HL Deb 27 July 1977 vol 386 cc971-3

2.51 p.m.

The Earl of ONSLOW

My 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 whether they are pressing ICI to increase the price of its fertilisers and, if so, how they reconcile this with fighting inflation and with Food From Our Own Resources (Cmnd. 6020).

Lord WINTERBOTTOM

My Lords, Her Majesty's Government are consulting interested parties about the arrangements that might restore all firms in the fertiliser manufacturing industry to a competitive footing.

The Earl of ONSLOW

My Lords, am I correct in saying that, in other words, the Government are encouraging ICI to increase its prices for nitrate fertilisers?

Lord WINTERBOTTOM

My Lords, I do not know what is going on in these commercially confidential discussions, but it is hoped that arrangements might restore all firms in the fertiliser manufacturing industry to a competitive footing.

The Earl of ONSLOW

My Lords, could the noble Lord then say what is not competitive at the moment? Is it that ICI can sell its nitrate fertilisers at £65 per ton ex-farm gate while others cannot, and that therefore by restoring the competitive position the Government are trying to use the wartime fertiliser regulations to increase the price of fertilisers? Can this possibly be correct?

Lord WINTERBOTTOM

My Lords, the noble Earl has touched upon a complicated subject. ICI accounts for 80 per cent. of the ammonia produced in the United Kingdom, and it has a very favourable long-term contract with the British Gas Corporation for the supply of gas which only expires in 1984. Perhaps the arrangements made between ICI and the British Gas Corporation are causing some imbalance in the industry at the moment.

The Earl of ONSLOW

My Lords, in other words, am I correct in saying that the Government are penalising ICI for having had the foresight to make a good, long-term contract with British Gas, and that those who did not have such foresight will be subsidised by the British farming industry which, as we know, is not allowed to increase prices in order to keep pace with inflation?

Lord WINTERBOTTOM

My Lords, this is a very complicated economic subject. All one can say is that at the end of the day it is the housewife who pays. She pays either more for her gas or more for her food. If, therefore, one increases the price of gas, this is what happens.

Lord SANDYS

My Lords, will the noble Lord draw the attention of his right honourable friend to the matters which have been raised by my noble friend Lord Onslow and, in addition, draw his attention to the article which appeared in the Economist to which the noble Earl has drawn attention?

Lord WINTERBOTTOM

Yes, my Lords, I will do that.