Gas and Electricity Prices

Oral Answers to Questions — Energy – in the House of Commons at 12:00 am on 17th June 1991.

Alert me about debates like this

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield 12:00 am, 17th June 1991

To ask the Secretary of State for Energy when he next expects to meet the directors general of Ofgas and Offer to discuss the regulation of gas and electricity prices.

Photo of Mr John Wakeham Mr John Wakeham , Colchester South and Maldon

I regularly meet the directors general of both Ofgas and Offer and discuss a range of matters of mutual interest.

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

Is the Secretary of State aware that the chairman of the National Consumer Council in the east midlands has severely criticised the prices being charged by the east midlands electricity authority, suggesting a figure of between 9 and 11 per cent? Consumers in the east midlands are being robbed, so the Secretary of State should get a flea in his ear and go and see those directors. Let us give them some teeth and have something done about the job. Incidentally, is the Secretary of State aware that they spent £28,000 taking business men to the cup final, and that they wined and dined them as well? What about that? It is time that the right hon. Gentleman pulled his socks up.

Photo of Mr John Wakeham Mr John Wakeham , Colchester South and Maldon

I would never accuse the hon. Gentleman of tabling a planted question—

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

On a point of order, Mr. Speaker. It was my question and not a plant, although I know what goes on on the Conservative Benches.

Photo of Mr John Wakeham Mr John Wakeham , Colchester South and Maldon

I was agreeing with the hon. Gentleman, not disagreeing with him. I said that the hon. Gentleman's question was not a plant, but it enables me, nevertheless, to say that domestic prices have fallen by 2·5 per cent. in real terms in the past seven years, which compares very favourably indeed with the price record of the last Labour Government, under whom there was an increase of 22 per cent. What is more, under the privatised system, domestic consumers are protected by substantial regulations which will enable prices to be kept down to the retail prices index level. That is working very well.

Photo of Mr Michael Morris Mr Michael Morris , Northampton South

Is my right hon. Friend aware that there is genuine disquiet in the east midlands, particularly if what has happened this year were to continue for the foreseeable future—over the next two or three years? My constituents are concerned to know whether my right hon. Friend the Secretary of State is confident that the regulatory powers are adequate to meet the ever-changing market conditions.

Photo of Mr John Wakeham Mr John Wakeham , Colchester South and Maldon

Yes, I am very confident that the powers are there. The increase in electricity prices for the domestic consumer will not be higher than the retail prices index over the three-year period. The director general can always come to me if he requires further powers.

Photo of Mr Peter Hardy Mr Peter Hardy , Wentworth

The Secretary of State mentioned the domestic consumer. He must be aware that the electricity price increases that heavy industrial users face are a serious deterrent to the maintenance of production and to exports. Does he not realise that those users face serious international competition and that our competitor countries behave with rather more sense than we do in this important matter?

Photo of Mr John Wakeham Mr John Wakeham , Colchester South and Maldon

We certainly do not subsidise electricity prices, which may be what the hon. Gentleman was suggesting, and I would not want to do that. The larger users can now use their commercial strength in a competitive market to negotiate the best prices available. A considerable number of industrial users have already benefited from competition and have been able to secure much lower prices.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

Will my right hon. Friend remind that moaning grandad on the Opposition Back Bench, the hon. Member for Ashfield (Mr. Haynes), that before privatisation the monopoly producer was its own regulator?

Photo of Mr John Wakeham Mr John Wakeham , Colchester South and Maldon

My hon. Friend is right. Further to what the hon. Member for Ashfield (Mr. Haynes) said, whether or not customers went to a cup final with an electricity company—

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

The company paid for it.

Photo of Mr John Wakeham Mr John Wakeham , Colchester South and Maldon

I was about to make that point. There was no cost to the consumers. Their prices—

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

The Secretary of State is a grandfather as well.

Photo of Mr John Wakeham Mr John Wakeham , Colchester South and Maldon

Perhaps we can keep the hon. Gentleman's private life out of this.

My point is that the regulations will mean that those expenses will not fall on the consumer.

Photo of Kevin Barron Kevin Barron Shadow Spokesperson (Energy and Climate Change)

Can the Secretary of State tell us whether it is the Government's plan that, as he rightly said, some of the larger commercial users are able to shop around and obtain the benefit of a 15 per cent. drop in the price that they paid the year before while domestic consumers have had an increase of 11 per cent?

Photo of Mr John Wakeham Mr John Wakeham , Colchester South and Maldon

Domestic consumers are protected by a system of price regulation. They have a different system because it is not possible to introduce competition for domestic users. They are protected by domestic regulations which do not allow prices to increase more than the retail prices index over a three-year period.