HL Deb 19 December 1984 vol 458 cc644-6

2.49 p.m.

Lord Bruce-Gardyne

My Lords, I beg leave to ask the first Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what information they have received from the British Gas Corporation regarding the price at which they propose to purchase gas from the Sleipner field; and what plans they have to enable United Kingdom North Sea licence-holders to export gas.

Viscount Long

My Lords, the Sleipner project is still under negotiation and the proposed terms remain commercially confidential. The question of gas exports is one for consideration if our known gas resources increase significantly relative to home demand.

Lord Bruce-Gardyne

My Lords, I am very grateful to my noble friend for that Answer. Will he bear in mind in considering the whole project that in the eyes of some of us Sir Denis Rooke, the chairman of the British Gas Corporation, is an over-mighty subject who badly needs watching? Will my noble freind bear in mind that the last deal that the British Gas Corporation concluded on the Frigg Field resulted in forcing successive British Governments to charge a tax rate on diesel and heavy oil fuels vastly out of comparison with that which is charged throughout the rest of the Community? Is this not an example of the folly of allowing this corporation to go its own wild way? Will my noble friend not agree that so long as it becomes apparent to the markets that British Gas is prepared to offer the Norwegians 34p a therm for gas for which they are only prepared to pay 23p a therm on comparable terms to North Sea gas licensees, it must call into question the whole logic and sense of any such deal?

Viscount Long

My Lords, I am grateful to my noble friend for his supplementary question, but I think that the British Gas Corporation does an extremely good job anyway. As my noble friend is discussing the price, and as at this moment of time I must be very careful because negotiations are at a very sensitive stage and will continue for a few months yet, I can assure my noble friend that the price of Sleipner gas relative to United Kingdom Continental Shelf supplies is one of the factors which the Government will have to consider in coming to a decision on Sleipner. In addition, in another place my right honourable friend the Secretary of State is keeping a watchful eye on negotiations that are taking place. Furthermore, as regards exports, the British Gas Corporation no longer has the monopoly; other companies can export gas if they wish.

Lord Stoddart of Swindon

My Lords, will the noble Viscount agree that Sir Denis Rooke is a fine and dedicated public servant, and furthermore that the British Gas Corporation is one of the most successful nationalised industries that we have, making great profits for the Exchequer at the present time? With regard to the Sleipner field, will the noble Viscount agree that supplies to Great Britain will be no more than adequate even with supplies from Sleipner? If we do not get those supplies, it may very well be that the British Gas Corporation will be unable to plan its long-term markets.

On the second point about exports, will the noble Viscount confirm that if gas exports are allowed this would raise United Kingdom gas prices to international levels, which are roughly 40 per cent. above the present United Kingdom levels, and that this would hit not only domestic consumers but also industrial and commercial consumers, thus putting up production costs and injuring their competitive position in the world markets? Is not that the fact about exports?

Viscount Long

My Lords, I am grateful to the noble Lord for paying tribute to the chairman of the British Gas Corporation. Indeed, he has worked very hard and it is a very technical area. As I have already said, the British Gas Corporation is doing a very fine job. Perhaps I might go one step further and say that the British Gas Corporation proposes to import gas from the Norwegian Sleipner field at a cost in excess of £20 billion. But as we are looking to the latter part of this century, the negotiations will not apply to the present but to the future.

The noble Lord also asked about gas exports and the price to consumers. As the noble Lord knows, the price to the consumer and in the international world fluctuates, so I cannot give him a great deal of information on the prices of gas.

Lord Bruce-Gardyne

My Lords, perhaps I may press my noble friend to go one stage further on the matter of exports. Is not the fact of the matter that under existing rules British North Sea licensees are obliged to land all gas from the North Sea in the United Kingdom and therefore it is totally uneconomic to export it to third customers and hence the British Gas Corporation, which does this marvellous job as a monopoly purchaser for a commodity for which, effectively by law, there is no other customer? Therefore, can my noble friend assure the House, first, that there is good news to the effect that this deal is on the point of abandonment; and, secondly, that if by any chance it were to go through, the restrictions obliging the North Sea licensees to land their gas on the coast of the United Kingdom would also be lifted?

Viscount Long

My Lords, yes, they are allowed to bring the gas to the United Kingdom coast.

Lord Leatherland

My Lords, will the noble Viscount stop his Back-Benchers from praising nationalised industries?.