Domestic Supplies (Standing Charges) (Hansard, 20 October 1982)

§ Mr. Mellor

My right hon. Friend and I have completed the first stage of the Government's examination of standing charges, in the course of which I have had discussions with the chairmen of the Electricity Council, the British Gas Corporation and the consumer councils.

Following this examination, my right hon. Friend announced recently that the gas and electricity industries, after discussion with us, have commissioned independent reviews of standing charges. These studies are being undertaken by independent consultants. They are covering: —the extent to which the costs reflected in the standing charges are independent of consumption; —whether any particular elements of these costs might be recovered in an alternative manner which would be fair to other consumers; —the scope for cost saving in the operations that make up the standing charge.

We expect to receive the consultants' report from the industries by the end of the year. There will be no further increase in standing charges until the studies are complete and their conclusions fully evaluated.

We are also concerned about the position of those consumers for whom the standing charge in their bill exceeds the charge for gas or electricity used. My right hon. Friend has therefore asked the industries to consider limiting the standing charge to a maximum of 50 per cent. of any bill. Unlike measures involving the elimination of standing charges, this would not have any significant effect on the bills of larger consumers. We have had to have well in mind throughout our examination that many poor consumers are large consumers facing relatively large bills. The removal of the standing charge for all or for specific groups of consumers would result in an increase in the unit rate which would have very materially adverse consequences on the bills of many poor consumers.