HC Deb 27 March 1975 vol 889 cc674-5
5. Mr. Gow

asked the Chancellor of the Exchequer whether he is satisfied with the rate at which nationalised industries are reducing the need for subsidy in their operations.

Mr. Dell

Yes, Sir. The phasing out of subsidies for price restraint by the gas and electricity industries and the Post Office is likely to be completed by 1976–77. The railways and, to a much lesser extent, the coal industry will be given continued support for social reasons.

Mr. Gow

Will the Paymaster-General reconsider the last part of his answer? Does he not agree that it is essential that the resolution of the Chancellor of the Exchequer in this matter be sustained? Will the right hon. Gentleman tell the House of the favourable consequences of that part of the Chancellor's policies in respect of which he is remaining firm so far as the Budget deficit is concerned?

Mr. Dell

In reply to the last part of the supplementary question, I cannot give any figures about the Budget deficit. As to the first part, I do not think hon. Members opposite are in a position to complain about my right hon. Friend's resolution. Hon. Members opposite handed over to us a vast deficit on this account, which we are now trying to correct.

Mr. Mike Thomas

Will my right hon. Friend bear in mind that these increases in nationalised industry prices bear heavily on those least able to meet them, and that increases in benefits may not be enough to alleviate the problem, particularly in respect of electricity prices? Will my right hon. Friend say what he proposes to do about them?

Mr. Dell

As my right hon. Friend the Secretary of State for Energy indicated recently, he has asked the electricity industry to weight the electricity price increases in favour of the small consumer. Something similar was done in respect of the gas price increases earlier in the year. I believe that the main emphasis here in helping to alleviate the undoubted problem to which my hon. Friend refers must be through the social security system.

Mr. Moate

Is the Paymaster-General aware that if the present railway fare proposals are accepted, railway fares will have gone up by about 43 per cent. in 12 months, and yet British Rail is still faced with a continuing and massive deficit? Is it not a fact that the finances of nationalised industry are out of control?

Mr. Dell

Most railways throughout the world, I believe, receive Government subsidy of one kind or another. The facts to which the hon. Gentleman has referred are very relevant in the current claims of the railway industry.

Mr. Nott

If there are excessive wage claims in the public sector which go beyond the guidelines of the social contract, will it be the Chancellor's policy to push these extra costs through into the prices of the nationalised industries as a matter of policy?

Mr. Dell

This is an inevitable result of excessive wage claims in these industries. Prices will have to go up very much faster.

Forward to