HC Deb 19 May 1980 vol 985 cc9-11
7. Mr. Hal Miller

asked the Secretary of State for Energy whether he has had representations from industry on the need to make available more regular supplies of gas.

Mr. Norman Lamont

My right hon. Friend and I have had representations from industry about a number of issues relating to gas supplies.

Mr. Miller

Does my hon. Friend understand that, apart from the increase in gas prices, which has placed a heavy burden on costings in industry, there is far greater concern about the availability of gas? Firms seeking to expand, particularly those in my constituency, have been unable to obtain supplies of gas for that purpose. Can my hon. Friend do anything about that?

Mr. Lamont

I understand the concern of my hon. Friend. Because gas is so much cheaper than competing fuels, there has been a run away demand for it. In the next four years British Gas intends to supply an extra 1 billion therms to the industrial market. It also intends to invest .4,000 million on extra transmission and various other projects to increase supplies. But it takes time to increase supplies of gas. We continue to discuss this matter with British Gas.

Mr. Park

Does the Minister agree that as well as availability, the price of gas is of equal importance? Surely it is inconsistent with Government policy, which is to create the right climate for industry, to impose swingeing increases and then cream off the money as a means of back-door taxation.

Mr. Lamont

The pricing policy adopted by the British Gas Corporation under this Administration is the same as the pricing policy that was followed previously, namely, that in the industrial market the price of gas should be related to the competing oil product. We intend to introduce the gas levy because there is a strong element of the economic rent of the monopoly profit in those figures. That is why we have done that.

Mr. Skeet

Has the Minister read the observation of the Chemical Industries Association about attempts to increase the supply of natural gas from the continental shelf and, in selected zones, to allow the free distribution of gas by the companies concerned and not by the British Gas Corporation?

Mr. Lamont

I admire the persistence of my hon. Friend. I think that he asked me about that in the debate last Wednesday. I confirmed to him that we were aware of the observation and were studying it urgently.

Mr. William Hamilton

Is the Minister aware that a junior Minister said at the weekend that gas prices would increase tenfold in the foreseeable future? Can the Minister give any justification for that statement?

Mr. Lamont

I have not seen the text of any such speech, and I do not think that it is likely that gas prices will increase tenfold. Obviously, the trend of all fossil fuel prices is likely to be upward in the foreseeable future.