Gas and Electricity: Advertising Costs (Hansard, 15 December 1983)

§ Baroness Burton of Coventry
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

§ The Parliamentary Under-Secretary of State, Department of Energy (The Earl of Avon)
My Lords, financial targets for the gas and electricity supply industries are defined in terms of a return on net assets. The targets naturally take account of all revenue expenditure including that of advertising.

§ Baroness Burton of Coventry
My Lords, does the Minister realise that his reply is worth exactly nothing? Is it correct that between July 1982 and June 1983 the nationalised gas and electricity industries spent £21.8 million on advertising and promotion? Further, is the noble Earl aware of the advertising battle being waged by these two state-owned industries so that consumers are in utter confusion as to which of the various conflicting claims is true? Thirdly, does the noble Earl recall that on 8th December, in the Statement on NHS Pharmaceutical Prices and Profits, the Government announced a compulsory reduction in the amount spent on advertising and promotion? Will the Government consider doing the same on these two equally nationalised industries?

§ The Earl of Avon
My Lords, I am sorry that the noble Baroness did not appreciate my reply to her Question. I did try to answer what was down on the Order Paper. As regards advertising figures, the noble Baroness is correct. The figures are approximately £22 million for one industry and £23 million for the other. I believe the noble Baroness did not make that quite clear. As regards the campaign, I agree with the noble Baroness and, I think, with the rest of the House that we all deplore advertising which is a denigration of products. To the extent that this took place I think it was unfortunate. This has been brought to the attention of the industries and I believe it will not happen again.

§ Baroness Burton of Coventry
My Lords, I am very surprised at making a little progress because I always expect an unsatisfactory answer. May I ask the Minister whether he realises that the Advertising Standards Authority—he will be familiar with its 342 advertising —is having great difficulty in deciding which of these claims is true? Surely the noble Earl will agree that the authority can no longer take the line, and I quote: The statistics have come from a variety of sources and they do not always agree Is the Minister aware that I have here a double page spread from the Daily Telegraph of 28th November in which gas is knocking electricity? While passing no opinion on the merits or demerits of the claim, does not the noble Earl think that something should be done about this? Will he accept, and will he feel able to pass on the Advertising Standards Authority the opinion of the Government that the authority must somehow now reach a decision on whether these claims are misleading or accurate and so help in the job they are supposed to do?

§ The Earl of Avon
My Lords, I think I ought to have made something clear in my earlier reply, and I shall try to do so now. The current campaign to which the noble Baroness referred, against the electricity supply industry, is being paid for by a private consortium of the gas central heating and gas wall heating manufacturers and not by the British Gas Corporation. I should have made that clear earlier. As regards going to the Advertising Standards Authority, the Electricity Council took these advertisements to the authority and I understand a report is shortly coming from the authority.

§ Lord Stoddart of Swindon
My Lords, I am very pleased to learn that the noble Earl deprecates this type of -yah boo" advertising. Indeed, I am glad that he has taken the boards gently by the shoulders and told them that it is not in the best interests of the public service and of the great public industries to descend to gutter advertising. Can the noble Earl assure me that in his future discussions with these industries he will impress upon them the need for co-operation between the two industries, and not competition, so that we can get a proper, rational, integrated energy policy in this country, in which the boards will not only co-operate in ensuring that the public know the best use of fuels but also co-operate in conservation, combined heat and power and in all other measures which would produce a decent—

Noble Lords
Speech!

§ Lord Stoddart of Swindon
It is not a speech, my Lords. I was asking the Minister whether he would impress upon the boards the desirability of these aspects in order that we may have a proper, rational and integrated fuel policy in this country. I should have thought that all noble Lords would want that.

§ The Earl of Avon
My Lords, of course the chairmen of the two boards are well aware of what goes on in this House and I am sure they will take account of what has been said. I should like to say something about what the electricity advertising costs are about. Of that total, £9 million is about energy efficiency and approximately £1 million is on education. I am sure we all welcome that.

§ Lord Jacques
My Lords, will the Government consider the French system, where they have two separate producing units but joint retail units for both gas and electricity? That would reduce unnecessary advertising.

§ The Earl of Avon
My Lords, I am grateful to the noble Lord for bringing that to my attention. I shall certainly consider it.

Viscount St. Davids
My Lords, would I be right in believing that I am more in line with the thinking of the noble Earl and less with the noble Lords on the Opposition Benches in suggesting that it is competition which is the most valuable advantage we could have, although no doubt a certain level of cooperation is necessary, and that that is the direction in which we should be moving?

§ The Earl of Avon
My Lords, certainly the noble Viscount has underlined one of the platforms of the present Government, which is to encourage competition.

§ Lord Molloy
Is the noble Earl aware that all these advertisements do is confirm the ancient adage that the market place is a place that is set aside for men to cheat each other? What we are really concerned about is how much of this cost will be taken into the calculations that might raise the price of both gas and electricity, particularly for old people, in the winter ahead, my Lords.

§ The Earl of Avon
I am sure that what the noble Lord, Lord Molloy, says is the purpose of the Question tabled by the noble Baroness and that is what we are bringing to the attention of the boards.

§ Baroness Burton of Coventry
My Lords. in view of the enormous profits that the industries have made will the Minister be coming to the House in the next day or so to make a statement on the proposed increase in the price of electricity?

§ The Earl of Avon
My Lords, I think that is quite another matter. We had an unstarred Question on that subject the other evening.