HC Deb 26 March 1990 vol 170 cc6-7
5. Mr. McFall

To ask the Secretary of State for Energy whether he has made an estimate of the effect that announced changes in domestic gas and electricity prices in April 1990 will have on the retail prices index.

Mr. Wakeham

It is estimated that the changes in gas and electricity prices will add about 0.4 per cent. to the retail prices index once the tariffs have been fully implemented.

Mr. McFall

How does the Secretary of State's recent decision to allow electricity prices to rise by more than the rate of inflation square with the Government's long-playing record, which we hear every Tuesday and Thursday at 3.15 pm, by the female lead singer of the "Mid-Staffs Blues Band", called "Bearing Down on Inflation"?

Mr. Wakeham

I enjoyed the hon. Gentleman's well-rehearsed supplementary question. The increase in the price of electricity which has recently been announced means that, on average, all prices will be increased by less than 6 per cent., which is less than the rate of inflation. Average domestic prices will rise by about 9 per cent., and, on average, customers over 1 MW will get a reduction in price.

Mr. John Marshall

Will my right hon. Friend confirm that, since privatisation, the real price of gas to the consumer has fallen and that during the last five years of the Labour Government the price of electricity rose by 155 per cent? Does my right hon. Friend agree that that suggests that privatisation rather than nationalisation is the key to consumer satisfaction?

Mr. Wakeham

My hon. Friend is absolutely right. Under this Government, prices have fallen, whereas they rose substantially under the last Government.

Mr. Morgan

Nevertheless, does the Secretary of State agree that the price rises that will take effect from next week have emerged as the most extraordinary unprotected rip-off ever to face the British consumer? Will the right hon. Gentleman comment on the letter that I received last weekend from Professor Stephen Littlechild, the regulator of the industry, who stated: I shall have no power to suspend the recent price increases or to impose temporary price increases at a different level."?

As the price increases that have been announced cannot be commented on by the old electricity consumer consultative councils, which can comment only on this year's prices and which will go out of action on 31 March, and nor can they be commented on by the new statutory electricity consumer committees, will the right hon. Gentleman confirm that nobody can comment on those price increases except himself, the Secretary of State? Does the right hon. Gentleman agree that, in effect, the electricity consumer is being shipwrecked while both lifeboats have been hidden in the boat shed and he has hidden the key?

Mr. Wakeham

That is not correct. There is nothing that I can do to stop anybody commenting on the price of electricity. If I wanted to do something about it, I should not be able to achieve it. Although the price increase for domestic consumers is slightly above the rate of inflation this year, it will be followed by two years of price stability, which is good for the consumer.