§ 2.55 p.m.
§ LORD BALOGHMy Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
§ [The Question was as follows:
§ To ask Her Majesty's Government how they reconcile Lord Denham's answer on Monday, May 24, 1971, according to which "the contracts for natural gas produced from the Continental Shelf are a matter for negotiation between the Gas Council and the producing companies" with (i) the Continental Shelf Act 1964, s. 9(2) and (3) and more especially s. 9(3)(a); (ii) the statement in the Conservative Party Manifesto (p. 11/2) according to which "we will subject all proposed price rises in the public sector to the most searching scrutiny. If they are not justified, they will not be allowed"; and (iii) the Prime Minister's statement on June 16, 1970: "taking a firm grip on public sector prices and charges such as coal, steel, gas …".]
§ LORD DENHAMMy Lords, the provisions of Section 9 of the Continental Shelf Act 1964 do not provide for the intervention of my right honourable friend in a situation where the Gas Council and the producer agree upon a price for the gas. As to the second and third parts of the question, these statements referred not to prices charged to public sector industries but by them.
§ LORD BALOGHMy Lords, while thanking the noble Lord for his short reply to my long Question, may I ask some supplementary questions? First, is he aware of the fact that on the basis of the statements cited in my Question the Government have undertaken to investigate thoroughly each increase in price? Secondly, is he aware of the fact that the cost of gas to the Gas Council is an item of cost in the Gas Council's price to the 179 public? Finally is he aware of the fact that his Prime Minister endorsed the previous statement given in the Communist manifesto—
§ SEVERAL NOBLE LORDS: Oh!
§ LORD BALOGHI plead guilty, my Lords; but I think that the noble Lord's Party is as destructive as the Communists. Finally, is he aware of the fact that his Prime Minister endorsed this? And does he think his reply really contributes to the credibility of the new-style Government?
§ LORD DENHAMMy Lords, I am aware of, and I would fully defend, the statements made by my right honourable friend and his right honourable friends: that they would investigate the charges by nationalised industries. I am certainly aware of that. The noble Lord, Lord Balogh, said that the actual price of the gas is an item of cost; but one ought to get this into proportion. If the additional cost of this gas were to be passed on to the consumer, the average price of gas would go up by 0.4 per cent. It is against that figure that I would ask the noble Lord to look at this matter.
§ LORD BALOGHMy Lords, I hope that the noble Lord will forgive me for asking how he got that extraordinary information; because so far as is known the cost of gas itself is roughly 40 per cent. of the price to the consumer and one old penny on the price is almost 40 per cent. of the price. Is the Minister aware that 40 per cent. of 40 per cent. is not 0.4 per cent?
LORD DEN:HAMMy Lords, I hesitate to argue with the noble Lord, Lord Balogh, in matters of mathematics, but I will tell him exactly how I worked out that figure. The additional cost of the gas is 0.3 of a new penny per therm. The gas in question is exactly one-eighth of the total gas available to the Gas Board (or will be when the field is in full production) and the average cost of gas to the consumer is 10.5 new pence per therm. If the noble Lord works that out he will arrive at the same answer as I did.
§ LORD LEATHERLANDMy Lords, while the noble Lord is quarrelling about percentages, can he give us an assurance 180 that the figure of 8.5 per cent. for the increase in the price of food since the Government came into office is correct?
§ LORD DENHAMMy Lords, I think that that was another question; but I am not sure because I did not hear the noble Lord clearly. Would he care to repeat it?
§ LORD SHACKLETONMy Lords, I would ask the noble Lord whether he would consider getting a new set of matchsticks—which we know are familiar and useful devices for calculation on the part of Conservatives—and see whether or not these studies have in fact been properly organised. He said that he himself did the sums; but have his own accountants looked at this matter?—because it is the most extraordinary approach to costing that any of us who has ever been concerned with accounting has heard of. May I ask whether he is aware that my noble friend perhaps committed a slight error when he referred to "his" Prime Minister? He is our Prime Minister, however much we may regret it.
§ LORD DENHAMMy Lords, I am quite aware that my right honourable friend is the Prime Minister of the noble Lords opposite as well; but I would stick to the fact that my sums are correct. I will certainly, at a more convenient time and place, justify them to the noble Lord.
§ LORD CONESFORDMy Lords, will Her Majesty's Government, when faced with a Question of this length, consider following the admirable example of the late Sir Stafford Cripps who, when asked a Question of approximately this length about how he did something or other, replied with a single word, "Easily"?