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Standing Charges

Volume 33: debated on Tuesday 7 December 1982

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asked the Secretary of State for Energy if he will publish in the Official Report the calculations on which he based his statement to the hon. Member for Hastings of 15 November, Official Report, c. 4, that the increased unit charge for electricity and gas if the standing charge were to be abolished would be 15 per cent.; and whether these calculations have been agreed with the gas and electricity boards.

In the course of the review of the impact of standing charges on poorer consumers by my Department earlier this year, BGC and the Electricity Council estimated the unit rates which would be needed in a domestic "flat-rate" tariff to preserve their revenue if the industries' standing charges were abolished. The results of these calculations were as follows:

Electricity Council:
Average existing unit rate for domestic consumers on unrestricted tariffs in England and Wales in 1982–835·1p/kWH
Revised unit rate if standing charges (including prepayment meter surcharge) were eliminated5·9p/kWH
Increase15 to 16 per cent.
British Gas Corporation:
Existing unit rate in first half of 1982–8330·5p/th
Revised unit rate if standing charges were eliminated35·9p/th
Increase17 to 18 Per cent.
For the purpose of the calculations, it was assumed that the level of consumption would not change as a result of adopting a flat-rate tariff.More recent estimates by the industries support my right hon. Friend's statement that the necessary increase would be around 15 per cent.