§ 3.22 p.m.
§ Lord Dean of BeswickMy Lords, I beg leave to ask the Question standing in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government what is their attitude towards the proposal by the Central Electricity Generating Board to reduce the electricity bills of energy-intensive firms.
§ The Minister of State, Scottish Office (Lord Gray of Contin)My Lords, discussions between the electricity supply industry and the National Coal Board on the proposed scheme to supply electricity more cheaply to very large industrial users are continuing. The Government's attitude towards the scheme cannot be formulated until the discussions have been completed.
§ Lord Dean of BeswickMy Lords, I am grateful to the Minister for that reply, but is he aware that there is an increasing danger of manufacturers who are big users of electricity moving their future activities abroad? Will he use his good offices, if possible, to speed up the process with a positive answer?
§ Lord Gray of ContinMy Lords, I appreciate the concern expressed by the noble Lord. I can tell him that the Secretary of State for Energy is in touch with the bodies on the progress of the discussions. Although the department is not directly involved in the 1163 discussions, the Secretary of State has made his interest known. We trust that they will not be too long in coming to a conclusion.
§ Lord MulleyMy Lords, does the noble Lord's Answer imply that the responsibility for electricity's finances is being transferred from the electricity councils and the regional boards to the generating board? Although I endorse my noble friend's contention about a reduction, I think that it would be wrong for the supply industry to be the body coming forward with financial and tariff proposals.
§ Lord Gray of ContinMy Lords, I think my Answer made it clear that at present the NCB and the CEGB are in consultation as to how they might achieve a system whereby heavy industrial users—and I emphasise that it is very large industrial users—may be able to obtain their power supplies more cheaply.
§ Viscount HanworthMy Lords, does the noble Lord recall that the Invergordon aluminium smelter which was sited on purpose near cheap hydro-electric power (or so it was thought) had to be closed because the tariff was the same whether it had local hydro-electric power or not? Does he not agree that there is a strong case for considering that sort of thing?
§ Lord Gray of ContinMy Lords, I am well aware of the circumstances surrounding the closure of the Invergordon smelter. Indeed, it was in my former constituency and I was very involved in the discussion that took place. But the situation there was slightly different in that the company entered into a complex and complicated agreement at the outset. It was all tied up with power stations which at the time were not built. In effect, it was the Hunterston power station. The point that the noble Lord has raised is not directly relevant to the Question, but the talks are taking place so that large industrial users may plan ahead and, one hopes, obtain electricity at a cheaper rate because of the high volume that they use.
§ Lord Stoddart of SwindonMy Lords, can the noble Lord confirm that there is a danger that certain large users will take their manufacturing capacity out of the country and move to where they can get cheaper electricity unless there is some arrangement in this country? Can he also confirm that if there is an agreement between the NCB and the CEGB the Government will put no obstruction in the way?
§ Lord Gray of ContinMy Lords, I think I have made it clear that the Secretary of State for Energy is keeping close contact with the two bodies concerned in the talks. They will be well aware of his view during their discussions. The definitive position of the Government cannot be established until an agreement is reached and we are made aware of it. Electricity prices generally in this country compare well with those elsewhere in Europe, except in France, where the consumer benefits very much from low-cost nuclear generation. However, large industrial users, particularly those with high load factors or those not able to join the electricity industry's consumer contracted load scheme, continue to pay more for their electricity 1164 than their counterparts in Western Europe. For that reason, discussions between the NCB and the CEGB are taking place. I am sure that we all wish the talks success in order that what the noble Lord fears about large industrial users moving from this country may not happen.
§ Lord Sefton of GarstonMy Lords, can the noble Lord assure the House that if, in order to give preferential prices to heavy users, the electricity industry cannot easily get the money needed, the cost will not be passed on to domestic consumers, and that if any subsidy is required, it will be met by central Government?
§ Lord Gray of ContinMy Lords, I can give no such assurance, but I am sure that that point is very much in the minds of those negotiating on behalf of the NCB and the CEGB.
§ Lord Sefton of GarstonMy Lords, will the noble Lord ensure that the House receives a report as to how any money is found by the CEGB if it sets this privileged price?
§ Lord Gray of ContinMy Lords, I am afraid that it is not within my power to give the noble Lord such an assurance.