§ Mr. Foulkesasked the Secretary of State for Energy if he will publish in the Official Report a table showing for the British Gas Corporation, the Central Electricity Generating Board, the area electricity boards, the North of Scotland Hydro-Electric Board and the South of Scotland Electricity Board (a) the estimated cost of the concessions to industrial users introduced (i) in the summer of 1981 after the publication of the National Economic Development Council's task force report and (ii) in the 1982 Budget (b) any consequential changes in external financing limits for 1981–82 and 1982–83 (c) any consequential adjustment to financial targets and (d) any compensation paid or proposed to be paid from central Government funds in respect of these requirements made upon each board to offset the costs borne by them.
§ Mr. MellorA full reply to the hon. Member's question does not lend itself easily to a tabular format.
The freeze of industrial gas contract renewal terms announced in the 1981 Budget cost the British Gas Corporation £73 million in lost revenue. The freeze on industrial contract prices, after the first 25,000 therms taken in the contract year which are on tariff terms, announced in this year's Budget is estimated to cost £61 million. The corporation is being compensated for the effects of both freezes by a reduction in the rate of the gas levy in 1982–83 from 5p per therm to 4p per therm, which will reduce its costs by about £140 million in the financial year 1982–83. The corporation's external financing limit for 1981–82, which was on a pre-levy basis at the time, was increased by £73 million from minus £390 million to minus £317 million in respect of the 1981 freeze.
There was no need to adjust the corporation's 1982–83 EFL in respect of the 1982 freeze as it is on a post-levy basis. However, because the compensating reduction in the levy for the 1981 freeze is also being made in the financial year 1982–83, it was necessary to reduce the corporation's 1982–83 EFL by £73 million from minus £2 million to minus £75 million. The net result of these changes is to leave British Gas' profits over the period of the present financial target unaffected by the direct impact of the two freezes. There was therefore no need to make any changes to the corporation's financial target.
6WThe estimated loss of revenue to the electricity supply industry arising from the electricity pricing measures announced in the 1981 Budget was £45 million. The further measures which were announced in this year's Budget are estimated to result in a loss of revenue of £71 million to the Central Electricity Generating Board and £16 million to the area electricity boards in England and Wales. The external financing limits for the electricity supply industry in England and Wales were consequently adjusted by £45 million from minus £210 million to minus £165 million in 1981–82 and by £87 million from minus £319 million to minus £232 million in 1982–83. The Government is currently discussing with the Electricity Council the implications of these measures for the industry's financial target. No compensation is to be paid from central Government funds.
The electricity industry in Scotland is a matter for my right hon. Friend the Secretary of State for Scotland.