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2.40 pm
Mr. Andrew Miller (Ellesmere Port and Neston): I congratulate my hon. Friend the Member for Barrow and Furness (Mr. Hutton) on raising this subject on the Adjournment and on all the work that he does on behalf of people resident in park homes. My interest stems from three such sites in my constituency--Orchard park in Elton, and Wervin and Dunham Hill parks. I shall concentrate my remarks on the latter because I have some evidence, to which I hope that the Minister will listen carefully, which supports solidly the argument made by my hon. Friend and gives good grounds for the Minister to reflect and come back with a positive answer in the not too distant future.
The three sites house 260 electors in my constituency, living in 173 homes. In a letter dated 1 March to Mr. Wilton-King, the secretary of Dunham Hill park residents association, the Department of Trade and Industry made it clear that the problem lay with the regional electricity companies. There was a gentle buck-passing exercise from the Department down to the regional electricity companies. The Department said:
My hon. Friend made the important point that the RECs had managed to find a way of collecting VAT, so it seems ludicrous that they cannot manage to collect the information necessary to make the rebate.
In an earlier letter dated 12 December to a gentleman in Towngate Wood park in Tonbridge, Kent, the same official at the Department used exactly the same sentence. He preceded it by saying:
He went on to say that the Minister for Industry and Energy had requested that officials look for methods of extending it. He then went on to use the same sentence as in the letter of 1 March:
Manweb, which services parts of the north-west, including the whole of my constituency, states that
Manweb has also told me in writing:
There are practical processes for collecting council tax and for charging VAT on electricity, so there must be a practical process for this objective, too.
The Dunham Hill park estate is owned by Mr. Hassall, who also resides on the site and therefore knows the situation facing the residents extremely well. He wrote to me recently to say:
He then makes a proposition which I hope that the Minister will consider:
So the information is readily available. I can understand the difficulties with people in caravan holiday homes and so on, but not with people who are on the electoral register and regularly making payments into the system. Mr. Hassall has been so open with me as to provide me with a copy of his electricity bill. It shows him, as a resident on the site with a Manweb account, getting his £50.56 credit--on a total bill of £1,872.66. That is considerably more than most of us would pay for electricity; yet he receives only one discount.
The Minister for Small Business, Industry and Energy (Mr. Richard Page):
I thank the hon. Member for Barrow and Furness (Mr. Hutton) for raising this subject, aided and abetted as he was by the hon. Member for Ellesmere Port and Neston (Mr. Miller). I am grateful for the opportunity to respond and to clarify the issue involved. I too have a park home site in my constituency.
I am sure that hon. Members are aware of the background to the grid discount and of the tangible benefits it is bringing to 21 million domestic customers of the regional electricity companies, but for the record I should like to set out briefly how the discount came to be made.
When the industry was restructured in 1990, the national grid was separated from the Central Electricity Generating Board and its ownership transferred to the
RECs. They were the owners of the national grid, which was privatised along with the RECs in December 1990. From that date until December last year, the grid was the property of the RECs--of private sector companies, not of the Government.
In the five years since privatisation, private sector disciplines have created an industry and a national grid that are virtually unrecognisable from their nationalised days. Costs have been reduced, efficiencies introduced and investment in infrastructure has been secured without recourse to the public sector restrictions--all while reducing final prices to the public and improving dramatically the profitability of those companies.
As the industry evolved, the ownership structure of the national grid gradually became less appropriate. Flotation of the grid as an independent quoted company was seen by many as the sensible next step. The RECs made their proposals to float the company last year. The Government, the regulator, Stephen Littlechild, and National Grid all welcomed that as a step that would focus the company even more effectively and reinforce the grid's independent position in the electricity market. This is important in the light of its statutory duties as a facilitator of competition in generation and supply.
The Government supported the proposed flotation in principle and encouraged the RECs to share the considerable benefits of that flotation with their customers. The RECs saw the force of that argument and proposed a discount of £50 to all their domestic customers as soon as practicable after the flotation took place.
Let us be clear. Until December last, the grid belonged to the RECs. They made the discount to their domestic customers. We encouraged them to do so and we welcomed the sizeable benefit that customers have received. But it was for the RECs to decide how to make the discount to their domestic customers and whether the benefit could be extended to others.
My colleagues and I--as I am aware from my own constituency--are acutely aware of the disappointment that is felt by people who, for whatever reason, have not or will not receive the discount. Let me also make it clear that neither the RECs nor anyone else are discriminating against owners of mobile homes. The issue is simply whether one was a domestic customer of one of the 12 regional electricity companies on the register date. The vast majority of domestic customers in England and Wales are customers of the RECs, but some are not. They may buy their electricity from other companies altogether, such as industrial suppliers; others buy from their landlord or from a reseller, such as a site operator. Some are metered; some are not. Some are charged separately for their electricity; some are not.
Residents of many mobile home sites buy from their site owner. In that respect, the site owner is not a mere agent of the RECs, as some believe; he is a trader in his own right. The charges made by the reseller are not simply passed through to the RECs. The reseller buys his electricity from the RECs. He then resells it to his customers, charging for the units used and for making his private distribution system available to the final consumer. The local REC has no relationship with the final consumer. It is unlikely that he even knows who the consumer may be. Legislation exists to prevent overcharging, but beyond that the reseller is a commercial
trader like any other. The hon. Member for Barrow and Furness asked whether I would discuss that with the RECs.
Mr. Hutton:
I am grateful to the Minster for showing his usual courtesy in giving way, but I am afraid that he is splitting hairs. It is quite unrealistic to maintain that park home owners get their electricity other than through the RECs. Electricity comes to the site from the RECs. It is then passed on to the park home owners, but it comes from the RECs. It does not come from any other source, so it is quite irrelevant that there is a middle man who passes the electricity on to the park home owners. The RECs have a responsibility. As my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller) said, it is easy to establish who the park home residents are. The RECs have a responsibility to find ways to pass that rebate on. I am afraid that the Minister does not seem to be willing to pursue that matter with them.
"Unfortunately the RECs have not been able to find a way of making the discount to this group of customers."
"I should point out that the National Grid Company belongs to the RECs and that it is they, not Government, who are making the fixed sum reduction to their domestic customers. In the end, it is they who will have to determine the means for making the reduction and how widely the net of eligible customers may be spread."
22 Mar 1996 : Column 686
"Unfortunately the RECs have not been able to find a way of making the reduction to this group of customers."
"it would be impossible to extend any discount scheme to benefit all of those categories. There would clearly be serious problems arising as to the definition of those intended to get the benefit and methods of auditing their entitlement."
"There would be no practicable process for identification or auditing indirect claims."
"This park is for retired and semi-retired people, all of them registered customers of Manweb in their previous homes and now because of the way the system works they are paying more for their electricity than other people who are supplied direct by Manweb."
"With regard to Manweb saying it would be difficult to identify eligibility I would be happy to supply them with a list of residents or copies of my electric accounts to help them, or of course they could consult the electoral register."
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