ADDITIONAL TERMS OF SUPPLY (Hansard, 5 April 1989)

§ Mr. Michael Spicer
I beg to move, That the clause be read a Second time.

§ Mr. Speaker
With this, it will be convenient to take Government amendments Nos. 12 to 14, 16, 17 to 21, and 26.

§ Mr. Spicer
New clause 5 allows the public electricity supplier to require anyone requesting a supply to accept certain additional terms on that supply. However, it will not weaken the obligation to supply electricity. That is because the new terms will apply only to two specific aspects of the supply. It is also because if there is any dispute over the terms of supply, the consumer will have the right to ask for an independent determination by the director under clause 21. Under amendment No. 13, which is in this group, the customer will be informed of that right.
The first of the contexts in which additional terms of supply will be permitted is in respect of safety. At present, the Bill does not allow the supplier to impose the restrictions necessary to allow him to comply with safety regulations. That could give rise to a potential anomaly. The supplier could be obliged to provide a supply under clause 15 although in doing so he would contravene the requirements of regulations made under clause 27 on safety. The new clause would therefore give the supplier the right to impose restrictions on the supply where necessary to enable him to comply with those safety regulations.
The second area in which terms could be imposed by the supplier under new clause 5 will ensure that consumers in general are provided with secure supplies without any 204 need for expensive price increases. As the Bill stands, a consumer would have the right to take action for any losses suffered as a result of negligence. It is right that in general such a remedy should be available to consumers. We would expect suppliers to take out normal commercial insurance to cover that possibility. However, in some instances a couple of seconds of lost power could have highly significant effects, especially in these days when so such dependence is placed on computers. There could be little or no—

§ Mr. Dennis Skinner (Bolsover)
The Minister should talk about computer breakdowns.

§ Mr. Spicer
I shall talk to the hon. Member for Bolsover (Mr. Skinner) afterwards to explain just how inaccurate was his intervention on this last night. I shall be happy to debate that matter with him if he wishes to intervene. I will not discuss it outside the Chamber—the hon. Gentleman often addresses us outside the Chamber —but I am happy to debate it inside the Chamber.
There might be little or no actual physical loss, but I he economic consequences could be major, far outstripping the actual value of any supply lost. In cases in which the degree of sensitivity to the loss of supply is so much greater than normal, under the Bill as it stands the supplier would have to take on the role of insurer for the consumer involved. The costs of insurance in such cases are likely to be high and could be met only through increased charges to consumers as a whole. We do not believe that it is justified to require the mass of consumers to face increased charges because of the particular sensitivity to loss of supply of a very small number of consumers.
To avoid that outcome, the new clause would enable the public electricity suppliers to impose additional terms restricting liability for economic loss so far as it is reasonable in the circumstances to do so. The restriction of liability would not apply to physical loss or damage but only to economic loss, and only to the extent that the restriction was reasonable. Any dispute over a restriction would come within the provisions of clause 21, allowing for independent determination by the director.
In the light of that explanation, I am sure that the House will welcome the new clause for the protection that it affords for the safety of supply and for consumers generally.
The other Government amendments are drafting amendments or consequential on new clause 5, except for amendment No. 13, to which I have already referred, and amendments Nos. 16, 21 and 26. Amendment No. 16 meets the points raised in Committee and provides that whenever a supplier serves a notice requiring security from an existing consumer he must at the same time inform the consumer of his right to have any dispute over that security determined by the director.

§ Mr. A. J. Beith (Berwick-upon-Tweed)
indicated assent.

§ Mr. Spicer
The hon. Member nods. That point was raised in Committee and the Government brought forward the amendment to meet our assurance.
Amendment No. 21 makes the continuation of an existing supply while any dispute affecting it is determined a matter for the director's discretion. Amendment No. 26 ensures that the director will be able to use his enforcement powers in respect of any breach of the provisions of new clause 5.
205 I hope that the House will feel able to accept new clause 5 and the associated amendments.

§ Mr. Barron
It is strange that after weeks in Committee the Government have come forward on Report to add things to the hastily cooked-up piece of ideology known as the Electricity Bill. On Second Reading and in Committee there was a strong statement by the Government to the effect that the duty of supply will be as never before—that we shall get away from the 50-yard rule in terms of domestic dwellings, and so on, and that we shall have a better electricity supply than we had in the public sector for many decades. Moreover, we were told, if anything fails and the lights go out we shall be able to get compensation from the successor companies.
Now, however, it seems that that may not be the case. The successor companies may have told the Government what the cost had been to the public sector over the years and what it might be to the private sector if there were a loss of electricity, especially to sensitive users such as commerce or industry, or indeed to domestic premises.
The Minister has partly answered the question that I was about to put to him, but what does the new clause mean in relation to the regulations in clause 27? The Minister says that it is all to do with safety, and I accept that, but does it mean any change in the present position? What is the current relationship between the right of supply and any safety regulations which might be seen to interfere?
Paragraph (b) concerns interruption of supply and the restriction on a supplier's liability. What happens at present if there is a power cut in a sensitive area, perhaps in a high-tech or industrial company? What obligations do the current area boards have in relation to insurance and a consumer's right to claim from them if there has been a major loss? Will there be a change in the present procedure and, if so, why? Will the new successor boards be feather-bedded against the actual cost of failing to meet a demand of a consumer with whom they have contracted in one form or another? Those questions appear relevant and must be answered by the Minister.
We are now at the Report stage of a Bill which was supposed to be the best thing ever for electricity generation and supply. Yet every time we meet to discuss it we have to accept amendments and new clauses which apparently seek to protect the industry from the problems that will be caused by putting this public utility into the private sector.

§ Mr. Beith
The new clause and the series of amendments grouped with it include some useful improvements to the Bill. The Minister referred to the one that will enable the customer to know his rights. That is something for which we pressed in Committee and I am glad that it has been included. Looking at the position so far, the inclusion of the restriction on liability is necessary, but, if the debate goes a little further, I may be persuaded another way. However, taking the Bill as it stood, all the amendments and the new clause together, the right to supply is still not what it appears to be, primarily because of the financial implications involved.
It is all very well for someone to have a right to require an electricity board to supply electricity, but if the company can then turn round and say, "Yes, you have that right and we will exercise it, but the estimated cost is 206 £2,500," that right does not amount to a row of beans. In my constituency, for example, charges of £115,000 for three properties, £200,000 for 10 properties and £3,906 for one property fewer than four miles from the centre of the town of Berwick have been quoted.
It is not merely that the companies in estimating the cost of providing the right to supply are likely to be very tough or demanding, but that they will argue that they have no right to in any way subsidise one consumer at the expense of others. Therefore, the amendments and the new clause will not be effective in the absence of any provision that would specifically allow and encourage the companies to meet the objective of providing electricity supplies throughout the country.
In this day and age it is surely a reasonable objective that wherever practically possible homes should have access to an electricity supply. If that were not so, the Government would not provide for the obligation to supply. Although they have not done so for gas, the Government consider it reasonable for every home to have a connection to the mains electricity supply. That will not be achieved, however, at the sort of prices being charged to remaining homes.
If those remaining homes had been in the North of Scotland Hydro-Electric Board area, up to now none of them would have had to pay more than £600. That in itself is quite a high charge, but at least the North of Scotland Hydro-Electric Board is backed by provisions that require it to have regard to the general development of the area and allow it to meet the cost of extending the electricity supply. The result is that in an area where many properties are more remote than they are in England, the level of connection of properties to the electricity supply is higher. Not many people realise that in the remotest Highlands of Scotland the proportion of properties connected to mains electricity is higher than in Northumberland, in Devon and in a number of other rural parts of Britain.
The time has surely come to clear up the remaining gaps in the electricity supply system, but the duty to supply as set out in the Bill and in the amendments is not sufficiently strong to do that. The Government could have made that duty stronger and they could have introduced amendments on the lines of the amendments that we introduced in Committee. Our amendments would have given the companies at least the opportunity, preferably the obligation, to continue the work of extending the electricity supply and to use some of the large funds that will be made available to them to do that. As it is, they will try to load on to every customer the cost of extending the supply and often that cost will be high.
4.15 pm
I am sorry to say that, despite the minor improvements in the new clause and associated amendments, a duty to supply will not be a reality for thousands of people in this country. They still have to manage without any electricity or they face the almost impossible task of trying to run two or three domestic appliances off a generator. As I told the Committee, anyone who has had the experience of trying to run a washing machine, a television and a few electric lights off a small generator on a dark winter's night knows that it is not much fun. That does not contribute to bringing up a family in reasonable conditions.
207 Farm workers, shepherds, and other people living and working in the countryside will have to put up with such a way of life for a great deal longer unless better provisions than those in the Bill are made.

§ Mr. Peter Hardy (Wentworth)
The hon. Member for Berwick-upon-Tweed (Mr. Beith) spoke about minor improvements, but "mini-minor" improvements might be a better description.
In Committee we agreed with the hon. Gentleman about the problems of rural supply and I am sure that he shares my belief that there will not be a massive eagerness on the part of private generators to supply small-scale customers in our remote areas. The proposed improvements will not take us very far in that direction.
In common with my hon. Friend the Member for Rother Valley (Mr. Barron) I recall the ebullient and sweeping speech made by the Secretary of State on Second Reading. The central point of his speech was that we would have masses of competition, new suppliers, enormous improvement and dramatic change. I told the Secretary of State then that I did not think that he had read his own Bill because clause 15 hedges everything about to the point that the right hon. Gentleman's sweeping and ebullient claims are somewhat—[Interruption.] My hon. Friend the Member for Bolsover (Mr. Skinner) perhaps describes it more effectively than I would have done.

§ Mr. Rhodri Morgan (Cardiff, West)
Spell it.

§ Mr. Hardy
I have no intention of spelling it. The comment made by my hon. Friend the Member for Bolsover was entirely justified if not entirely in place.
At the time of Second Reading the Secretary of State had not read clause 15. It is obvious that the claims that he then made and the posture that he adopted was hedged about to such an extent that his claims were questionable. To add further hedging with the new clause warrants further comment.
It is interesting that new clause 5(b) demonstrates that, at last, the Government accept that negligence is possible. It is a modest contribution to the Government's realisation that negligence is encountered from time to time. As the months pass we may see more examples of such negligence in the Bill and the subsequent privatisation.
I hope that we do not vote against the new clause, but it is worth putting on the record that, once again, it adds further contradictions to the claims made by the Secretary of State on Second Reading.

§ Mr. Frank Haynes (Ashfield)
First, I welcome the Secretary of State who is in his place today. We really did not see a lot of him Upstairs in Committee when we did all the graft.

§ Mr. Michael Spicer
Come off it.

§ Mr. Haynes
I do not know why the junior Minister says, "Come off it." Is he protecting the Secretary of State? I am sure that the right hon. Gentleman can look after himself. We intend to argue about what the Government want to do about the privatisation of electricity and I hope that the junior Minister, who will reply at the end of the debate, will keep his mouth closed for a minute and listen to what is said instead of yatting away to his right hon. Friend at his side. That happens all the time, and it is wrong. Afterwards, some of these Ministers say that they do not remember what an hon. Member said, or what the 208 Opposition said. Is it any wonder when they are sitting gas-bagging on the Treasury Bench? Ministers must listen to what is being said.
I remember the speech made by the Secretary of State on Second Reading about the dramatic changes that were going to take place. He also talked about something else —consumer rights. We talked about consumer rights in Committee and we know what sort of consumer rights that there will be. I experienced them not long ago in my constituency—under the present regime.
My hon. Friend for Rother Valley (Mr. Barron) talked about when power is cut off and the difficulties that the consumer will then face, but what about upsurges of power which can damage people's property—their washing machines, refrigerators, televisions and God knows what? When we were in Committee I did not hear the junior Minister describe how the consumer would be looked after if that happened. Consumers want to know exactly what help they will receive, and what rights they will have. It is all right for the Secretary of State to nod and say "yes" but we want real answers to these questions. What sort of compensation or help will consumers get when there is an upsurge of power—as happens all the time? Not long ago, I experienced that in my own constituency, in the wonderful little village of Selston.
I do not suppose that the Secretary of State knows anything about Selston. However, my hon. Friend the Member for Bolsover (Mr. Skinner) does, because his constituency is not far down the road and he lives not far away. He knows what a wonderful little place it is. A row of houses suffered an upsurge of power which affected a number of consumers. I took the matter up with the area board but, to start with, it did not want to know. Therefore, I went and banged on the door in the hope that I had the support of the Secretary of State for Energy. I sorted it out in the end—[HON. MEMBERS: "Well done."] I am talking about the little village of Selston, which is only a minute patch on the map of the United Kingdom.

§ Mr. Skinner
I wonder whether Selston is the village which had a unique system of paying electricity bills many years ago under the old regime. Meters were emptied arid people would receive rebates. Some people put pit washers in the meter instead of two bob pieces and asked, "What happens if you put in more washers than there is rebate?" They were told that it would be left over until the next month. A new inspector arrived and stopped that practice. One of the fellows said, "He has broken custom arid practice so I am refusing to allow this new regime to apply." His electricity supply was cut off and he went to his Member of Parliament and said, "Will you get my electricity restored?" His Member of Parliament said that he would try. The fellow said, "I have got four kids and no lights or telly—nothing." The Member of Parliament said, "I will give you some candles." The man said, "Don't bother. I'm connected up with him next door." Is that the same village?

§ Mr. Haynes
It is the same on Report as it was in Committee, where Conservative Members received an education about this sort of thing. I shall come to the point made by my hon. Friend the Member for Bolsover but I shall make an additional point. My hon. Friend is right. That is what used to happen. Those so-called coins, made in the blacksmith's shop, were really efficient at the job: they fitted exactly. Those people knew what they were 209 doing. I do not know what those at the Treasury would have said if they had known that coins were being made for the meters on National Coal Board blacksmiths' premises. But the Secretary of State has cheated those people: they now have to put in a card rather than a coin, or so-called coin.
My hon. Friend the Member for Bolsover knows as well as I do that those coins can no longer be made because they have closed the damn pit. The Secretary of State laughs, but 1,100 people lost their jobs in that village when the Government closed the pit and stopped them from making those coins for the meter.

§ Mr. Skinner
Is not the moral of the story that the new owners of the electricity industry will have a double handful down in Selston and places like it? The Minister would do well to tell the potential purchasers about the trouble that they will have in collecting the money.

§ Mr. Haynes
That is one of the reasons why we have suggested to the Government that they should not privatise the industry. At present money is being poured into those people's pockets in massive tax reductions, but privatisation will bring real problems.
I am standing here, however, because I am concerned about the consumers. I am one of them. I live just down the road from the wonderful little village of Selston, in the constituency of Ashfield, in the beautiful county of Nottinghamshire. Even the Secretary of State is being given an education this afternoon. He was not in Committee very often to be educated, but his junior Minister was always there—and listened sometimes, although he did not give us the answers that we wanted.
I hope that we will be given an answer this afternoon. Will consumers really get their rights, or will they be robbed? Will they be taken for a ride by the so-called electricity experts who will move in and buy up our industry if the Government get away with this Bill and it becomes an Act? My fear is that under the Bill and the present Administration the consumer will not get a fair deal.

§ Mr. Michael Spicer
Mr. Deputy Speaker—[HON. MEMBERS: "Answer that lot."] I certainly will answer that lot, because it is easily answerable. First, however, let me reply to the hon. Member for Rother Valley (Mr. Barron). The hon. Gentleman asked what changes were being made to the present position. Existing safety regulations will apply. What has changed is that for the first time we are talking about consumers, who will have a right to supply. Whatever anyone says—for instance, the hon. Member for Berwick-upon-Tweed (Mr. Beith)—no one who lives more that 50 yd from a mains supply now has such a right. Of course supply is cost-related, but should the potential consumer feel that he has been overcharged he will for the first time have the right to appeal to the Director General of Electricity Supply.
The other change is that the obligation to supply has been switched to the electricity distribution company. That is one reason why we must ensure that the obligation relates to, and does not completely override, the need for safety regulations to apply.
I turn to the remarks of the hon. Member for Ashfield (Mr. Haynes), who is again behaving like a Whip, having gone all quiet on the Front Bench.

§ Mr. Haynes
I will not allow the Minister to provoke me. I have behaved myself in the Chamber—which is more than can be said of some hon. Members.

§ Mr. Spicer
I apologise to the hon. Gentleman if I provoked him with my reference to his having gone quiet. I can see that that may have been a bit provocative. Let me "unprovoke" the hon. Gentleman by saying that he was not quiet a few moments ago. If I may say so, he was talking a lot of rubbish—and I hope that that does not provoke him. I have to say to him and to the hon. Member for Wentworth (Mr. Hardy)—perhaps, indeed, to all hon. Members—that, far from the Opposition having educated us in Committee, the process was rather the other way round, particularly in respect of the question of consumers. It is quite right that it should be so, because the whole of this Bill is dedicated to the consumer. That is precisely why we are changing the situation, and we have three days on Report to carry on the process of education.
Opposition Members must accept that at present there is a monopoly supplier who determines the costs, whatever those costs may be, and then passes them, without any checks or balances, straight through to the consumer, the person to whom we are addressing ourselves today.

§ Mr. Joseph Ashton (Bassetlaw)
If this legislation is dedicated to the consumer, will the consumer be able to have a coin-operated meter on demand—something that is not possible at present?

§ Mr. Spicer
The Bill incorporates arrangements for prepayment—something that no current legislation does. So far as prepayment is concerned, there will be new rights for the consumer that is quite clear.

§ Mr. Ashton
Will the consumer have the right to ask for the installation of equipment that will enable him to pay by a method other than meeting a big bill after a three-months delay?

§ Mr. Spicer
Of course, all sorts of things have to be taken into account—for instance, theft and matters to do with security, which must modify what is being done.
At present there are no checks and balances for the consumer. That will be changed radically by this Bill. It is a fundamental point, and it is no bad thing that the hon. Members for Ashfield and for Wentworth have raised it in the context of consumers. It is well to establish firmly on the record again that this Bill changes the situation fundamentally.[Interruption.] The hon. Member for Sedgefield (Mr. Blair) says that prices will be put up. If he wishes to make that kind of comment from a sedentary position, he must tell me why. We know of many projects —20 at the moment, and I am sure that there are many others in the pipeline—whose cost structures are considerably below those of the CEGB, on average. Under the Bill, it will be possible to have new power stations and generating arrangements—something which, by the way, would not be possible or practicable in the present situation.
Far from what the hon. Gentleman has suggested, the pressure on prices will be downward. I agree that the key factor here is which system will do more to put pressure on prices. It is part of our case that the downward pressure will be far greater in the private sector, under the terms of this Bill, than would be the case were the present situation 211 to persist—for precisely the reasons I have already given: that the present system is one in which a monopoly supplier passes his costs, without any checks or balances, straight through to the consumer. That must be less good, from the point of view of pressure on prices, than the system that we are proposing.

§ Mr. Morgan
Will the Minister please explain what he means by downward pressure on prices from the 20 private sector projects? They are attracted to come into the industry only by the price increases that the Secretary of State announced in April 1987 and April 1988. Had the Secretary of State not imposed those price increases, which were double what the industry had asked for, the headroom would be nowhere near what the private sector generators need to attract them into the industry on a competitive basis.

§ Mr. Spicer
I have a great deal of respect for the hon. Gentleman because of his knowledge of the industry and the way in which he puts his questions, but he has missed the fundamental point that in a private and varied system it is possible to introduce greater efficiency. It is not necessarily the case that private sector generating companies require an artificially high price to be set to attract them into the industry. All that they want is the opportunity to do business. That is precisely what the Bill will give them.

§ Mr. Hardy
The Minister had not dealt with the exemptions to which I referred when I said that the Secretary of State's ebullience was definitely hedged. According to clause 16, the consumer may have the right to demand a supply, but the supplier has a certain right to refuse to supply.
According to clause 16(2)(a), a public electricity supplier will not be required to give a supply of electricity if he is prevented from doing so by circumstances not within his control; or if (c) it is not reasonable in all the circumstances for him to be required to do so. Will those circumstances include the remote rural resident who has already been referred to in the debate?

§ Mr. Spicer
I have already made that point absolutely clear. I have also pointed out—I said earlier that it was the whole point of new clause 5—that certain conditions will be imposed, particularly when safety matters are involved. The supplier will have the right to specify under what conditions he is prepared to undertake the contract. However, those conditions must be reasonable and I have already referred to the kind of circumstances in which conditions could be imposed. We start from the basis of the right to supply. Only in the most extenuating circumstances where the test of reasonableness has been applied and where safety is concerned would the right to supply be modified.

§ Mr. William O'Brien (Normanton)
Does the Bill provide any protection for consumers over standing charges? As there is to be competition throughout the country over electricity supplies, will there also be competition over standing charges? Will the fact that the supply network is to be a separate operation result in another standing charge? Water authorities will levy two standing charges. Does the Bill provide any protection so that customers—

§ Mr. Deputy Speaker (Mr. Harold Walker)
Order. I find it difficult to understand the relationship between that point and the new clause.

§ Mr. Spicer
Standing charges will be essentially the same as they are now. However, the regulator will be able to determine whether the charges are excessive. That will be part of his duties.

§ Mr. Barron
I thank the Minister for answering my question about the scope of the regulations in terms of new clause 5. He said that there will be no change. However, he has avoided my question about paragraph (b). I shall ask it again so that he knows exactly what I am talking about. Paragraph (b) refers to restricting the liability of the supplier for economic loss if he fails to supply electricity to a dwelling or to industry, commerce or hospitals. New clause 5 appears to contradict the speech of the Secretary of State for Energy. He referred to the compensation that would be made available to consumers if a public electricity supplier failed to supply electricity. That was incorporated in the White Pa per and it was referred to on Second Reading and in Committee. However, it now appears to be suggested that in future consumers will have to insure against economic loss if there is a failure to supply electricity.
Will there be any change, as regards area boards, in the obligation that the area board now has compared with the obligation that the private sector will have because of the Bill? It is important that that point is answered. If there is to be a cushion, we can see that taking the industry into the private sector benefits the consumer not at all but perhaps says to him that he must insure, because the industry will be unable to ensure that there is a supply of electricity.

§ Mr. Ashton
The Minister has failed abysmally to answer the point made by my hon. Friend the Member for Ashfield (Mr. Haynes)—my hon. Friend made it in a jocular manner, but it is important—about poor consumers who have great difficulty in paying their bills and who for many years have sought an automatic right to a coin-operated slot meter or to a meter which takes some sort of plastic token which disintegrates when inserted. That is the only way in which any one-parent family or anyone on a low income can enjoy a system of "pay as you burn".
Under such a system, thousands of consumers have found that they can manage to survive without getting into debt simply because if the meter cuts off at 10 o'clock on a Thursday night they go to bed and put the kids to bed or they manage with some sort of food that needs no cooking. That is how they survive when they know that they are coming to the end of the week and the Giro has not yet come. Many of my constituents, in an area with 17 per cent. unemployment, come into that category.
The electricity boards—and, indeed, the gas boards—have always resisted pressure to go back to the old system of collecting from slot meters because they do not want the job. They argue that collectors from meters are often hit on the head when they are collecting, people know when they are coming round and meters can be broken into by local burglars, thus increasing theft. I suspect that the real reason is not the desire to reduce theft but an unwillingness to let consumers know how much they are consuming,. They would prefer a system whereby we all get into debt for three months and until the bill comes in none of us knows how much it will be.
213 I wish that someone would invent some sort of meter which poor people could stick on their mantelpiece and which would show them how fast it was going round and how much electricity they were consuming so that they could, for instance, turn off a bar of the fire. It would work the other way as well—at present old people often sit and shiver in winter, terrified to turn on another bar of the fire because they do not know how much electricity it will take.
Power is probably the only product that people consume first and find out the price later. No one would go into a restaurant, order a meal and only after eating it ask how much it cost. Yet we are expected to consume electricity and gas in that way.

§ Mr. Keith Mans (Wyre)
Does the hon. Member agree with me that the area board statistics for the past three or four years, with their encouragement for pre-payment meters, plastic cards and other tokens, show that they are going in the direction that the hon. Member wishes and will continue to do so after privatisation?

§ Mr. Ashton
I am coming to that.
We are faced with the problem of people not knowing how much they have consumed until they have consumed it and then being faced with a big bill that they cannot pay. Instead of going down to the area office and explaining, they often let it drift.
The hon. Member for Wyre (Mr. Mans) referred to some sort of card. It costs £2 and one can check off how much has been used, but if the card expires on a Saturday or Sunday people cannot get down—

§ Mr. Mans
rose—

§ Mr. Ashton
The hon. Gentleman can make his point afterwards. I am not giving way all the time. If the hon. Gentleman wants to speak, he can speak later.
Occasionally I have received a complaint from a person with a card that it has run out at the weekend and he cannot get a replacement from the local office. In my constituency the local office might be 10 miles away, at Mansfield or Doncaster. Even if he has the money, there may be no bus to take him there. There are other problems, too.[Interruption.] The hon. Member for Wyre should not be too impatient. We have three days on this Bill so it is no use him getting excited.
The problem will be solved if the person in difficulty can put a 50p piece into a slot. The fuel policy action group can confirm that in some cases, after reconnection of a supply, the meter has been rigged to go at such a speed that the person gets only half what he pays for because he has debts to pay off, so it becomes like a treadmill and the consumer is back to square one.
4.45 pm
There are difficult and complicated methods of paying debts, but none is as effective as the old system under private enterprise. I was a boy before the industry was nationalised. In the poor areas in Sheffield, where I lived, everyone had a slot meter. In many terrace houses not every room had electricity. Often the area board would say to a family, "We think that you can only afford electricity in three rooms." My grandmother did not have electricity upstairs, and in the kitchen she had an old gas lamp, 214 because the area board thought that she would not be able to pay for more electricity. Nobody wants to go back to those days.
The private boards will find, like anyone else, that they will suffer bad debts. In the past the rest of us have paid for the bad debts. The authorities stick 2.5 per cent. on everybody's bill and we all pay. It is like the credit card companies which charge 27 per cent. interest because they have to cover for bad debts. With the nationalised industries, if there is a disconnection at least a Member of Parliament may raise the matter locally and exert pressure, or even ask a question in the House about the increasing number of disconnections. When the gas industry was sold off, disconnections rocketed—the people reading the meters were told to adopt a much tougher line—and exactly the same will happen with electricity. There will be a harder attitude to poor consumers who cannot pay their bills at the end of three months.
The Bill is not good enough. There is no protection for the poor one-parent family who cannot pay when suddenly faced with a bill for three months' electricity. The only protection is to give them the right to demand a "pay as you burn" system, but as yet there is no right for anyone to demand such a meter. I hope that the Minister can tell us that the Bill will include a provision to give that right to poor consumers.

§ Mr. Deputy Speaker
Before the Minister replies a second time, do any other hon. Members wish to take part in the debate? No.

§ Mr. Michael Spicer
Later amendments will address themselves specifically to the point which the hon. Member for Bassetlaw (Mr. Ashton) has raised. By way of a brief response, there will be a right to ask for prepayment meters if people want them. Far from disconnections going up, they are coming down dramatically. One reason is that people are getting prepayment meters. The hon. Gentleman referred to miscallibration of meters. In those circumstances there can be a direct appeal to the director general.
The hon. Gentleman raised the question of using cash rather than tokens. As my hon. Friend the Member for Wyre (Mr. Mans) mentioned, one reason for the move to prepayment systems, using tokens or cards, is precisely because they are more secure and cannot be robbed so easily. We will have a debate on the subject, but I can give the hon. Member for Bassetlaw those assurances on the questions that he raised on behalf of poorer consumers.

§ Mr. Mans
Does my hon. Friend agree that the hon. Member for Bassetlaw (Mr. Ashton) is living in the past? The type of prepayment meters now being fitted have a button on them to allow consumers £2 or £5 worth of free electricity which they pay for after the event. That gets over the problem that the hon. Gentleman suggested might arise for consumers.

§ Mr. Ashton
Will the Minister ask the boards to make that fact clear to the public in advertisements? I assure him that few members of the public know about it.

§ Mr. Spicer
It becomes a right, and with the latest technology the boards would do well to take the hon. Gentleman's advice and advertise it widely.
The hon. Member for Rother Valley (Mr. Barron) raised the question of liability, and one must ask what sort of consumers he had in mind. If the supply companies had 215 all the liability imposed on them, that would mean them having total insurance to cover all eventualities, and that would be extremely expensive. It would have to be paid for by other consumers in higher tariffs.
We say that there should be a test or reasonableness. We are making a distinction—that is what the new clause is about— between physical loss which is incurred through a breakdown in supply and which is fully insurable, and unreasonable economic loss—vast losses because of a temporary, perhaps few seconds' disruption of supply. For large computer companies or large companies owning computers—the type of consumer the new clause addresses—it would be surprising if they were not properly insured against such eventualities.

§ Mr. Barron
Will they be insured?

§ Mr. Spicer
I cannot speak for every company in the land. It would be surprising, first, if they were not properly insured and, secondly, if they did not have back-up systems, such as small generators, as a standby capacity. Most large computer users and manufacturers would have a standby capacity, and that is the type of company we are considering in this context.

§ Mr. Barron
What liability do the area boards have at present when eventualities of this type occur? Will companies have to insure differently in the future, or will liability be accepted by the boards?

§ Mr. Spicer
I will obtain the precise answer for the hon. Gentleman because I do not want to mislead him about the exact liability that the companies will have. We are talking about companies going into the private sector, where the issue of insurance will apply in the way I have described. But I will obtain for the hon. Gentleman the details of the precise status of the obligations and liabilities that are covered at present.