HC Deb 17 December 1984 vol 70 c7
2. Mr. Malone

asked the Secretary of State for Energy if he will make a statement on the Government's current policy on gas pricing.

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

Gas prices are determined by the British Gas Corporation, taking into account the need to achieve an adequate return on capital, and to obtain an adequate and continuing supply of gas.

Mr. Malone

I am grateful to my right hon. Friend for that reply. Can he confirm that it is Government policy to ensure that gas is provided to the consumer at the most competitive prices? In addition, will he undertake that in the event of gas prices perhaps falling, as a result of increased efficiency on the part of the British Gas Corporation, prices will reach the consumer unaltered and that there will be no interference to put them up?

Mr. Buchanan-Smith

Pricing is the responsibility of the British Gas Corporation. We expect the corporation to be competitive. I hope my hon. Friend welcomes the fact that, under its financial targets and performance aims up to 1986–87, it is expected to achieve a reduction in unit net trading costs in real terms of 12 per cent. compared with 1982–83. There is strong pressure on the British Gas Corporation to be efficient, and I am sure that it will be.

Mr. Rowlands

As future gas prices and supplies may be determined by the decisions to go ahead with the Sleipner contract, will the Minister say what is the Government's position on it? As I understand it, negotiations are virtually complete between the British Gas Corporation and its opposite number. Where do the Government stand on the Sleipner contract?

Mr. Buchanan-Smith

The Sleipner negotiation is not confined to the British Gas Corporation and the Norwegian company Statoil. There are a number of other big financial considerations which affect the future of gas supplies to the United Kingdom and our balance of payments. Negotiations continue on those issues. Until they are concluded, I regret that it is not possible to answer the hon. Gentleman's question.