Privatised Utilities: Pricing Policies (Hansard, 22 March 1993)

§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Baroness Denton of Wakefield)
My Lords, this is a matter for the utility companies, their regulators and customers. The utility regulators have statutory duties to protect the interests of customers. If there is evidence of a problem, I am sure that the regulators will wish to take note and discuss it with the companies with a view to resolving the issue urgently.

§ Lord Molloy
My Lords, I thank the noble Baroness for that reply and acknowledging that many of those utilities are striving very hard to improve their services, but is she aware that small businesses are being overcharged to the tune of £100 million a year 2 and that those excessive charges have been laid by British Telecom and the water, gas and electricity companies? Does the Minister agree that those matters should be looked into?
There is one other small matter. I refer to those who live alone, or who are crippled or old-age pensioners. Where their meter cannot be read they receive an estimated account which, needless to say, is well in excess of the true figure, although at the following reading the subscriber is compensated by the subsequent bill not being so heavy. However, is the Minister aware that the customer may have paid out quite a large amount of money which would have gained interest in the intervening period? Would it not be possible for meters to be read more regularly?

§ Baroness Denton of Wakefield
My Lords, it is the policy of all the utilities to read regularly meters which are inside houses. Should there be an estimate for someone who is in no position to read his own meter, I am sure that the local gas or electricity board will be very happy to help.

§ Lord Gainford
My Lords, has my noble friend the Minister any evidence of customers receiving bills showing excessive estimated amounts well beyond the readings? I ask that question because it happened to me. I received an estimated bill. I checked the reading, which turned out to be far less than the figure on the bill.

§ Baroness Denton of Wakefield
My Lords, until now I have no direct information as regards estimates. I am certain that the bill was corrected when it was drawn to the attention of the company concerned.

§ Lord Stoddart of Swindon
My Lords, does the Minister agree that the privatised fuel companies cannot have done anything so vicious and cruel as the Chancellor did last Tuesday when he raised the price of domestic fuels by 8 per cent. from next year and by 17.5 per cent the year after, which will cheat customers of £2,500 million? Can she give an explanation as to 3 why the Chancellor and the Prime Minister, who promised that there would be no such increase, have so quickly broken their promises?

§ Baroness Denton of Wakefield
My Lords, I find it difficult to relate the question asked by the noble Lord, Lord Stoddart of Swindon, to that on the Order Paper. The impact of VAT on those with the lowest incomes is recognised. The Chancellor has said that that will be taken into account when the social security benefits are uprated in April 1994.

§ Lord Peston
My Lords, I suppose that the relevance of my noble friend's question is that a 17.5 per cent. increase in fuel bills looks very large relative even to the overcharging of the privatised utilities. Does the noble Baroness agree that there are two concepts of overcharging here which we need to look at? The first is the tendency to get bills wrong, which is a new phenomenon. I do not remember this enormous tendency to get bills wrong before private ownership—certainly not on this scale.
Secondly, does the Minister agree that not only do the companies get the bills wrong but, now that they have been privatised, it is perfectly legal for them to put up their charges enormously anyway? In that connection, does the Minister agree that water is the most astounding example? Today I received my water bill which is absolutely staggering. One used to believe that water was cheap, but it now appears to be one of the dearest commodities.

§ Baroness Denton of Wakefield
My Lords, if noble Lords opposite wish to discuss VAT on domestic gas and electricity, I am sure that they will table a Question in due course. As regards overcharging, I point out that since privatisation British Telecom prices have fallen by 27 per cent. and that by the end of this month domestic gas prices will have fallen by 21 per cent. The noble Lord, Lord Peston, knows as well as I do that the need for infrastructure costs in the water industry is enormous.

§ Lord Kinnaird
My Lords, does my noble friend agree that one reason why water has become so expensive is that people waste it so?

§ Baroness Denton of Wakefield
My Lords, I agree with my noble friend that there is a great need to conserve the precious resource of water. The water boards are now looking at ways of doing that.

§ Lord Peston
My Lords, did the Minister intend to agree with her noble friend? That would imply that suddenly we have developed a greatly increased propensity to waste water. That is simply not believable. We may well waste water and we have been doing so all our lives.

§ Baroness Denton of Wakefield
My Lords, I was saying to my noble friend that water shortages are a problem in this country. The water utilities are looking at ways of ensuring that that problem can be dealt with.

§ Lord Marlesford
My Lords, will my noble friend underline the point that consumers of all these 4 industries are likely to receive a much better deal if there is vigorous regulation by the regulator rather than having their fate in the hands of a government who also own the industry?

§ Baroness Denton of Wakefield
My Lords, I am delighted to agree with my noble friend that competition is to the benefit of the consumer.

§ Lord Grimond
My Lords, will the Minister reconsider her answers to the noble Lord, Lord Peston? Whatever the expense involved in renewing pipes, and such things, by the water suppliers, water charges have increased beyond all reason. We are bombarded by statements that the water authorities now run racing on their reservoirs, and so forth. The public are fed up with the water charges. We should be grateful if the Minister could do something about them.

§ Baroness Denton of Wakefield
My Lords, charges are now regulated by an independent regulator, and that must be to the benefit of users.

§ Lord Molloy
My Lords, is the Minister aware that Ofgas, the gas industry watchdog, has claimed that complaints have nearly doubled during the past year? The Federation of Small Businesses and the National Consumer Council are adamant that the overcharging is getting out of hand. Is it possible for the Government to encourage both sides to get together to examine the matter so that the investigation satisfies all concerned?

§ Baroness Denton of Wakefield
My Lords, there are always individual cases that need to be examined and discussed by the two parties. However, overall charges have gone down. That is to the benefit of small and large companies. In a recent independent market research survey British Gas came out second only to Marks and Spencer for customer care.