HL Deb 30 June 1980 vol 411 cc111-4

7.28 p.m.

The Earl of GOWRIE

My Lords, I beg to move that this Bill be now read a third time.

Moved, That the Bill be now read 3ª,—(The Earl of Gowrie.)


My Lords, during the Committee stage of this Bill, the matter of energy price disadvantages between the United Kingdom and other countries was questioned by the noble Earl, Lord Gowrie, and I promised to return to this at this stage of the Bill. I did so because I believe that there is an unwillingness on the part of the Government to accept that energy prices generally, and gas prices in particular, in other countries are substantially lower than those in Britain. As I outlined to the House in my previous speech, the price disadvantage to United Kingdom industry, particularly to the paper and board industry, can be completely substantiated, and in many cases the lower energy prices in other countries result entirely from a deliberate policy of subsidisation. This is aimed at enabling these countries to compete more successfully in world markets.

While the noble Earl, Lord Gowrie, says that he understands that other countries will be forced to bring their prices in line eventually, there is no way in which this can happen in the short run, if at all. In the longer term, even if this action is taken, large sections of United Kingdom industry will have been forced to close, resulting partly from the unfair price differentials that I have mentioned.

Unless the Government recognise, and take action on, this and other key issues to which I referred in my earlier presentation to the House, then in my view the industrial base of the United Kingdom economy will slide slowly but surely into the North Sea, from where come our oil and gas resources at the moment. I realise that there is very little chance of the House agreeing to any changes in this Bill now having its Third Reading, but can we please obtain the reassurance of the Government that this Bill, as presented, will not serve to encourage or allow industry to be further discriminated against, either in terms of supply or in terms of price, and that the Government will seek to review the overall policy of energy supply and price to industrial users, and in particular will ensure that energy prices charged to United Kingdom industry are not unnecessarily exploitive and are internationally competitive?


My Lords, I would not wish for one moment to oppose the Third Reading of this Bill. As I said on Second Reading, this is a Bill which has to go through, although in my opinion it is a trivial Bill which, except for the fact that it is necessary to cope with the problems of the Gas Board, does nothing for the gas industry. My noble friend Lord Irving of Dartford has made, I think, some extremely telling points, both at the Committee stage and now, and I hope the Government will not let the matter rest where it is but will in the near future come forward with more clear and positive proposals for the gas industry, which is a very important industry in connection with some of the highly energy-intensive industries in this country. This is going to be vital.

I do not agree with the general attitude of the Government that gas is underpriced. I think the question of underpricing has nothing to do with its relation to the cost of other fuels. Otherwise, you would always say that the most expensive fuel sets the pace for everything else. My Lords, I hope that we shall allow this Bill to be read a third time.

7.32 p.m.

The Earl of GOWRIE

My Lords, I am grateful to both noble Lords for the succinctness with which they have made their points, although I have to say that I do not altogether agree with them. Furthermore, there seems to me to be a contradiction between the position of the noble Lord, Lord Wynne-Jones, who said that this Bill does nothing for the gas industry, and the position of his noble friend Lord Irving, who said that this Bill does nothing, for industry. I think that if the position of the noble Lord, Lord Irving, is right, then the position for the gas industry need not be so bad. But in fact I think the real nub of the issue is not simply finding the dearest energy you can and gearing everything up to it; it is really that it is impossible to consider gas prices logically without reference to prices of oil, the two sources of supply and the two kinds of energy service that they provide being so similar. One fuel can substitute for another in so many cases, and as oil prices have risen sharply over the past year or more so gas prices have followed.

On the point of unfair competition with British industry, which the noble Lord, Lord Irving, with great credit to him, has consistently put in this House on this Bill, while I will concede to him that there are varying degrees of lag between different countries adapting their gas prices to their oil prices, adapt they must, because the revenue loss or conservation loss to the countries concerned will be far too great if they do not. In fact, we are seeing signs all over the Western economies of gas prices coming in line with oil prices.

A significant exception which the noble Lord may have in mind in this context is, as I understand it, the case of some of the Dutch; but, as your Lordships know, the Dutch are much the largest gas suppliers on the continental mainland, and there, I think, the difficulty from their point of view is that they are an honourable nation and they have already signed contracts with price notations in the contracts which they would dearly like to put up but cannot until the contracts come to an end. But I think the noble Lord will find that the contracts will come to an end with sufficient speed for British industry not to be at the price disadvantage that he is so worried about.

I agree with him that at a time when British industry is facing very considerable difficulties generally, we must be constantly vigilant of anything which would put British industry at additonal disadvantage; and I will undertake to the noble Lord to monitor (with him, if he wishes, and in response to anything he cares to ask me) how this price disadvantage may beworking out over the next months and year, because obviously we would be concerned about that.

Finally, I want to emphasise that the Bill does not represent any new departure of pricing policy on the part of the Government. We have already taken action aimed at correcting the present under-pricing in the domestic sector, and I must say to the noble Lord, Lord Wynne-Jones, that in relation to oil prices it is, of course, technically underpricing. So far as the price to the industrial sector is concerned, succeeding Governments have endorsed the British Gas Corporation's policy of charging prices broadly related to those of the competing oil product. My Lords, this Bill merely removes an impediment to the implementation of that policy, and that is why I ask your Lordships to give it a Third Reading.

On Question, Bill read 3ª, and passed.


My Lords, I beg to move that the House do now adjourn during pleasure until 8.30 p.m.

[The Sitting was suspended from 7.36 to 8.30 p.m.]

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