§ Mr. Lofthouseasked the Secretary of State for Energy what effect on the public sector borrowing requiremet will occur as a result of the removal of income from the profits of those parts of the British Gas Corporation which are to be privatised.
§ Mr. John MooreIt is not possible to give a specific answer at this time. The PSBR would benefit not only in the short term from the proceeds of privatisation—which cannot be quantified until that event takes place—but in the longer term by savings in the expenditure BGC would have incurred had it continued to own the assets. The precise size of the potential income stream from the assets to be privatised turns on a number of uncertain variables, including the price of oil.
§ Mr. Hardyasked the Secretary of State for Energy if he will reduce the profit requirement placed on British. Gas to ensure that industrial gas prices are not increased from 1 March 1982; or, if not, by how much he expects such prices to increase from that date.
§ Mr. John MooreI have no plans to change the present financial target for the British Gas Corporation of an average pre-tax return of 3.5 per cent. on average net assets at current cost, which expires on 31 March 1983. Detailed pricing decisions within the overall financial framework set by the Government are a matter for the corporation. British Gas has said that it will apply any increases in industrial contract prices that might be necessary after the present freeze expires on 1 March 1982 in a gradual and phased manner, and taking into account market conditions.