Energy Prices (Hansard, 23 February 1981)

§ 2. Mr. Waller
asked the Secretary of State for Energy if he will make a statement on his consideration of measures to assist industrial high energy users whose energy costs compare unfavourably with their international competitors.

§ 5. Mr. William Hamilton
asked the Secretary of State for Energy if he will make a further statement on energy prices for industry.

§ The Secretary of State for Energy (Mr. David Howell)
It was agreed at the NEDC meeting in January that British industry generally was not at a disadvantage compared with its international competitors over energy costs. The Government have made clear their concern that certain energy-intensive industries are having to pay more for their energy than some of their counterparts overseas. If the pound continued to strengthen against European currencies, it could lead to increasing disparities in energy prices in sterling terms. The NEDC task force will shortly be reporting on the current situation for large users.

§ Mr. Waller
Will my right hon. Friend ensure that it becomes better known than it is at present that industrial energy prices on the Continent have risen at least as fast as they have in this country? That is not generally realised. When considering special measures to assist high energy users, will he take into account the fact that those include not only industries such as steel, but certain parts of the textile industry, even though they do not have the same pull as the steel industry?

§ Mr. Howell
The concern of the NEDC task force is with the high load and large users, where it seems to be agreed that disparities may exist, but I understand my hon. Friend's question. The first part of his question is correct. All over the world, and indeed in many European countries, energy prices have been rising at a faster rate than they have here. We have had a huge oil price explosion, the shock waves of which are going through all industrial systems throughout the world.

§ Mr. William Hamilton
Does the right hon. Gentleman accept that the weight of evidence being produced by several industries, including those mentioned by the hon. Member for Brighouse and Spenborough (Mr. Waller), is overwhelmingly in support of the view that our industry is being unfairly discriminated against on energy pricing? Why are the Government continuously prevaricating on the matter? When may we have a definitive statement on their policies?

§ Mr. Howell
The NEDC task force was set up to identify the precise areas where allegations and beliefs proved to be more than just feelings and were facts. As was recognised by the Government a considerable time ago, there are disparities for bulk users. As I mentioned in my original answer, the continual movement of the pound makes the disparities even harder and greater in some cases. That has been recognised. That is why the task force was set up, and the Government have said that they will respond when they see the exact nature of the problem.

§ Mr. Hal Miller
Does my right hon. Friend agree that, among our international competitors, the French are making great progress in keeping down the rise in electricity prices by the use of nuclear power? Will he take this early opportunity to rebut the findings of our Select Committee in that respect?

§ Mr. Howell
I do not want to take this opportunity to comment on the Select Committee's report, which is being studied closely by the Government. My hon. Friend makes a valid point. The cost structure of an electricity industry with a growing nuclear component and a large hydroelectric component is bound to be increasingly favourable in future. That is why the Government believe that we should have a modest, but expanding, nuclear programme.

§ Mr. Rowlands
The Secretary of State should not come to the Dispatch Box and be so bland and complacent on issues that are of serious importance to the whole of our industry. When will the NEDC report emerge? With each week that goes by, companies lose vital export orders as a result of energy prices. Will the right hon. Gentleman confess not only that he forced up gas prices to domestic consumers by more than the British Gas Corporation wanted last year, but that he insisted that it should impose higher increases on industrial consumers? Will he take on board the arguments from both sides of the House that industry is seriously affected by the Government's energy policy?

§ Mr. Howell
The answer to the hon. Gentleman's first question is that the report is expected on about 4 March. On the second question, the BGC's industrial energy policy is determined by economic pricing principles, which the Government adhere to and which are in accordance with the corporation's own policy and aims in industrial energy. Domestic energy prices are about half those in France and Germany. That is generally recognised by industry, which has urged that those prices should rise even faster. I have resisted that, because I believe that the proposed rate of increase is substantial. However, industry was pressing me to do even more.