§ 11. Mr. Campbell-Savoursasked the Secretary of State for Energy what consultations he has had during the last month with leaders of British industry on energy pricing policy.
§ Mr. David HowellI discussed industrial energy pricing with members of the NEDC at the June meeting.
§ Mr. Campbell-SavoursAs the value of the Government's recent energy package for industry has been more than offset by the increased duty on derv, does not that militate against the interests of the economies of the regions, especially the Northern region? Will the Minister undertake to consult industries in the regions about his energy package?
§ Mr. HowellI take every opportunity to consult industrialists in the regions and centrally on energy problems, especially on how they can make more efficient use of energy in a high-cost energy age. The price concessions for electricity and gas, which were announced in the Budget, have an effect on one group and the now reduced increase in the price of derv has an effect on another group. There is only a partial overlap. I do not think that it can be said that one offsets the other.
§ Mr. BudgenWill my right hon. Friend further demonstrate his devotion to market pricing in energy by welcoming the present glut in oil and promising to make no attempt to hold up the price of oil, which would be damaging to energy consumers, especially those engaged in heavy manufacturing industry in the West Midlands?
§ Mr. HowellUnited Kingdom crude oil prices are not determined by a Government selling price, as are crude oil prices in some oil-producing countries. United Kingdom prices are determined by commercial negotiations between producers, traders and customers. The British National Oil Corporation is much the largest trader and tends to set the pattern for United Kingdom prices. It does so by following world market trends in crude oil prices. It has done that all along.
§ Mr. Robert C. BrownDoes the right hon. Gentleman understand that the glass industry, which is represented by the Lemington glassworks, in my constituency, and the brick industry, which is represented by Throckley brickworks, in my constituency, are paying through the nose for gas? It is one of their biggest costs. The Government are creaming off vast sums for British Gas through the Gas Levy Act 1981. Surely we should give serious thought to making British industry more competitive with its subsidised counterparts in Europe.
§ Mr. HowellI understand the problems of industries that face high energy costs. Firm gas contract prices will be about 10 per cent. lower by December. For customers on interruptible contracts, the effective benefit will be a price that is about 10 per cent. below the heavy fuel oil duty. Indeed, that is already so. These are substantial advantages. They reflect the disparities outlined in the NEDC report. They are of real benefit. The hon. Gentleman will understand that the price of gas for British industry when compared with prices in other countries may have changed since last winter. Fluctuations in exchange rates are influential factors. French industrial gas prices increased by 22 per cent. last week. These factors produce a different picture.
§ Mr. HendersonDoes my right hon. Friend accept that one of the reasons for the high cost of electricity is the high cost of the coal that is still used in most of our power stations? Does he agree that a substantial injection of private capital into the coal industry for new development would be greatly to the advantage of the industry and of consumers?
§ Mr. HowellI accept that competitively priced coal and more nuclear power are the key to cheaper electric power in Britain. My hon. Friend is entirely right in that respect.