HC Deb 17 February 1993 vol 219 cc305-7
4. Mr. Chisholm

To ask the President of the Board of Trade what proposals he has in relation to the paying of gas, electricity and telephone standing charges by pensioners.

The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Neil Hamilton)

Government legislation has provided the regulators with full powers to regulate utility prices for supply to household customers and a duty to protect the interests of consumers. Utilities may decide on the form and scale of their charges, including standing charges, but must satisfy their regulator.

Mr. Chisholm

Is the Minister aware that a large number of pensioners have difficulty with their electricity, gas and telephone bills, and that standing charges often represent 50 per cent. or more of those bills? Does he realise that the profits of the privatised utilities have exceeded £35 billion during this unending recession? Will the Government therefore follow the example of the Irish and other European Governments by ensuring that a small part of those fat profits is used to abolish pensioners' standing charges?

Mr. Hamilton

Of course, under nationalisation we were used to industries making not profits but losses, which were paid for by the community generally. If the hon. Gentleman wants to protect the interests of those on lower incomes, he has got the wrong end of the stick. Of those in the bottom one fifth of the income scale, only about 30 per cent. are pensioners. If, having phased out standing charges, we were to recoup that revenue by increasing prices, the poorest in society would be the losers.

Mr. Bill Walker

Does my hon. Friend agree that nothing is for free and that standing charges are part of the charge made for having and using any service that is available? If there were no standing charges, other charges would have to be adjusted accordingly. The question is, on whom would those adjusted charges fall and who would be most greatly disadvantaged?

Mr. Hamilton

I agree entirely with my hon. Friend. Some standing charges have diminished over the years. Since privatisation, British Gas standing charges have reduced by 32 per cent., which reflects that company's success in paying its way by being efficient. That is a great British company, as many companies that were previously nationalised have become—earning income abroad which contributes substantially to their increased profits, from which tax revenue is paid rather than consumed.

Mr. O'Neill

Does the Minister agree that the most effective way of alleviating fuel poverty is to increase the housing stock's energy efficiency and to assist the funding of such work? Is he prepared to instruct the electricity regulator to introduce an E factor similar to that employed by British Gas, whereby it is prepared to fund environmental improvements and conservation? [Interruption.] If the Minister has finished consulting his colleagues, perhaps he will give the House an answer.

Mr. Hamilton

I prefer to ask those who know about the subject—unlike the hon. Gentleman, who prefers to rely on his colleagues' ignorance—and my hon. Friend the Minister for Energy is the Minister principally responsible for such matters. I can tell the hon. Gentleman that we have no power to instruct the regulator in such terms. The regulator's powers are set out in Acts of Parliament He is obliged to consider a variety of factors, which are all defined in legislation.