HC Deb 08 June 1981 vol 6 cc6-7
4. Mr. Cadbury

asked the Secretary of State for Energy whether he is satisfied that, in the long term, the United Kingdom electricity supply industry as presently structured will be able to produce electricity at costs comparable with those elsewhere in Europe.

The Under-Secretary of State for Energy (Mr. Norman Lamont)

Our ability to produce electricity at costs comparable with those elsewhere in Europe will depend crucially on the trend in coal prices and our performance in constructing power stations to time and to cost. Future electricity prices in this country are less likely to be affected by the electricity supply industry's structure than by these factors.

Mr. Cadbury

Will my hon. Friend not agree that because of the monopoly position of the Central Electricity Generating Board it is difficult to measure its efficiency? Will he also not agree that if it was possible to decentralise and to reorganise the CEGB on a regional basis, the resulting smaller units would be more manageable? Would it not also be possible to make cost comparisons between one region and another, thereby introducing some competition?

Mr. Lamont

I agree with my hon. Friend' s first comment about the difficulty of measuring efficiency. That is why the Government have stated that they intend, when a suitable legislative opportunity arises, to remove the monopoly on electricity supply. With regard to my hon. Friend's comments on the structure, the whole thrust of pressure has been for greater centralisation. The Government have rejected this pressure precisely for the reasons stated by my hon. Friend. We believe that there should be yardsticks of comparison among different parts of the industry. We have asked the Electricity Council to implement some new arrangements. We shall want to see, in the first instance, how those work. This will be followed by a review. I shall also bear in mind my hon. Friend's comments.

Mr. Palmer

Does the Minister agree that the French electricity supply industry, which is nationalised, and also has a monopoly has the great advantage of not being subject all the time to Government interference and can borrow money on the market competitively without the limitation imposed by the cash policy of this Government?

Mr. Lamont

I do not think it is possible to draw lessons from abroad in the manner attempted by the hon. Gentleman. The German electricity industry is organised much more on the lines mentioned by my hon. Friend the Member for Birmingham, Northfield (Mr. Cadbury). There are many different types of utility in different parts of the country. Private generation also plays a part.

Sir Brandon Rhys Williams

Bearing in mind the great potential importance to long-term electricity supplies of the proposal for a Severn barrage, will the Department produce as quickly as possible the report of the Bondi committee? Are there also grounds for hope that the Government will be prepared to express a warm welcome for it?

Mr. Lamont

We shall be producing the report very soon.

Mr. Merlyn Rees

Given the sponsorship by the Department of Energy of the CEGB, does the Minister agree with the severe criticisms made of the CEGB by the Minister for Consumer Affairs?

Mr. Lamont

My right hon. Friend is well able to answer for herself. My right hon. Friend was referring to criticisms of the CEGB made in the report of the Monopolies and Mergers Commission. The Government will be issuing their comments on that report in due time.