HC Deb 24 May 1982 vol 24 cc771-6

Motion made and Question proposed, That this House do now adjourn.—[Mr. Archie Hamilton.]

12.23 am
Mr. Arthur Palmer (Bristol, North-East)

I wish to raise the important decision made by the Secretary of State for Energy not to reappoint Mr. Glyn England to the chairmanship of the Central Electricity Generating Board. I seek to do so for two reasons. The first is the way in which an eminent power supply engineer has been treated by the Secretary of State. Secondly, there are the wider issues raised by actions that spring from the Government's general attitude to the nationally owned industries.

It would have been more in keeping with the Secretary of State's position if he had come to answer the debate. I know that it is normal practice on an Adjournment debate for a junior Minister to take the responsibility, but in these circumstances it would have been better if the Secretary of State had answered. The Secretary of State, not the Under-Secretary, sacked Mr. England.

Mr. England has not directly or indirectly asked me to raise the matter in the House. As a fellow power supply engineer, I have known him for many years. He also lives in the Bristol area. I told him of my intention to raise the matter in the House but the responsibility is mine. A week ago I put down a parliamentary question, as the Minister knows.

Last Monday I said that the case had caused great resentment in the electricity supply industry, especially among the technical staff, from whom Mr. England sprang, and the power station management in the regions. On 2 April he was called to the Secretary of State's office. I am told that he was informed in an abrupt few minutes that it was not intended to reappoint him.

About three days later the technical staff union in the industry, the Electrical Power Engineers Association—I am a long-standing member and still a member of the executive committee—was in annual conference at York. The EPEA organises the entire technical engineering and scientific staff of the industry. The case was fully debated as an emergency. Mr. John Lyons, the moderate and restrained general secretary, stated: The treatment of Glyn England, Chairman of the CEGB, is abominable … The Secretary of State is entitled to appoint a different Chairman if he wishes to … He hasn't done that. He has not got anyone else to replace Glyn England. He has said that Glyn England is not suitable for the job, no matter that he cannot find a replacement … This is a personal snub to Glyn England and the whole of the electricity supply industry. Why was Mr. England dismissed? Let us not have humbug about the phrase. The Secretary of State said that his five-year term had come to an end and not been renewed. What a smooth explanation!Last Monday I said that he had virtually been dismissed. The following day The Daily Telegraph, which is hardly an extremist newspaper, was much more blunt. A headline referred to the "sacked power chief'. That was the general reaction of the press, including the more serious newspapers.

Mr. England's promotion to the CEGB chairmanship was the culmination of a long and varied career as an engineering manager in public electricity supply following his war service. His was a career appointment. That is significant. At the age of 60 he is at the height of his powers. Had he not the ill fortune to have accepted a board appointment in the gift of a Minister, he would have gone on to the standard retiring age of 65. He would have drawn his full contributed pension. As it is, he is to go out, as I understand it, with a reduced pension. The Under-Secretary shakes his head, and I should be glad to hear from him on that point. Mr. England was of that view. He is to go out, apparently, with a pension reduced by five contributory years. What a way to treat a loyal servant of this industry.

If Mr. England had worked for a large private company—it would have to be a monster private company with a massive investment to equal that of the CEGB on an annual basis—as the managing director who had been displaced, he would have received what is known as a golden, or perhaps a diamond, handshake.

To return to my question: why was Glyn England dismissed? It could hardly be because of poor CEGB performance. At a time of static demand for electricity, the board has managed to cut its costs and increase operating profits. In the financial year that has just ended it is expected to make an operating profit of £320 million. That is £80 million above expectations and £130 million above last year.

An investigation that I thought was unnecessary was carried out somewhat spitefully by the Government through the Monopolies and Mergers Commission into the affairs of the CEGB. The commission, after the most searching of investigations, which took up an enormous amount of the time of the industry's busy staff, concluded that the board was run very efficiently.

Was Mr. England dismissed because of the advice tendered to the Secretary of State from others outside? I cannot answer that question but the Under-Secretary could if he wished. At his press conference, Mr. England said that two criticisms had been mentioned to him. One was that private industrialists distrusted the CEGB. Which private industrialist? Was it Lord Weinstock of the General Electric Company, a major supplier of plant and equipment to the board, who has been notoriously at war with the CEGB for years? If that were the case, the whole of the board should have been censured. But all the other members have been reappointed. Only Mr. England is the scapegoat.

The other criticism that Mr. England said had been made to him from outside was that departmental officials had complained of a lack of information made available to them by the CEGB. On this charge, I understand that Mr. England,—and I do not blame him—has written to Sir Donald Maitland, the permanent secretary of the Department, as Mr. England claims that the charge is entirely untrue.

With regard to advice from outside—and this is my question, not that of Mr. England—was the view of the Electricity Council and its chairman sought? After all, one of the duties of the Electricity Council is to advise the Minister. Did the advice of the Electricity Council play a part in the downfall of Mr. England? I doubt whether I shall receive any answers to these pertinent points. I do not think that the Under-Secretary would dare to answer them.

Therefore, I am driven back to the commonly accepted political explanation, which is that the former chairman of the CEGB spoke out of turn too often. This is a characteristic that Glyn England has shared with Sir Denis Rooke, chairman of the British Gas Corporation. Denis Rooke has complained from time to time about his treatment from Ministers but he is perhaps too big a fish to throw out. The unions in the gas industry have demonstrated their power over the proposed closure of gas showrooms, now abandoned.

I have talked about Mr. England speaking out of turn. I shall quote from a fully justified speech that he made this year to his staff at Leatherhead. The speech was widely reported. I am sure that it was read with great irritation by the Secretary of State. I shall quote from Power News for convenience, although the speech was reported in all the newspapers. Mr. England said: Why then do responsible people make generalised criticisms of public sector enterprises, ignoring the substantial differences between them? There is a tendency, which I find regrettable, to use the public sector in general as the whipping-boy for the nation's present economic difficulties. It is not surprising if there is a feeling among staff that, however hard they work, however well they face challenging times, they can, in the eyes of some Ministers, never get it right, simply because they work in a public enterprise. According to Power News, Mr. England went on to say that, to counter this, he regarded it as part of his job to speak out when he considered that Ministers were being less than fair to the generating board and its staff.

There is insufficient time and it would not be appropriate tonight for me to discuss the difficult question of the proper and efficient relationship that should exist between nationally owned industries and their sponsoring Ministers. It has been written about, debated, and argued about for many years. For myself, I lean towards the original Morrisonian concept that the public corporations should run their own affairs within the terms of their statutes, balancing one year with another financially. If Ministers find it necessary to intervene in policies, they must do so openly and take responsibility at first hand.

Mr. Glyn England gave several examples of the present Government violating this principle—for instance, over coal prices. These prices were increased to the CEGB last year because the Government reached agreement with the National Coal Board and the miners—they were anxious to avert a mining stoppage—on imports of coal and on certain diseconomies, if you like, which meant that some pits would be kept open that it had previously been intended should close. The effect was to push up the price of coal to the generating board, which was not even consulted. Following an investigation of the matter, the Select Committee on Energy has made trenchant criticisms on this point.

Mr. England had to speak his mind, as he saw it, on behalf of his industry and suffered accordingly. To sum up, first, Mr. England was personally shabbily treated by the Secretary of State. Secondly, Ministers should not be so sensitive to public criticisms of their policies by board chairmen, who are not, after all, civil servants.

Thirdly, if board careers are in future to be cut short to suit the political doctrines of Ministers, able employees will be chary of going on to the boards. At one time, to be a member of the board was regarded as the pinnacle of a successful career in the industry. Employees will not be so ready to do so in future if the present Secretary of State continues his activities.

12.40 am
The Under-Secretary of State for Energy (Mr. David Mellor)

I should like, first, to say to the hon. Member for Bristol, North-East (Mr. Palmer) sincerely, as I think he knows, that his knowledge of and commitment to the electricity supply industry are well known and respected throughout the House. He served for many years as a power engineer. He still keeps close contacts within the industry. His support for a number of important policies, most notably the nuclear power programme, is welcome to us.

I regret that the hon. Gentleman should feel so dismayed about this matter that he has raised it on the Adjournment in the terms that he has. I am sorry that on this occasion I shall not be able to agree with many of the points that he made. The hon. Gentleman has raised a number of interesting issues. The nationalised industries comprise a significant part of the economic activity of this country. The quality of leadership of these industries is of first importance. Thus, whenever the period of appointment of a chairman reaches its conclusion, it must be right to consider carefully what would be best for the industry in question.

I wish to make it clear that Mr. England's appointment has come to an end after the normal period of five years. Mr. England, who is now 60 years of age, was not dismissed or sacked. Rather, my right hon. Friend the Secretary of State, who has the statutory responsibility for board appointments in the electricity supply industry, decided, after careful consideration, that it was time to make a change.

As the hon. Gentleman said, Mr. England has a record of long and distinguished service to the industry. My right hon. Friend has written to him in appreciation. A copy of the letter has been placed in the Library. It has therefore become, in effect, a public document and it would be perhaps proper for me to quote that letter in full tonight. In the letter, my right hon. Friend said: I told you at our recent meeting that I had decided it was time for a change in the chairmanship of the CEGB, and in consequence I would not be asking you to serve for a further term at expiry of your present appointment. I am now writing to confirm this and to take the opportunity of placing on record, both for myself and on behalf of my predecessors, appreciation of your long and distinguished service to the electricity supply industry. I send you my best wishes for the future. It would be wrong to suggest that Mr. England has not been reappointed because of any particular failing. On the contrary, the Secretary of State's judgment reflects the view—as he says in the letter—that the time has come for change, and in particular for an appointment from outside the electricity supply industry.

I should like to dilate for a moment on the statutory basis for the appointment of senior management in the light of one or two of the matters that the hon. Gentleman raised. Appointments at the top of the electricity supply industry are within the gift of the Secretary of State. Top officials are given a contract for a term certain. That term expires by effluxion of time. It is then entirely a matter for my right hon. Friend, who has unfettered discretion, whether to reappoint or not. Refusal to offer a new term is not a dismissal. Therefore, there is no requirement in law or in equity for the Secretary of State to give reasons—certainly not to put forward or substantiate criticisms or allegations of shortcomings on the part of someone who has not been reappointed. It would be invidious if the situation were to be otherwise. The Secretary of State's job in discharging his statutory obligation is already difficult and it would make his task even more difficult. It would hardly be advantageous for the individual concerned if a discussion were to be embarked upon on why he was not reappointed or why, if he were reappointed, a particular period was chosen. The hon. Gentleman will be aware that reappointments are for differing periods and that they are sometimes well short of five years.

Mr. Palmer

I take the hon. Gentleman's point, but this was a career appointment. It was not somebody coming in from outside who served five years and went. This was cutting Mr. England's career short.

Mr. Mellor

I was dealing with that. But the appointment is for a term certain of five years. That is in the statute for the apparent reason that the Secretary of State is to be given powers to decide at that period whether to make a reappointment. He is only exercising the statutory powers that Parliament in its wisdom many years ago chose to confer on him, and which have been used in a number of instances to reappoint or not under successive Governments.

If would be invidious to give details, and wrong to do so, but any such discussions would be unfair to the many individuals and groups within and without the industry who feel it right to give the Secretary of State their views on appointment and reappointment issues. Those views must remain confidential.

The hon. Gentleman spoke about responsibility. The Secretary of State has taken this decision and takes the responsibility for it, as we all do as Ministers in the Department in defending ourselves against what has been said by the hon. Gentleman and by some others. It is worth remarking that we have not for a moment made any allegations or imputations. We rest on the basis that is set out in my remarks and has been set out in the Secretary of State's letter. As I have already made clear, my right hon. Friend believes, first, that it was time for change at the top of the CEGB and, secondly—this is his considered judgment, which he is fully entitled to arrive at—that it would be best for someone outside the industry to take on the chairmanship of the board at this time.

Mr. Palmer

Does the hon. Gentleman suppose that in the electricity supply industry there is no one capable of taking this position?

Mr. Mellor

That is not what I am saying. I am saying that the Secretary of State takes the view—I must stress that other Governments have done so, including those supported by the hon. Gentleman—that at a certain stage there is virtue in bringing in someone from outside. That is a perfectly honourable decision. There may be room for dispute about it, but it is not a dishonourable decision or one that is necessarily motivated by anything improper or by any desire to do down the industry. It was in this instance the result of a genuine assessment, which we believe in the fulness of time will be shown to be right.

The decision was entirely within my right hon. Friend's competence and entirely within the statutory framework. If it had been intended, as the hon. Gentleman suggests, that senior executives in the industry should be entitled to stay on until choosing to retire, until the age of 65 or for life, the Secretary of State would hardly have been given the power to appoint for term certain in the first place. The opportunity to review, reconsider and bring in new blood is fundamental to the way in which the legislation is framed. Inherent in it is the right of the Secretary of State to decide, with the minimum of fuss, not to reappoint if that be his considered view.

There is, therefore, no reason for anyone to suggest that my right hon. Friend has done anything outlandish in exercising his powers in the way that he has. Nor is there any reason for Mr. England or anyone on his behalf to feel discomfited. The letter that I quoted paid a warm tribute to him. He has held high office in the industry for many years, culminating in five years as chairman of the CEGB. That is a longer period in one top job than many people enjoy, particularly many who hold high office in politics. He has had a good opportunity to make his mark in the industry and on the board, and his efforts are appreciated. For all of us, whatever job we hold, there is a time to come in and a time to go out. In many ways, I feel that this situation might be best left at that.

Allegations have been bandied about in some sections of the press and elsewhere as if to suggest that the Government are pursuing some kind of vendetta against senior figures in the industry or that we are intent on filling this top job with a political hack, so perhaps I should say a little more in this respect.

First, both my right hon. Friend and his predecessor paid considerable attention to appointments in the industry. We are aware of the need for continuity at the top of the industry. Anyone who looks at the pattern of reappointments to the electricity supply industry under this Government will find little evidence to support an accusation that the Government were inclined, for one reason or another, not to reappoint senior and leading figures within the industry. The chairman of the Electricity Council, Mr. Bunch, a man who has devoted his life to the industry, was reappointed by my right hon. Friend until his retiring age, which comes up next year. Nor should it be forgotten that the three other CEGB board members, whose appointments expired this year, have been reappointed—Mr. Bonner, the long-serving deputy chairman, Mr. Lomer, the effective and respected board member with responsibility for construction, and Mr. Blackman, the member with responsibility for operations. The same applies to a whole host of area board chairmen and deputy chairmen.

There is the allegation that the new chairman might or will be a political appointment. I am not in a position to say tonight who the new chairman will be. However, my right hon. Friend has made it clear that while there are a number of distinguished executives within the board, he believes that the time is right to look further afield for a new chairman. There should be real advantage in having a new man who will bring a fresh impetus and give a strong lead in achieving the highest possible standards of efficiency, for the benefit of domestic and industrial consumers alike.

My right hon. Friend will announce the name of the new chairman as soon as possible—I hope in the very near future. I assure the House that this will not be any kind of narrow political appointment. Put simply, the man appointed will be the best available for the job. I believe that his qualifications and distinction will be such that only a narrow partisan, far removed from the hon. Member for Bristol, North-East, could quibble. I feel confident that when the name is announced the hon. Gentleman will not be displeased.

Question put and agreed to.

Adjourned accordingly at eight minutes to One o'clock.