HC Deb 27 February 1989 vol 148 cc6-8
7. Mr. McAvoy

To ask the Secretary of State for Energy what representations he has received regarding the protection of low-income consumers' rights in the light of privatisation of the electricity industry.

The Secretary of State for Energy (Mr. Cecil Parkinson)

I have received some representations on the need for measures to protect the low-income consumer of electricity.

Mr. McAvoy

Would not a more extensive energy-saving programme be more helpful to low-income households, as it would ensure that less heat is wasted?

Mr. Parkinson

As the hon. Gentleman may have heard us say, we have put a considerable push behind the community insulation programme. We have a technical difficulty because of the change in the training scheme, but we want to see the scheme renewed and taken up again as soon as possible.

Mr. Baldry

Does my right hon. Friend agree that the best protection for the low-income consumer will be competition? Should not the Opposition be reminded at every possible opportunity that under this Government, even taking into account the April increases, electricity prices will have fallen in real terms by 8.1 per cent., whereas under the Labour Government they increased by the equivalent of two percentage points every six weeks? The Opposition should never be allowed to forget that or to get away with it.

Mr. Parkinson

My hon. Friend is right. In considering the Electricity Bill in Committee, we find it difficult to reconcile the Labour party's posture as the friend of the consumer with its record when in Government. The Labour Government presided over record price increases week after week.

Mr. Madden

Surely it is high time that the electricity, gas and water industries had a common policy to avoid disconnections, especially those involving low-income families and pensioners, so that those vulnerable groups and others are not left without heat, light or water for months or, in some instances, years on end, as has happened?

Mr. Parkinson

As the hon. Gentleman knows, there is a common code for electricity and gas. The code has been modified and has been shown to work. Disconnections of gas supply fell by 21 per cent. last year. [Interruption.] Questions about water supply disconnections should be addressed to my right hon. Friend the Secretary of State for the Environment.

Mr. Michael Morris

Is not one of the great benefits of privatisation the fact that it clarifies, not least in administrative form, the rights of consumers, which is to the benefit of all consumers, including those on low incomes?

Mr. Parkinson

Yes, Sir. Several new rights are given to consumers under the Electricity Bill. As I announced to the Committee, the changes proposed for gas by the director general of Ofgas will be extended to the electricity supply industry. That will put the low-income user of both sources of power in the best position ever.

Mrs. Clwyd

Is the Secretary of State aware that in my constituency 60 per cent. of households have incomes of £4,000 per year, or less and that it is an area of especially high unemployment? Does he appreciate that paying energy supply bills is a special problem for those who are unemployed? Will he consider the particular problems of the town of Mountain Ash, where gas and electricity supply disconnections have increased fourfold in the past nine years? Will he consider also the implications of the present policy for low-income consumers?

Mr. Parkinson

Under this Government, help to pay heating bills is a consumer's right. That was not the position under the Labour Government. Under this Government, there has been an increase from £90 million to more than £417 million in the support given through the heating allowance, which is now built into income support. The voluntary code and the introduction of prepayment meters has had a dramatic effect on disconnections throughout the rest of the country. I shall be meeting representatives of the South Wales Electricity Board tomorrow evening and I shall bring the matter to their attention.

Mr. Blair

As fuel costs to the electricity industry have fallen by more than 7 per cent. in real terms in the past two years, will the Secretary of State strike a blow against inflation and help the consumer by cancelling the 6 per cent. proposed price increase in April?

Mr. Parkinson

In arriving at the proposed price increase, the industry has taken into account the reduction in its coal bill. The proposed increase might otherwise have been higher. Whatever the increase is, it will be below the rate of inflation. Once again, it will be this Government who are keeping price increases below the rate of inflation. It was the Labour Government who increased them ahead of the rate of inflation.