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Column 817electricity charges resulting, for example, from additional expenditure on refurbishing transmission or distribution systems which are subject to more severe weather conditions than those in urban areas. It is the view of the Council that remote rural areas in the South of Scotland require no less protection than what is proposed for the North of Scotland area and there should be no possibility of discrimination between tariffs for the same class of consumer living in different areas of the South of Scotland." Incidentally, the same applies to consumers of the South of Scotland board who live in my constituency in England, because they also will be served by the company that replaces it. The same will apply throughout England and Wales.
The other place did an excellent job when it defeated the Government on this part of the Bill. The Government, in their reference to and discussion of the amendments before us tonight, have simply taken refuge in technicalities and referred to the one amendment which would give the director general an obligation to take into account the needs of consumers in rural areas. That amendment alone would impose no obligation on the companies not to discriminate against rural areas. It is not sufficiently strong to protect the rural consumer from adverse tariffs which may already be planned for them by some of the people who will run those companies.
In the absence of anything better, I ask the House to stand by the judgment of the other place. There are a great many people in the other place who know a great deal more about the countryside than most members of the Government and most of the people who devised the Bill. The Government's defeat in the other place was the result of a recognition of rural problems, which is still not apparent in the actions of Ministers.
The Government still have time tonight to accept more of the Lords amendments and not seek to overturn them. I believe that the Government's attitude is a slap in the face for country dwellers throughout England, Wales and the south of Scotland. The House should not allow them to do it.
Mr. Hardy : I agree emphatically with the hon. Member for Berwick- upon-Tweed (Mr. Beith), and I underline the powerful arguments advanced by my hon. Friend the Member for Carmarthen (Mr. Williams), who represents a large rural constituency.
The Minister should understand that some Labour Members represent county seats in England. My constituency is a county seat because I argued at the Boundary Commission hearing that it should be. Even in my constituency, which is in a metropolitan area, I have small settlements and cottages here and there, off the beaten track, and I am extremely worried about the people who live there. After the five-year transition period--the hon. Member for Berwick-upon-Tweed reminded the House that there is no guarantee that we will have to wait until the five years is over--there could be serious developments. When people want to make a profit out of the electricity supply industry, those who live some distance away from a conurbation will be at risk.
I am surprised that the Government have decided to treat the other place with contempt. As the hon. Member for Berwick-upon-Tweed said, the noble Lords who took
Column 818part in that debate know what they are talking about. They understand the anxieties in rural and not-so-rural areas of Britain. The Minister should have taken the time to watch television this weekend. They were burning an effigy of one of his right hon. Friends.
Mr. Hardy : I felt sorry for the Minister concerned, whose effigy was burnt in one of Britain's most true-blue areas. The hon. Member for Southampton, Test (Mr. Hill) is not paying much attention, but it happened not far from his constituency. I had not expected to read that Conservative Ministers' effigies had been burnt in counties such as Hampshire, but it happened, and with good reason. The people responsible know that their areas are not being served well by an Administration who have hitherto pretended to care about rural Britain.
Only a week or two ago, I took part in a debate in the House about a problem related to this--the housing problem. In huge parts of rural Britain, the cost of housing is now such that people who were born in a certain village, perhaps descended from generations of forebears who have lived there, can no longer afford to live there themselves. Now, even if they can afford the rent, they will not be able to afford the fuel. The Government are disregarding the yeomen to look after the yuppies, and the Bill is an example of their shifting priorities.
I am worried about people living in such places as Lea Brook and Street in the parish of Wentworth, from which my constituency takes its name. I am also worried about slightly larger communities such as Hooton Roberts, which has 80 or 90 electors. I am worried about communities a little larger than that as well. As the squeeze for profit develops in the electricity supply industry, the community at risk may become larger and larger. The industry will certainly be eager to supply London ; I do not know whether it will be eager to supply Wentworth, and I certainly do not think that in five years' time the people of Wentworth--the village and perhaps the constituency--should feel entirely confident that they will pay no more than those living in Sheffield, Manchester, Birmingham or London.
If the Government begin to panic--there seems to be a good deal of panic in the air at present--to make sure that the people of Hampshire will not continue to burn effigies, they may decide to make electricity cheaper in the south than in the north. It is all very well for the hon. Member for Test to welcome such a prospect ; I heard him shout, "Hear, hear," when I suggested that there was a serious risk. The fact remains that we have been subsidising the south of England for a long time in any case, because we have been bearing the cost of loss of transmission.
Because it is a national service, we have been prepared to accept the burden, but now that we see the real risk--as a result of all the effigies being burnt all over the south of England--we are entitled to be a little worried, fearing that additional burdens may be imposed on us. I hope that the Minister will reassure us, first, that the boards will be told emphatically that the five-year transition period constitutes a pledge that will not be broken, and, secondly,
Column 819that the electricity supply industry will be asked as a matter of urgency to ensure that that period is extended to at least 10 years--long enough, at any rate, to cover the political life of every Conservative Member.
Thirdly, we should like an assurance that the Government are beginning to understand that the rural areas already face serious problems--problems of access, cost, housing and transport. Some of the older inhabitants of such areas may rapidly develop an inclination to take up witchcraft ; the Secretary of State may wish to ponder the fact that, before long, the broomstick may be the only viable form of transport in some parts of Britain hitherto regarded as salubrious. I recognise that the Government face serious problems in relation to country dwellers. More farmers are going bankrupt in this year of grace, under this Administration, than ever before.
The Government must recognise that the priorities that the other place embraced a few weeks ago have more political wisdom than the criticism that the Minister offered on the amendments when he said that they were wrecking amendments. I wish they were. Above all, I should like the Government to recognise that they may be wrecking but they are wise, and it would be wise of the Government to accept them.
Mr. Wallace : I had not intended taking part in the debate, because my hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) argued cogently and effectively the reasons why the House should agree with the amendment proposed by the other place to protect the interests of rural consumers. However, the Minister's response to my intervention was so unsatisfactory that it is necessary for me to put some points on the record and to seek a further response from him.
I welcome the fact that a special provision on common tariffs has been made for the North of Scotland Hydro-Electric Board area. This has been granted by the Government because they no longer see fit to include in the legislation a clause imposing a statutory duty on the company supplying electricity to the Highlands and Islands to take account of social and economic factors affecting that area. I accept that that makes this area different from others, but my hon. Friend the Member for Berwick-upon-Tweed and other hon. Members argued compellingly that rural consumers and those in other areas should be treated equally. I ask the Minister to consider their argument. Even the special treatment given to the hydro board falls short because of the cost of connection for new consumers of that board. Lords amendment No. 8 provides some protection for consumers in my constituency and elsewhere who face high connection costs. In my intervention and on Report, I instanced the case of a constituent who had been faced with a bill of over £60,000 for connection. He lives in an area which, for historical and archaeological reasons, is designated a conservation area, so the wires and lines must be placed underground, adding to the cost. On Report, the hon. Member for Western Isles (Mr. Macdonald) instanced other cases of consumers who were asked to pay £60,000. Since then, one of my constituents from the island of Stronsay has told me of a bill of more than £13,000. By no stretch of the imagination can people on modest incomes and pensioners readily find such amounts. In reply to my intervention, the Minister said that other means of help would be available.
Column 820When pressed, he mumbled something about social security assistance. I do not think that he intended that to be a full answer.
I took up with the Minister of State, Scottish Office the case of my constituent with the £60,000 bill, and the hon. Gentleman took some time to reply. I do not complain about that, because the time was undoubtedly spent by him and his officials in trying to find what assistance might be available. The best that they could come up with was a £600 grant and £600 loan from the Crofters Commission. That is inadequate. It can be argued that this is an inadequacy of the present system, but there is nothing in the Bill to give consumers in the north of Scotland and elsewhere any confidence that under the new system connection charges will be reasonable and within the scope of most ordinary people.
I found one ray of hope, which I hope that the Minister will consider. Clause 19 (1) refers to the power to recover expenditure and states :
"Where any electric line or electrical plant is provided by a public electricity supplier in pursuance of section 16(1) above, the supplier may require any expenses reasonably incurred in providing it to be defrayed by the person requiring the supply of electricity to such extent as is reasonable in all the circumstances."
The implication of "to such extent" is that the whole amount does not necessarily have to be recovered from the consumer. I should like to elicit from the Minister the circumstances in which he would consider it unreasonable for the cost to be defrayed by the consumer. Will the Minister consider that seriously? The present prices are prohibitive. Many people cannot afford to be connected to the mains electricity supply. They cannot benefit from facilities such as off-peak heating, and have to depend on generators, which can be unsatisfactory.
Undoubtedly, the Minister will ask the House to vote against Lords amendment No. 8, which would provide the only protection for rural consumers. In his reply, will he give some hope to those faced with substantial bills for connection charges?
Mr. Morgan : It falls to me to make the last contribution from the Opposition on this amendment. It is an old principle of Damon Runyon's New York that, "The opera ain't over until the fat lady sings." I say that without disrespect to the Prime Minister. It is clear from the debate that the Government's treatment of shareholders and consumers is different. By rejecting Lords amendment No. 1, the Government are saying that they cannot discriminate in favour of any group of consumers, yet they made it clear earlier that they would do anything to discriminate in favour of shareholders. That is the problem and that is why the Bill will redound to the Government's disadvantage at the next general election.
Mr. Michael Spicer : The amendments highlight a difference between the philosophies of the Government and the Opposition parties. Either one agrees that competition will benefit the consumer and will put a downward pressure on prices or one does not.
Column 821If one accepts that competition between the area boards will bring benefits to consumers--who can contract elsewhere for their electricity--it stands to reason that they should be able to charge prices to combat the effect of that competition. So long as the prices bear a relationship to cost, that will have the effect of bringing prices down in urban areas. We have talked about deprivation in rural areas, and in other circumstances the Opposition would talk about deprivation in urban areas, too. There will be a general downward pressure.
I must answer the hon. Member for Wentworth (Mr. Hardy) about the policy of common tariffs. I assure him that the period will be five years. Thereafter, the policy of allowing the area boards to charge prices which relate to costs and allow them to compete will apply. That will be to everyone's benefit, because prices will come down. [Interruption.] No. I gave the hon. Member for Berwick-upon-Tweed (Mr. Beith) the answer, that the converse is possible. If we allow cherry-picking--where the best customer areas are taken away--the area boards will be left with rural customers and much the same overheads. The effect of that on rural customers would be increased prices. There would be a narrower customer base associated with much the same overheads. That would be bad for rural customers.
I accept that there is a philosophical difference. We believe that competition will be in the direct interest of consumers. It will place a downward pressure on prices which will be a good thing for rural, as well as for urban, customers.
The hon. Member for Orkney and Shetland (Mr. Wallace) assumed that the Government would invite the House to reject Lords amendment No. 8. In fact, we suggest that the House should accept that amendment. That is an important concession to the hon. Gentleman's argument and to the argument made in another place. In direct answer to the proposition made in respect of the regulator, I remind the hon. Gentleman that that amendment will require the regulator in carrying out his duties to take into account the interests of rural customers. That enormous concession on the Government's part directly meets some of the anxieties that have recently been expressed.
I hope that hon. Members will think again on the basis of that major concession, although I agree that it does not completely meet the philosophical argument voiced by Opposition Members about competition, because the Government believe in competition, and competition runs right through the Bill.
I do not wish to be presumptuous, but this may be the last occasion on which I shall have the honour of addressing the House on this matter, and it gives me great pleasure to reiterate the importance of competition. The abolition of the common tariff assumption is fundamental to our restructuring of the industry. We believe that that is fundamentally good and in the interests of consumers. I ask the House to reject the Lords amendments with the exception of Lords amendment No. 8.
Question put, That this House doth disagree with the Lords in the said amendment :--
The House divided : Ayes 291, Noes 194.
Column 822Division No. 319] [9.46 pm
Alison, Rt Hon Michael
Arnold, Jacques (Gravesham)
Arnold, Tom (Hazel Grove)
Baker, Nicholas (Dorset N)
Banks, Robert (Harrogate)
Bennett, Nicholas (Pembroke)
Bevan, David Gilroy
Biffen, Rt Hon John
Blackburn, Dr John G.
Blaker, Rt Hon Sir Peter
Bonsor, Sir Nicholas
Boscawen, Hon Robert
Bottomley, Mrs Virginia
Bowden, A (Brighton K'pto'n)
Boyson, Rt Hon Dr Sir Rhodes
Braine, Rt Hon Sir Bernard
Brooke, Rt Hon Peter
Brown, Michael (Brigg & Cl't's)
Browne, John (Winchester)
Bruce, Ian (Dorset South)
Clark, Hon Alan (Plym'th S'n)
Clark, Dr Michael (Rochford)
Clarke, Rt Hon K. (Rushcliffe)
Coombs, Anthony (Wyre F'rest)
Coombs, Simon (Swindon)
Cope, Rt Hon John
Currie, Mrs Edwina
Davies, Q. (Stamf'd & Spald'g)
Davis, David (Boothferry)
Douglas-Hamilton, Lord James
Evans, David (Welwyn Hatf'd)
Fairbairn, Sir Nicholas
Fenner, Dame Peggy
Field, Barry (Isle of Wight)
Fishburn, John Dudley
Fookes, Dame Janet
Forsyth, Michael (Stirling)
Fowler, Rt Hon Norman
Fox, Sir Marcus
Glyn, Dr Alan
Goodson-Wickes, Dr Charles
Gorman, Mrs Teresa
Grant, Sir Anthony (CambsSW)
Greenway, Harry (Ealing N)
Greenway, John (Ryedale)
Griffiths, Sir Eldon (Bury St E')
Griffiths, Peter (Portsmouth N)
Gummer, Rt Hon John Selwyn
Hamilton, Neil (Tatton)
Hampson, Dr Keith
Hargreaves, A. (B'ham H'll Gr')
Hargreaves, Ken (Hyndburn)
Hicks, Mrs Maureen (Wolv' NE)
Higgins, Rt Hon Terence L.
Hogg, Hon Douglas (Gr'th'm)
Hordern, Sir Peter
Howarth, Alan (Strat'd-on-A)
Howarth, G. (Cannock & B'wd)
Hughes, Robert G. (Harrow W)
Hunt, David (Wirral W)
Hunt, Sir John (Ravensbourne)
Hurd, Rt Hon Douglas
Johnson Smith, Sir Geoffrey
Jones, Gwilym (Cardiff N)
Jones, Robert B (Herts W)
Jopling, Rt Hon Michael
Kellett-Bowman, Dame Elaine
King, Roger (B'ham N'thfield)
Knight, Greg (Derby North)
Knight, Dame Jill (Edgbaston)
Lamont, Rt Hon Norman
Lawson, Rt Hon Nigel
Lee, John (Pendle)
Lennox-Boyd, Hon Mark
Lester, Jim (Broxtowe)