Standing Charges (Abolition)

Bill Presented – in the House of Commons at 5:06 pm on 25th July 1984.

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Photo of Jeremy Corbyn Jeremy Corbyn , Islington North 5:06 pm, 25th July 1984

I beg to move, That leave be given to bring in a Bill to abolish standing charges for gas, electricity, water and telephone services for pensioners and persons in receipt of certain State benefits. This issue has been debated in the House many times and I imagine that virtually all right hon. and hon. Members have, during various election campaigns, met pensioners on doorsteps and tut-tutted at the appalling size of standing charges for basic services and promised to do something about them. The House has still failed to pass any Bill that abolishes that monstrous inequality.

I am told by the Brent Pensioners Group that more than 130 right hon. and hon. Members have written to it supporting such a proposal as this. I imagine that many more will do the same if asked. It is regrettable that standing charges still remain. I have deliberately included standing charges for gas, electricity, water and telephones in the Bill because I believe that they are basic services and are vital for pensioners and recipients of supplementary benefits.

Standing charges are expensive. They amount to £9·90 for gas, £7·45 for electricity and £16·27 for telephones per quarter. If we add the standing charges for water and sewerage, the bill comes to more than £40 per quarter for most people. In other words, pensioners must pay £160 a year, or £3 a week, in standing charges for basic necessities.

In reply to my hon. Friend the Member for Wolverhampton, North-East (Mrs. Short) last year, the Department of Energy said that abolition of standing charges would cost about £300 million a year. The calculation applied only to gas and electricity. I have examined the annual reports of the gas and electricity boards. They are difficult to understand, because of the calculations of the number of people who pay standing charges and how much they pay, but it appears that in 1982–83 British Gas made profits of more than £660 million and paid a levy to the Government of £527 million. This year, the levy has increased to £750 million. That is a tax on a state-owned industry, yet the Government have the temerity to say that they cannot afford to abolish standing charges.

In the last year for which figures are available the Central Electricity Generating Board made a profit of more than £330 million. Therefore, in the Government's own terms, it is feasible and possible for them to abolish standing charges and not to tax pensioners and the poorest people in Britain in the way that they do at the moment.

Another reason for bringing forward the Bill is that a fundamental principle is at stake. Britain has a graduated taxation system and graduated benefit system— albeit graduated and adjusted in the wrong way — but in standing charges for gas, electricity, water and rental for telephones we have a head tax — a tax on consumers irrespective of their ability to pay. That is obviously and blatantly unfair.

I can give many examples of hardships in my constituency and in many others. People are frightened to use enough gas to heat their homes in winter and enough electricity to cook a decent meal, and they are frightened of the quarterly bills for the telephone and water. Yet at the same time they are told by the Government that the scheme that was introduced in 1983, whereby the Government sought to limit the size of standing charges to no more than 50 per cent. of the Bill, has, in effect, subsidised the owners of second homes and country cottages. Those are the people who have benefited most. It is the small consumers who are deliberately away from those homes for nine or 10 months of the year who receive subsidies on their gas and electricity bills as a result of Government policy.

The only way to be fair is to abolish standing charges for pensioners and people in receipt of supplementary benefits. I have also deliberately included in the Bill the abolition of the rental cost for telephones for pensioners. I do that for two reasons. First, for pensioners, access to a telephone is not a luxury but a necessity. I recently addressed a meeting of severely disabled people in my constituency. When I talked to them about the dial-a-ride scheme or dialling for a taxi subsidised by the GLC to take them anywhere they wanted to go, they said that those schemes were not a lot of good. Because of the difficulties of obtaining a telephone from the social services departments of some London boroughs, they were completely housebound and imprisoned in their own home. We should abolish telephone rental charges for such people.

This is probably the last opportunity that there will be for the House to abolish rental charges for telephones, because of the Government's plans to privatise British Telecom. A privatised industry would be hell-bent on making huge profits out of its consumers rather than concerned about providing the vital service that telephones give to so many people in Britian. That is the price of privatisation.

I also draw to the attention of the House the frightening fact that every year 48,000 more elderly people die during the winter than during the summer. Many of them suffer and die from hypothermia because they are frightened to turn on the heating during the winter months. There are stories of people going to bed at 5 o'clock in the afternoon because they were afraid to turn the heating on to keep the house warm. They are frightened of the bill that will arrive at the end of the quarter. There are so many people in that terrible and frightening situation that action is demanded.

In Britain there is an average consumption of 400 therms in a manual worker's household. There is an average consumption of 330 therms in a pensioner's household. Is that because pensioners like to have their houses colder than people in work, or is it because they are frightened of the bill that will arrive? For a manual worker's household — not the best paid people in the country and not represented by Conservative Members, but nevertheless people in work—standing charges make up 2·2 per cent. of their household bill. For a pensioner couple it is 5·2 per cent. of their household bill. For a single pensioner, nearly 10 per cent. goes in this monstrous charge.

The electricity and gas boards are conscious of the odium that is heaped on them because of the size of standing charges. They are conscious of the criticisms that they receive because of them, so they have all introduced an increase in the number of prepayment meters or in the number of people paying by fuel-direct schemes. According to the London electricity board, in 1980–81 22·5 customers per thousand were disconnected because of their inability to pay the bill. In 1982–83 that figure had dropped to 11·5. During the same period the number of people on prepayment meters had gone up from 64 per thousand to 75 per thousand and the number of people on fuel-direct schemes had gone up from 6·4 per thousand to 11·7 per thousand. That shows to me the determination of the energy councils to collect the standing charges and the bills. That such action has to be taken to drag money from people shows me the desperation to which so many are driven. That means that many household bills go unpaid. Food bills go unmet as people starve and try to keep themselves warm during the winter. That is the reality of life for many people in Britain.

Fuel bills are often three times higher during the winter than in the summer. Action is urgently needed. There is a tremendous feeling of anger among pensioners and people in receipt of state benefits about this head tax on the poorest people in Britain. Indeed, I recently attended a meeting of the Tufnell Park Pensioners Action Group in my constituency. I thought that its members would want to talk about many issues, but the only issue they wanted to talk about was what we could do to abolish standing charges. We have one opportunity to remove the fear of cold and poverty that haunts so many pensioners and claimants by supporting and passing the Bill to abolish standing charges today.

Question put and agreed to.

Bill ordered to be brought in by Mr. Jeremy Corbyn, Mr. Chris Smith, Mr. Harry Cohen, Mr. Tony Banks, Mr. Mark Fisher, Mr. Tony Benn, Dame Judith Hart, Mr. Ron Davies, Mr. Clare Short, Mr. Eddie Loyden, Mr. Ron Brown, and Mr. Dennis Skinner.