§ Lord FERRIERMy Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government whether the Department of Energy will, as a matter of urgency, tackle the problem of high off-peak electricity tariffs in respect of domestic space heating and, further, whether they will use the substantial profit on the sale of gas to reduce off-peak electricity rates at least in areas where gas is not available to consumers.
§ Lord STRABOLGIMy Lords, off-peak tariffs are kept under review. Although they increased rapidly from 1974 following the energy crisis, in the last two years the rate of increase has been markedly slower and off-peak electricity prices are now about half the level of unrestricted prices. Government measures to alleviate the position of low income consumers have operated in the winters of 1976 and 1977. Any profits made by the British Gas Corporation will be transferred to reserve as required by the Gas Act 1972, and these would not be available for distribution to electricity consumers.
§ Lord FERRIERMy Lords, while I thank the noble Lord for that reply, rather a non-possumus reply, may I ask whether he is aware that there is a large body of opinion that, despite the fact that tariffs are kept under review, the whole tariff structure of the electricity industry should have a thorough overhaul, especially in regard to off-peak tariffs because 50 per cent. is really not low enough for an off-peak tariff, particularly in view of the profitability which has been published since this Question was put down? There is another question, if I 132 may ask it. Is the noble Lord aware of the number of new houses designed to be heated by electricity which are deteriorating because people cannot afford to pay the off-peak rates for heating?
§ Lord STRABOLGIMy Lords, off-peak tariffs cover little more than the cost of the fuel used to generate electricity. Virtually none of the capital costs associated with generation, transmission and distribution fall on the night rates. However, Area Boards are aware that the sharp increase in energy prices in recent years has meant a difficult readjustment for many consumers, particularly those in all-electric accommodation, and have sought to ensure that tariff increases arc kept to the minimum possible; and in addition all tariffs are subject to continuous review. With regard to the question about housing, as the noble Lord is aware and your Lordships will be aware, the Government have introduced the Homes Insulation Bill as part of a £320 million energy conservation package. This has been passed by another place and is at present before your Lordships.
§ Lord HARMAR-NICHOLLSMy Lords, is the noble Lord aware that, although he suggests that off-peak electricity is half the normal cost, even half the present-day cost is much higher than that which people were led to believe they would have to pay when they were put to the expense of installing their night storage heaters? The effect of that is to undermine the confidence of people in following any Government suggestions for conserving. For example, if improvements to prevent heat from escaping will entail the rates on a property going up, as so often happens, then the whole confidence in following Government directions has been undermined.
§ The LORD PRIVY SEAL (Lord Peart)My Lords, I hope the noble Lord will not abuse his position. I know he is in many ways a very fine Parliamentarian, but I think he should really live up to his name.
§ Lord HARMAR-NICHOLLSMy Lords, is the noble Lord aware that my question took half the time the noble Lord took in answering the original Question?
§ Lord STRABOLGIMy Lords, following the 1973 energy crisis fuel costs did rise rapidly and electricity prices increased by more than the rate of inflation. The rate of price increases has since slowed down, and the industry hope to be able to contain future price increases to around the general rate of inflation in the next few years.
§ Lord BLYTONMy Lords, is the Minister aware that under the laws of the nationalised industries it would be illegal to transfer gas profits to the electricity industry, or coal profits to the electricity industry? Will he inform the noble Lord opposite that he is absolutely wrong in law in the Question he put down on the Order Paper?
§ Lord STRABOLGIMy Lords, my noble friend is absolutely right. His interpretation of the Gas Act is perfectly correct. I hope noble Lords opposite will take note of it.
§ Baroness WOOTTON of ABINGERMy Lords, may I ask my noble friend whether he has considered that, if every industry takes steps to keep level with the rate of inflation, the rate of inflation will never go down?
§ Lord STRABOLGIMy Lords, I am sure that is a very interesting observation from a distinguished economist.
§ Viscount MOUNTGARRETMy Lords, is the noble Lord aware that many people engaged in agriculture occupy farmhouses, and if they are required to pay their own electricity bills they are charged at farm tariff rates? Would it not be fair if these people occupying farmhouses could be charged domestic tariff rates rather than farm tariff rates?
§ Lord STRABOLGIMy Lords, I am sure that is a very interesting point and I will transmit it to my right honourable friend.
§ Baroness BURTON of COVENTRYMy Lords, might I ask if this is an interesting point? Would the Minister be able to tell us this: when the Electricity Consumers' Council receives its new status as a statutory committee will it not be necessary for the electricity industry to refer to it questions raised by the noble Lord opposite concerning these tariffs?
§ Lord STRABOLGIMy Lords, as far as I am concerned all the points made by my noble friend are interesting. With regard to this particular point I take note of it and I am sure that it will be possible, but I shall go into the matter and let my noble friend know.
§ Lord SEGALMy Lords, is my noble friend aware that the maintenance of a continuous even temperature during the bitterly cold winter months is by far the most effective way of avoiding hypothermia in old people? Could not the Government engage on an active publicity campaign to promote the use of these off-peak electricity heaters?
§ Lord STRABOLGIMy Lords, yes; that is in hand.
§ Lord FERRIERMy Lords, as regards off-peak electricity heaters, there are many such heaters but people cannot afford to use them and that is the trouble. Would it not be fair, in the light of what the noble Lord, Lord Blyton, has said, to approach this matter from the social angle as opposed to the intrinsically electric supply angle? Indeed, it might be worth while from the State's point of view to include the social angle with the intrinsically mechanical one.
§ Lord STRABOLGIMy Lords, the night rate is still only 50 per cent. of the day rate. As regards the social angle, as I said earlier, the Government have introduced the electricity discount scheme for lower income people. There is a code of practice which has been introduced for easy methods of payment and also advice about disconnections. Also, as I have said, we have introduced the Homes Insulation Bill.
§ 2.46 p.m.