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Sakhalin Oil and Gas Project

7. Mr. Elfyn Llwyd (Meirionnydd Nant Conwy) (PC): What the status is of the application for Export Credits Guarantee Department support from the Sakhalin II phase 2 oil and gas project. [156258]

The Minister for Trade and Investment (Mr. Mike O'Brien): In October 2002, we received an application for cover for the Sakhalin II project. No decision on ECGD cover has yet been taken, pending a full assessment.

Mr. Llwyd : I am grateful to the Minister for that response. Is he aware of the study by Richard A. Fineberg Research Associates on the seismic risk associated with the onshore portion of the phase 2 pipeline? That study found that the Sakhalin Energy Investment Company, led by the Royal Dutch/Shell Group, has underestimated the number of active fault lines that the buried pipeline will have to cross. Apparently, it has also underestimated the increased risk of the pipeline rupturing—a risk associated with its being buried, rather than elevated above the fault, as was the case with the trans-Alaska pipeline system. What account will the Minister take of the potential impact on the critically endangered western grey whale of constructing offshore production platforms?

Mr. O'Brien: The issues that the hon. Gentleman raises are very serious and they will form part of the overall environmental assessment that has to be made. We will have to look not only at any seismic implications of the project, but at the impact on fisheries, the social impact, and the implications in terms of oil spills and human rights. Importantly, as he said, the western grey whale is a critically endangered species. It is believed that only 100 remain and I have personally written to the chief executive of the project expressing my concern. Before I approve any support for the project, however,

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I will need to be confident that, among other things, the best scientific advice is available not only on the seismic and other environmental issues, but on the whales.

Dr. Vincent Cable (Twickenham) (LD): When my former colleagues in the oil industry and others approach the Minister for help, why cannot they be told that it is possible to buy private political risk insurance and medium-term credit in the market? Why does the taxpayer have to underwrite it?

Mr. O'Brien: If the hon. Gentleman talked to business interests in Britain, which I urge him to do—he clearly does not do so enough—he would find that they regard the support from the Export Credits Guarantee Department as absolutely vital to the future success of British industry, particularly our high-tech industry. The way in which the hon. Gentleman and his Liberal Democrat colleagues intend to destroy, as it appears, ECGD support for British industry is something that our industry must be deeply concerned about.

Mr. James Arbuthnot (North-East Hampshire) (Con): I am delighted to say that I entirely agree with what the Minister has just said. The Export Credits Guarantee Department used to be the best in the world, but does the Minister accept that Department's own judgment last year that it provides generally less cover than other export credit agencies and at generally greater cost than other such agencies in the world? Is that good for British business?

Mr. O'Brien: The hon. Gentleman might like to consider the reason why ECGD is having more difficulties than some other export credit guarantee departments. Could it be attributable to the fact that, in 1993, the Conservative Government decided to privatise the most profitable area of ECGD, so the cross-subsidisation that takes place in other export credit agencies across the world cannot take place in the UK? That has damaged British industry in the long term, and we believe that we are now putting in place the best possible means of ensuring support for British industry. That is what we intend to do.

Electricity Prices

9. Julie Morgan (Cardiff, North) (Lab): What investigation she has conducted into the differences in the price of electricity among the countries and regions of Great Britain. [156261]

The Minister for Energy, E-Commerce and Postal Services (Mr. Stephen Timms): The most important reasons for variations in retail electricity prices are differences in local transmission and distribution charges and differing customer willingness to switch to competing suppliers.

Julie Morgan : Will the Minister confirm that south Wales domestic electricity prices are the highest in Britain? Will he look further into the problem and try to do something about it?

Mr. Timms: My hon. Friend is certainly right that the cost of electricity for domestic customers in Cardiff and

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south Wales is relatively high by comparison with other areas. According to energywatch, however, a typical domestic customer in south Wales could cut the electricity bill by 10 per cent. by switching from the former local monopoly supplier. Fewer customers appear to have done that in south Wales than elsewhere. Energywatch does publish easy-to-use price comparisons and it might be helpful if my hon. Friend pointed out the benefits of shopping around, which can be significant.

Bob Spink (Castle Point) (Con): So what are the Government doing to increase the transparency of the pricing of electricity, to encourage customers to make that move?

Mr. Timms: That is an important area and, as I said, energywatch is doing valuable work in producing easy-to-use and simple price comparisons so that people can easily make the requisite comparisons.

Helen Jackson (Sheffield, Hillsborough) (Lab): Does my hon. Friend acknowledge that high electricity prices, together with steep rises in the price of scrap steel, are having a serious impact on the UK steel industry—which probably has the highest fixed energy costs of all industries, which it cannot reduce? What action will the Government take to control energy prices in that crucial industrial sector? If none is taken, the steel industry will seriously suffer.

Mr. Timms: My hon. Friend makes an important point. We keep a close watch on energy prices because of their impact on UK competitiveness. Current changes in gas pricing, for example, will affect not only the UK but other countries throughout Europe. The competitive market for energy provides the best assurance of the lowest-possible prices but we shall continue carefully to examine the implications of energy costs for UK companies.

Mr. Julian Brazier (Canterbury) (Con): In view of the blast against privatisation that we have just heard from Minister for Trade and Investment, will the energy Minister confirm that since privatisation, large British organisations have enjoyed the second-lowest electricity prices in the European Union and that all other organisations enjoy the lowest?

Mr. Timms: There are significant benefits from the structure of the UK energy generating industry and the Government are firmly committed to ensuring that competitiveness is retained.

Mr. Michael Clapham (Barnsley, West and Penistone) (Lab): My hon. Friend will agree that the cheapest electricity on the wires is from coal, which is much more flexible than other sources. The UK coal industry is facing a crisis, with Hatfield colliery facing immediate closure—and Hatfield leads into the country's largest coal reserves. Will my hon. Friend review the situation in respect of that colliery, so that coal reserves on the east coast are not lost?

Mr. Timms: We have a substantial programme of coal investment, involving aid totalling £60 million—

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including £15 million earmarked for Hatfield colliery. We all hope that a private sector financing package will present itself before the end of March, to take forward the development of the new seam at Hatfield and take advantage of the £15 million grant offer.

Company Takeovers

10. Tony Lloyd (Manchester Central) (Lab): What representations she has received on the laws governing company takeovers. [156262]

The Minister for Industry and the Regions (Jacqui Smith): We have held widespread discussions and received representations—in particular, during negotiations on the takeovers directive. We will be consulting further on the detail of its implementation.

Tony Lloyd: Professional football is enormously important in the life of the nation and to many of our fellow countrymen and women. Many football supporters are extremely agitated by the acquisition of Chelsea and there is constant speculation about a takeover of Manchester United, which is destabilising. The ordinary supporter would like it clearly recognised by the Government that the public interest should not be not confined to the interests of shareholders and that football fans ought to have their views considered and taken on board. Will my right hon. Friend make it clear that any proposed acquisition of a Premiership club or even of a smaller club in the Football League will be considered in terms of the public interest, and that the Government will take powers to ensure that the rights of football supporters are recognised?

Jacqui Smith: Football clearly embraces and promotes great passion and emotion—though perhaps not quite as great as that shown by Manchester United's captain last night. Any business must pay attention to the needs of its customers, even when they are Manchester United fans. However, we must not lose site of the fact that football clubs are businesses. Manchester United, as a company, has chosen to raise money from investors by having its shares listed on the stock exchange.

It would not be appropriate for me to comment on specific takeover speculation, but I assure my hon. Friend that robust safeguards are in place, under the City takeover code overseen by the takeover panel, to ensure that all shareholders—including those who support football clubs as fans—are properly protected. Concerns about competition are met by competition legislation, which safeguards against any company assuming a dominant position in a market.

Mr. Nick Gibb (Bognor Regis and Littlehampton) (Con): The Minister will know that the takeover of the one-stop shops by Tesco means that the one in Nyetimber in my constituency is to close its post office counter, even though the existence of that facility was used to justify the closure of the post office in Pagham. As a result, there is no now post office for the people of Pagham. Will the Minister or one of her colleagues meet a delegation from Pagham to discuss how we can restore postal services to the people there?

Jacqui Smith: My hon. Friend the Minister for Energy, E-Commerce and Postal Services has already

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spelled out the action that we are taking to ensure that we maintain the post office network necessary to serve people's needs. However, I am sure that the Post Office will look carefully at how it can maintain the service that the hon. Gentleman has referred to, for the good of his constituents.

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