HC Deb 28 February 1983 vol 38 cc12-3
14. Mr Grist

asked the Secretary of State for Energy how energy prices paid by British industry compare with prices paid by industry in the rest of the Common Market.

Mr. Lawson

A recent study by the CBI shows that industrial energy prices in the United Kingdom in general compare well with those in the rest of the European Community.

Mr. Grist

I thank my right hon. Friend for that brief answer, which seems to have been based on exchange rate changes, the fall in oil duty and the actions of the Government. Does he accept that the CBI report drew attention to the lack of competitiveness of British industry as a result of the heavy fuel oil duty that it has to pay compared with our partners in the Community?

Mr. Lawson

It is possible to give one particular item, such as the heavy fuel oil duty, where the price paid in the United Kingdom, inclusive of tax, is higher than the average in the European Community. On the other hand, in respect of foundry coke we are in line with or cheaper than other countries. Interruptible gas here is cheaper than in other countries of the European Community. It is necessary to take these matters in the round, rather than to look at individual items—particularly fuel oil, which is not the most important element in industrial energy costs.

Mr. Hoyle

Does the Secretary of State realise that, while he is giving complacent answers, the paper and board industry is declining fast because of competition from west European and Scandinavian countries, which have subsidised energy supplies?

Mr. Lawson

I do not think that the hon. Gentleman is entirely right. I know that the paper and board industry is going through many difficulties at the present time. I have had discussions with a number of representatives of that industry. Those difficulties are by no means solely or even mainly due to energy costs.

As for the comparison with Scandinavian countries, the hon. Gentleman should bear in mind that they have not only forests, but hydro-power, which is the cheapest source of electricity, and we cannot possibly compete with that.