§ Sir Michael McNair-WilsonTo ask the Secretary of State for Northern Ireland if he will make a statement about electricity tariffs in Northern Ireland.
§ Mr. BrookeThe Government have decided to end the tariff subsidy arrangement whereby electricity tariffs in Northern Ireland are linked to the highest in England and Wales. This decision, which will have effect from 1 April, follows a detailed review of existing tariff policy. The review concluded that, on the basis of oil price projections, the tariff link arrangements are no longer appropriate. The review recommended that NIE should, therefore, return to setting its tariffs on the basis of its own costs rather than by reference to the tariffs of area boards in England and Wales. It is clear, moreover, that the privatisation of the140W electricity supply industry in England and Wales and the decision to privatise NIE also have made the link less appropriate.
For the future, NIE's tariffs will have to be based on the economic price of producing and delivering electricity in Northern Ireland. In the year beginning 1 April 1990, a tariff increase of around 8 per cent. on average would, in the Government's view, be consistent with that objective.
I expect to receive within the next week or so NIE's detailed proposals for the different categories of consumer. When agreement is reached on these, NIE will make a full announcement.