HC Deb 27 February 1989 vol 148 cc8-9
8. Mr. John Greenway

To ask the Secretary of State for Energy what representations he has received on the current policy of British Gas on debt and disconnections.

Mr. Parkinson

The Director General of Gas Supply recently announced agreement with British Gas on new methods of debt collection with a view to reducing the number of disconnections.

Mr. Greenway

I thank my right hon. Friend for that welcome news. A reduction of 21 per cent. in disconnections in 1988 is significant and demonstrates that the structures that were put in place are working. I am sure that the new procedures which my right hon. Friend has just announced will help to get the number of disconnections down even lower. However, is it not the case that British Gas in the private sector is showing a flexibility and compassion which it could not show in the public sector? Will my right hon. Friend assure the House that the same arrangements about disconnections will apply to electricity and that no one should be cut off simply because they have difficulty paying a bill immediately?

Mr. Parkinson

I think that in this case the electricity industry can claim to have set the pace for the gas industry. The electricity industry has substantially improved the position, principally as a result of the introduction of pre-payment meters. Their introduction in the gas industry will produce a similar and welcome improvement.

Mr. O'Brien

Will the Secretary of State examine the reason why cut-offs are so frequent among lower-paid people who use gas? In my constituency there are elderly people who use gas only for a gas poker. Yet their accounts show that two units plus standing charge works out at more than £3 per unit. Such crippling and cruel incidents are happening. Will the Secretary of State consider the crippling effect of standing charges on low-income families who use a minimum amount of gas?

Mr. Parkinson

This matter has been examined by both Labour and Conservative Governments, who concluded that the standing charge is the fairest way to recover the fixed overheads accompanying the supply of electricity and gas. They concluded that the people who would suffer from the abolition of standing charges would be those on low incomes, whose bills would rise.

Mr. Hannam

Does my right hon. Friend agree that there is a direct link between the very helpful downward trend in disconnections and the fact that gas prices have dropped by 9 per cent. since gas privatisation? Is that not an indicator for the future of the electricity supply industry, in which there will also be downward pressure on prices?

Mr. Parkinson

My hon. Friend is right. The Opposition predicted all sorts of huge escalations in gas prices as a result of privatisation, but in fact gas prices have fallen since privatisation.