HC Deb 19 December 1983 vol 51 cc3-4
4. Mr. Eggar

asked the Secretary of State for Energy if he will make a statement on the financial and service targets set for the British Gas Corporation for the next four years.

The Secretary of State for Energy (Mr. Peter Walker)

I have agreed with the British Gas Corporation a financial target and a performance objective for the period 1983–84 to 1986–87. The financial target will require the corporation to earn an average current cost operating profit, before taxation and interest, of 4 per cent. on average net assets at current cost. The performance objective is a 12 per cent. real reduction, by 1986–87 against 1982–83, in unit net trading costs per therm of gas sold and used at seasonal normal temperatures.

Mr. Eggar

I thank my right hon. Friend for that first announcement of the detailed proposals on the targets. Whatever the future structure and ownership of the British Gas Corporation, it is essential for its good running that it has clear targets. Will my right hon. Friend assure the House that the targets will not be changed during the next three years?

Mr. Walker

Yes. In fairness to the British Gas Corporation, it also wanted the right, should anything extraordinary happen, to revise the targets. This is not just a one-way position. I agree completely with my hon. Friend that the only way sensibly to control the nationalised industries is to set them financial targets and give them every opportunity of meeting them.

Mr. Lofthouse

Does the Secretary of State expect a ceasefire in the war between himself and the Chancellor of the Exchequer, and who does he expect to be the victor?

Mr. Walker

I expect not a ceasefire, but happy, contented and cheerful dialogues.

Mr. Orme

When will the Secretary of State stop using the gas industry as a means of imposing a fuel tax on the consumer, especially when it is unnecessary to do so?

Mr. Walker

The right hon. Gentleman's remark is quite extraordinary. A previous occasion on which the financial targets of the gas industry were mentioned was on 22 December 1978—seven days after Parliament had gone into recess. The then Secretary of State for Energy, Mr. Tony Benn, announced that, in accordance with the White Paper on nationalised industries, he had set financial targets for the electricity and gas industries. British Gas would have to earn 6.5 per cent. on turnover after interest, and the electricity supply industry 10 per cent. on average net assets. Did the hon. Gentleman object to that tax?