Standing Charges

HC Deb 06 December 1982 vol 33 cc339-40W

Mr. Murphy

asked the Secretary of State for Energy what representations he has received seeking the ending of energy standing charges and their substitution by the spreading of all costs.

Mr. Mellor

I have received a number of letters advocating the elimination of standing charges in gas and electricity bills and a raising of unit rates to recover the revenue. Under statute, the industries are responsible for their tariff structure. However such a measure would have the effect of reducing small bills at the expense of increasing larger bills.

The extent to which current standing charges fairly reflect the costs incurred by the industries in supplying consumers is one of the issues which are being examined by the independent consultants commissioned by the industries.

Mr. Alfred Morris

asked the Secretary of State for Energy when he expects the electricity supply and gas industries to respond to the request made to them to consider limiting the standing charges they impose to a maximum of 50 per cent. of any bill, for the purpose of relieving the burden on small consumers; and if he will make a statement.

Mr. Mellor

I expect them to respond once they have received the reports of the independent consultants who are looking at standing charges. These reports are due by the end of this year.

Mr. Alfred Morris

asked the Secretary of State for Energy what would be the cost as a percentage of electricity revenue and of gas revenue of limiting the standing charges imposed by the electricity supply and gas industries to a maximum of 50 per cent. of any bill.

Mr. Mellor

The cost to the industries of limiting standing charges in domestic bills to a maximum of 50 per cent. of any bill is roughly estimated at around one third of 1 per cent. of the revenue of the British Gas Corporation and about one-sixth of 1 per cent. of the annual revenue of the electricity supply industry in England and Wales. The estimated cost to the esi has recently been revised by the Electricity Council as a result of a more detailed analysis of the effects of the proposal.