HC Deb 16 June 1986 vol 99 cc748-50
11. Mr. Greenway

asked the Secretary of State for Energy if he will make a statement on the ending of the scheme for making refunds on standing charges for gas and electricity.

The Parliamentary Under-Secretary of State for Energy (Mr. Alastair Goodlad)

Tariffs are a matter for the industries. As they made clear when ending the schemes, these had proved to he much more costly than anticipated and were largely providing help to those who clearly did not need it —for example, second home owners. The ending of the schemes was welcomed by the consumers' and consultative councils.

Mr. Greenway

Does my hon. Friend agree that it was right to end the scheme for second home owners who clearly did not need it, but that it was a tragedy to end it for small users, who were generally elderly pensioners or unemployed people who, to my own knowledge, saved on the use of energy in order to benefit from the scheme? Will he have talks with the industry with the intention of restoring the scheme for pensioners and those on very small incomes?

Mr. Goodlad

My hon. Friend is uncharacteristically incorrect in saying that most of the scheme's beneficiaries were pensioners and those on low incomes. Standing charges cover unavoidable costs incurred by the industries in keeping supplies available, such as maintenance, meter reading, accounting and billing, and emergency services. Abolition would penalise many of the less well off, because lost revenue of £550 million for each industry would have to be recovered through increased unit charges. That would harm those with large heating needs, such as the sick, the disabled, the very young and the old.

Mr. Haynes

When will the Minister wake up to the fact that standing charges have been a backdoor method of increasing prices for long enough? As the hon. Member for Ealing, North (Mr. Greenway) asked, when will the Minister take note of pensioners and those on low incomes? Those changes are among the items from which they seek relief. Will the Government seriously consider abolishing standing charges altogether?

Mr. Goodlad

As I said to my hon. Friend the Member for Ealing, North (Mr. Greenway), there is no reason to abolish standing charges. The hon. Gentleman will realise that help to the less well off is best directed through the social security system. As he will know, the Government have done much to improve provision under the social security system. Supplementary benefit is up 6 per cent. in real terms, and more than £400 million was spent on heating additions in 1984–85, which is £140 million more in real terms than was spent in 1978–79.

Mr. Peter Bruinvels

I do not normally agree with the hon. Member for Ashfield (Mr. Haynes), but standing charges cause great anxiety to my constituents, particularly the elderly. Should not the cost of the meter, and so on, be included in the tariff, so that one pays more the more energy one uses? Let us do away with standing charges. They are an unfair way of taxing the elderly.

Mr. Goodlad

As I have said, it would be disadvantageous to the elderly if the cost of standing charges was included in the unit rate, particularly for those who use a lot of energy as opposed to those who do not use much, but who give rise to certain charges to the industry.

Mr. Bruce

Will the Minister acknowledge that pensioners feel strongly about this issue and that those who do not qualify for heating allowances but who are on low incomes suffer the full brunt of the Government's pricing policy, which is to force up the price of energy? If the Minister is not prepared to abolish standing charges, which is what most people want, he should come up with an acceptable alternative that will benefit pensioners who do not get fuel allowances, and not just say that it cannot be done.

Mr. Goodlad

It would not be to the benefit of pensioners overall if standing charges were abolished. The hon. Gentleman is not correct to say that we have been forcing up the price of energy. In the three years 1982 to 1985, domestic electricity prices rose by only 6 per cent. Under the Labour Government they rose by 2 per cent., on average, every six weeks. Domestic gas costs the same in real terms today as it did in 1970.