HC Deb 27 April 1981 vol 3 cc509-10
11. Mr. Rost

asked the Secretary of State for Energy what progress he is making in monitoring the efficiency of the nationalised industries.

Mr. Norman Lamont

Through financial targets, cash limits and the examination of corporate plans, the Government seek both to influence and to watch closely the efficiency of nationalised industries. The Government will continue to press them to take all possible steps to increase efficiency and to contain costs.

Mr. Rost

Does my hon. Friend accept that merely watching nationalised industries will not improve their efficiency and that the consumer expects the Government to break up nationalised monopolies and to provide stimulus by introducing real competition?

Mr. Lamont

I entirely agree that financial targets are one thing but that the real spur to efficiency is competition. That is why we are planning to legislate to remove the monopoly of the electricity supply industry.

Mr. Palmer

Is that question not similar to asking "Have you stopped beating your wife?" Why is it assumed that the nationalised energy industries are inefficient? If they are, is not that the responsibility of the Government?

Mr. Lamont

My hon. Friends are understandably concerned, first, because prices have been rising and, secondly, because these are monopoly industries. Where there is a public monopoly it is up to the Government to see that there is efficiency. That is why we have referred the efficiency of the electricity industry to the Monopolies and Mergers commission, whose report will soon be published, but we still intend to remove the monopoly of the electricity supply industry.

Mr. Eggar

May I welcome my hon. Friend's view that one way to increase the efficiency of nationalised industries is to denationalise them? May I express the hope that this will happen as soon as possible? May we have a statement at the earliest possible opportunity on removing the British Gas Corporation's monopoly and monopsony powers?

Mr. Lamont

My hon. Friend has raised this matter on several occasions, and I have considerable sympathy with what he says. We have been negotiating with the Norwegian Government about the possible importation of gas, which has been very much on our minds. We have the monopsony of the BGC at the top of the agenda.

Mr. Merlyn Rees

The Minister mentions prices as a measure of inefficiency, but does he recollect that his Administration have increased gas prices more than the BGC wished? If there is a justification for criticising prices, so be it, but does the Minister accept that it ill-becomes him to berate the BGC when his Department increased prices?

Mr. Lamont

I entirely reject that suggestion. Following the great rise in oil prices, other energy prices were inevitably affected, which is what happened under the previous Government, when electricity prices to the domestic consumer rose in two successive years by 37 per cent. per annum. The right hon. Gentleman should talk rather less about price increases under this Government.