HC Deb 17 January 1977 vol 924 cc11-2
7. Mr. Gow

asked the Secretary of State for Energy whether he will make a statement about the gas price increase which the Government are asking the British Gas Corporation to put into effect from April 1977.

The Minister of State, Department of Energy (Dr. J. Dickson Mahon)

The details of the increase will be announced as soon as they have been settled.

Mr. Gow

I congratulate the right hon. Gentleman on his commitment to the overriding need to reduce the public sector borrowing requirement, but why has the gas industry been singled out for non-preferential treatment? Will he confirm that it is no part of the Government's policy that there should be thermal price parity in the supply of energy?

Dr. Mabon

I am grateful to the hon. Gentleman for letting me make this point. This is not a tax on gas. It has not been made at the request of the coal industry or electricity industry. It is a move simply to reduce indebtedness on the part of a highly successful nationalised corporation. The fact that the real price of gas has fallen over recent years has given us the chance to try to make the gas industry one of our best industries.

Mr. Palmer

Is this the start of a consistent and balanced policy of energy pricing, which, as my right hon. Friend knows. I have urged upon his Department for some time?

Dr. Mabon

We have no intention to reduce the competitive position of gas. That statement applies to the question asked by the hon. Member for Eastbourne (Mr. Gow). As for the general position, this is a very complex area and we are trying hard to meet all the problems.

Mr. Geoffrey Finsberg

Has the right hon. Gentleman observed the statement by the National Gas Consumers Council? Where there is a highly profitable industry, is it not more sensible that the industry should pass on its profits to its consumers by reducing prices and should not be overtaxed because it is efficient?

Dr. Mabon

If it were an undeveloping industry, an industry which had reached its capacity, that might be a sensible proposition. However, gas has an immense future in this country and there is much public investment still to be achieved.

Mr. Kelley

Does my right hon. Friend realise, when contemplating this part of his navel, that 14 to 15 years ago the scientific experts at Millbank were telling us how much cheaper gas would be than any other form of energy, but that certain action was taken by the National Coal Board which has put us in the position of so having to put up the price of gas that it is the dearest form of supply of domestic heat?

Dr. Mabon

I have lost 10 lb in weight over Christmas, so I am able to contemplate my navel a bit more easily than before. Gas still remains a highly competitive fuel. I think it is perfectly reasonable that the price should be raised to repay its debt to the nation.

Mr. Tom King

Is it desirable that energy prices should be fixed by the Chancellor of the Exchequer? Were consultations held with British Gas before this announcement was made?

Dr. Mabon

As the hon. Gentleman will know, if he is ever back in Government, if that ever is the tragic case for our country, there are certain possibilities but one cannot go into full consultations before the event. Past practice shows that the hon. Gentleman is on dangerously thin ice in talking about the behaviour of some Governments towards nationalised industries. Perhaps he will bear in mind how shamefully the nationalised industries were treated by the Conservative Government from 1970 to 1974.