Ways and Means

Part of the debate – in the House of Commons at 7:19 pm on 13th December 1994.

Alert me about debates like this

Photo of Nigel Evans Nigel Evans , Ribble Valley 7:19 pm, 13th December 1994

I am extremely grateful for the opportunity to take part in this evening's important debate. We all know the reasons for the second Budget. Sequels never measure up to original movies and the same applies to the second Budget, but one has to appreciate the fact that we never wanted a second Budget.

I found it peculiar to listen to Opposition Members saying how dreadful it was that the Government were raising taxes on fuel to 17.5 per cent. They condemned us for doing so and said that the compensation package was simply not enough. I looked through some old newspapers going back to May 1974, which reported shocking rises in electricity prices. On one occasion there was a 30 per cent. rise and an article in the business section of The Observer of 5 May 1974 stated that a 30 per cent. increase announced in the Budget speech by Mr. Denis Healey took account only of fuel price increases of 300 per cent. on oil and 45 per cent. on coal and ignored the uncomfortable fact that the industry was already heavily in the red even before the oil crisis and the miners' strike.

During the period 1974–79, electricity prices rose on average by 2 per cent. every six weeks. Electricity prices rose by 30 per cent. above the rate of inflation, which averaged 15.5 per cent. I tried to recollect what compensation package was in place for pensioners and those on fixed incomes during those bleak days. Of course there was none. Exactly the same applied to gas bills and other prices that pensioners and people on fixed incomes had to meet because of runaway inflation.

The position is very different today. I received a letter from NORWEB dated 9 December that mentions standing charges being reduced by £1.50 each quarter—or £6 a year—from 1 January 1995. It says that that decrease, on top of the decrease already announced earlier this year, was more than enough to offset the rise in VAT. People—certainly those in the north-west—have been more than compensated for VAT increases and there is additional compensation for many people on fixed and low incomes.

The hon. Member for Warwickshire, North (Mr. O'Brien) spoke about discounts for British Gas consumers who have standing orders, but not for those who pay their bills diligently. I agree with him, and I hope that British Gas moves quickly to ensure that many consumers who pay their bills on time are not penalised simply because they do not pay by direct debit. I hope that British Gas will soon announce that it will heed the voices of many hon. Members on both sides of the House on this issue.