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1. Mr. Ground : To ask the Secretary of State for Energy when he last met the chairmen of the regional electricity companies to discuss levels of disconnection for debt.
The Parliamentary Under-Secretary of State for Energy (Mr. David Heathcoat-Amory) : I am delighted that the number of disconnections for debt has continued to fall. In 1991, the figure for England and Wales was less than a third of what it was 10 years ago.
Mr. Ground : I thank my hon. Friend for that answer. Is it right to see in the big reduction in disconnections signs of a different attitude on the part of the electricity companies to their customers and signs of better management since the companies were privatised, and is there scope for further improvement in this respect?
Mr. Heathcoat-Amory : Yes, the sharpest reduction in disconnections for debt has occurred since the companies were put into the private sector. I believe that they are now closer to their customers and more able to cater for the needs of their customers, including those who fall behind with their payments. I look forward to further reductions in unnecessary disconnections and I know that that is also the desire of the independent electricity regulator.
Mr. Harry Barnes : The reason why there are fewer disconnections is that the electricity companies have introduced card meters, so that people cut themselves off rather than having to be cut off by the electricity companies. Moreover, there is an absence of facilities for obtaining cards for the meters, so that many people who have to use them have to spend a considerable amount of money on travelling to get hold of cards. As the meters are now in operation, will the Minister take action to ensure that dispenser facilities are more widely available?
Mr. Heathcoat-Amory : The installation of pre-payment meters is one reason why the number of disconnections has fallen, but more important is the fact that the regional electricity companies, under the terms of their licence, have to approve a code of conduct with the Office of Electricity Regulation and must offer customers who are in genuine difficulties a payment plan so that debt can be paid off over a period. If customers agree a payment plan, they will not be disconnected. That is a very much better arrangement than that which pertained more than 10 years ago, when a
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state-controlled monopoly was only too ready to disconnect customers without agreeing such arrangements.Mr. Dobson : What are the prospects of disconnection for industrial customers in the coming year if they cannot afford to pay the exorbitant increases that the electricity companies are seeking from them? For instance, Fields Packaging of Bradford has been asked to pay 30 per cent. more, and Ibstock Brick in Leicestershire has been asked to pay between 20 and 30 per cent. more. How can the Minister or the companies justify increases of five to seven times the rate of inflation?
Mr. Heathcoat-Amory : We are anxious that all industrial customers should have access to competitively priced electricity and I am pleased to say that an independent survey showed that in the first year after privatisation three quarters of those customers experienced at least a 10 per cent. reduction in their bills. Any subsequent increases should be seen in that context. Moreover, it should be an embarrassment to the hon. Gentlemen to be reminded that under the last Labour Government prices for domestic customers rose by 22 per cent. in real terms. That was a scandalous neglect of the interests of those customers and it will not be repeated under this Government.
3. Mr. Alan W. Williams : To ask the Secretary of State for Energy if he will make a statement on the discussions taking place in the European Community about setting an EC-wide reference price for the cost of coal.
The Secretary of State for Energy (Mr. John Wakeham) : No, Sir, because there are no such discussions. The Commission has made it clear that it has no proposals for guide prices on coal contracts or for Community subsidies for coal production. Its ideas on "reference prices" are aimed at reducing the amounts of aid for coal production that member states may give to their industries.
Mr. Williams : Will the Minister confirm that, at about £42 a tonne, the average price of British coal is well below that of west German coal?
Dr. Kim Howells : Which costs two or three times as much.
Mr. Williams : That is right--two or three times as much. As Europe moves to become a single market, does it make any sense that Britain should be closing coal mines which are producing coal far cheaper than those in west Germany? Why are the Government so intent on destroying the industry through imports, through the dash for gas, and through their privatisation proposals? Would it not make more sense to have a moratorium on pit closures in the interests of jobs, the balance of payments and European energy conservation?
Mr. Wakeham : I agree with the hon. Gentleman that British coal is the cheapest in western Europe, but it is certainly not cheaper than coal from the United States or Australia and it is still uncompetitive in world terms. However, the next coal contracts will be at competitive rates and I believe that they will be satisfactory for British Coal.
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Sir John Hannam : Does my right hon. Friend agree that such a proposal about coal imports would be in direct conflict with the objectives of GATT and of free trade and would also result in the removal of the need for competitiveness in British Coal, which would work to the disadvantage of the consumer?Mr. Wakeham : I agree with my hon. Friend. I do not believe that those questions have been properly thought through. There are questions about our international obligations to GATT and to the Community. There are also implications for the steel industry and, as my hon. Friend pointed out, there are implications for electricity consumers. It is not in the long-term interests of the British coal industry not to become efficient and competitive.
Mr. Redmond : If the Secretary of State wishes to be believed at the Dispatch Box, he must honour what he says at the Dispatch Box. During the last Energy Question Time, more than a fortnight ago, he promised to write to me but he has failed to do so. If he makes statements from the Dispatch Box, he should be a man of honour and honour his promises.
Mr. Wakeham : I have to say that I have no idea what the hon. Gentleman is talking about.
Mr. Gerald Howarth : Does my right hon. Friend agree that the interests of my coal mining constituents would best be served by long-term contracts with the generators, which the British coal industry is well placed to secure and which the generators should welcome, and not by market rigging by Labour politicians posing as experts?
Mr. Wakeham : I agree with my hon. Friend. British Coal is in a position to sign long-term contracts with the generators, which will be very much in the interests of British Coal and the electricity consumers.
Mr. Barron : If the Secretary of State regards protecting the British coal industry and, therefore, the nation from the fluctuation in world prices as rigging the market, will he explain why he has done exactly that by rigging the market for nuclear electricity in this country?
Mr. Wakeham : The arguments for nuclear electricity were different-- [Interruption.] Oh, yes. We argued, rightly, that we believed in a diversity of supply and we wanted to ensure that that diversity of supply was available. We believe that British Coal can achieve a significant share of the coal market for generation in the new contracts which begin in 1993, and we believe that it will be able to achieve that at competitive prices.
4. Mr. Hague : To ask the Secretary of State for Energy what is his estimate of the current level of unleaded petrol sales in the United Kingdom ; and what comparable figures he has for EC member states.
The Parliamentary Under-Secretary of State for Energy (Mr. Colin Moynihan) : Unleaded petrol sales in the United Kingdom currently account for nearly 44 per cent. of all petrol sales. The United Kingdom Petroleum Industry Association estimates that in 1990 the market share of unleaded petrol in other European Community countries was as follows : unified Germany 71 per cent., Denmark 58 per cent., Netherlands 49 per cent., Luxembourg 32 per
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cent., Belgium 27 per cent., Eire 20 per cent., France 14 per cent., Italy 5 per cent., Greece 3 per cent., Spain 1 per cent., Portugal 1 per cent. The comparable United Kingdom figure for this period was 34 per cent.Mr. Hague : Does my hon. Friend agree that those figures reflect a sharp improvement in this country over the past few years and scope for some of our Community partners to do more to encourage unleaded petrol sales? Does my hon. Friend expect that unleaded petrol sales in Scotland would improve if the petroleum engineering directorate were relocated to Aberdeen?
Mr. Moynihan : My right hon. Friend the Secretary of State is to announce today that he is appointing Ernst and Young management consultants to undertake an independent study of the case for and against relocating the Department of Energy's petroleum engineering directorate to Aberdeen. Whatever the findings on relocation, there may well be an impact on the level of unleaded petrol sales in Scotland and thus in the United Kingdom.
Mr. Simon Hughes As the Minister's first answer made it clear that a price differential has been a major cause of the substantial increase in sales of unleaded petrol, and as the Secretary of State is on record as saying that the market has a role to play in cutting the use of petrol across the market in the United Kingdom, by what figures does the Department currently estimate that petrol prices will increase over the next few years?
Mr. Moynihan : As the hon. Gentleman knows, we are not in a position to predict what oil prices or, through oil prices, petrol prices will be over the next few years. On the hon. Gentleman's first point, there is no doubt that the duty differential in favour of unleaded petrol has been an important catalyst for the increased take-up of unleaded petrol, but the need for further changes to the duty differential is, as the hon. Gentleman knows, a matter for my right hon. Friend the Chancellor.
Mr. Mans : Although those figures are very encouraging, does my hon. Friend agree that an awful lot of older vehicles could be converted to run on unleaded petrol but that people are ignorant of that fact? Will my hon. Friend therefore consult his colleagues at the Department of Transport to see whether it is possible for notices to be sent with car tax reminders, indicating whether certain vehicles could be easily converted to run on unleaded petrol?
Mr. Moynihan : My hon. Friend makes a very imaginative proposal. I will certainly pass it on to my right hon. and learned Friend the Secretary of State for Transport. My hon. Friend will know that more than 200,000 free information booklets have already been distributed, which answer questions about unleaded fuel and provide contact numbers for the main car manufacturers. Seven out of 10 cars on the road are capable of using unleaded petrol, but we need to press on and go further.
Mr. Win Griffiths : Having admitted that the lower duty on unleaded petrol has helped to promote its use, has the Minister had any discussions with the Treasury about introducing such a lower level of duty for the cleaner diesel fuels which are now available, especially as BP is one of the pioneers in that respect?
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Mr. Moynihan : The answer is no--not least because diesel prices are determined by the market. I accept that, at present, they are high--only slightly below unleaded petrol prices--but, as the hon. Gentleman knows, that is because the demand for gas oil, which is equivalent to diesel, is high at this time of year as it is used for heating and high demand tends to push up prices. However, I expect the differential between unleaded and diesel to revert to the norm in the summer months.5. Mr. Hain : To ask the Secretary of State for Energy what proportions of coal consumed in Britain was from (a) imports and (b) domestic production in 1979 and 1991 ; and if he will make a statement.
Mr. Wakeham : In 1979, imports accounted for 4 per cent. and domestic production for 96 per cent. of United Kingdom coal consumption. The corresponding figures for 1991 were 17 per cent. for imports and 83 per cent. for domestic production.
Mr. Hain : Since 1979, when the Government came to power, coal imports have increased from 4 million tonnes to 19 millions tonnes, an increase of 346 per cent., which has had the effect of wiping out the coal fields of south Wales, damaging our balance of payments, costing the taxpayer £8,500 for every one of the tens of thousands of unemployed miners, and making us dreadfully dependent on foreign supplies. Does the Secretary of State appreciate that that is economic lunacy of the highest order, or is he just plain thick?
Mr. Wakeham : No. The answer is that expensive electricity is very bad for British industry. The reason why coal imports have been increasing has been the failure of British Coal to be competitive enough. That is not through lack of support by this Government, who have put £17 billion into the coal industry since 1979. I am pleased to say that there are now signs--after the improvement in recent years and with further improvements- -that British Coal will be able to secure good contracts for the future.
Mr. Rost : How is British Coal expected to compete in the privatised electricity market when the duopoly is able to close down coal-fired power stations even though they can produce cheaper electricty than the new gas turbine power stations, because the duopoly is able to pass the extra costs to consumers? Should not the regulator ensure that the extra costs for higher cost plant are not passed to consumers? Should not coal-fired power stations, which could be competitive and which the duopoly rejects, be offered for sale so that continuing competition can develop?
Mr. Wakeham : Some of those questions are for the regulator. I remind my hon. Friend that the regional electricity companies have an obligation to undertake economic purchasing. If, as my hon. Friend suggests, there is cheaper electricity to be obtained from coal-fired power stations than from gas-fired power stations, I would expect them to use the electricity from coal-fired stations, in accordance with their licence obligations.
Mr. Eadie : Does the Secretary of State realise that his comments have failed to persuade the House that the policy that he and the Government are operating is right?
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It is a gross slander on the miners to talk about the cost of coal and about productivity when miners in Britain are achieving record productivity figures. How can the right hon. Gentleman stand at the Dispatch Box and seek to justify the untrammelled entry of coal imports into Britain, which is flinging thousands of miners out of work and at the same time digging a hole for the economic morass in our balance of payments?Mr. Wakeham : I cannot accept the hon. Gentleman's analysis. The threat to coal jobs has been much more from gas than from imported coal. The only way to deal with that is to make coal a competitive source of fuel and the first choice for the generators. It is possible for British Coal to achieve those contracts and that is what I look forward to seeing.
6. Mrs. Gorman : To ask the Secretary of State for Energy if he will make a statement on the number of new independent electricity generating units since privatisation.
Mr. Wakeham : The Government welcome the strong growth of competition in generation. The first project to be developed since privatisation, at Roosecote, is already supplying electricity to the grid. Four other independent generating stations are under construction and the Government are aware of about 30 other potential independent projects.
Mrs. Gorman : I thank my right hon. Friend. I am delighted with the progress that we are making in finding new sources of electricity generation. Does my right hon. Friend agree that we should welcome the decision by the European Commission to remove its restriction on gas-fired generating stations? Does he agree that gas is better not only because it is transported through its own pipelines and therefore takes transport off the road, but because it is green-clean and thermally more efficient? In my constituency it has stimulated the introduction of three new generating plants, two of them based at oil terminals at Shell haven, where the oil industry welcomes the progress of moves towards gas and is not mounting a rearguard action against it, as the coal industry seems to be doing.
Mr. Wakeham : I welcome the introduction of gas as a fuel for power generation, but it must remain competitive with coal : that will produce the best prices for electricity consumers.
Mr. Lofthouse : The Secretary of State will undoubtedly be aware that Mr. Malcolm Edwards told the Select Committee on Energy last week that the cost of gas for generation of electricity would be about 2.7p per kilowatt hour compared with 2.2p for coal. That was similar to the evidence that the Secretary of State gave some weeks ago. To enable the House and the country to clear the matter up, will the Secretary of State tell us the correct figure? Will he consider bringing the regulator's review of purchasing policy forward from 1993?
Mr. Wakeham : I have been in the House long enough to know that it is not appropriate for me to comment on evidence given to a Select Committee until that Committee has reported. However, I am prepared to confirm that in
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my evidence to the Select Committee I made it clear that the regional electricity companies were obliged to purchase the most economic electricity on the market. If that be coal-fired generation, so much the better.Mr. Hind : My right hon. Friend will be aware of widespread concern in the community that whatever fuel is chosen by the electricity producers, it should be the cleanest fuel of all. Environmental considerations must play a part. If coal is to be the choice, does my right hon. Friend agree that scrubbers are essential at coal-fired power stations and the type of coal put into them must be low in sulphur dioxide emissions?
Mr. Wakeham : My hon. Friend is absolutely right. Gas is environmentally helpful in achieving the Government's target of stabilising carbon dioxide emissions at 1990 levels by the year 2005. The Opposition policy of seeking to stabilise emissions at 1990 levels by the year 2000, while keeping the coal industry at its existing size, stopping the use of gas and phasing out nuclear electricity, is the mathematics of Bedlam--it just does not add up.
Mr. Dobson : Will the Secretary of State name to the House any allegedly independent gas-fired generating projects which do not involve investment from regional electricity companies? For example, is it not true that the Roosecote project has received a substantial amount of capital from NORWEB but that the deal has been kept secret? No one knows how big the contribution was and the price paid for the electricity is being kept secret. Should it not be transparent?
Mr. Wakeham : I believe that contracts between generators and regional electricity companies are commercially confidential, and there is no reason why they should not be--
Mr. Barron : The regulator must know the difference in price.
Mr. Wakeham : I agree with the hon. Gentleman. That information must be available to the regulator, and it is. Secondly, the licensing obligations of regional electricity companies apply to power that they buy from their affiliates as well as to power that they buy from other people.
7. Mr. Gwilym Jones : To ask the Secretary of State for Energy what the budget for the Energy Efficiency Office will be in 1992-93 ; and what was the comparable figure for 1979-80.
Mr. Heathcoat-Amory : The budget for the Energy Efficiency Office in 1992-93 will be £59 million, an increase of 40 per cent. on this year's budget. The comparable figure for expenditure in 1979-80 was £2.4 million.
Mr. Jones : What action is being taken by South Wales Electricity and the other companies on that most important aspect of energy efficiency?
Mr. Heathcoat-Amory : Under the terms of their licences, the newly privatised regional electricity companies must take steps to promote the efficient use of their fuels. In addition, the regulators of both the electricity and gas industries are examining with the industries scope for further funding of energy efficiency measures, funded in
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part under the price formula. Since privatisation there has been a transformation in the attitude and work of those energy companies towards promoting energy efficiency as well as selling their product.Dr. Kim Howells : Does the Minister agree that no matter what progress is made in energy efficiency--in Wales or in the west country, for example--it could all come to nothing if the Government press ahead and force British Gas to start up a new company for the transportation of gas through its pipelines? It would mean that British Gas would put a mileage rate on the transportation of gas so that regions such as Wales will suffer from higher gas prices, which will offset anything that we may do to achieve efficiency.
Mr. Heathcoat-Amory : Those are matters for the regulators of the industry concerned, who have an explicit duty to promote competition in the industries and to safeguard the interests of consumers. Before the industries were privatised, there was no comparable safeguard for the consumer. It has come about entirely as a result of privatisation.
9. Mr. Jessel : To ask the Secretary of State for Energy by how much the level of prices for fuel, light and power has changed in real terms since 1986.
Mr. Moynihan : The cost of fuel, light and power to the domestic sector is estimated to have fallen by 8 per cent. in real terms between 1986 and 1991. For the industrial sector, it is estimated that the cost has fallen by more than 25 per cent. in real terms during the same period.
Mr. Jessel : Is not that a tremendously impressive achievement? It is no wonder that we receive so few complaining letters about electricity prices these days. Can my hon. Friend say how far that is due to privatisation?
Mr. Moynihan : I believe that it is due both to privatisation and to the benefits of restructuring, especially in the electricity industry. It is evident that the emergence of competition in both generation and supply has had a significant impact on prices.
Mr. Tony Banks : Why is it, then, that so many of our constituents are coming to advice surgeries about bills that they cannot afford to pay? Is not it now time that the Minister decided that the standing charges, which are an unacceptable imposition, particularly on the elderly, should be abolished? Why have the Government not done something about that?
Mr. Moynihan : The hon. Gentleman will be able to tell his constituents, as I do mine, that domestic users and other small users of electricity are protected for the first time, as a result of the Government's initiative, by price controls against unjustified price increases.
Mr. Rathbone : Can my hon. Friend say what the price increases are likely to be in the forthcoming year?
Mr. Moynihan : The protection offered by electricity price controls against unjustified increases will limit increases up to April 1992 to the level of inflation as measured from October to October, subject to unforeseen circumstances. It is important that those controls are seen in a three-year context.
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10. Mr. Haynes : To ask the Secretary of State for Energy when he last met the chairman of British Coal to discuss redundancy payments for mineworkers.
Mr. Heathcoat-Amory : We meet the chairman of British Coal on a regular basis to discuss all aspects of the coal industry.
Mr. Haynes : I am not surprised that the Minister has not mentioned redundancy payments for miners when they are closing pits willy-nilly. You know, Mr. Speaker, they would complain like billy-o on the Treasury Bench if we docked their redundancy payments. Yet they are using blackmail on miners to vote to close pits earlier than they year that had been decided on so that they can close the pit down and they have cut the redundancy payments for miners. They should be ashamed of themselves. What are they going to do about it?
Mr. Heathcoat-Amory : If I heard the hon. Gentleman correctly, he suggested that redundancy pay for displaced miners was excessively generous. That is a curious message from the Labour party, although it is true that Opposition this year voted against the Coal Industry Bill, which provides for the continuation of those generous payments to redundant miners. Miners all over the country will know that the Labour party voted against those terms.
Mr. Haynes : On a point of order, Mr. Speaker. Due to the unsatisfactory reply from the Minister, I shall apply for an Adjournment debate.
12. Mr. John Marshall : To ask the Secretary of State for Energy what was the total subvention to British Coal from the Exchequer over the past five years.
Mr. Heathcoat-Amory : The total amount of Government grant that has been made available to British Coal over the past five financial years is £8.5 billion.
Mr. Marshall Does not that figure underline the Government's commitment to the coal mining industry? Would my hon. Friend care to hazard a guess about how many fewer jobs there would be in that industry if that money had not been given? Does he agree that that money underlines the huge benefits to the taxpayer that will come from the privatisation of the industry, to which the Labour party is opposed?
Mr. Heathcoat-Amory : My hon. Friend is right to point out that, in the past five years and beyond, the taxpayer has not been ungenerous in giving money to the coal industry. In return, we expect the industry to fight for its share of the electricity market by improved productivity. I am delighted at the progress that the industry has made with Government assistance.
Mr. Hardy : The Minister has accepted that investment by the state has assisted miners to achieve records of productivity unmatched by the rest of British industry. However, despite that achievement in the national interest, the Government have sat idly by while the electricity supply industry has disregarded that massive increase in productivity. Not only have the Government disregarded the electricity supply industry's disdain for that achievement, but they have sat idly by and watched
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collieries close which, in the past five years, have taken up a large part of that sum of money about which the Minister boasted just a moment ago.Mr. Heathcoat-Amory : The provision of £8.5 billion of grant aid hardly amounts to standing idly by. The mining industry knows that its long-term security comes only from selling its product to customers at prices they can afford. If we insisted on electricity generators buying expensive coal, that would be bad news for domestic electricity customers and it would cause job losses in the rest of British industry.
13. Mr. Cohen : To ask the Secretary of State for Energy at current trends, how much plutonium he expects the thermal oxide reprocessing plant to have produced by the year 2000.
Mr. Heathcoat-Amory : BNFL estimates that, by the year 2000, some 30 tonnes of plutonium should have been recovered during reprocessing in THORP.
Mr. Cohen : Is not THORP about to become the principal producer of plutonium for proliferators in the world? Will it not produce the equivalent of about a quarter of the nuclear arsenals of both the Soviet Union and the United States at their peak by the year 2000? Is not THORP capable of destroying the world, and should not the Minister show some courage as well as some sense and phase out plutonium production?
Mr. Heathcoat-Amory : The reprocessing does not create plutonium but recovers it so that it can be recycled as a source of energy. The hon. Gentleman may know that a tonne of plutonium is equivalent, in energy terms, to about 3.5 million tonnes of coal. It therefore makes sense to recover that element for possible future use in civil reactors or, one day, in the fast reactors.
15. Mr. Skinner : To ask the Secretary of State for Energy what recent meetings he has had with the National Union of Mineworkers to discuss the proposed pit closures ; and if he will make a statement.
Mr. Wakeham : I have had no recent meetings with the National Union of Mineworkers to discuss pit closures.
Mr. Skinner : Does the Minister agree that 90 million tonnes of imported coal last year is equivalent to about 20 pit closures involving 20,000 men? Compared with how the German coal industry is subsidised--its coal is produced at no less than £89 a tonne compared with £42 a tonne for deep-mined coal in Britain--how can we say that the industry is on a level playing field in Europe? What guarantees do we have that some of that imported coal is not part of the German coal laundered in Rotterdam with coal from other countries? Does that mean that we are helping to subsidise the German coal industry while shutting pits in this country and throwing people out of work? Those people then receive the dole, which is taxpayers' money. The whole matter needs to be brought to an end immediately.
Mr. Wakeham : The hon. Gentleman put his finger on the cause of the problem--the excessive subsidies in
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Germany. I want those subsidies to be phased down by the Community, and I also want to encourage British coal to be exported to Germany if that is a way to deal with the problem.Mr. Roger King : Is my right hon. Friend aware of the widespread confusion among Opposition Members--particularly the hon. Member for Holborn and St. Pancras (Mr. Dobson), shown by his attitude towards the importation of coal--and the great conflict within the Labour party about how to handle the matter? Will my right hon. Friend comment on the Labour party's idea on the possibility of stuffing the generating board with political satraps to bring salvation to its energy policy?
Mr. Wakeham : From time to time I read about the views of the hon. Member for Holborn and St. Pancras, (Mr. Dobson) but I was also interested to read over my cornflakes on Saturday morning the Labour party briefing to the effect that we were not to take the hon. Gentleman too seriously.
Mr. John Evans : Surely the Secretary of State agrees that it is economic madness to switch electricity generation from coal to gas, close scores of collieries and throw thousands of miners on to the dole? Does not the industry need a long-term agreement to keep collieries like Parkside in my constituency, the very last colliery in north-west England, in existence?
Mr. Wakeham : We need the lowest possible electricity prices for consumers and British Coal has a part to play in that. I agree with the hon. Gentleman that it would be in Britain's best interests to have long- term coal contracts, but those must be negotiated on commercial terms.
16. Sir John Hannam : To ask the Secretary of State for Energy what the budget for the Energy Efficiency Office will be in 1992-93 ; and what was the comparable figure for 1979-80.
Mr. Heathcoat-Amory : I refer my hon. Friend to the answer I gave earlier today to my hon. Friend the Member for Cardiff, North (Mr. Jones).
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