Electricity Charges

HC Deb 14 December 1987 vol 124 cc760-1

7. Mr. Madden

To ask the Secretary of State for Energy what recent estimates he has made of the impact upon (a) pensioners, (b) low-income families and (c) domestic users generally, of increased electricity charges.

Mr. Michael Spicer

There has been no overall increase in electricity tariffs since April 1985, nor will there be any increase this winter. It will be for the Electricity Council to determine the effects on tariffs from next April of the new financial targets that we set for the industry.

Mr. Madden

Why are the old and the cold being asked next year and the year after to pay big increases which are wholly unnecessary and unjustified and will simply give City slickers a big profit when electricity is privatised? Does the Minister understand that it will not wash for Ministers to make comparisons between United Kingdom and Common Market electricity prices, when pensions in the Common Market are substantially higher than here? Does he further understand that it is deeply shameful for pensioners and low-income families to be ripped off in that way by Ministers whose entire lives are cosseted and who are protected against the cold at a time when there is great anxiety about the plight of pensioners and low-income families?

Mr. Spicer

The precise increases will depend upon what further success the industry has in reducing costs. We expect the average householder's expenditure to increase by 40p a week and the average pensioner's expenditure by 30p or 35p a week. I should stress that any increase next April will be the first effective increase since April 1985. Since that time single pensions have increased by £5.25 a week and are due to rise by a further £1.65 a week next April.

Mr. Baldry

Does my hon. Friend agree that it does not lie in the mouth of any Labour Member to express concern about rising prices when the previous Labour Government presided over record increases in inflation and record increases in prices, to the detriment of the poor and the pensioners?

Mr. Spicer

My hon. Friend is correct. Under Labour, electricity tariffs rose by 30 per cent. in real terms; under us, electricity tariffs have fallen by 15 per cent. in real terms.

Miss Mowlam

Does the Minister intend after April next year to continue lower tariffs for industries such as ICI? If he does, will that continue to be to the detriment of, and cause increased handicap to, pensioners and people on low incomes?

Mr. Spicer

My right hon. Friend the Secretary of State has just said that the Opposition have rather changed their tune, having learnt what is happening—[Interruption.] Last week the Opposition were complaining about heavy increases in industrial costs, so their tune has changed. It is for the industry to determine exactly how the prices will be distributed. Our understanding is that the bulk and intensive discounts will remain.

Mr. Oppenheim

Can my hon. Friend tell us how much higher electricity prices would be now if we had given in to Scargill in 1984–85, as the Opposition urged us to do?

Mr. Spicer

I do not have the calculations with me, I am afraid, but that is a very good question. Prices would undoubtedly be much higher.