GAS AND ELECTRICITY INDUSTRIES

HC Deb 16 January 1980 vol 976 cc1644-61

The Secretary of State for Energy (Mr. David Howell)

With permission, Mr. Speaker, I should like to make a statement about financial targets for the British Gas Corporation and the electricity supply industry in England and Wales.

It is a fundamental objective of this Government's policy towards the nationalised industries that they should be set a clear financial discipline. We therefore opened discussions with the gas and electricity industries on medium-term financial targets for the period 1980–81 and 1982–83. The external financial limits for 1980–81 announced last November were set in the light of these discussions, which have now been satisfactorily concluded.

In a period of international uncertainty over fuel supplies and rapidly rising fuel costs, it is important that consumers should be aware of the true value of the fuel they are using. The prices which consumers pay for different fuels must reflect that value, taking into account, in particular, the fact that oil and gas supplies are limited. We must conserve our scarce energy supplies for future generations. After a year in which crude oil prices have risen by 100 per cent. or more, this is bound to mean heavy increases in other fuel prices. The need to move to economic pricing has been our main consideration in setting the financial targets for the two industries.

I recognise that adjusting to an era of higher energy prices brings serious problems for many consumers, especially the old and the poor. The new scheme of assistance with heating costs announced by my right hon. Friend the Secretary of State for Social Services on 22 October was designed to provide worthwhile help for those in most need. We shall take proper account of the cost of energy in our social policies and in determining benefit levels, particularly the levels of extra heating additions. We are reviewing, in this context, the whole range of help available to assist consumers with fuel bills.

I should first like to deal specifically with gas. There are five reasons why domestic gas prices will have to rise.

First, our reserves of natural gas represent a finite and increasingly valuable national resource. If the price is too low, we shall burn it up too fast and bring forward the day when we have to turn to more expensive sources of supply.

Secondly, in the short term, too, low prices cause peak demand to surge above what it would otherwise be, bringing the risk of shortages and supply cuts on cold winter days.

Thirdly, gas from new North Sea fields will cost several times more than earlier gas supplies and prices must reflect these much higher costs.

Fourthly, a sensible approach to pricing is vital if we are to achieve a proper balance of supply and demand, as between all consumers of gas. For industrial and commercial customers, it has been the longstanding policy of the British Gas Corporation to sell gas at a price broadly related to that of the competing oil product. The Government endorse this policy. The only alternative would be some form of arbitrary rationing and the risk of ever-increasing supply shortages.

Fifthly, artificially low prices concentrate the benefits on those who have access to gas supplies at the expense of the rest of the population. Correct pricing is essential if some of the financial proceeds from our natural gas resources are to be secured for the benefit of the nation as a whole. Hon. Members will recall that even the Price Commission, in its report last July, before recent oil price increases, concluded that domestic tariffs should be 30 per cent. to 35 per cent. higher in real terms.

Against this background, and the background of soaring world oil prices, we have set the British Gas Corporation a target, expressed as an average annual rate of return to be achieved over the period April 1980 to March 1983, of 9 per cent. on net assets valued at current cost. The target is related to current cost operating profit after taking account of depreciation but before interest and tax. It will be adjusted, if necessary, after introduction of the proposed new current cost accounting standard. The target rate of return is expressed as an average over three years. The actual rate of return is likely to be lower than 9 per cent. at first, but will increase progressively over the period.

Details of the tariff changes necessary to achieve the target are a matter for British Gas. However, in broad terms, the Government expect domestic gas prices to increase this year by 10 per cent. over and above the rate of inflation, followed by comparable real increases in the following two years.

Against the same criteria of economic pricing, electricity prices will also rise, though the expectation is that this will be less than in the case of domestic gas.

The target for the electricity supply industry in England and Wales has been set at an average annual rate of return of 1.8 per cent., on net assets valued at current cost, again over the three years 1980 to 1983. As in the case of gas, details of tariff changes are a matter for the industry. Prices are likely to increase over the three-year period of the target by about 5 per cent. over and above increases in the industry's own costs of which fuel costs are the biggest element.

The Government have asked both the British Gas Corporation and the Electricity Council to phase this year's increases in two stages, one in April and another in October.

Dr. Owen

Against a background of spiralling domestic inflation, is the right hon. Gentleman aware that these are astronomical increases? There is not a family in the country that will not be severely affected. Is he aware that fuel, light and power represent 6 per cent. of an average family income and over 10 per cent. of the income of those people whose earnings are 20 per cent. or more below the average? This is a severe blow. Do not these increases demonstrate the appalling economic meanness of the abolition of the electricity discount scheme?

Is the right hon. Gentleman prepared to accept a rebate scheme for fuel applicable to everyone, whether using gas, electricity, coal or paraffin? Until the right hon. Gentleman and the Government come forward with a generous scheme for helping with fuel bills, we cannot possibly accept the logic of increasing prices to this extent.

Will the right hon. Gentleman explain exactly what he means when he refers to the rate of inflation in this coming year? What rate of inflation is he estimating for the year 1980? Will he also come clean and explain what his statement means in terms of gas bills between April of this year and April next year? What will be the percentage increase on gas bills? What will be the percentage increase on electricity bills from April to April that every family will have to find?

Will the right hon. Gentleman give an assurance that he will not introduce some modification of the scheme announced by his right hon. Friend the Secretary of state for Social Services, which helped only 350,000 people as opposed to the 3.5 million helped by the electricity discount scheme, which meant a saving from £45 million to £14 million? Will he give an assurance that he will use these revenues for a generous scheme for helping the poor and those with high fuel bills?

Mr. Howell

I am certainly aware of the impact on all our price levels of higher energy costs. We all regret that, but we must face the fact that there has been a 100 per cent. increase in world crude oil prices in the past year. This necessarily means a major adjustment for all of us.

The right hon. Gentleman talked about the needs of the poor and the old. Those needs are fully recognised in Government social policy.

The right hon. Gentleman also talked about the electricity discount scheme, but that scheme was only for electricity consumers. I think that it is generally recognised that it was an idiotic scheme, because it spread benefit very widely, often over those who did not need it. I very much prefer the scheme developed by my right hon. Friend and announced in October, which provides a basis for support, in a time of high energy costs, over a far wider area of all consumers. It will meet the needs far more effectively than the electricity discount scheme, which was generally recognised as a bad scheme and a silly one. [Hon. Members: "Why?"] Because it concentrated only on electricity.

That is our approach. We are determined to develop our social policies effectively in an era of high energy costs. That is the obvious way forward.

As to inflation rates in 1980, we shall have to see what the outturn of inflation is. I cannot predict it. The prices will have to be based on the inflation outturn when it comes along.

As to the increases on average bills over the year, bills vary widely for different families, but the broad effect over the year will be an increase in family gas and electricity bills of rather less than the total inflation, plus the 10 per cent., because the second 10 per cent. will not come until October. The precise figures will vary from family to family.

Mr. Skeet

Is my right hon. Friend aware that the real price of gas between 1970 and October 1979 fell by one-third? Is he aware that consumers in the United Kingdom are somewhat better off, in that VAT is not charged on gas but in Europe it is, at between5 per cent. and 20 per cent.? Will my right hon. Friend bear in mind that he has no power under the Gas Act 1972 to claw back to the Crown the excess profits made by the industry?

Mr. Howell

My hon. Friend is right, in that even after the increases Britain is likely to have the lowest domestic gas and electricity tariffs in Europe.

As to the powers concerning the large surplus which will obviously be generated as we move to economic pricing, my hon. Friend is right. The existing powers allow only for the surplus to be returned to the Exchequer and the Treasury to help reduce, amongst other things, the public sector borrowing requirement. That is the limit of the powers.

Mr. J. Enoch Powell

Why should we conserve resources for future generations when we cannot know what the circumstances of those future generations will be?

Mr. Howell

I think that the right hon. Gentleman and I agree that the motive force for conservation must be the price decisions and the price signals as they operate in the face of the consumer. Nevertheless, there is another consideration which is not economic. It is a strategic consideration. It is a patriotic one, if the right hon. Gentleman likes to put it in that way. It is that in a dangerous world, when our sources of supply of oil and gas, liquid gas or gas in frozen form, are politically unstable areas, it makes strategic sense for this nation to postpone as long as possible the day when we shall again be dependent on politically dangerous and politically influenced sources of supply. That is not economics; it is strategy. I believe it to be good strategy for this nation.

Mr. Emery

Will my right hon. Friend tell the House whether in his moving away from the policy of long run marginal costs, which has been adopted by Governments of both parties in the past, the AA/RR of 9 per cent. which he is now setting is considerably higher than that which has been obtained by the long run marginal costs? If that is so, in the state of inflation that exists would it not make greater sense to spread the increase in prices of 27 per cent. in the next 12 months over a much longer period?

Mr. Howell

It is not the policy to move away from the principle of long run marginal costs. One of the realities that must be faced is that the British Gas Corporation is now having to look further a field for new gas supplies. It can no longer rely on the very cheap Southern Basin contracts, which were running at about 2p per therm. That was for the old gas. But the old gas will not go on for ever. The corporation is already having to pay 14p per therm—seven times as much—for gas from the Frigg field, and it will certainly be asked still higher figures for further gas from the North Sea. Therefore, to replace the very cheap gas that the nation has enjoyed will require a vast increase in resources and revenues. That alone is one reason why prices which have been depressed—the issue was ducked for too long under the previous Government—must now be raised.

Mr. Arthur Lewis

The right hon. Gentleman will be aware that even now, without the increases, I have had quite a correspondence with him about the fact that the aged, the sick, the infirm and those on social welfare benefits who are already having difficulty in paying fuel bills find that the gas and electricity boards are with speed and, it seems, enthusiasm cutting off their supplies. Can the right hon. Gentleman give an assurance that he will have a word with the Department of Health and Social Security and the boards to see that before such people are cut off the boards consult that Department, to ensure that those con- cerned are not blind and bedridden people who cannot get out of bed to collect the letters of notification or to answer the door, and who find that they are being cut off, so that they have no heat, no light, no gas, no nothing? The Minister has done nothing about it.

Mr. Howell

The hon. Gentleman is right to say that the matter is a cause of serious worry. He is wrong to say that we have done nothing about it. First, there is the code of conduct which the nationalised industries are obliged to follow. There have been complaints about that code and the way in which it is used. For that reason, we are reviewing the whole way in which that code is being applied. I say "we", but in fact an independent review is being carried out. I believe that that will help in this matter.

The hon. Gentleman also highlights the difficulties, which I do not shirk, over paying higher fuel bills that the energy costs impose on us for outside reasons and that come into our national economy. Perhaps I may give the hon. Gentleman an example. An average quarterly domestic bill is now about £29. Next year it will be £7 more. About £4 of that rise is due to the effects of inflation, and the remaining £3 is due to a real increase in the price of gas. Therefore, average bills will be about 50p a week higher next year, of which less than half will be due to a real increase in gas prices. I tell the hon. Gentleman that, and I should also have said it to the right hon. Member for Plymouth, Devonport (Dr. Owen), who rightly asked me that question.

Mr. Penhaligon

In the light of the 9 per cent. return on capital, just how is the value of gas in the North Sea arrived at? Who sets the value? Is it ourselves, OPEC or market forces?

Mr. Howell

It is market forces. We import from Norway about 20 per cent. of our gas. There is competition for gas supplies from the North Sea, and there will be increasingly strong competition in future years. Therefore, the market price of gas is influenced by market forces. The price of gas from the Frigg field, a median field between Norway and Britain, from which a third of our gas comes, is related by a fixed formula to the price of oil. Therefore, every time the price of oil goes up worldwide the price of gas going into our pipes, our stoves and our heaters goes up as well.

Sir Bernard Braine

Is my right hon. Friend aware that whilst everyone would agree that some increase in energy prices is necessary, in the light of the circumstances that he has described, many people in this country are mystified? They see the gas industry making substantial profits. My own constituents know that it is difficult enough to meet electricity and gas bills now. Can my right hon. Friend explain the justification for the size of the increase in gas prices? That is what people want to know.

Mr. Howell

I shall do my best to meet the points made by my right hon. Friend. He speaks of the British Gas Corporation's substantial profits or surplus. It is certainly true that as we move towards economic pricing—which the Government believe to be vital—that surplus will increase. While the BGC may have a large surplus and is efficient, it does not mean that it is competing for customers. On the contrary, customers are competing for gas, as industry well knows. That will continue until the price rises to economic levels. Failure to go that way will be grossly inefficient and will lead to arbitrary rationing and shortages. I believe that though people may dislike price increases as I do, the danger, without price increases, is that there will be no gas at all. Then people really will freeze.

Mr. Benn

Is the right hon. Gentleman aware that his arguments will not carry a great deal of weight because everyone knows that there are many ways of conserving gas supplies without imposing a savage tax upon the poorest consumers, who will be driven to disconnection and poverty? Is he aware that this will increase industrial costs for those firms that depend on fuel and that it will lead to further difficulties in exporting and maintaining employment at home? Is he further aware that in the long run what Britain needs is a powerful manufacturing industry upon which it can rely when the oil runs out? What are the Government doing about that?

Mr. Howell

I try to listen to, and sometimes learn from, the right hon. Gentleman, my predecessor in this post, but the idea that holding down gas prices is the best way to help the poorest people is surely a silly proposition. Such a policy helps the rich and poor alike. There are much more efficient ways—upon which the Government are bent—of helping those who are in need, particularly as they face hardship caused by high energy prices.

Whatever the present price of energy, which is related to oil, industry is clamouring for more gas. That indicates that, whatever the price of gas, industry prefers to move from oil to gas. The policy of the British Gas Corporation—endorsed by the Government—is to relate industrial gas prices to the competing oil products' price. That is our policy and is, I think, the current policy of every Western industrial country, with the possible exception of the United States which is moving in that direction.

Mr. Forman

Is my right hon. Friend aware that the move towards economic pricing of gas will be strongly welcomed on energy conservation grounds by many of his right hon. and hon. Friends? Is he further aware that there may be a case for examining again the possibility of an additional gas tax in order to recoup some of the extra revenue for the Treasury which might then be made available for the poorer gas consumers?

Mr. Howell

I am grateful for my hon. Friend's point about conservation. It is a vital consideration. A gas tax is certainly an interesting idea. The present surplus generated by the British Gas Corporation—which in some ways could be described as a rent because of the cheap gas coming from the Southern Basin—goes to help the Exchequer and thus is to the general benefit of the community. It also helps, among other things, to reduce the public sector borrowing requirement.

Mr. S. C. Silkin

Will the right hon. Gentleman tell the House where in legislation is the authority for the sort of considerations that he has just mentioned as a justification for increasing the price of gas to the extent that he has said will be necessary? Has he taken the best legal advice as to the vires of what is being done?

Mr. Howell

I do not believe that the right hon. and learned Gentleman heard what I said. I said that a gas tax was an interesting idea. There is no gas tax and no authority for such a tax. The present practice is for the British Gas Corporation to contribute its surpluses to the national loans fund. They then count against the PSBR. That is present practice, for which there is recognised authority. The right hon. and learned Gentleman is right to say that we would need new legislation for the introduction of a gas tax.

Mr. Gordon Wilson

Does the Minister realise that the measures that he has announced will have a great effect on those areas of Scotland and the North where the climate is more severe? Does he realise that elderly people may die of hypothermia because of his moves? Since there will be an increased surplus available from the British Gas Corpoartion, will he make that money available to expand the fuel discount system so that those in greatest need will benefit? As part of his energy policy, will the right hon. Gentleman try to get some work done on insulation so that all consumers may heat their homes adequately without consuming so much energy?

Mr. Howell

I have said that we shall develop our social policies in the light of the impact of the high cost energy era which is now with us and which will not go away. That era is a reality and we must have the courage to face it. The hon. Gentleman has a good point about insulation. The Government are now encouraging an extensive programme of domestic insulation. It is more extensive than the programme that we inherited, because we have expanded it to cover public authority housing. Recently we announced new guidelines for local authorities which will enable more pensioners and other elderly people to benefit from schemes for home insulation. We recognise the importance of insulation and we shall continue to do so.

Mr. McCrindle

As a result of my right hon. Friend's announcement, may we expect a further policy statement on the social considerations of increased gas and electricity prices? Will the Secretary of State confirm that any such further announcement will be made in the very near future to enable any additional assistance that is felt to be necessary to be fed into the budget arithmetic?

Mr. Howell

We are talking about prices that will have their impact next winter. That is some time ahead. However, I shall draw the attention of the Chancellor of the Exchequer to the remarks of my hon. Friend. I have said that we intend to develop our social policy—the Chancellor has effectively said the same—in order to take account of national conditions in an era of high cost energy. We recognise those factors.

Mr. Hardy

Is there not an element of brutality in the right hon. Gentleman's excessive reliance on pricing in pursuit of energy conservation? Is it not clear as a result of his recognition—belated though it may be—that our oil and gas reserves are finite, that his comments can be dismissed as humbug since he has supervised the flaring of gas to the tune, over the past six months, of 551 million cu ft a day? That is far more than has been consumed on any day in the past six months by the whole of the Yorkshire and Humberside region.

Mr. Howell

We have imposed severe flaring restrictions, as the hon. Gentleman knows. I cannot see his justification for making that point.

It seems to me that the worst humbug would be to proclaim, in the cause of helping those genuinely in need, a general reluctance to allow the price of gas to rise to economic levels, thus causing major waste and shortage. Such a policy would possibly bring a small benefit to a vast number of people, but in the long run it would neglect the poorest and the most vulnerable. That is the real humbug.

Mr. Bruce-Gardyne

Is there not a faint aroma of hypocrisy rising from the Opposition in view of the way in which they supported the right hon. Member for Bristol, South-East (Mr. Benn) in his aspirations to achieve a gas price which would insulate the National Union of Mineworkers from the consequences of its own wage bargaining? Will my right hon. Friend consider whether it is time to look again at the exclusive access of the British Gas Corporation to supplies of gas from the North Sea? Is there not a case for opening the door to private enterprise to compete with the British Gas Corporation for those supplies at perhaps a more remunerative price?

Mr. Howell

I note my hon. Friend's second point. It is an interesting suggestion, and the Government are reviewing the whole structure of the nationalised industries to make them more competitive. I have no doubt that such suggestions will be taken into account.

As to coal prices, I should make it clear to my hon. Friend that the price of electricity is primarily dragged up by coal and oil prices, whereas the need for the price of gas to rise is primarily to do with economic pricing and the need for conservation. It so happens that in my statement there is mention of an improvement in the balance between gas and electricity. It would be wrong, however, to assume that there is a cause and effect between electricity and gas prices at the centre of our policy. There is not, nor is there meant to be.

Several Hon. Members rose—

Mr. Speaker

I propose to call four hon. Members from each side, which will give a fair run.

Mr. McWilliam

Is the Minister aware that coal gas can be used when supplies run out? Is he suggesting that the nation's coalfields are politically sensitive? Will the Minister prevail upon the Chancellor of the Exchequer to recognise that, because of the increase of 27½ per cent. in the price of gas, old people will die next winter unless they receive a higher pension or a subsidy for gas? Does the Minister agree that if he does not understand the difference between a primary source of energy, such as coal, oil or gas, and a secondary source of energy, such as electricity, he needs to do a little more homework?

Mr. Howell

I am not sure that I understood the depth of the tail end of the hon. Member's question. The hardship caused by rising prices will be met by the automatic uprating of benefits. I have said that our social policies will be developed effectively in an era of high cost energy. The hon. Member mentioned coal gas. In due course it will be necessary, if we maintain a national gas transmission system when our North Sea natural gas has been burnt up, to turn to coal gas. Major research and experiments are being conducted. Undoubtedly that will be expensive and it will mean that once again the price of gas is related to the price of coal, which is within the nation's influence. One of the encouraging factors is the high productivity at many of the coalfaces. We have the basis in the nation—and this is common ground—for building out of the old coal industry a new and profitable enterprise for the future.

Mr. John H. Osborn

To what extent will the new increases in gas prices make flaring uneconomic and therefore make it worth while to use the wasted gas reserves? What estimate has been made of the increased prices increasing the viability of developing otherwise uneconomic or marginal gas fields?

Mr. Howell

The prices involved are to the customer. My hon. Friend is talking about prices to the producer, which are not changed by what I have said today. Flared gas is an associated gas—largely wet gas, a curious term. Until there is a gas-gathering pipeline in the North Sea, which I hope that we can achieve, there are limits to the amount of gas that can be recovered. When it is recovered, it is used mainly for butane, propane and other bases for the petrochemical industry. What I have said today does not change that. My statement will not directly affect the development of the marginal fields. The British Gas Corporation is now having to pay higher prices for new supplies of gas, and that is bound to have an impact on calculations about whether it is worth spending money on exploring and developing new gas fields.

Mr. Soley

Does the Secretary of State accept that the increase in gas prices is disastrous for low-income groups? Will he consider announcing an expanded fuel discount scheme at the same time as price increases for gas and electricity are announced? Does he accept that price rises and discount schemes should go hand in hand and that people should not have to wait in fear and suspicion until a scheme is announced to help people at risk?

Mr. Howell

The development of a social policy of the most effective kind should go hand in hand with the impact of price rises. However, it is necessary to announce the financial targets, as I have today, so that the industries involved can plan their finances for next year. Our social policy must be developed in that way. I emphatically reject the philosophy behind the electricity discount scheme, which seems to spread the margarine too thinly and involves only small sums of money. I admit that large numbers of people benefit, but my right hon. Friend's scheme produces benefits up to 10 times greater—£50 per person—for those who are in genuine need. I am sure that that is right.

Mr. Burden

Did the British Gas Corporation ask for the increased gas prices which the Minister has announced today?

Mr. Howell

No. The Government set targets higher than those which the British Gas Corporation wanted. I am happy to make that clear. We did that because we have to ensure that our natural gas assets are not burnt up dangerously fast as oil prices soar and everybody rushes to buy gas.

The Government have a responsibility which goes wider than that of the British Gas Corporation. It is true that the British Gas Corporation will have to pay much more for its new gas and will, therefore, need higher revenues. The Government set higher targets than the corporation wanted because of the needs of the national energy policy and because we do not want our resource to be burnt up so dangerously fast that we are confronted again much too early with the need to import from dangerously unstable political areas.

Dr. Owen rose—

Mr. Speaker

I intend to call the right hon. Member for Plymouth, Devonport (Dr. Owen) when I have exhausted the number of hon. Members that I said I would call.

Mr. Spriggs

Is the Minister aware that his statement will be interpreted by the industries which produce electricity and gas to mean that he is encouraging a commercial price for gas? The poorest people especially will be rationed by price.

Mr. Howell

The nation as a whole will have to be rationed by price. Within that we shall devise social policies to help those who are hardest hit. The aim of the hon. Member for St. Helens (Mr. Spriggs) is to help those who are most vulnerable. The worst way to do that is to hold down prices. That helps poor and rich alike and that cannot be compassionate or sensible.

Mr. Proctor

Is my right hon. Friend aware that the British Gas Corporation indicated to the National Gas Consumers Council that the increases cannot be justified on commercial grounds? I am a fan of market pricing, but I should like a comment on that. May we have an assurance that the profits created by the price increases will not be used to subsidise other more inefficient nationalised industries?

Mr. Howell

As my hon. Friend is a fan of market pricing, he will be glad to know that we are moving towards market pricing. Of course, that will lead to a large surplus because old gas was cheap; new gas will be much more expensive. It is rubbish to say that the surpluses will be used to subsidise loss-making industries, which is what my hon. Friend suggested in a broadcast yesterday. The surpluses help to reduce the public sector borrowing requirement—an aim to which I thought my hon. Friend was dedicated.

Mr. James Lamond

What did the gas and electricity consumer councils say when they were informed about the increases?

Mr. Howell

The views of the consumer councils have not yet been conveyed to me in detail. The natural reaction of all consumers when confronted with higher prices is not to like them. None of us likes higher prices. However, we shall all have to pay more for petrol, gas and other fuels. That is the reality.

Mr. Eggar

I welcome the broad aims of my right hon. Friend's statement, but why has he chosen to raise gas prices by relating them to the increase in the real rate of return required by the BGC? Why has he not decided to price gas in relation to the price of home heating oil and to phase in such price increases? Why has he not considered introducing a gas tax to recoup the economic rent that will accrue to BGC? Does he agree that part of such a tax could be used to reduce the bills for the poorest consumers?

Mr. Howell

I answered the gas tax point earlier. Our policy, however, means that the price of gas is being related to the price of the marginal fuel—heating oil—and the real rate of return is the return required to achieve that. That figure is 9 per cent. which, regrettably, is high by today's standards, although 10 years ago a great deal of British industry would have regarded a net rate of return of 9 per cent. on revalued assets as being perfectly attainable. It is a reasonable rate for a highly efficient industry.

Mr. Robert C. Brown

Is the Secretary of State aware that his statement is like the flared-off gas to which he referred—wet? It was certainly short of any significant energy conservation measures, and it certainly lacked equity. It is scandalous that the right hon. Gentleman should be compelling a highly efficient nationalised industry to increase its prices to a level that it is not seeking. Is he aware that, in spite of all that he said about the sick, the unemployed and the pensioners—on which I agree with him entirely—the 30 per cent. increase is nothing short of a punitive tax which will hit particularly the lower paid?

Mr. Howell

The hon. Gentleman's points about social policy and hardship are well taken. I recognise them fully. On the question of the present surplus and profitability of the BGC, the plain fact is that the corporation is not competing for customers. On the contrary, customers are clamouring for more gas. It would be a very serious matter if British industry were to be deprived of the supply of gas that it needs and our entire energy policy were to be distorted. That is a most important consideration because that is the source of the wealth needed to pay for the social policies upon which the hon. Gentleman and his right hon. and hon. Friends are always so ready to spend money.

Dr. Owen

What price increase did the chairman of the British Gas Corporation consider to be commercially justified? What is the expected increase in profitability of the BGC over the next financial year resulting from the extra amount that the Government have imposed on the price list?

Mr. Howell

The estimate on the latter point would be £200 million to £300 million extra. On the first point, the British Gas Corporation did not express a view in precise terms but took the view that, while it agreed with the aim and objective of moving to economic pricing, for the present year, it would have wanted a somewhat lower figure, but it did not give me a precise figure,

Mr. Cryer

On a point of order, Mr. Speaker. During the course of the Secretary of State's statement, members of the Press Gallery were busily turning over copies of the statement. It is a perennial cause of concern that, with certain limited exceptions, hon. Members are not provided with copies of statements. This practice has continued for years, but there is no reason why it could not be changed. I inquired at the Vote Office, but the statement was not available when the Secretary of State had sat down. If hon. Members had copies, it would give them the opportunity to put more informed questions. It would be a useful innovation for hon. Members to have copies.

Will you, Mr. Speaker, therefore, use your powers, which I understand may be limited, in this matter? I understand that motions to alter the procedures of this place are a matter for the Leader of the House, who is a member of the Cabinet and has not the slightest wish to alter a situation that benefits the Government by preventing the sort of detailed probing and questioning which hon. Members have the right to engage in. I ask you, therefore, Mr. Speaker, whether we can make a slight alteration to our procedures to improve them.

Mr. Speaker

I do not comment on the merits of the hon. Gentleman's point of order, but he will know that it is not within my discretion to require copies of statements to be made available to hon. Members. I do not wish to enter into any argument on this. The hon. Gentleman has made his point, and I am sure that it has been heard by those responsible.

Mr. Arthur Lewis

Further to the point of order, Mr. Speaker. I accept that you cannot and will not intervene between Government and Opposition, but I believe that you have a duty to assist hon. Members to carry out their work, a task that you exercise very well with regard to the Library, assistants and so on. If you were to indicate your support for what my hon. Friend the Member for Keighley (Mr. Cryer) has suggested—I do not suggest that you should say anything on the Floor of the House—that would be most helpful. If the Leader of the House knew that that was your view and that you wanted to improve facilities for hon. Members, he would be more likely to respond favourably.

Mr. Speaker

I have listened with respect to the hon. Gentleman, who has served in the House for 35 years. He will not expect me to comment further, but I am much obliged for what he has said.

Mr. Maxton

On a point of order, Mr. Speaker. Since the Secretary of State's statement covered the electricity supply industry for England and Wales, can you give an assurance that there will be a similar statement in respect of the electricity supply industry in Scotland? Will it be done by a press statement, or will Scotland be exempt from the increase?

Mr. Speaker

I share the hon. Gentleman's ignorance on that matter.