HL Deb 29 July 1974 vol 353 cc2063-9

3.53 p.m.


My Lords, with the permission of the House, I will repeat a Statement made by my right honourable friend the Secretary of State for Energy. I should like to apologise to the House beforehand because this is a lengthy Statement, in fact the longest that I have experienced, and I fear that to be on the long side is disagreeable. The Statement says:

"I informed the House on June 20 that I had asked the Chairman of the Electricity Council to examine what adjustment could be made to give relief to the domestic consumer of electricity on the off-peak rates. I also indicated that my aim would be to restore the previous differential between off-peak electricity and electricity at the standard rate.

"There are basically four off-peak and night-rate tariffs still being used although not all of them have been offered to new consumers for some years. The actual rates, both off-peak and standard, differ between each electricity Area Board reflecting differing local circumstances. The Area Boards in England and Wales will at my request adjust each of these off-peak rates so that they once more represent the same percentage of the new standard domestic rate as they did in relation to the previous standard domestic rate in March, 1974. This will restore all the domestic off-peak percentage relationships to the same position they held before the introduction of the fuel cost adjustment clauses. The overall national average percentage increase on the off-peak rates is now expected to be approximately 34 per cent. as compared with the 70 per cent. expected earlier.

"A substantial proportion of the consumers on non-domestic tariffs are, however, also residential consumers such as small shopkeepers and those living in Old Peoples' Homes and hostels. I am advised by the Electricity Council that it is administratively impracticable to segregate from the tariffs concerned consumers on premises used wholly or mainly for residential purposes. I have therefore decided in order to avoid any hardship to the consumers concerned that similar adjustments should be made to all quarterly off-peak tariffs.

"These adjustments will take effect in respect of consumption starting from the/ first meter-reading on or after August 1, 1974. This means that all off-peak consumers will receive a bill for one summer quarter at the full rate. I regret that it is not practicable to make this adjustment retrospective on consumption which has started to be incurred at the existing higher rates during May to July. But to attempt to do so would impose an excessive administrative burden on the industry and prejudice our aim of giving the earliest possible relief for the autumn when heating requirements increase.

"These adjustments, the full details of which will be published as soon as possible by the Area Boards, will on present fuel costs result in a loss of revenue for the industry of about £30 million this year and about £40 million in a full year.

"The industry will have to be compensated by the Government. This will be a substantial additional burden on the Exchequer and is not a concession which can continue indefinitely.

"In the changed world energy scene we have to accept that electricity like other forms of energy is going to cost considerably more than it did in the past.

"The Government are however conscious that fuel costs bear heavily on the poorer sections of the community. We shall, therefore, as I explained to the House on June 20, be reviewing the policy for energy prices in the light of their impact on household expenditure. In the meantime the adjustments I have announced to-day will give substantial relief to off-peak consumers.

"I believe we have dealt with the problem fairly and responsibly and I trust the House will accept that we have met the genuine concern which was expressed on off-peak charges."


My Lords, this Statement will be warmly welcomed on, I think, many sides of the House as a bowing to the pressure which has been exercised from certainly one particular quarter on the other side of the House on a number of occasions. I am particularly glad because this bears most hardly on people like old-age pensioners and other low income groups who had felt themselves misled by the announcements made by the Electricity Boards, who seem to have got themselves in something of a muddle. This raises one question. I notice that this announcement specifically refers only to England and Wales, and I am not quite sure why Scotland has been left out of this Statement. Perhaps the noble Lord could explain that to us. We have to realise that rising electricity costs are inevitable in the face of a 22 per cent. inflation over the last six months, and this leads me to ask whether the cost of the electricity will rise with the anticipated increase in the cost of power station coal that I believe we have coming in the autumn.


My Lords, I should like briefly to associate noble Lords on these Benches with what the noble Lord has just said, and to welcome this Statement. I am sure it will mean a great deal of relief, both mentally and physically, to many people in this country, particularly the poor and the old. I should like to welcome the Statement from that point of view, although I shall certainly wait with some anxiety to know what the future cost of the electricity works is going to be.

4.0 p.m.


My Lords, as to the first question of the noble Lord, Lord Strathcona and Mount Royal, the Secretary of State for Scotland is answering a Parliamentary Question to-day about the adjustments which the Scottish Electricity Board are making in their off-peak tariffs. So far as the Area Boards are concerned they will state the various changes within the next few days.

So far as the future of the electricity and other energy tariffs are concerned, obviously we shall have to reconsider the situation very thoroughly. The problem has been bedevilled by the fact that we have been experiencing one of the most awful inflationary bouts since 1970, perhaps since 1969, and therefore the aim of mitigating inflation and of having a pricing system which corresponds to the national aim of optimising resource use will have to be reconciled. I am quite sure that we shall have to make up our mind that energy will cost more. The question is, how should that be made compatible with the distribution of income, which suggests that one ought to try at any rate to supply the minimum energy to the poorer sections of the population at some better price.


My Lords, while I dislike small-mindedness, I had hoped I might be allowed to join the august company of those asking preliminary questions on this matter, because it is the custom in another place and if a Member has a Question down and a Statement is made in connection with that Question, even if inadvertently, the person who has asked the Question has a chance to comment.

However, having got that small-mindedness out of my system, I wonder whether I might ask the noble Lord something. First of all, I am very glad that the Secretary of State has felt able to remedy what he himself called a sense of injustice, because the whole House will agree that the consumers of this country really believed they had been offered half-price electricity in these off-peak periods. That, I gather, we have got. May I ask the Minister whether I understand correctly from his Statement what may be unavoidable but what I think is distressing, that consumers are to suffer this unjust penalty, described as unjust by everybody, of this additional 70 per cent. charge for the immediate months following March 1? In other words, I think he told us that this correction would not come into effect until August I. Now would he consider it right that people should be unjustly penalised for a period of three or four months by an unjust decision which the Secretary of State has tried to remedy?


My Lords, the essential aim of the Secretary of State was to make sure that the adjustments are made in time to cover consumption in the autumn when it generally starts to increase. Billing is a highly mechanised operation; reprogramming is necessary to meet the early implementation of the new concessionary rate on consumption as from the first meter reading after August 1. This prime aim would have been jeopardised if in addition the industry would have had to make retrospective adjustments to the existing programming of bills on past consumption.

The strongest concern has been expressed about off-peak charges for the purpose of room heating, not water heating. In the period from May 1 onwards, one of relatively low consumption, I have accepted the industry's advice that it would prejudice the main objective, which is an early relief for the autumn, to give relief in the past warmer months when heating requirements have been low.


My Lords, I having been involved in this matter in at least three Questions in the past, is my noble friend aware that I do not derive any satisfaction from the decision, for this reason, that the Electricity Authority was engaged in arbitrary action without consulting consumers, and then under pressure had to yield, which is most unsatisfactory? Would it not be better in future if, before a nationalised industry take action of an arbitrary character, they should take the appropriate measures to ascertain the views of consumers?


My Lords, before the noble Lord replies, may I too ask him whether he would approach his right honourable friend about this matter of the refund? In regard to those who have already paid extra money during these months—whether for water heating of for ordinary heating, the principle remains the same—it is very unfair to say that a computer cannot disentangle the problem. If the use of a computer enables us to pay more, arbitrarily, it can surely work out a way to arrange for a refund. I would stress that the situation is very unfair.


My Lords, I am by no means surprised that my noble friend Lord Shinwell is dissatisfied. The increase in rates was not arbitrary; it was an identical addition to all tariffs, and it was identical because the cost of fuel has gone up by the same amount whether it is for off-peak or on-peak use. It is not correct to say that the views of consumers have not been ascertained. One might say that the bodies formed for the purpose, to wit the Electricity Consumers Councils, have not done their duty, or that they have been misled, or they could not from inside their own constituent body conjure up Lady Burton and Lord Shinwell; but certainly it was not the fact that the consumers' views have not been ascertained, and no protests have been made at the point.

So far as the question of my noble friend Lady Phillips is concerned, I fear that perhaps I expressed myself most imperfectly. I apologise to her for that. I said that if, in addition to the present reprogramming, they needed to make a reprogramming for the period from May 1 onwards, then the reprogramming would not have occured in time to bill the consumers from August onwards. While I do not wish to enter into a controversy in connection with a Statement I would say that for those people who have room heating—and that is the majority of the consumers—this way of proceeding is, to my mind, the most satisfactory and the least discriminatory.


My Lords, can the noble Lord say whether it is the intention that the Statement that he indicated is being made by the Secretary of State for Scotland will be repeated in this House.


My Lords, I understand not because it was not a Statement in answer to a Question. If the noble Lord puts down a Question I shall endeavour, as always, to answer promptly, truthfully, and perhaps comically.


My Lords, leaving aside the events which have led up to this Statement, which so far as it goes, I think will be warmly welcomed on all sides of the House, will the noble Lord, looking to the future, bear in mind that there are a large number of chronically sick people, arthritics among others, who depend very much on this heating? Will he make representations to his right honourable friend that in the future, when increases become necessary, more attention is given to their needs than has sometimes been given hitherto?


My Lords, I always understood that the great Conservative Party was in favour of selective help, not general help which helps people who do not deserve it.


My Lords, I wonder whether my noble friend would bear with the most unintellectual question? I am sure he understands computers. I do not. From his Statement this afternoon it seems that he is telling the House that it is impossible for people to have a refund for these past three months of a charge which is admitted to be unjust simply because the computer cannot arrange it. Is the noble Lord aware that computers can do extraordinary things? Is he aware that we get telephone bills, air tickets to various places and every kind of account itemised in the most incredible way by computers? Would it not be better if we did away with the computer in this case and gave the customers their refund?


My Lords, I do not know whether I am fully aware of the complexity of computers. Possibly I am not, but certainly the noble Baroness, Lady Burton, does not seem to be aware of the difficulties which would have been caused, otherwise she would not say that human labour could do this job in time for the general increase of charges to be effective on August 1.


My Lords, I thank my noble friend for his welcome Statement and congratulate him also on its wording, which followed exactly and with considerable precision the one I read in the newspapers this morning? Arising out of that, may I ask whether he can use his influence with his noble friends to put a stop to many of these leaks from Government Departments?


My Lords, being a considerable sufferer from those leaks I would agree with the noble Lord. However, I do not think that any Government have ever succeeded in stopping leaks.