§ Mr. Austin Mitchell
asked the Secretary of State for Energy what is his directive to the public electricity supply industry concerning charges; whether this takes account of the actual costs of generating electricity; and if so, how the two are related.
§ Mr. David Howell
As I told the House on 16 January, the Government 571W have set the financial target for the electricity supply industry in England and Wales for the three years 1980–81 to 1982–83 as an average return of 1.8 per cent. on net assets valued at current cost. In meeting this target the industry will have to take account of all costs involved in generating and distributing electricity. The largest element of these costs is fuel. However, the detailed tariff changes necessary to meet the target are a matter for the industry, although I have asked the industry that this year's increases be phased in two stages.