HC Deb 25 July 1983 vol 46 cc768-70
2. Mr. Gould

asked the Secretary of State for Energy by what percentages gas and electricity prices to the domestic consumer have risen since May 1979.

The Minister of State, Department of Energy (Mr. Alick Buchanan-Smith)

Domestic gas prices have increased by 112 per cent. and domestic electricity prices have increased by 82 per cent. since May, 1979, but 2.5 million low-income customers obtain £350 million of assistance in meeting their fuel bills.

Mr. Gould

Will the Minister come clean and admit that such terrific increases have been forced on the industry by the Government and that they should therefore be regarded as a concealed tax increase to be added to the already increased tax burden suffered by most families under this Government?

Mr. Buchanan-Smith

I completely disagree. The hon. Gentleman knows that five years ago commercial consumers of gas subsidised domestic consumers to a high degree. That is not in the best interests of industry. I trust that the hon. Member realises that the use of coal and oil accounts for more than 50 per cent. of the cost of electricity and that those costs have gone up much faster than inflation.

Mr. Hal Miller

Will the Minister confirm that tariffs have been skewed against industrial customers? Does he agree that it is high time that something was done to ensure a more equitable distribution of those costs, which are largely coal-related?

Mr. Buchanan-Smith

Unless we have sensible and proper pricing, particularly for gas, energy will not be properly used and our industry will not be competitive with industries in other countries.

Mr. Hardy

Does the Minister accept that prices for domestic and industrial consumers have risen far faster than the rate of inflation? Is that not related to the Government's brutal policy of relying upon price to achieve conservation? Given the effect upon many millions of people — more than the number that he suggested — is it not time for a reappraisal of that approach?

Mr. Buchanan-Smith

I should have more respect for the hon. Gentleman's comments if he acknowledged the considerable help that the Government have given to less well off consumers. The hon. Gentleman should acknowledge that there has been no increase recently in the price of electricity. One hopes that increases in electricity prices will be contained within the rate of inflation now that the adjustment mentioned earlier has taken place.

Mr. Waller

Is not the principal reason why domestic gas prices have had to rise faster than the inflation rate in the past three years that they were held down for party political reasons in the period up to the 1979 general election? Does not the way that that industry was treated in that period provide a good reason why political parties should not interfere in the future?

Mr. Buchanan-Smith

My hon. Friend is right. If one is interested in jobs and in industry developing and competing fairly, one must have a realistic policy. That policy has been, and is being, tempered by what we are doing for the less well off consumers.

Mr. Rowlands

If inflation is seen by the Government as the number one enemy, how in he name of heaven does the Minister square their policy with a 112 per cent. increase in one of the fundamental heating costs for British families? Given that the British Gas Corporation made an enormous profit this year and that the Government are taking £500 million a year in the gas levy, could not they use a little of that money to reduce gas prices to the domestic consumer, thereby cutting inflation at a stroke?

Mr. Buchanan-Smith

If the hon. Gentleman had listened to what I said he would know that £350 million is spent on helping less well off domestic gas consumers. We inherited complete unrealism, and that required some work and effort. The hon. Gentleman's party did not pick up the bill, so there is no point in his criticising those who had to.