Mr. Winnick) has done nothing but make seated interventions. I have no intention of giving way to him, but I shall give way to the hon. Member for Antrim, East (Mr. Beggs).
§ Mr. Beggs
I do not want to appeal to compassion, but does the Minister agree that British citizens in Northern Ireland should be entitled to fuel at the same respective cost as citizens on the mainland? Does he further agree that it is time that we had the interconnector between Northern Ireland and Scotland?
§ Dr. Boyson
I take that on board. I am not an expert on fuel prices in Northern Ireland, but I shall study them tomorrow. Citizens throughout the United Kingdom have the same basic requirements in fuel, food and other essentials.
What have the Government done to deserve such condemnation?
§ Dr. Boyson
That is right. Coal prices were increased last November by 3.8 per cent. after one year. Gas prices were increased this January, after 15 months, by 4.3 per cent. Electricity prices are to be increased by 2 per cent. in April, after no increase in two years. Under the last Labour Government, prices were increasing by 2 per cent. every six weeks. [Interruption.] For anyone to intemipt at that stage shows guts, if not much intelligence.
In the last two years there has been no increase in standing charges. The February 1984 edition of "Energy Trends" shows that over the period between the fourth quarter of 1982 and the fourth quarter of 1983 coal prices were constant in real terms, domestic electricity prices fell by 5 per cent. in real terms and domestic gas prices fell by 2.6 per cent. in real terms.
§ Dr. Boyson
No,. the Minister will not give way. Since 1968, gas prices have risen at a lower rate than average earnings or retirement pensions.
The second part of the Opposition's motion calls upon the Government to introduce measurs, as though we had done nothing. Let us consider the supplementary benefit heating additions introduced by the Labour Government and the increased cost of fuel and light, compared with the Government's record. We shall then see the competition of compassion and appreciate what the Government are doing about the problem.
When the Labour Government were in office from. July 1974 to November 1978, supplementary benefit heating additions increased by 112 per cent. At the same time the heat and light components in the retail price index increased by 107 per cent., giving a tiny increase of roughly 5 per cent. in the value of heating additions provided by the Labour Government, when compared to prices. Between November 1978 and November 1983 the average supplementary benefit heating additions increased by 140 per cent., while the retail price index components for fuel and light increased by 100 per cent. In other words, there has been a 40 per cent. increase under a Conservative Government in real terms, compared with a 5 per cent. increase for a similar period under the Labour Government.
1097 I do not know how the Opposition can table such a motion as this. Perhaps they will withdraw it when they have heard these facts and figures. The Government are spending £130 million more on heating additions in real terms than when we came to office.
Before the hon. Member for Oldham, West talks about unemployment, it is important for him to remember that unemployment is only one factor among many. The Government have increased the additions as well, as the figures show. In 1979–80 the Government introduced heating additions with immediate effect for those on supplementary benefit above the age of 70. The Labour Government could have done so, but did not. We came to office, saw the light and did it. The elderly had no automatic heating allowances under Labour, despite all that the Opposition have said today. We introduced heating additions for those on supplementary benefit aged 70 and older, as well as for those with children below the age of five. Hundreds of thousands of British people are grateful to the Government for introducing those additions at that time.
We have heard good speeches on energy policy from Conservative experts on energy, although we do not always agree entirely. My hon. Friends the Members for Havant (Mr. Lloyd) and for Bedfordshire, North (Mr. Skeet) have both spoken on the matter, as well as my hon. Friend the Member for Devon, North (Mr. Speller).
§ Dr. Boyson
I shall not give way. I am speaking my mind. I am sorry that I cannot give way to the hon. Gentleman for whom I have the greatest regard, but I must continue with my theme and talk about the views of my hon. Friends. We have only seven minutes left before a Division.
Reference has been made to the over-80s by my hon. Friend the Member for Bedfordshire, North. The Government have helped the over-70s on supplementary benefit as well as unemployed men aged 60-plus who were in need of long-term supplementary benefits. [Interruption.] Those men were in need of benefits, which the Labour Government did not provide. Now they receive £11 a week more than on short-term supplementary benefit. I appreciate that the benefit addition at the age of 80 is only 25p a week and I shall look at this matter, although I cannot guarantee that we shall be able to increase it.
§ Mr. Ashdown
On a point of order, Mr. Speaker. We are listening avidly to what the Minister has to say, but if he insists on addressing his remarks to his hon. Friends with his back to the Opposition we cannot hear his important remarks.
§ Dr. Boyson
I apologise, Mr. Speaker. You have brought me entirely to order. I am glad that the hon. Member for Yeovil (Mr. Ashdown) is following my argument so closely.
In 1978–79, towards the end of the Labour Government's period of office, £124 million was spent on 1098 additional heating allowances. Indexed for inflation, that would now be £250 million. We are spending £380 million—a real increase of £130 million—and more than £200 million of that goes to pensioners. Heating additions are now paid to 2.5 million households, compared with 1.6 million households in 1978, and help is now given to 1.6 million pensioners compared with 1.2 million in 1978.
§ Dr. Boyson
We have given automatic heating additions to pensioners over the age of 70 and to households with children under five, as I have mentioned.
The Opposition motion suggests that we have no insulation policy. In the last year of the Labour Government, 239,000 lofts were insulated, compared with 431,000 in 1982–83. We have almost doubled the number. All who need to insulate their lofts are eligible for a local authority grant of up to £69, or 66 per cent. of the cost. Pensioners and the severely disabled on supplementary benefit or housing benefit can obtain 90 per cent. of loft or home insulation costs up to £95. This was mentioned by my hon. Friends the Members for Bedfordshire, North and for Havant and by the hon. Member for Dundee, East (Mr. Wilson) and the right hon. Member for Salford, East. We all agree on the need for insulation. The Labour Government gave some assistance, but we have increased it. The Opposition motion is therefore somewhat ungrateful.
The hon. Member for Oldham, West (Mr. Meacher) referred to poverty. I refer him to the ministerial statements of his right hon. Friend the Member for Salford, East, who said that no Government had ever accepted that the supplementary benefit level was the poverty level. The right hon. Gentleman said in answer to an oral question:Poverty is a relative matter, and the Government do not accept that a simple poverty line can be drawn."—[Official Report, 26 October 1976; Vol. 918, c. 255.]The hon. Member for Oldham, West should have dinner with his right hon. Friend afterwards and get the full story.
A little nearer Christmas in the same year, the right hon. Gentleman said in a written answer:It is a paradox that using supplementary benefit levels as the poverty line can mean that the number of people in poverty can increase whet} a Government improve benefit levels".—[Official Report, 13 December 1976; Vol. 922, c. 497.]The very fact that we have increased virtually every benefit, including a 5 per cent. improvement in real terms in short-term and long-term supplementary benefit rates, means that we are now attacked for allegedly putting more people into poverty. That is the nonsense of trying to draw the poverty line in that way. I hope that the hon. Gentleman will talk to his right hon. Friend and get this sorted out so that the same argument does not arise on every occasion. We have increased virtually every benefit since we came to office, but time does not allow me to recite the list of 18 or 20 examples.
I conclude as I began. In a free society producing goods and services there must be a proper pricing policy related to return on assets in energy as in any other industry. This is a necessary indication for both producers and consumers. As my right hon. Friend the Minister of State said in his opening speech, there is only about a 1 per cent. return on assets in the electricity industry. There is concern 1099 on both sides of the House about the need to help the poorer families. We have considerably increased the help given to those families, as our amendment makes clear.
The Government were elected and re-elected to bring inflation under control. We have not just talked about that: we have done it. The Labour Government had 110 per cent. inflation in five years. They shed no tears for the people whose life savings they destroyed. In many cases, that is why those people are now in the queue for fuel assistance. As the Gallup poll of two weeks ago showed, old people are still more concerned about the effects of inflation than the size of their pensions—no doubt because they remember their sufferings under the Labour Government.
§ Question put, That the original words stand part of the Question:—
§ The House divided: Ayes 202, Noes 289.1102
|Division No. 197]||[7 pm|
|Abse, Leo||Dubs, Alfred|
|Adams, Allen (Paisley N)||Duffy, A. E. P.|
|Alton, David||Dunwoody, Hon Mrs G.|
|Anderson, Donald||Eadie, Alex|
|Ashdown, Paddy||Eastham, Ken|
|Ashley, Rt Hon Jack||Edwards, Bob (W'h'mpt'n SE)|
|Ashton, Joe||Ellis, Raymond|
|Atkinson, N. (Tottenham)||Evans, John (St. Helens N)|
|Bagier, Gordon A. T.||Ewing, Harry|
|Banks, Tony (Newham NW)||Field, Frank (Birkenhead)|
|Barnett, Guy||Fields, T. (L'pool Broad Gn)|
|Beckett, Mrs Margaret||Fisher, Mark|
|Beggs, Roy||Flannery, Martin|
|Bell, Stuart||Foot, Rt Hon Michael|
|Bennett, A. (Dent'n & Red'sh)||Forrester, John|
|Bermingham, Gerald||Forsythe, Clifford (S Antrim)|
|Bidwell, Sydney||Foster, Derek|
|Blair, Anthony||Foulkes, George|
|Boothroyd, Miss Betty||Fraser, J. (Norwood)|
|Bray, Dr Jeremy||Freeson, Rt Hon Reginald|
|Brown, Gordon (D'f'mline E)||Freud, Clement|
|Brown, Hugh D. (Provan)||George, Bruce|
|Brown, N. (N'c'tle-u-Tyne E)||Gilbert, Rt Hon Dr John|
|Brown, R. (N'c'tle-u-Tyne N)||Godman, Dr Norman|
|Bruce, Malcolm||Golding, John|
|Callaghan, Rt Hon J.||Gould, Bryan|
|Callaghan, Jim (Heyw'd & M)||Gourlay, Harry|
|Campbell, Ian||Hamilton, W. W. (Central Fife)|
|Campbell-Savours, Dale||Hardy, Peter|
|Canavan, Dennis||Harman, Ms Harriet|
|Carlile, Alexander (Montg'y)||Harrison, Rt Hon Walter|
|Carter-Jones, Lewis||Hart, Rt Hon Dame Judith|
|Clark, Dr David (S Shields)||Haynes, Frank|
|Clay, Robert||Healey, Rt Hon Denis|
|Cocks, Rt Hon M. (Bristol S.)||Heffer, Eric S.|
|Cohen, Harry||Hogg, N. (C'nauld & Kilsyth)|
|Coleman, Donald||Holland, Stuart (Vauxhall)|
|Concannon, Rt Hon J. D.||Home Robertson, John|
|Conlan, Bernard||Howell, Rt Hon D. (S'heath)|
|Cook, Frank (Stockton North)||Howells, Geraint|
|Cook, Robin F. (Livingston)||Hoyle, Douglas|
|Corbyn, Jeremy||Hughes, Dr. Mark (Durham)|
|Cowans, Harry||Hughes, Robert (Aberdeen N)|
|Craigen, J. M.||Hughes, Roy (Newport East)|
|Crowther, Stan||Hughes, Sean (Knowsley S)|
|Cunliffe, Lawrence||Hughes, Simon (Southwark)|
|Cunningham, Dr John||Janner, Hon Greville|
|Dalyell, Tam||Jenkins, Rt Hon Roy (Hillh'd)|
|Davies, Rt Hon Denzil (L'lli)||John, Brynmor|
|Davies, Ronald (Caerphilly)||Johnston, Russell|
|Davis, Terry (B'ham, H'ge H'l)||Jones, Barry (Alyn & Deeside)|
|Deakins, Eric||Kaufman, Rt Hon Gerald|
|Dewar, Donald||Kilroy-Silk, Robert|
|Dixon, Donald||Kinnock, Rt Hon Neil|
|Dormand, Jack||Lambie, David|
|Douglas, Dick||Lamond, James|
|Leadbitter, Ted||Redmond, M.|
|Leighton, Ronald||Rees, Rt Hon M. (Leeds S)|
|Lewis, Ron (Carlisle)||Robinson, G. (Coventry NW)|
|Lewis, Terence (Worsley)||Rogers, Allan|
|Litherland, Robert||Rooker, J. W.|
|Lloyd, Tony (Stretford)||Ross, Ernest (Dundee W)|
|Lofthouse, Geoffrey||Ross, Wm. (Londonderry)|
|Loyden, Edward||Rowlands, Ted|
|McCartney, Hugh||Ryman, John|
|McDonald, Dr Oonagh||Sedgemore, Brian|
|Mackenzie, Rt Hon Gregor||Sheerman, Barry|
|McNamara, Kevin||Sheldon, Rt Hon R.|
|McWilliam, John||Shore, Rt Hon Peter|
|Madden, Max||Short, Mrs R.(W'hampt'n NE)|
|Marek, Dr John||Silkin, Rt Hon J.|
|Marshall, David (Shettleston)||Skinner, Dennis|
|Martin, Michael||Smith, C. (Isl'ton S & F'bury)|
|Mason, Rt Hon Roy||Smith, Rt Hon J. (M'kl'ds E)|
|Maxton, John||Snape, Peter|
|Maynard, Miss Joan||Soley, Clive|
|Meacher, Michael||Spearing, Nigel|
|Meadowcroft, Michael||Steel, Rt Hon David|
|Michie, William||Stewart, Rt Hon D. (W Isles)|
|Mikardo, Ian||Stott, Roger|
|Millan, Rt Hon Bruce||Strang, Gavin|
|Miller, Dr M. S. (E Kilbride)||Straw, Jack|
|Mitchell, Austin (G't Grimsby)||Taylor, Rt Hon John David|
|Molyneaux, Rt Hon James||Thomas, Dr R. (Carmarthen)|
|Morris, Rt Hon A, (W'shawe)||Thompson, J. (Wansbeck)|
|Morris, Rt Hon J. (Aberavon)||Thorne, Stan (Preston)|
|Nicholson, J.||Tinn, James|
|Oakes, Rt Hon Gordon||Torney, Tom|
|O'Brien, William||Wainwright, R.|
|O'Neill, Martin||Warden, Gareth (Gower)|
|Orme, Rt Hon Stanley||Wareing, Robert|
|Owen, Rt Hon Dr David||Welsh, Michael|
|Park, George||White, James|
|Parry, Robert||Wigley, Dafydd|
|Patchett, Terry||Williams, Rt Hon A.|
|Pendry, Tom||Wilson, Gordon|
|Penhaligon, David||Winnick, David|
|Pike, Peter||Wrigglesworth, Ian|
|Powell, Rt Hon J. E. (S Down)||Young, David (Bolton SE)|
|Powell, Raymond (Ogmore)|
|Prescott, John||Tellers for the Ayes:|
|Radice, Giles||Mr. James Hamilton and Mr. Allen McKay.|
|Adley, Robert||Channon, Rt Hon Paul|
|Aitken, Jonathan||Chapman, Sydney|
|Ancram, Michael||Clark, Hon A. (Plym'th S'n)|
|Arnold, Tom||Clark, Dr Michael (Rochford)|
|Atkins, Rt Hon Sir H.||Clark, Sir W. (Croydon S)|
|Atkins, Robert (South Ribble)||Clarke, Rt Hon K. (Rushcliffe)|
|Baker, Rt Hon K. (Mole Vall'y)||Clegg, Sir Walter|
|Baker, Nicholas (N Dorset)||Colvin, Michael|
|Banks, Robert (Harrogate)||Conway, Derek|
|Beaumont-Dark, Anthony||Coombs, Simon|
|Bellingham, Henry||Cope, John|
|Bendall, Vivian||Couchman, James|
|Benyon, William||Crouch, David|
|Best, Keith||Dorrell, Stephen|
|Body, Richard||Douglas-Hamilton, Lord J.|
|Boscawen, Hon Robert||du Cann, Rt Hon Edward|
|Bowden, A. (Brighton K'to'n)||Edwards, Rt Hon N. (P'broke)|
|Boyson, Dr Rhodes||Emery, Sir Peter|
|Brandon-Bravo, Martin||Fairbairn, Nicholas|
|Bright, Graham||Fallon, Michael|
|Brooke, Hon Peter||Favell, Anthony|
|Brown, M. (Brigg & Cl'thpes)||Fenner, Mrs Peggy|
|Browne, John||Finsberg, Sir Geoffrey|
|Bryan, Sir Paul||Fletcher, Alexander|
|Buchanan-Smith, Rt Hon A.||Fookes, Miss Janet|
|Buck, Sir Antony||Forman, Nigel|
|Budgen, Nick||Forsyth, Michael (Stirling)|
|Bulmer, Esmond||Fowler, Rt Hon Norman|
|Burt, Alistair||Fox, Marcus|
|Butcher, John||Franks, Cecil|
|Carlisle, Kenneth (Lincoln)||Fraser, Peter (Angus East)|
|Freeman, Roger||Knox, David|
|Gale, Roger||Lamont, Norman|
|Galley, Roy||Lang, Ian|
|Gardiner, George (Reigate)||Latham, Michael|
|Gardner, Sir Edward (Fylde)||Lawrence, Ivan|
|Garel-Jones, Tristan||Lawson, Rt Hon Nigel|
|Gilmour, Rt Hon Sir Ian||Lee, John (Pendle)|
|Glyn, Dr Alan||Leigh, Edward (Gainsbor'gh)|
|Goodhart, Sir Philip||Lennox-Boyd, Hon Mark|
|Goodlad, Alastair||Lester, Jim|
|Gorst, John||Lewis, Sir Kenneth (Stamf'd)|
|Gow, Ian||Lightbown, David|
|Gower, Sir Raymond||Lilley, Peter|
|Greenway, Harry||Lloyd, Ian (Havant)|
|Gregory, Conal||Lloyd, Peter, (Fareham)|
|Griffiths, E. (B'y St Edm'ds)||Lord, Michael|
|Griffiths, Peter (Portsm'th N)||Lyell, Nicholas|
|Grist, Ian||McCurley, Mrs Anna|
|Ground, Patrick||Macfarlane, Neil|
|Grylls, Michael||MacKay, Andrew (Berkshire)|
|Hamilton, Neil (Tatton)||MacKay, John (Argyll & Bute)|
|Hampson, Dr Keith||Maclean, David John.|
|Hanley, Jeremy||McNair-Wilson, P. (New F'st)|
|Hannam, John||McQuarrie, Albert|
|Hargreaves, Kenneth||Major, John|
|Harvey, Robert||Malins, Humfrey|
|Haselhurst, Alan||Malone, Gerald|
|Havers, Rt Hon Sir Michael||Maples, John|
|Hawkins, C. (High Peak)||Marland, Paul|
|Hawksley, Warren||Marshall, Michael (Arundel)|
|Hayes, J.||Mates, Michael|
|Hayhoe, Barney||Mather, Carol|
|Hayward, Robert||Maude, Hon Francis|
|Heathcoat-Amory, David||Mawhinney, Dr Brian|
|Heddle, John||Maxwell-Hyslop, Robin|
|Henderson, Barry||Mayhew, Sir Patrick|
|Heseltine, Rt Hon Michael||Mellor, David|
|Hickmet, Richard||Meyer, Sir Anthony|
|Hicks, Robert||Miller, Hal (B'grove)|
|Higgins, Rt Hon Terence L.||Mills, Iain (Meriden)|
|Hind, Kenneth||Mills, Sir Peter (West Devon)|
|Hirst, Michael||Miscampbell, Norman|
|Holland, Sir Philip (Gedling)||Moate, Roger|
|Holt, Richard||Monro, Sir Hector|
|Hooson, Tom||Montgomery, Fergus|
|Hordern, Peter||Moore, John|
|Howarth, Alan (Stratf'd-on-A)||Morrison, Hon C. (Devizes)|
|Howarth, Gerald (Cannock)||Moynihan, Hon C.|
|Howell, Rt Hon D. (G'ldford)||Mudd, David|
|Hubbard-Miles, Peter||Neale, Gerrard|
|Hunt, David (Wirral)||Needham, Richard|
|Hunt, John (Ravensbourne)||Nelson, Anthony|
|Hunter, Andrew||Neubert, Michael|
|Irving, Charles||Newton, Tony|
|Jackson, Robert||Nicholls, Patrick|
|Jenkin, Rt Hon Patrick||Norris, Steven|
|Johnson-Smith, Sir Geoffrey||Onslow, Cranley|
|Jones, Gwilym (Cardiff N)||Ottaway, Richard|
|Jones, Robert (W Herts)||Page, John (Harrow W)|
|Joseph, Rt Hon Sir Keith||Page, Richard (Herts SW)|
|Kershaw, Sir Anthony||Parkinson, Rt Hon Cecil|
|Key, Robert||Parris, Matthew|
|King, Roger (B'ham N'field)||Patten, John (Oxford)|
|Knight, Gregory (Derby N)||Pawsey, James|
|Knight, Mrs Jill (Edgbaston)||Peacock, Mrs Elizabeth|
|Knowles, Michael||Percival, Rt Hon Sir Ian|
|Pink, R. Bonner||Stewart, Ian (N Hertf'dshire)|
|Pollock, Alexander||Stokes, John|
|Porter, Barry||Stradling Thomas, J.|
|Powell, William (Corby)||Sumberg, David|
|Powley, John||Tapsell, Peter|
|Price, Sir David||Taylor, Teddy (S'end E)|
|Prior, Rt Hon James||Temple-Morris, Peter|
|Proctor, K. Harvey||Thomas, Rt Hon Peter|
|Pym, Rt Hon Francis||Thompson, Donald (Calder V)|
|Raff an, Keith||Thompson, Patrick (N'ich N)|
|Rathbone, Tim||Thorne, Neil (Ilford S)|
|Rees, Rt Hon Peter (Dover)||Thornton, Malcolm|
|Renton, Tim||Thurnham, Peter|
|Rhodes James, Robert||Townend, John (Bridlington)|
|Rhys Williams, Sir Brandon||Townsend, Cyril D. (B'heath)|
|Ridsdale, Sir Julian||Tracey, Richard|
|Rifkind, Malcolm||Trotter, Neville|
|Roberts, Wyn (Conwy)||Twinn, Dr Ian|
|Robinson, Mark (N'port W)||van Straubenzee, Sir W.|
|Roe, Mrs Marion||Vaughan, Sir Gerard|
|Rossi, Sir Hugh||Viggers, Peter|
|Rost, Peter||Waddington, David|
|Rumbold, Mrs Angela||Waldegrave, Hon William|
|Ryder, Richard||Walden, George|
|Sainsbury, Hon Timothy||Walker, Bill (T'side N)|
|St. John-Stevas, Rt Hon N.||Walker, Rt Hon P. (W'cester)|
|Sayeed, Jonathan||Wall, Sir Patrick|
|Shaw, Giles (Pudsey)||Waller, Gary|
|Shaw, Sir Michael (Scarb')||Walters, Dennis|
|Shelton, William (Streatham)||Ward, John|
|Shepherd, Colin (Hereford)||Wardle, C. (Bexhill)|
|Shepherd, Richard (Aldridge)||Warren, Kenneth|
|Shersby, Michael||Watson, John|
|Silvester, Fred||Wells, Bowen (Hertford)|
|Sims, Roger||Wheeler, John|
|Skeet, T. H. H.||Whitfield, John|
|Smith, Tim (Beaconsfield)||Whitney, Raymond|
|Soames, Hon Nicholas||Wiggin, Jerry|
|Speed, Keith||Winterton, Mrs Ann|
|Speller, Tony||Winterton, Nicholas|
|Spencer, Derek||Wolfson, Mark|
|Spicer, Michael (S Worcs)||Wood, Timothy|
|Stanbrook, Ivor||Woodcock, Michael|
|Stanley, John||Yeo, Tim|
|Steen, Anthony||Young, Sir George (Acton)|
|Stevens, Lewis (Nuneaton)||Tellers for the Noes:|
|Stevens, Martin (Fulham)||Mr. Douglas Hogg and Mr. Archie Hamilton|
|Stewart, Allan (Eastwood)|
|Stewart, Andrew (Sherwood)|
§ Question accordingly negatived.
§ Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on amendments) and agreed to.
That this House welcomes that increases in the prices of the nationalised energy industries are now below the rate of inflation and that the Government has maintained and improved the real value of social security particularly for the neediest members of the community.".