HC Deb 07 November 1983 vol 48 cc8-9
8. Mr. Winnick

asked the Secretary of State for Energy if he will state the total increase in the price of domestic gas since May 1979.

Mr. Buchanan-Smith

The average price paid by a typical domestic gas consumer in the hon. Member's constituency has increased by 23.22p per therm since May 1979.

Mr. Winnick

I wanted the figure for the national increase. Is the Minister aware of the considerable hardship caused to many people, including my constituents, as a result of the increases in gas prices, which, since May 1979, have more than doubled in the retail prices index? Is the Minister also aware that many people on low incomes, but not necessarily receiving supplementary benefit, do not receive any assistance towards their fuel bills? Will there not be tremendous hardship this coming winter for many people because of the increases in gas prices?

Mr. Buchanan-Smith

I appreciate the hon. Gentleman's concern for those who are less well off, but, to put it into perspective, it is worth reflecting that in real terms gas prices are the same today as they were in 1970. If we are to help those who are less well off, it is better to direct the help in their direction. I hope that the hon. Gentleman will acknowledge that 2.25 million people are benefiting from Government schemes and that some £350 million a year is being spent on these schemes. Later this month, the heating addition is to go up. The Government are not only concerned, but are taking action.

Mr. Michael Morris

Is it not inevitable, because the British Gas Corporation proposes to price gas on historic costs rather than on the marginal costs of buying gas, that there will have to be further increases in domestic gas prices?

Mr. Buchanan-Smith

The corporation has made announcements about what might be necessary, but at this stage no decisions about increases this year have yet been taken.

Mr. Bruce

Does the Minister acknowledge that over the past four or five years the price of gas has been determined not by market forces but by direct Government intervention? Will the Government continue this policy or will the BGC be allowed to determine the price in view of its own needs, particularly in the face of plans to privatise the corporation?

Mr. Buchanan-Smith

I should be interested in the hon. Gentleman's views on that matter and whether he feels that a rational pricing policy should be followed to make the best use of these resources. That has been the purpose of our policy over the past three years. That period of adjustment has now been completed.

Mr. Orme

In each of the past three years have not the Government imposed a 10 per cent. increase above the rate of inflation? Is that Government policy?

Mr. Buchanan-Smith

As I made clear in another answer, the increase of 10 per cent. a year over three years has been debated in the House on many occasions. It was done to achieve a more rational and sensible gas policy, particularly for the exploitation of our resources in the North sea. If the hon. Gentleman does not believe in a successful exploitation and development policy, I hope that he will tell the House.