Energy Costs (Hansard, 26 November 1980)

§ 3. Mr. David Steel
asked the Secretary of State for Scotland what assessment he has made of the impact of high energy costs upon industry and employment in Scotland.

§ The Secretary of State for Scotland (Mr. George Younger)
Scottish industries are affected by rising world energy prices and we are giving urgent consideration to the report on comparative international energy prices submitted to us recently by the Confederation of British Industry.

§ Mr. Steel
Is the Secretary of State aware that the country will be glad to hear the last part of that answer? Is he further aware that the textile industry, the paper-making industry and even the electronics industry in Scotland suffer from the fact that their competitors have the benefit of cheap energy supplied by their Governments? Will he treat this matter as urgent? Will he press the Chancellor of the Exchequer to remove the heavy fuel oil tax, which could be an immediate step to reduce the cost of energy to industry?

§ Mr. Younger
The Government, too, are concerned about the problems that these industries face. We are concerned to look into the survey submitted to us by the CBI. We are paying attention particularly to the methods by which one compares energy prices in different countries. I can assure the right hon. Gentleman that we are doing the best we can to assess these factors.

§ Mr. Henderson
Is my right hon. Friend satisfied that the State monopolies that are mainly involved in this exercise are taking steps to improve their productivity and to take tough decisions of the kind that their customers face in the real competitive world?

§ Mr. Younger
Yes. I am grateful to my hon. Friend for making that point. The electricity and other energy-using industries in the State sector are doing everything they can to economise on costs. They are taking new steps, following the Government's initiative, to communicate with their customers on the best means of saving on energy.

§ Mr. Robert Hughes
Is the Secretary of State aware of the loss of 350 jobs at Culter paper mills outside Aberdeen, which ends paper making in that area after more than 300 years? Is he aware that the paper industry is concerned about high energy costs? Will he consult his right hon. and hon. Friends in the Government and reduce the ridiculous diktat that fuel prices must rise by 10 per cent. more than inflation?

§ Mr. Younger
I share the hon. Gentleman's concern about the paper-making industry. He may be glad to know that I am arranging to meet representatives of that industry as soon as possible to hear the problems in more detail. We shall look at the matter carefully.

§ Mr. Gordon Wilson
Does not the Secretary of State feel that it is both anomalous and unfair that Scotland, as a major oil producer and exporter, should suffer these disadvantages of high energy costs? Is it not appropriate that he should press the point with his right hon. and learned Friend the Chancellor of the Exchequer to see that an oil fund is set up in Scotland, which would enable aid to be given to our industries in difficulty?

§ Mr. Younger
If Scotland wishes to make the best use of the unique advantage of North Sea oil, it would be well advised not to depart from world energy prices in using it. Otherwise, it would be used far too quickly. Scotland gets overwhelmingly the greatest benefit from oil development. The employment picture in the North-East of Scotland should have convinced even the hon. Gentleman of that.

§ Mr. Myles
Will my right hon. Friend pay particular attention to the problems of the fishing and the horticulture industries, whose energy costs are a high proportion of their total costs?

§ Mr. Younger
Yes. The Government have been putting pressure on the Commission in regard to the horticulture industry, and it is taking action to ensure, for instance, that Dutch growers have the same prices as other Dutch industries, which in the past they have not had.

§ Mr. Harry Ewing
As the decision of the Government to make the Gas Corporation increase its prices against its wishes in order to reduce the public sector borrowing requirement has proved an abysmal failure, would it not be prudent for the Secretary of State to advise his Cabinet colleagues to withdraw the increase and thereby help the gas consumers at both industrial and domestic levels?

§ Mr. Younger
As the hon. Gentleman may know, we are taking steps to enable the price of new firm gas contracts to be held down. There is no future in pretending that gas costs less than it really does. The hon. Gentleman would do a grave disservice to our future security of gas supplies if he were to succeed in doing any such thing.