HC Deb 15 March 1989 vol 149 cc271-4W
Mr. Michael Brown

To ask the Chancellor of the Duchy of Lancaster, pursuant to his answer of 1 March, Official Report, column 190, if he has estimated how long it will be before effective competition is introduced into the gas supply market in the United Kingdom.

Mr. Atkins

[holding answer 14 March 1989]: Implementation of the Monopolies and Mergers Commission's recommendations will encourage the development of competition in gas supply. In addition the MMC recommended that, towards the end of the five years initial period for the price schedule, the Director General should review its continued appropriateness taking into account the extent to which effective competition has by then emerged, or is likely to emerge, in the supply of gas in the United Kingdom.

Mr. Michael Brown

To ask the Chancellor of the Duchy of Lancaster, pursuant to his answer of 1 March,Official Report, column 190, if he will make a statement about the effect that the action taken, following the publication of the Monopolies and Mergers Commission report on gas prices, will have in the short and medium term upon the overall price of firm gas charged by British Gas to large industrial consumers.

Mr. Atkins

[holding answer 14 March 1989]: It will lead to similar customers being charged at the same rate In the short term, this may mean a reduction in price for some, an increase in price for others. In the medium term, there should be a reduction in the average price paid.

Mr. Michael Brown

To ask the Chancellor of the Duchy of Lancaster what information he has as to which markets large industrial users of firm gas operate in(a) Europe and (b) the world, other than the United Kingdom.

Mr. Atkins

[holding answer 14 March 1989]: I do not have information on export markets categorised according to their suppliers' energy use.

Mr. Michael Brown

To ask the Chancellor of the Duchy of Lancaster if he accepts the conclusion of the Monopolies and Mergers Commission that high United Kingdom gas prices are a cause for real concern, Cm. 500, paragraph 8.24; and if he will make a statement.

Mr. Atkins

[holding answer 14 March 1989]: We have made clear that we accept the conclusion of the Monopolies and Mergers Commission that British Gas's pricing policy has operated against the public interest in various ways including higher charges for those customers less well-placed to use alternative fuels or to obtain alternative fuels on favourable terms. Therefore we have acted on the MMC's recommendation on British Gas's pricing and contract policies in the supply of gas to large users.

Mr. Michael Brown

To ask the Chancellor of the Duchy of Lancaster (1) if he will make a statement about the conclusion of the Monopolies and Mergers Commission, Cm. 500, paragraph 8.23, that British Gas prices for firm gas are up to 80 per cent. higher than elsewhere in the European Community; and in what way the action taken will remove such a price differential in the short or medium term;

(2) if he will make a statement about the conclusion of the Monopolies and Mergers Commission that since the latter part of 1985 prices for fine gas have fallen by 12 per cent. in the United Kingdom compared to between 30 per cent. and 48 per cent. in other European Community countries, Cm. 500, paragraph 8.22; and in what way the action taken will prevent such price reduction differential reccurring in the short or medium term.

Mr. Atkins

[holding answer 14 March 1989]: The Secretary of State welcomed the report by the Monopolies and Mergers Commission and initiated action to implement its specific recommendations on pricing and contract conditions. These will bring transparency to gas prices for large users in the United Kingdom and thus encourage the development of competition in gas supply. With regard to other European Community countries, the European Commission is proposing legal action to require greater transparency in energy pricing, particularly for large industrial users.

Mr. Michael Brown

To ask the Chancellor of the Duchy of Lancaster, pursuant to his answer of 1 March,Official Report, column 190, what information he has as to whether British Gas supplies firm gas to large industrial consumers in the United Kingdom on terms which are more or less favourable than those available to similar consumers in the other main gas consuming countries of the European Economic Community; and if he will make a statement about the effect that the action taken will have in the short and medium term upon such terms.

Mr. Atkins

[holding answer 14 March 1989]: I refer my hon. Friend to tables 4 to 6 of the OFGAS study "The EEC Industrial Gas Market". The immediate effect of the action taken will be to ensure the same price for large users with similar consumption in the United Kingdom as is the case in most of the main gas consuming countries of the European Community. In the medium term, there should be a reduction in the average price paid by large users in the United Kingdom.

Mr. Michael Brown

To ask the Chancellor of the Duchy of Lancaster, (1) pursuant to his answer of 1 March,Official Report, column 190, what information he has as to whether British Gas pricing policies in relation to firm gas have distorted competition since the latter part of 1985 between major industrial consumers in the United Kingdom on the one hand and those operating in the other main gas consuming countries of the European Economic Community on the other hand; and with what effect;

(2) whether he has received any evidence that the difference in price for firm gas between the United Kingdom and the other main gas consuming countries of the European Economic Community has had an adverse effect on the competitiveness of United Kingdom companies; and if he will make a statement.

Mr. Atkins

[holding answer 14 March 1989]: I refer my hon. Friend to the results of the survey of British Gas contract customers given in appendix 5.2 of the Monopolies and Mergers Commission's report on Gas (CM 500).