HC Deb 30 May 1962 vol 660 cc1356-8
35. Mr. Millan

asked the Secretary of State for Scotland what consultations he has had with the North of Scotland Hydro-Electric Board regarding its financial obligations under the White Paper, Command Paper No. 1337.

38. Mr. Lawson

asked the Secretary of State for Scotland what discussions he had with the North of Scotland Hydro-Electric Board before the Board announced its recent price increases; and whether he took account of the effect of these increases on Highland development and industry.

40. Mr. Steele

asked the Secretary of State for Scotland what financial objectives have been set for the North of Scotland Hydro-Electric Board under the White Paper, Command Paper No. 1337.

Mr. Maclay

The North of Scotland Hydro-Electric Board has agreed, pending the Mackenzie Committee report, to apply such tariff changes as will produce a percentage increase in the income derived from its own consumers similar to that which is to be achieved by the South of Scotland Electricity Board. In suggesting a financial objective in these terms I had in mind the special circumstances of the North of Scotland Board and the fact that an increase of this kind preserves the relative position of the North of Scotland Board's area in such matters as Highland development and the attraction of industry.

Mr. Millan

Will the Secretary of State explain exactly what this means to electricity consumers in terms of money? Is it not misleading to say that the Board has agreed these financial objectives since this price increase, which it is putting into operation because of the financial objectives, is something which it desperately did not want to enforce?

Mr. Maclay

To be fair to everyone concerned, the Board was very concerned about this matter, and I explained fully to the Board the reasons for the White Paper and these financial objectives, and it agreed to carry out the policy which I explained.

Mr. Lawson

As the Board itself and the Consultative Council are both opposed to the line being taken by the right hon. Gentleman, and since both are responsible bodies, does not this suggest that he, in his concern for financial considerations, is in danger of defeating the purpose for which this Board was set up?

Mr. Maclay

No, Sir. In any efforts to improve the economy of the Highlands and the whole of Scotland we must be certain that we are building on solid economic foundations. I do not think that what would amount to a concealed subsidy is the right way to do it.

Mr. Steele

The right hon. Gentleman has not given us a figure, but if one relates this increase to the increase made by the South of Scotland Electricity Board, it means a 10 per cent. rise. Is he aware that the then hon. Member for Glasgow, Pollok (Mr. George), on the Second Reading of the Hydro-Electric Development (Scotland) Act, 1943, indicated that he did not think that electricity by itself would bring new industry to the Highlands and that something more would be required? Does not the right hon. Gentleman agree that the present Chairman of the Hydro-Electricity Board then said that it would need cheap electricity? How will this increase assist the Chairman in his efforts?

Mr. Maclay

I do not think that it has ever been argued that it should be uneconomic electricity.

Mr. Millan

As the Board made a surplus of £1¾ million last year, is it not wrong that it should be forced to impose a further price increase?

Mr. Maclay

If the hon. Gentleman will study the capital cost of the Board's operations, and relate it to the White Paper on the financial and economic obligations of the nationalised industries, he will realise the reasons for what I have done.