HL Deb 21 July 1987 vol 488 cc1263-4
Baroness Elliot of Harwood

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 whether they will report on the progress of British Gas in the private sector.

The Earl of Dundee

My Lords. it is not the normal practice of Her Majesty's Government to report on the progress of private sector companies. The Chairman of British Gas, Sir Denis Rooke, made a preliminary announcement of the 1987 results on the 17th June. He reported profits of £1,293 million before tax on an historic cost basis and announced a 4.5 per cent tariff reduction, with both rates per therm and standing charges being reduced. British Gas's report and accounts will be sent to shareholders, currently numbering some 3 million, later this month.

Baroness Elliot of Harwood

My Lords, I thank the noble Earl very much for that excellent reply. I have been requested to ask whether the changes in gas prices could possibly be altered more consistently, as they change too often and it is difficult for horticulturists. Is that possible?

The Earl of Dundee

My Lords, every effort will be made to ensure that gas prices are stable. Your Lordships will be aware of the regulatory system which is now in force and which is monitored by Ofgas in order to make sure that price increases are always less than inflation.

Lord Mulley

My Lords, is not one of the problems of privatising essential utilities that this House and Parliament generally lose any influence and control over their affairs?

The Earl of Dundee

My Lords, this House continues to have an influence, as naturally does the other place, over our affairs; but now the decision has been taken to put British Gas in the private sector it is obviously up to British Gas itself to manage its own affairs.

Lord Boyd-Carpenter

My Lords, will my noble friend pass on the excellent example of British Gas in reducing prices after privatisation to those companies or organisations still remaining in the public sector?

The Earl of Dundee

Yes, indeed, my Lords, I shall pass on my noble friend's remarks.

Lord Stoddart of Swindon

My Lords, is the noble Earl aware that we believe that he has set a desirable precedent today in answering and apparently taking ministerial responsibility for a private industry? Can he also say whether the reduction of 4½ per cent. in gas tariffs is not rather mean, bearing in mind that oil prices have fallen by 16p over the last couple of years? Is British Gas not giving more attention to shareholders' interests than consumers' interests?

The Earl of Dundee

No, my Lords, I would not agree with that. I think that the consumers' interests are the interests which are mainly taken into account. I very much welcome the recent 4.5 per cent. cut in tariffs. The reduction passes on to tariff customers the lower gas purchase prices now forecast by British Gas, as well as efficiency gains, and this is of course required by the new regulatory system whose operation is monitored by Ofgas.

Lord Campbell of Alloway

My Lords, will my noble friend the Minister accept that he is not answering for private industry but is answering a Question in your Lordships' House?

The Earl of Dundee

My Lords, I entirely agree with my noble friend.

Lord Ezra

My Lords, may I ask the noble Earl whether the Government have received complaints from certain industrial consumers about the pricing and contract policies pursued by British Gas in view of its strong market position, and, if so, what they propose to do about it?

The Earl of Dundee

My Lords, I think perhaps that is another Question.

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