§ 3. Dr. Edmund Marshall
asked the Secretary of State for Energy what consultations he has had with the British 503 Gas Corporation about new pricing arrangements for the 5 per cent. of industrial gas customers who consume 85 per cent. of the gas supplied to industry.
§ The Under-Secretary of State for Energy (Mr. Norman Lamont)
My right hon. Friend the Secretary of State and I have had thorough consultations with the British Gas Corporation. Changes in pricing policy to assist large consumers were announced in the Budget.
§ Dr. Marshall
Is the hon. Gentleman aware that major industrial gas consumers, such as the glass and chemical industries, are finding that the gas price plateau announced in the Budget does not apply to their main contracts for interruptible supplies of gas? Will he have further discussions with the BGC to try to extend the plateau to cover such contracts?
§ Mr. Lamont
I shall consider any examples that the hon. Gentleman cares to bring to my attention. We are talking about a plateau for renewal prices. Prices will be 10 per cent. lower than they otherwise would have been, which compares with a gap at the end of the year of 10 to 15 per cent. which the NEDC report identified. That is the extent of the reduction in prices that is being made at a time when prices in other European countries are rising sharply.
§ Mr. Lamont
My hon. Friend is right, but it depends upon the year that one takes. The price of interruptible gas supplies is now well below the price of heavy fuel oil, whereas at times when the Labour Government were in office it was above that price. Industrial gas prices rose by an average of 28 per cent. per annum under the previous Government, compared with an expected increase this year of about 13 per cent.
§ Mr. Rowlands
Is it not a bizarre consequence of the Budget concessions that some of the largest consumers will benefit hardly at all, especially those with interruptible supplies contracts? Will he accept that those who are faced with increases this year should have their prices frozen, in the same way as will those with renewable contracts?
§ Mr. Lamont
As I told the hon. Member for Goole (Dr. Marshall), the measures on interruptible prices will ensure that prices will be 10 per cent. below what they otherwise would be. That is against a background of French prices having risen by 120 per cent. in the past two years. Gaz de France has said that it might have to increase prices by 30 per cent. this year, and prices in Germany might increase by 60 per cent. this year. Against that background, what has been announced is significant.