HC Deb 03 November 1980 vol 991 cc949-51
15. Mr. Hardy

asked the Secretary of State for Energy if he will meet leaders of British industry to consider comparison of energy prices in the United Kingdom and in countries which are major competitors of the United Kingdom.

Mr. David Howell

Yes, Sir. When I met the CBI representatives last week they told me that it would be a few weeks yet before their report on comparative international energy prices would be ready.

Mr. Hardy

Does the right hon. Gentleman accept that the share of energy costs in industry's total costs is far more significant than he seemed to recognise in the House before the recess? He may not have seen the total figures, but is he aware of the evidence compiled jointly by the public and private sectors of the steel industry, which demonstrates that we pay far more heavily for steel than do our European competitors? Does not that evidence more than justify the U-turn that everyone, apart from the Secretary of State and half his colleagues in the Cabinet, perceives to be necessary?

Mr. Howell

For energy-intensive industries, energy is, by definition, a substantial cost. As we have moved into an era of high-priced energy all over the world, industries that use a lot of energy and cannot employ devices for greater energy efficiency without major new investment obviously face considerable difficulties. No one can question that. At my request, the electricity supply industry is reviewing the whole bulk supply tariff system. That will cover the position of large users. Overall on electricity supply, the CM has told me in preliminary talks that it does not think that there are major worries in comparison with other European competitors. Of course, I recognise that comparisons with North America are a different thing.

Mr. Michael Morris

Is my right hon. Friend aware that although his Department may consider United States' prices to be another matter, they are a strong competition to British industry? May we have an assurance that when we have a response to the CBI report it will take into consideration the energy and fuel prices in the United States?

Mr. Howell

My hon. Friend and I do not have to await the CBI report for me to recognise the extreme seriousness of the American and Canadian subsidised oil and gas prices, which are causing major damage to the whole of Europe—it is a Europe-wide problem—and exacerbating world energy difficulties. My right hon. Friends and I have been pressing the American and Canadian Governments continually for some time, and we intend to go on doing so with increased vigour, because these are serious and damaging policies for the whole of Europe.

Mr. Dobson

When the British part of the figures has been prepared, will the right hon. Gentleman ensure that the figures comparing the AGR production costs of electricity with coal-fired production costs include an estimate for the three much-delayed stations, which have not worked and which have cost so much, and are not based only on the rather misleading and fraudulent figures of the one station that the CEGB has managed to get to work?

Mr. Howell

The hon. Gentleman is trying to get in a point that is related to another question. Other nations have a larger nuclear proportion in their electricity supply systems, and as nuclear electricity has so far proved cheaper that is a considerable advantage to those other countries. That makes the case for a larger nuclear element in our electricity supply.

Mr. Moate

If the CBI demonstrates that particularly the heavy energy using industries are bearing a much heavier energy cost than our Continental competitors—a fact that my right hon. Friend seems consistently to have denied—what powers have the Government to intervene, and how quickly will they intervene in what is an increasingly urgent matter, particularly for the steel, paper and board and other similar industries?

Mr. Howell

My hon. Friend is not correct in saying that the facts have been consistently denied. I have always recognised that in certain energy-intensive industries there are particular problems. We are waiting to receive from the CBI the evidence of specific firms—not even industries generally—that are in difficulties. It appears that industrial gas prices in Continental Europe are moving ahead fast. Indeed, they are moving ahead of British prices. There have been complaints about oil product prices in the United Kingdom market, and when I have more specific details I shall raise the matter again, as I have already, with the oil industries to find out whether they can maintain fully competitive prices for their refined oil products. I understand that for most oil products they are competitive, though there may be some higher prices here for heavy fuel oil.