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Electricity Supply Industry (Subsidy)

Volume 887: debated on Monday 24 February 1975

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asked the Secretary of State for Energy what he now expects to be the total subsidy, including interest due but forgone, to the electricity supply industry for 1975.

The amount of compensation for price restraint in the next financial year will depend mainly on the amount of the next electricity price increases, which are now under consideration.

Why will not the hon. Gentleman answer the Question on the Order Paper in terms of figures? How many hundreds of millions of pounds is it? Will he please come properly briefed to this House?—[Interruption.] The hon. Gentleman has not made any attempt to answer the Question.

Will the Under-Secretary explain the justification for paying heavy subsidies in respect of the use and consumption of the fuel oil part of a barrel of crude at the same time as he is imposing swingeing taxation on the lighter fraction of petrol? What is the point of that?

The hon. Gentleman, rather characteristically, is assuming certain things. He should not do so. The deficit is expected to be about £300 million, but the amount of compensation has not yet been determined. The hon. Gentleman must be aware that my right hon. Friend the Chancellor of the Exchequer mentioned pricing policies in his last Budget speech. It is not unknown to the House. If the hon. Gentleman will put down a Question on the other matters to which he referred, I shall be happy to answer it.

Does my hon. Friend agree that these so-called subsidies—in fact, price stabilisation payments—were not asked for by the electricity supply industry, were not wanted by the trade unions in the industry, and were introduced by the previous administration?

My hon. Friend is correct. The unions bitterly resented the policy pursued by the last administration. It is a bit hard now to have complaints by hon. Gentlemen opposite because this Government operate pricing policies in this matter.

It has been widely assumed in the Press that there will be an electricity price rise of 37½ per cent. Will the Minister now answer the Question put by my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) as to where that will leave the electricity industry in the next financial year?

The right hon. Gentleman is aware that the increase was referred to the Prime Commission. My right hon. Friend the Chancellor of the Exchequer mentioned getting back to proper pricing policies, but said that we could not get back to them because of the legacy and the inheritance, for which the right hon. Gentleman had some departmental responsibility. We cannot do everything at one time. We have made a policy decision and we are implementing it.