HC Deb 21 July 1980 vol 989 cc8-9

3. Mr. Hal Miller asked the Secretary of State for Energy to what extent fuel prices are subsidised in the European Economic Community; and what representations he has made to the Council of Ministers on the matter.

The Under-Secretary of State for Energy (Mr. Norman Lament)

The principle of economic pricing of energy was endorsed by all member States in the Energy Council of Ministers on 13 May. I do not have full details of the extent to which fuel prices may be subsidised in other member States. We are, however, continuing to stress on all occasions the importance of implementing this principle.

Mr. Miller

In the light of the information that I have given to the Department about the extent of the subsidy for gas and coking coal, is my hon. Friend aware of the foundry and forging industries' view that either there must be an end to the subsidies, which in some cases amount to 100 per cent., or that there must be some control over the import of products of those industries?

Mr. Lamont

I understand that my hon. Friend has written to my hon. Friend at the Department about coking coal imports and will be receiving a reply. It is largely a matter of other countries being more competitive and not a question of subsidies.

Mr. Hardy

Will the Minister confirm that his Department has plenty of information to prove that our energy pricing policy is markedly disadvantageous to British industry? Will he accept that, although we are achieving self-sufficiency, we are also achieving idiocy?

Mr. Lamont

I do not accept that. Energy costs are a small proportion of the total cost of most industries—usually about 1 or 2 per cent. We are watching carefully the trend in gas and electricity prices in this country and in the EEC to ensure that British industry is not at a disadvantage.

Mr. Skeet

Is my hon. Friend aware that tomato growers in Holland receive a considerable subsidy for their gas? Will he make representations to see either that that is discontinued or that United Kingdom growers receive a subsidy?

Mr. Lamont

My right hon. Friend the Minister of Agriculture, Fisheries and Food has been making representations at the Council of Ministers, and the Commission has been preparing a report on the problem. Proposals are to be put to the Council of Ministers tomorrow.

Mr. Ashton

What is the Minister's answer to the Chemical Industries Association, which has strongly protested to him that our gas is 7p to 17p per therm dearer than elsewhere and that Belgium and Italy particularly have heavily subsidised gas? Is he aware that our chemical industries on Merseyside and in Manchester, where there is high unemployment, are suffering the most? Has he no comfort to offer them?

Mr. Lamont

I am meeting representatives of the chemical industry again this week. Average contract prices for gas in the first quarter of this year were 16p per therm, which may not be apparent from some tables that have been published. Renewals and new contracts are running at a higher rate than the average price for the first quarter of this year, but that is also true in other European countries. The hon. Gentleman may have noticed that the Algerian negotiations with France for LNG, which are before transport and storage costs, are opening at 26p per therm, as is the Norwegian-German Gel-senberg deal.

Mr. Speaker

Order. [Hon. Members: "Good answer."] It may be a good answer, but it is much too long.

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