§ Last year I announced substantial help for industry on energy prices. The NEDC task force, which has made a valuable contribution to a wider understanding of these matters, reported in November that these changes had significantly improved the position of large energy users here compared with their Continental competitors. But we are very conscious of the problems which remain, at least for some industries.
The Government have accordingly discussed with the electricity supply industry their pricing proposals for 1982–83. I am glad to be able to announce that these will include new special arrangements to benefit larger users—those heavy industrial users which face the greatest difficulties. A scheme will be introduced under which customers can gain significant reductions in their charges in return for a commitment to accept load reductions. The industry estimates that over 100 major companies should benefit.
§ This will be in addition to the arrangements for electricity prices which I announced last year and which will continue this year. But both the number of customers able to benefit from the new scheme, and the extent of the benefits, on average, will be greater.
§ To pay for these measures we are increasing the external financing limits for the electricity indutry, including Scotland, by some £100 million in 1982–83. These costs are additional to the EFLs shown in the public expenditure White Paper.
§ Some large industrial users of gas face similar problems, and here, too, we propose significant relief. For contract customers the price of gas taken after the first 25,000 therms in the contract year will be frozen at the level charged on 1 April 1982. This freeze will apply until the end of 1982. The cost of this measure is forecast to be some £60 million.
§ In addition, we have asked the National Coal Board to renew the measures first announced last year, so as to avoid further increases in the list prices for foundry coke until the winter. The board's deficit grant and EFL will be adjusted accordingly and the cost will be met from the Contingency Reserve.
§ Last year I announced the introduction of grants towards the costs of converting from oil-fired boilers to coal. We have now decided to extend the scope of these grants to cover conversions of other industrial oil-fired equipment and conversions of gas-fired equipment to coal. The scheme will also now cover conversions in service industries as well as in manufacturing. At the same time 747 we are reducing the qualifying threshold for the total project cost from £25,000 to £15,000. This will help a large number of smaller firms, particularly in the horticulture industry. The cost of these changes will be met from within the £50 million already allocated for this scheme.
§ Taken together with the measures announced in my last Budget, these three measures—special arrangements for large electricity users, the freeze on gas contract renewal prices and on list prices for foundry coke—should reduce the energy costs of British industry, compared with what they otherwise would have been, by over £250 million over the two years concerned. They represent a serious and significant response to industry's representations on energy prices.