HC Deb 29 November 1984 vol 68 cc1078-80
8. Mr. Nellist

asked the Secretary of State for Northern Ireland if he will make a statement on the future of the Northern Ireland gas industry.

Dr. Boyson

The Government announced on 6 September that the proposed Kinsale gas project would not proceed as it would not be economically viable for Northern Ireland. We have always made it clear that we could not continue to subsidise a gas industry that had no real prospects of viability; we have now asked towns gas undertakings in the Province to consider their position.

Mr. Nellist

Should not the Minister explain to the House that that decision directly affects the jobs of 1,200 workers in the gas industry and indirectly those of many hundreds more? It also affects services to over 68,000 households, which depend on gas as their sole source of energy. According to Coopers and Lybrand in 1981, the decision not to go ahead with that project and the implied dismantling of the gas system in Northern Ireland would cost £124 million. Should not the Minister explain the need for a fully nationalised gas industry and a commitment by the Government to the jobs of workers in that industry and to the services that they currently provide?

Dr. Boyson

The decision was made purely on economic grounds, in that what one spends on gas subsidy one cannot spend on other things. It is a question of preferences. At present, the subsidy for 3 per cent. of the energy used in the Province costs £12 million a year. No one appreciates more strongly than I do the concern for jobs in Northern Ireland, but there is a subsidy per man of £12,000. The decision was made purely because the heavy fuel cost with which the gas from the Republic of Ireland is linked rose tremendously in the past year, while the demand for gas by both domestic consumers and industry fell.

Rev. Martin Smyth

Will the Minister ensure that if the gas industry goes out of operation liquid gas will be considered, in order to compensate those users who wish to use it rather than turning to more expensive forms of heating?

Dr. Boyson

We have not closed any of the 13 gas enterprises in Northern Ireland. We have said only that we cannot continue with an open-ended subsidy, or any subsidy at all. If any of the towns gas operations can continue economically, they may do so with our blessing. If those companies decide that they must go out of business because of the costing, we shall have to consider the Government's responsibility in connection with alternative fuels and equipment, and what the hon. Gentleman has said will be taken into account.

Mr. Michael Brown

Following the collapse of the natural gas project, will my hon. Friend say whether there is any opportunity or likelihood of Northern Ireland overcoming its dependence on very high-cost energy sources?

Dr. Boyson

I am grateful for that question. Recently there has been a considerable discovery of lignite reserves in the Province. Northern Ireland's problem is that it has no native energy supply. However, hundreds of thousands of tons of lignite have been found, not only near Lough Neagh, but in four or five other areas of the Province. We hope in January to fire about 500 tons in the west Belfast power station, to find out whether lignite can be used for electricity generation.

Mr. Archer

Has the Minister read the report of the joint working group of the Northern Ireland gas employers board and the gas trade union group, which suggests an alternative project for saving the jobs? If he has not read it, will he undertake to do so if I send him a copy?

Dr. Boyson

I always welcome any gift from the right hon. and learned Gentleman, especially during the Christmas season. However, I have read the report, but neither we nor our advisers in the Department are convinced that the idea is economic. If it is economic and people want to do that they can—we are merely ending an open-ended subsidy.

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