HC Deb 25 February 1999 vol 326 cc376-7W
Dan Norris

To ask the Secretary of State for Trade and Industry what plans he has to remove the right of(a) water, (b) electricity and (c) gas suppliers to make standing charges payable by (i) pensioner households and (ii) households receiving income support; and if he will make a statement. [71054]

Mr. Battle

Clearly it is essential that special care should be taken to ensure that vulnerable groups of customers have access to reliable, affordable, water and energy supplies. That is why this Government have vigorously taken forward work on modernising the framework for utility regulation. The Government's review of water charging in England and Wales raised concerns about the effect of high standing charges on low income, low water users such as pensioners living alone. The Government will consider further how these effects can best be mitigated within the new framework proposed in the Water Industry Bill now before Parliament. Also, we are encouraging the regulator for gas and electricity to review the Social Dimension in his Action Plan, with a view to determining what further initiatives can provide effective help to the fuel poor.

Standing charges have been the usual means of utility companies making a charge for the fixed costs of providing a service which do not vary according to the level of usage. Such costs generally include meter reading, accounting and billing, maintenance of infrastructure, and provision of emergency services, although there is no requirement for these costs to be recovered by means of a standing charge.

With the spread of competition in the gas and electricity markets, many customers already have a choice of who should supply them with these important utility services.

Soon, that choice will extend to all such customers. Some gas and electricity suppliers recognise that standing charges are either not popular or appropriate for every individual customer, and have decided to offer different terms which exclude any standing charge. Customers will be able to choose what is best for their own particular needs.

It is our objective that all groups of customers should benefit from increasing efficiency by receiving quality service at the best possible prices.