British Gas Corporation

Oral Answers to Questions — Energy – in the House of Commons at 12:00 am on 11th February 1980.

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Photo of Mr Chris Patten Mr Chris Patten , Bath 12:00 am, 11th February 1980

asked the Secretary of State for Energy when he plans next to meet the chairman of the British Gas Corporation.

Photo of Mr Ron Leighton Mr Ron Leighton , Newham North East

asked the Secretary of State for Energy when next he will meet the chairman of the British Gas Corporation.

Photo of Mr Alfred Dubs Mr Alfred Dubs , Wandsworth Battersea South

asked the Secretary of State for Energy when last he met the chairman of the British Gas Corporation.

Photo of Barry Sheerman Barry Sheerman , Huddersfield East

asked the Secretary of State for Energy when next he plans to meet the chairman of the British Gas Corporation.

Photo of Mr David Howell Mr David Howell , Guildford

I meet the chairman of the British Gas Corporation regularly and whenever necessary.

Photo of Mr Chris Patten Mr Chris Patten , Bath

When he next meets the chairman, will my right hon. Friend be in a position to report substantial progress on working out the details of the fuel allowances scheme to which he referred two weeks ago? When can we expect that scheme to see the light of day?

Photo of Mr David Howell Mr David Howell , Guildford

The details of schemes for additional help are primarily for my right hon. Friend the Secretary of State for Social Services. I told the House that not only will increases be taken into account in next November's up ratings of pensions and supplementary benefit heating additions and family income supplement, but that the Government are reviewing the whole range of help available. I told the House also that proposals will be announced in good time to allow people to plan how they can manage next winter—it is the impact next winter with which we are concerned—and that is still the position.

Photo of Mr Ron Leighton Mr Ron Leighton , Newham North East

When the Minister next meets the chairman to discuss gas prices, will he bear in mind that there has been a startling increase in the number of applications to the social services committee of the London borough of Newham for help with fuel bills, and I have received a letter from the chief executive telling me that the committee has already spent more in the first seven months of the current year than it did in the whole of last year? Will the right hon. Gentleman take it that many people, especially the elderly, the frail and the housebound, are frightened to put on their heating systems, and that there is real fear of deaths from hypothermia as a result?

Photo of Mr David Howell Mr David Howell , Guildford

It is recognised that there are these serious worries. The price increases which we have been discussing affect next winter, but as regards this winter it was recognised last October that for a limited number of people much more help was desirable. That is why the scheme which my right hon. Friend proposed, although that was admittedly for a more limited range of people, made increased allowances available, in some cases up to seven times the average available under the previous Government's electricity discount scheme. I know that the discount scheme was put forward with good motives, but I think that it is recognised by all concerned, including the consumer councils and the fuel poverty groups, that it was not effective and not satisfactory, and my right hon. Friend's scheme provides a far better basis in social policy for developing the right kind of help.

Photo of Mr Alfred Dubs Mr Alfred Dubs , Wandsworth Battersea South

When the Secretary of State next meets the chairman, will he make clear whether responsibility for future pricing policy lies with the British Gas Corporation or with the Government?

Photo of Mr David Howell Mr David Howell , Guildford

The question of deciding tariffs lies with the nationalised industry corporations. The Government are required to set financial targets, ideally for three years. The previous Government stated in a White Paper that the targets should be set for a three-year period, but when it came to the point they did not face up to it and set the target for one year. The Government have set the targets, which have pricing implications, for three years. Detailed tariffs are a matter for the corporation.

Photo of Patrick Cormack Patrick Cormack , Staffordshire South West

When my right hon. Friend next sees the chairman, will he discuss the possibility of an inverse tariff for domestic users, which would have the double effect of making cheaper the essential therms which are used by old people and other needy people, and encouraging energy conservation?

Photo of Mr David Howell Mr David Howell , Guildford

That idea has been put forward over the years. It was looked at closely in 1976 and in 1978 by the previous Government, and we have looked at it again recently, as have the nationalised industries consumer councils. In all cases the conclusion is that although inverted tariffs would help some poor small consumers, some poor but large consumers of energy would be grievously hurt by such an inversion—wherever the line was drawn. The natural instinct is to try to look for ways in which any pattern of tariffs will meet the problem, but the idea of inverted tariffs, while it might help some people, will certainly hurt others, who might be very poor.

Photo of Mr Mike Thomas Mr Mike Thomas , Newcastle upon Tyne East

Is the right hon. Gentleman suggesting that Sir Dennis Rooke and his colleagues asked the Minister to raise the price of gas? Was it a policy forced upon him by them?

Photo of Mr David Howell Mr David Howell , Guildford

I have made clear that the BGC shares the objective of moving towards economic energy pricing.

Photo of Mr Mike Thomas Mr Mike Thomas , Newcastle upon Tyne East

Did it want it? Did it ask for that?

Photo of Mr David Howell Mr David Howell , Guildford

The British Gas Corporation agreed that for the present year an increase of the order proposed was necessary, and it agreed to implement that increase. It believed that for the years thereafter the objective was right, but said that it wished to go slower than the two-year proposals in the financial target. I have set that out. I have also set out the Government's reasons for differing from the BGC about the later two years, which lie primarily in the area of the need to conserve energy in the dangerous world situation, which it would be utterly irresponsible for any Government to ignore in the move towards a more market-related price structure.

Photo of Mr David Trippier Mr David Trippier , Rossendale

Will my right hon. Friend tell the House how many industrial projects have been held up as a result of the high demand from domestic users of gas?

Photo of Mr David Howell Mr David Howell , Guildford

I cannot give a precise number, but 4,000 industrial customers are now waiting for gas and cannot get it. To some degree that must be related to the supply of and the demand for gas. It is also related to the conditions under which the British Gas Corporation is required to supply to the domestic consumer on a statutory basis. Nevertheless, we face today something akin to mass rationing. We inherited that problem, but to have to apply gas rationing in an island with such extensive gas resources seems to require the sort of genius that belongs to the Labour Party.

Photo of Mr Allen McKay Mr Allen McKay , Penistone

When the right hon. Gentleman next meets the chairman of the British Gas Corporation, will he take up the problems of gas supply in rural areas? Will he ask the chairman to use some of the surplus profit to carry the supply into such rural areas as my constituency?

Photo of Mr David Howell Mr David Howell , Guildford

The first problem facing the gas corporation is to connect up the enormous backlog of customers who cannot get gas, and then to cope with the continuing numbers of new customers—now running at about 300,000 each year. The chairman has a major problem of supply to deal with, and he must overcome rationing and interruption. Those must be his priorities.

Photo of Mr Michael Colvin Mr Michael Colvin , Bristol North West

In view of the pending increase in the price of gas, there is likely to be a greater demand for solid fuels. Is my right hon. Friend aware that distributors in the Bristol area are already expressing concern about supplies of solid fuel, particularly for domestic use? Is he entirely happy about the National Coal Board's distribution policy? Will he investigate that policy and make sure that there is sufficient solid fuel available for domestic purposes when the price of gas goes up? Will he make a statement in due course?

Photo of Mr David Howell Mr David Howell , Guildford

Distribution is a matter for the chairman of the National Coal Board. I shall look into the point that my hon. Friend raises and write to him.

Photo of Dr David Owen Dr David Owen , Plymouth, Devonport

If we are to move to economic energy pricing, it is vital that the Department of Energy does not absolve itself from the responsibility for gas consumers—whether they are poor, in rural areas or in domestic or industrial areas. Will the right hon. Gentleman make it clear to the House that he accepts that the moneys now being received by some of the energy industries as a result of a pricing policy which is influenced by OPEC will be available to consumers of energy, both in terms of generous schemes for helping the poor and in generous schemes to increase conservation?

Photo of Mr David Howell Mr David Howell , Guildford

The Government have made clear that they believe in developing effective social policies. It is through social policies that the consequences of fuel hardship should be met. That applies as much to those in hardship through supply or consumption of fuel as to those in hardship on the conservation side.

As to the availability of moneys, the right hon. Gentleman should not overlook the gigantic investments in the energy industries, some through the Exchequer and some through public funds. Britain is Europe's leading energy producer and one of the largest energy investors. That is the Government's policy. We believe that it is the right policy to meet the energy crises ahead.

Photo of Mr George Thomas Mr George Thomas , Cardiff West

I shall allow a minute extra on each of the groups of questions to be answered later.