HC Deb 10 May 1995 vol 259 cc731-3
4. Mr. Canavan

To ask the President of the Board of Trade if he will arrange to meet the chairman of British Gas to discuss gas supply. [21945]

The Minister for Industry and Energy (Mr. Tim Eggar)

My right hon. Friend and I meet the chairman regularly to discuss a range of issues.

Mr. Canavan

Will the Minister demand an explanation from the chairman on why more than 16,000 disconnections were made last year because of fuel poverty and why the number of consumer complaints increased by 150 per cent. during the first quarter of this year compared with the first quarter of last year? Will the Minister instruct the chairman, the chief executive and all the other fat cats on the board of British Gas that it is high time that they put their house in order and started providing a better standard of service instead of lining their pockets with exorbitant salary increases and share options?

Mr. Eggar

The hon. Gentleman mentioned the current figure for disconnections but failed to mention that, some six years ago, just after privatisation, there were 61,000 disconnections a year, which shows that British Gas has improved its standard of service to those clients by a very high degree. Moreover, the standards with regard to the introduction of pre-payment meters have improved sharply. The 39 standards of service set out by the Office of Gas Supply have been met in full, with the exception of three specific services, two of which my hon. Friend the Under-Secretary of State referred to. British Gas has said publicly that it is committed to improving its standards further. If that is not enough for the hon. Gentleman, he should know that we shall introduce competition into the domestic gas market, which will almost inevitably lead to a reduction in prices for domestic consumers and an improvement in standards of service.

Mr. John Marshall

When my right hon. Friend meets the chairman of British Gas, will he congratulate him on the massive increase in investment since the industry was privatised, the massive increase in productivity and the substantial real terms reduction in prices? Does he agree that the snivelling comments of the hon. Member for Falkirk, West (Mr. Canavan) show that the new Labour party is just the old Labour party writ large, with the same prejudices it has always had?

Mr. Eggar

I absolutely agree with my hon. Friend.

Mr. Salmond

Is it possible that the Minister is unaware that British Gas is now held in public odium and that, at the annual general meeting later this month, the British Gas board faces a revolt by small shareholders, not just on salaries but on a range of other issues? When will the Department of Trade and Industry stop waffling on about British Gas being a world-class company and recognise that it has created a privatised Frankenstein's monster that is now totally out of touch with its customers, shareholders and staff?

Mr. Eggar

British Gas is a world-class company and is winning business for Britain throughout the world. The hon. Gentleman should welcome that.

Mr. Marlow

Instead of making down-market and emotive allegations about Frankenstein's monsters, privatisation and the rest of it, will my right hon. Friend tell my constituents, who have a real interest in this subject, what has happened to gas prices in real terms since privatisation and how those compare with prices before privatisation? Behind everything else, that is the issue that really matters to them.

Mr. Eggar

My hon. Friend is absolutely right. Gas prices have fallen by more than 20 per cent. in real terms since privatisation and by 15 per cent. when account is taken of the imposition of value added tax. Furthermore, standards of service have improved and the number of disconnections has fallen, which is concrete evidence of the success of our privatisation policy.

Mr. O'Neill

When the Minister sees the chairman, will he take account of the fact that the assurances which he gave in Committee on schedule 5 to the Gas Bill, that the changes were no different from those that would take place in any other privatisation legislation, will result in the prospect of a world-class company like British Gas abrogating its contracts on gas supply with a number of companies, both British and international? Does he realise that he is putting Government support behind the possibility of a major British company betraying undertakings that it has entered into faithfully with other companies, both British and worldwide, to take their supplies of gas at prices that were agreed some time ago?

Mr. Eggar

The point that was made in Committee with regard to schedule 5 was that there was a clear precedent for the allocation of existing contracts in such a position. The most recent precedent was the Gas Act 1986 and the previous one was in 1981, in the sale to Enterprise Oil.

As the hon. Gentleman said in Committee, and as I reiterated in that debate, it is appropriate that there should be commercial discussions between the producers and consumers of gas—in that case, between British Gas and several suppliers. That is what I believe that the hon. Gentleman said in Committee he wanted, and that is what I continue to want. I hope that there will be successful commercial discussions in the coming weeks.