HL Deb 08 February 1977 vol 379 cc1099-102

6.3 p.m.


My Lords, I beg to move that the Electricity and Gas Undertakings (Financial Provisions) (Northern Ireland) Order 1977, laid before the House on 25th January, be approved. The order is in two distinct parts. First, it authorises payment of compensation to the Northern Ireland Electricity Service for financial loss incurred in the year 1975–76, in respect of observance of national price restraint policy, and to the Northern Ireland Gas undertakings for loss incurred similarly in 1974–75 and 1975–76. Secondly, it amends the Gas Act (NI) 1971 and the Electricity Supply (NI) Order 1972 by regularising matters involving the issue of gas and electricity bills based on estimated levels of consumption in circumstances where officers of the fuel undertaking are unable, for whatever reason, to gain access to premises for the purpose of inspecting meters. Articles 2 and 3 together with the Schedule provide for the payment of compensation. The provisions extend the powers contained in the Electricity and Gas (Financial Provisions) Measure (Northern Ireland) 1974, and bring Northern Ireland into parity with the Statutory Corporations (Financial Provisions) Act 1975. It is expected that some £31 million will be paid under the order.

Your Lordships will be aware that price restraint subsidies were ended over the whole range of nationalised industries by April 1976, and therefore the order stops with the year 1975–76. But this does not mean that we shall ignore the serious financial difficulties of the Northern Ireland energy concerns. Very substantial tariff increases will be required in future, to enable the electricity and gas undertakings to break even, even in the absence of any further assistance. I am sure that such increases, on top of a tariff structure which is already the highest in the United Kingdom, would be highly undesirable. This is why we are currently examining the future financial prospects of the Northern Ireland Electricity Service in the light of both the Shepherd Report, which examined the Service's financial position, and the Economic and Industrial Strategy Review, better known as the Quigley Report.

Meanwhile, a survey of the Northern Ireland gas industry by experts from the British Gas Corporation is currently under way, and when we receive their report, which we hope will be by the end of March, we expect to be better informed about the range of options for the gas industry's future in Northern Ireland. At present, gas prices in Northern Ireland are about three times higher than in Great Britain and are still not at an economic level. Northern Ireland's energy problems stem from a lack of indigenous resources, a high dependence on oil for both electricity generation and gas manufacture and high interest charges. These problems are formidable but the Government are determined to do what they can to lessen them.

Article 4 of the order remedies a defect in existing legislation dealing with the issue of electricity and gas bills based on estimated levels of consumption. Under the present legislation, whenever increased charges are levied they are not to apply until after the inspection of a consumer's meter following the publication of the new rates of charge. This stringent provision has proved unworkable in those areas where it has been difficult—sometimes impossible—to inspect meters. Indeed, the present law in Northern Ireland could be seen as unfair in the sense that it provides a premium to those consumers who are normally not at home when the meter reader calls, or to those who will not co-operate by allowing meters to be read. The estimating of meter readings when access to premises cannot be gained is a normal practice of the electricity and gas industries in the rest of the United Kingdom. There are, therefore, strong grounds for amending Northern Ireland legislation to permit use of an estimate of consumption at a time of increased charges. At the same time, statutory backing is provided for the long-standing practice of charging on an estimate when charges are static. Article 3 also provides that these changes should apply retrospectively. This is necessary because, despite the current statutory provisions, the energy undertakings have in fact been following the accepted practice in the rest of the United Kingdom by issuing accounts based on estimates even when these related to increased charges. My Lords, I beg to move.

Moved, That the Electricity and Gas Undertakings (Financial Provisions) (Northern Ireland) Order 1977, laid before the House on 25th January, be approved.(Lord Melchett).

Lord O'NEILL of the MAINE

My Lords, while welcoming the noble Lord's explanation of the order, I should like to ask whether he thinks it possible that some method could be found by which natural gas could be brought to Northern Ireland. This is where we miss out at the moment, I am afraid. Secondly, how do matters stand about the possibility of having a nuclear power station reactor for the whole of Ireland?


My Lords, on the first point, I am sure that is one of the matters that will be looked at by the experts from the British Gas Corporation who are currently studying the Northern Ireland gas industry. I have not seen their report. I would suggest that it might be best to see what they have to say about the many possibilities which have been canvassed, including the possibility of piping natural gas to Northern Ireland, before I comment on it.

The second question which the noble Lord asked concerned the possibility of a nuclear power station serving the whole of Ireland. I confess that I have not heard that suggested before. However, my understanding is that the power station development at Kilroot is likely to supply the needs of Northern Ireland for the foreseeable future. Therefore, I do not think the problem is lack of capacity but rather the cost of the existing capacity.

On Question, Motion agreed to.