HC Deb 26 January 1981 vol 997 cc624-5
6. Mr. Whitehead

asked the Secretary of State for Energy what calculation his Department has made of the additional cost to British industry of the recent increase in gas prices.

Mr. Norman Lamont

The most recent available figures show that, for the first three quarters of 1980 the increase in gas prices, if there were no alteration in consumption, would represent an additional cost to industrial consumers of some £200 million.

Mr. Whitehead

Is the Minister aware of the extremely serious situation in the Courtaulds factory in my constituency, where the recent increases have added £300,000 to the bill for a firm which has just had to shed 2,000 of its 6,000 workers? Is he not aware that, with the great competitive disadvantage that we suffer by comparison with the United States, such firms are going out of business as a result of Government policy?

Mr. Lamont

I am aware of the representations by the hon. Member on behalf of firms in his constituency. One of them—I am not sure whether it is the one to which he has just referred—will certainly benefit from the concession which my right hon. Friend recently announced about the price for new gas contracts. I also recognise that this country is at a disadvantage on gas prices compared with the United States. The Government are pressing the United States Government strongly to accelerate the deregulation of gas prices there.

Mr. Marlow

Although we on the Government side fully support the idea that energy should be charged at its market price, is is evident that some countries in Europe are cheating and thereby gaining a competitive advantage. Will my hon. Friend see that levies are introduced so that those countries do not continue to export their unemployment to this country.

Mr. Lamont

Where other countries are subsidising or cheating, the Government will certainly take strong action. That is exactly what we did in the case of Dutch horticulturists, where the case is likely to go to the European Court. But my hon. Friend should recognise that gas prices in Europe are also increasing rapidly. In real terms, industrial gas prices have increased in France by 100 per cent. in two years, and in Germany faster than the United Kingdom rate of 50 per cent., so many increases in gas prices to industry are occurring in Europe as well.

Mr. Rowlands

Does not the Minister realise that in all our constituencies small firms have been complaining bitterly, and justifiably, about the swingeing increases in gas prices over the last 12 months? What is the Department's estimate of the increases in the coming year, in the light of press reports of 25 per cent? Surely small firms cannot take those continuing increases. It is the Government's policy which is causing them.

Mr. Lamont

No decision has been made yet by the British Gas Corporation about increases in industrial prices. Consultations are still going on. I note what the hon. Gentleman says about small firms. There is something in that, of course, although many of the complaints that we receive are from the very largest users. Those are the people who complain that they are most at a disadvantage. But on one point, the hon. Gentleman is wrong. These are not Government-imposed increases or Government taxes. These are the BGC's price increases. It wants them and it does not want the policy altered in any way. I know that the hon. Gentleman cannot understand this because, at the behest of the IMF, his Government imposed a 10 per cent. increase in gas prices.

Several Hon. Members


Mr. Speaker

Order. This topic comes up again in a number of the following questions.

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