Electricity Prices (Hansard, 20 March 1991)

§ 5. Mr. Martyn Jones
To ask the Secretary of State for Trade and Industry what discussions he has had with large industrial users of electricity regarding the proposed increases in electricity prices.

§ Mr. Redwood
My right hon. Friend the Secretary of State for Energy has met the chairman of ICI to discuss that problem. My right hon. Friend the Secretary of State for Trade and Industry would be happy to hear further representations, but the main responsibility rests with the Department of Energy and with the regulator of electricity.

§ Mr. Jones
Of course, the main responsibility rests with the Department of Energy, but I am sure that the Secretary of State for Trade and Industry would be concerned about the effects on large industrial users of increasing electricity prices—much above the already scandalous 13 per cent. being charged to domestic consumers. Is the Minister concerned that that rise is due to the privatisation of a service industry and that, far from helping British industry, it is nailing British manufacturing industry to the wall?

§ Mr. Redwood
I do not agree that that is the result of privatisation. It is the result of the costs of generating power and the allocation of those costs to larger industrial users. The hon. Gentleman might like to know that our energy costs for large industrial users are below those of Germany, one of our main competitors.

§ Mr. John Browne
Will my hon. Friend confirm that companies are free to negotiate price with the electricity companies and generators and, furthermore, that electricity companies are free to offer discounts or even cash rebates to companies or individuals who invest in energy-saving measures?

§ Mr. Redwood
My hon. Friend makes good points. Of course, the idea of opening the market to competition is that large industrial users can think of other ways of gaining the power that they need by involving themselves in generation schemes or by encouraging new generators to enter the market. That is exactly what will happen. I am sure that the hon. Member for Clwyd, South-West (Mr. Jones) will welcome the progress that has been made in letting industry have more choice and control over power sources, quality and price.

Mr. John D. Taylor
Does the Minister accept that in Germany 35 per cent. of energy supplies benefit industry because they come from lignite mines near Bonn? Does he further accept that British industry would have considerably reduced electricity costs if we developed the lignite mines in the United Kingdom? Such resources would provide much greater energy than those in Iraq.

§ Mr. Redwood
The Government welcome the development of any energy sources that improve the supply and cost of energy, subject to the normal planning constraints and the energy policy laid down by the Department of 272 Energy. I am sure that in the new competitive conditions in the energy market more innovation will be a characteristic, although whether it will include what the right hon. Gentleman recommends is a matter for the market, not for me.