Electricity Privatisation (Hansard, 12 November 1990)

§ 7. Mr. McAvoy
To ask the Secretary of State for Energy when he next expects to meet the chairmen of the 12 area electricity companies to discuss the effects of privatisation on less well-off consumers.

§ Mr. Baldry
The Government believe that all consumers will benefit from the privatisation of the electricity industry.

§ Mr. McAvoy
The Minister will recall that the Secretary of State has devised a system whereby domestic electricity consumers will face price increases of at least 11 per cent. next year. That increase is based on the October retail prices index plus 1 or 2 per cent. Does he also recall that those who buy electricity shares will be protected from those increases by the award of vouchers that can be used to offset their electricity bills? Will he undertake for this year only to extend the voucher system to all less well-off consumers so that electricity privatisation does not further deepen the divisions in our society?

§ Mr. Baldry
The price controls on the industry are designed to protect customers against increases over and above the rate of inflation subject to unforeseen circumstances until 31 March 1993. In the past five years, domestic prices have fallen by about 5 per cent. in real terms.
I think that the hon. Gentleman is slightly confused about the electricity vouchers. The incentives that include electricity vouchers are part of the Government's marketing campaign for the share offers. The cost of those incentives is met by the Government, from the proceeds of the sales, and not by the regional electricity companies or the consumer. The price of electricity is set by the companies and will be the same whether or not incentives are offered.

§ Mr. Mans
As many less well-off people rely wholly on electricity for their heating, may I ask my hon. Friend what steps have been taken to guarantee the supply of electricity and to discourage disconnections under the new privatised regime?

§ Mr. Baldry
I am glad to say that disconnections for debt now represent only 0.33 per cent. of all customers. That is the lowest-ever level, and is less than half that in 1976. Indeed, previous protections against disconnections are being not only retained but enhanced, because licences require each regional electricity company to produce a code of practice to help those finding difficulty in paying bills and to draw up procedures to deal with customers who fall into debt.