HC Deb 17 March 1986 vol 94 cc58-71

'The Secretary of State shall as soon as possible after the transfer to the successor Company of the property, rights and liabilities of the Corporation form and register under the Companies Act 1985 a Company for each region of the Corporation and transfer from the successor Company to each such regional Company the property, rights and liabilities formerly pertaining to the Corporation in each relevant region together with a share of the property, rights and liabilities of the successor Company which the Secretary of State shall deem equitable.".—[Mr. Wilson.]

Brought up, and read the First time.

Mr. Wilson

I beg to move, That the clause be read a Second time.

The new clause is probably one of most radical that has been tabled. Although many hon. Members are completely and utterly against the privatisation of British Gas, it is recognised that the Government have a substantial majority and on Second Reading the vote was given for privatisation. My new clause is no approval of privatisation— I am against it. The structure that has been adopted by the Government for British Gas is highly dangerous.

My new clause seeks to establish not the one successor company that the Government have outlined as appropriate to take over the work, enterprise, rights, assets and obligations of the BGC, but to use the mechanism that exists in the Bill for the successor company so as to provide for each of the regional boards or areas of British Gas to be divided up into companies and for those to be floated on the stock market.

It is important to address ourselves to a point that did not emerge in Committee but which was acceded to in Committee—that British Gas in its present form is a public utility which is highly centralised but which has some regional operations which, prior to the 1972 Act, were autonomous boards in the gas industry. Since nationalisation, bit by bit we have seen those powers disappear.

I am suggesting that we retain the central successor company. The Bill provides for transfer of the assets on a vesting day to that company. It would perhaps have been easier to eliminate that company altogether but I would be forestalled in that by the Bill's long title. In any event, it is a useful mechanism because, although I would prefer, for instance, to see Scottish Gas become a completely autonomous company with access to its own sources of gas, I recognise that that might not be appropriate to other parts of the United Kingdom. A substantial pool of gas is available to Scottish Gas because twice our market consumption share comes from indigenous resources in the North sea. I exclude the supplies of gas which come from the Norwegian sector. A successor company could be a holder of the pool of gas which exists and could make it available to the regional companies which will be set up to market it, to provide for the distribution services, the sales of appliances in the showrooms, and so forth.

There are some parallels to that. In England there is the Central Electricity Generating Board and there are marketing companies, but those are, of course, in the public sector. The independent television industry provides another example. The Independent Broadcasting Authority sponsors Independent Television News, which supplies news or central facilities to individual companies down the line. Those companies supply the programmes to the consumers and they have to pay their share of the costs of ITN.

Mr. Jim Craigen (Glasgow, Maryhill)

Following those analogies, will there be some franchising arrangement with the regional companies and do I take it from what the hon. Gentleman says that he has in mind marketing companies?

Mr. Wilson

No, I shall correct the hon. Gentleman's impression. I want gas companies in each region where British Gas currently operates. I would not necessarily take the franchising further than the analogy I gave in relation to ITN. It would not be appropriate in the circumstances that I have outlined. Nevertheless, it is quite a good analogy to show that there can be a central holding of the raw material of gas and yet independent companies would be able to market their own.

Alternatively, there is the other situation that I have desrcibed of an independent company in each area, but then the current pool of gas would have to be divided in some way so that a continuity of supply was provided for.

Mr. Dick Douglas (Dunfermline, West)

Would the regional companies that the hon. Gentleman proposes be independent or wholly owned subsidiaries of the central company? A strict reading of the new clause shows that they would be wholly owned subsidiaries of the central company.

Mr. Wilson

The hon. Gentleman was fortunate enough not to serve on the Standing Committee that considered the Bill which, to put it mildly, took a rather long time. If the hon. Gentleman consulted the Bill he would find that it is necessary to go through the procedure that I have outlined. The long title, in particular, would prevent the setting up of individual companies as successor companies through transfer by the Crown direct from British Gas. As I said at the outset, independent companies would be floated off separately and they would be centres of authority.

Let me deal with the structure which exists in the Bill. Whether or not we embark on the principle of privatisation, what the Government have sought to do is not acceptable to many people. In other words, they are turning a public monopoly into a private monopoly with no real opportunity for competition, with weak regulatory powers, and, as is hinted at in the abolition of the regional gas consumers councils now served by British Gas which was discussed earlier, we are seeing incipient centralisation by British Gas. That background is ominous. Few countries will allow the creation of such a huge monopoly on that basis. Indeed, in the United States, the home of the free market, legislation seeks to bust trusts when they come to that stage. The Americans found it necessary to break up "Ma Bell", whereas here we have an example of the Government going ahead with the creation of Mr. Gas. It is dangerous in terms of the accumulation of authority within the overall economy of the United Kingdom and it is also dangerous for the various areas of the United Kingdom because they will see what responsibility and authority is left to British Gas operating in their areas slide to the centre.

In Committee we discussed the fact that already British Gas is altering the name of Scottish Gas to British Gas Scotland and Wales Gas to British Gas Wales, and so on. A new uniform structure is being imposed from the centre.

The only reason why the Government have gone ahead with the privatisation of British Gas in this form is that they wish to sell in a hurry. Their time is running out and this is one example where the Government have not even tried to project the benefits of privatisation. Instead, they seem more honest in their aims when they recognise that, given the reduction in oil revenues, it is a great advantage to them to have massive resources coming in, albeit of capital arising through the sale of shares in British Gas, in order to finance tax cuts for the next election. But that is a short-term advantage that would have disastrous consequences. In the interests of widening the share distribution and strengthening the economy, it would be far healthier for the Government to consider the flotation of separate companies, each having a distinctive basis. Thus, I have in mind the setting up of 12 companies.

In Committee I drew the following analogy. One of the difficulties facing Merseyside is the absence of indigenous companies. When Liverpool was flourishing, insurance and shipping companies acted autonomously, creating wealth and providing jobs in the area. Now there is a wasteland. Many of us in Scotland are worried that if too many of our companies are taken over, any opportunities to change our economy will go, along with the units on which we had previously relied. Thus, I fear the Bill's consequences for regional development.

In Committee, I drew attention to an interesting article by Mr. Dennis Wilson, a former director of British Gas, which appeared in the magazine Gas World. He lamented the abandonment of autonomous systems of staff and line management, and desrcibed the flight of authority from the regional boards under the 1972 Act, saying that they had been emasculated. He also complained that British Gas, at the centre, was spawning a central hyperstructure of mammoth proportions, situated in expensive London locations and of no benefit to local consumers. He clinched that argument with the remarkable information that, at March 1985, there were 6,768 employees at the headquarters of British Gas. As a former director, he made it clear that he thought that the headquarters exercised an over-close srcutiny of the activities going on in the various regions or areas of the corporation. He said that, although demanning and efficiency had been called for from British Gas as a whole, there had been 4.4 per cent. demanning in the regions with only 1.1 per cent. demanning at headquarters. That rings true.

Perhaps the headquarters staff are doing work that is duplicated elsewhere. But even if they are doing valuable work, it could be done at area headquarters. That would create employment as well as opportunities for promotion and advancement and would give a commercial boost to the many areas that suffer from high unemployment. Thus, good quality jobs are being lost. When so many employees are employed at head office a sort of arteriosclerosis of the corporation develops. However, as I am not medically qualified, I would not want to elaborate on that save to say that it does not bode well for the corporation's commercial health.

I believe that we should float off companies in each of the areas. They would carry out the main functions with the exception, perhaps, of buying gas, although they could perhaps undertake that function in competition with each other 'at a later stage. They could oversee supply within their respective areas, management techniques and the taking of decisions with regard to gas showrooms. Regional companies might well have the advantage of being able to favour local suppliers, which would be good for the health of the economy.

Moreover, the flotation of such companies would strengthen the economy, particularly in Scotland. Some of those companies would be substantial. The number of staff at regional level ranges from 5,000 to 11,000. Scottish Gas serves more than 1 million customers, has 74,000 appliance sales per year and carried out 1.25 million service jobs in the last year of operation. All those functions would be better controlled at an area level. Scottish Gas also has sales of £403 million and investment worth about £20 million per year. Its wages amount to £57 million and a recent magazine article estimated its pre-tax profits to be about £35 million. However, that as an estimate, as British Gas does not attempt to split up its overall profits between the area organisations.

I commend the new clause to the House. The Government should have undertaken something like it from the beginning, instead of creating a colossus which might have adverse effects on the economy. If a Scottish Gas plc was established it might make up, in some small way, for the recent loss of Andersson Strathclyde, Bells, House of Fraser, perhaps the Trustee Savings Bank if the appellate committee of the other place does not change the judgment, Coats Patons and possibly Distillers. It would greatly help the Scottish economy to have a new, thriving company on the market that was controlled from within Scotland. It might also be an answer to some of the economic problems affecting different parts of the United Kingdom, and I commend it to hon. Members.

Mr. Alex Fletcher (Edinburgh, Central)

I shall be brief, as I was not a member of the Committee and so have not followed the arguments as closely as have the hon. Member for Dundee, East (Mr. Wilson) and my right hon. Friend the Minister of State. I apologise to my right hon. Friend in advance in case I make some points which have already been considered in Committee, or which to his mind are too obvious even to be discussed. However, I am sure that my right hon. Friend will have patience with me.

I was attracted by the new clause because it gives the House a chance to consider the structure of the new, privatised corporation. My interest is based, not only on any regional or Scottish consideration, but on the question of how the corporation will develop over the years. We naturally think of British Gas as a national and local gas supplier and distributor, but we shall be introducing a company which has the capacity to stand alongside BP as a large high-tech energy business which is capable of supplying the domestic market as its primary consideration as well as of moving internationally and taking its place in the exploration, distribution and development of energy resources in other parts of the world. I have the same view of British Telecom, although it is the local and national telephone company. I hope that it will use its domestic base to exercise influence, economic power, and profitability in other parts of the world.

I return to the local, regional and Scottish scene. It is important for regional policy that the management and administration of separate regional companies—I see them as subsidiaries of the main privatised corporation—have local accountability. Their ability to contribute to high calibre management jobs would satisfy the regions and Scotland.

The proposed system will give us a local chairman who is little more than a PR man. He will have a grand title—I make no criticism of people holding such jobs—but he will be a PR officer for customer service. With separate fully accountable subsidiary companies, with all the local and regional assets in the balance sheet, we could have proper local management and boards of directors and some competition between regions in terms of service, quality of service and efficiency of administration. It would be possible to compare the efficiency of the different subsidiaries and to discover what benefits might accrue from the lessons learnt.

That is done in the electricity industry in Scotland. The two companies submit two balance sheets and accounts which include all the assets. A different system is operated south of the border by the Central Electricity Generating Board and the distribution boards, but the Scottish model is at least worthy of consideration and debate. The consumer should be able to judge, on a full and proper company law basis, the performance of one regional gas operating company compared with another, without taking anything away from the efficiency or efficacy of British Gas plc. With those thoughts in mind, I support the new clause.

Mr. Bruce

I support the new clause tabled by the hon. Member for Dundee, East (Mr. Wilson), to which I have appended my name. The issue was raised in Committee and I regret that the Government are not prepared to face up to it. A number of matters have emerged. It is not just a question of before and after. The clause proposes to go further than what occurs at present. The Bill will create a more centralised gas industry. Even if the Government cannot accept the full thrust of the clause, they should have the grace to acknowledge that they are not simply transferring the status quo but are engaged in greater centralisation. Many of us feel that that is a retrograde step.

6.45 pm

The new clause suggests that we go further and create autonomous companies in Scotland and Wales and in the English regions. I accept that the competition would be limited, since the core business would have a substantial monopolistic element, but the scope for more competition would be greater. The transparency factor would be greater, but one would be able to examine the performance of different regional and national companies and draw lessons from them, whereas at present we are at the mercy of a centralised wisdom heavily concentrated at the corporate headquarters in London.

I suggest that the regional companies should be able to buy their gas—in most cases from British Gas through the transmission system—with the option of buying gas from other sources, whether that is from other than natural sources as technology changes, or from local natural sources onshore or offshore.

The hon. Member for Dundee, East mentioned the concern about the size of the British Gas Corporation headquarters in London. I fear that after privatisation the headquarters will be even bigger and that the management jobs available outside London will be fewer. Management decisions are being made at a central corporate headquarters and decision-making is not being devolved, so the freedom to pursue action needed in a particular area or region is not taken on board.

The decisions by North Thames gas on a particular course of action are fundamentally different from those that might be taken in Scotland. If they are that different, separate and autonomous companies should make the decisions. Each area should have the freedom to pursue policies in the light of local circumstances and different market circumstances.

Consumer councils have also been discussed in terms of regionalisation. I am slightly puzzled that some members of the Committee seemed enthusiastic about regional consumer councils, but were unwilling to accept that that need for local control and autonomy should reach the management and organisation of the gas industry. It seems strange to be in favour of regional consumer councils, but in favour of a unified, centralist, London-based corporation, without the opportunity to develop separate identities in the region.

The Government have rejected our proposals and have been inclined to rubbish them, but they have not come up with arguments as to why our proposals cannot be put into effect. The Minister will recognise that many people outside the House are puzzled about why that option has not been seriously considered. If it had been fully considered and the Government had said that they had examined it in depth but had good, coherent reasons why it would not be in the best interests of the consumer, the shareholders or the taxpayers, we should be more satisfied. The Government have said that they do not see any advantage in our proposals, but they have failed to say why.

In Scotland there is considerable interest in the idea of Scottish gas being handled by a separate company operating as an independent entity. It would have its headquarters in Scotland and the people of Scotland would have a direct stake in it. We see no reason why other regions, such as Wales, should not be given a similar opportunity. The proposal does not mean that there would be no centralised gas industry. Of course the transmission system must be centralised, and many of the corporate offices will continue to function to provide a service, but we need a counterbalance.

A monolithic structure will pursue its own policies and there will be no opportunities for the Scottish, Welsh and the English regions to say that they do not believe that the corporate central decisions are in the best interests of their consumers. They will be outvoted. All that we shall have is a National Consumer Council with possibly one regional representative. That is a weak and inadequate alternative to what is proposed.

The Government should have explored the sentiment behind the new clause more thoroughly. I urge them to take on board our serious proposal, even if the clause is not structured perfectly. If the Government go ahead with their centralist philosophy they will alienate many people outside London who are fed up with decision-making being taken away from their locality and made in London. The decision-making process will be removed from their localities and there will be an inability to get at the person making the decisions. The local representative may continue to be near to someone's doorstep, but very often it will be necessary to go to London to get satisfaction or to change policy.

Mr. Douglas

I shall try to be brief, but we are dealing with an important issue which must be treated seriously. We have heard three speeches on the new clause and there have been three different interpretations of it, and I shall not necessarily present my interpretation of the clause. I am in favour of a decentralised operation. The hon. Member for Dundee, East (Mr. Wilson) made clear the thrust of his argument in his closing remarks. He puts forward the clause as a piece of decentralisation, and in so doing claims that Scottish Gas plc will become the cure-all for the ills of the Scottish economy.

Mr. Wilson

I did not say that.

Mr. Douglas

I am not saying that the hon. Gentleman used those exact words, but he suggested that Scottish Gas plc would become a cure-all. Is he saying that the Strathclyde problem would be resolved and that Scottish Gas would lead to an expansion of employment? Under the existing structure we have had reasonable decentralisation. I do not say that everything has been perfect because public utilities, which tend to be monolithic, cannot be perfect. However, when a public utility has some form of accountability through a Minister to Parliament, pressures can be exerted in reflecting regional concerns.

The real thrust against the Government's proposals is that once the corporation becomes a company the chances of controlling it and achieving a regional dimension, whether the region is Scotland as a nation or another area, will diminish and evaporate almost completely. I found the remarks of the hon. Member for Edinburgh, Central (Mr. Fletcher) humorous when he said that he wanted the new company to be a real challenger to BP. The Government introduced the Oil and Gas (Enterprise) Act 1982 and in so doing they stripped British Gas of any opportunities it had of engaging in exploration and production. However, every sinner who repenteth is worth while.

I think that I speak for all Scottish Labour Members when I say that we want to see decentralisation. However, we recognise that the chances of us exerting pressures within a regional dimension will diminish and evaporate once the Bill is enacted. That is why we are so opposed to it. I do not think that it is valuable to give the impression to the Scottish people, the Welsh people, or the people of any region of the United Kingdom that if we set up mini companies that are independent, or wholly-owned subsidiaries of the major company, they will cure the major difficulties within the Scottish economy and that Scotland will get a great prize.

Mr. Orme

The hon. Members for Dundee, East (Mr. Wilson) and for Gordon (Mr. Bruce) asked me on Second Reading whether the Opposition were in favour of the sort of proposal that is before us in new clause 1. I said then that we were not. Notwithstanding all the faults or weaknesses that may exist in British Gas, I think that Scotland, along with other areas, has had good service from it. The policy that has been advanced by the hon. Member for Dundee, East could lead to different charges in different areas. If independent companies were set up, their charges could be different. I come from the northwest and I do not want differential charging to be a feature of life in areas that are far from the centre. That would pose a danger for Scotland, Wales and other areas.

How far should we go with any independence that is created? I think that we should—

Mr. Wilson

It does not necessarily follow that charges in the more remote areas would be higher. In Scotland we have two electricity generating boards, and the price of electricity is cheaper to the customer in Scotland than in England and Wales. If a pool of gas is owned by the successor company and there is level pricing, any reductions in the price of gas that are enjoyed by the customer will be the result of the efficient management of the local companies.

Mr. Orme

I do not think that the parallel with electricity is valid. The hon. Gentleman is playing into the hands of Conservatives who talk about competition and want to see British Gas broken up. British Gas is highly efficient and the charges for gas are too high only because of things like the gas levy. The Government are draining away that which is created by the efficiency of British Gas. There could be cheaper prices in Scotland, Wales and England. The structure that is proposed by the hon. Gentleman would not work, and it would not be in the interests of Scotland or any other region within the United Kingdom.

Mr. Fletcher

The right hon. Gentleman said a few moments ago that there could be differential pricing in the regions. He argued that the further away from the centre an area was the more that that could he. Surely he is not suggesting that the centre of the gas industry is the west end of London. Everything depends on where the centre is.

Mr. Orme

It is not a geographical issue in that sense. When the Telecommunications Bill, as it then was, passed through the House, I was involved because of my responsibilities as an Opposition spokesman. There were major arguments on behalf of those living in rural areas and much time was spent discussing what would happen to them if the Bill were enacted. We spoke of the dangers of differential pricing.

The Opposition feel that the new clause is unnecessary. If the hon. Member for Dundee, East and those who support him force a Division on this issue, I shall ask my right hon. and hon. Friends not to support the clause.

Mr. Buchanan-Smith

I agree with the comments of the right hon. Member for Salford, East (Mr. Orme) about the woolliness of the way in which the new clause was introduced by the hon. Member for Dundee, East (Mr. Wilson). The hon. Gentleman talked about cheaper electricity being available in Scotland, but he did not acknowledge that the lower prices are related directly to the extent to which we depend upon nuclear power in Scotland. I hope that the hon. Gentleman consulted the hon. Member for Gordon (Mr. Bruce), and I hope that he in turn consulted his hon. Friends in the Social Democratic party.

With respect to my hon. Friend the Member for Edinburgh, Central (Mr. Fletcher), the alliance that we see on the new clause does not take into account the fact that the people of Scotland would not know where they were when it came to their energy policy. Each party would be advocating a different policy. On that basis, if on no other, anyone who believes that a clause of this nature would be for the benefit of Scotland would be wise to srcutinise closely precisely what it is that those who support it are trying to achieve.

I think that the hon. Member for Dundee, East was less than fair when he said that a new structure was being imposed on Scotland by British Gas. That is not true. British Gas is maintaining the structure and organisation that currently applies. There has been a change of name and Scottish Gas has become British Gas Scotland. I should have thought that the hon. Gentleman would prefer "Scotland" to the adjective "Scottish". It is important that that is on the record, because the hon. Gentleman returns constantly to this issue and misleads people in desrcibing what is taking place. As I said in Committee, there will be no change in the structure and organisation of British Gas Scotland.

I think that my hon. Friend the Member for Edinburgh, Central was less than fair to the chairman of what will be British Gas Scotland in desrcibing him as no more than a public relations officer. My hon. Friend has a different kind of constituency, and I do not know whether he has had any dealings with the chairman, but I have had many dealings with the chairman in relation to service, transmission lines, and so on—I do not mean small individual consumer questions, but larger matters of supply to whole communities, renewal or reinforcement of transmission lines, and so on—and have never failed to obtain complete satisfaction. I felt, therefore, that my hon. Friend's comments belittled the chairman's role.

The hon. Member for Gordon asked why the proposal in the new clause could not be carried out, but nobody has said that. I am surprised that the hon. Gentleman did not listen more carefuly to what was said in Committee. The question, as the right hon. Member for Salford, East has said, is whether it is worth doing and whether it is in the interests of consumers in Scotland.

Those who support the new clause must realise that we start from a successful, integrated industry. That is partly due to the development of North sea gas and the almost total reliance, apart from some liquid natural gas, on an integrated distribution system throughout the United Kingdom. Had we begun from the situation at the time of nationalisation, with individual gas works producing gas from coal in a large number of different places, different considerations might apply, but as we now have an integrated industry relying on a single source of supply it makes no sense to break it down.

Mr. Craigen

The Minister has spent so much time telling us what an excellent gas industry we have that I am surprised there is any need for privatisation. How can he guarantee that the industry will behave as he suggests in relation to structure once it is privatised?

Mr. Buchanan-Smith

That is exactly the question that I wanted. I was getting worried that it would not be asked. I believe that the tests in the private sector—competition with other fuels in the industrial market, and so on—will provide far greater incentives to efficiency and higher standards of service to the consumer. It has been amply demonstrated that the private sector provides better standards of service and efficiency in the interests of the consumer.

The hon. Member for Dunfermline, West (Mr. Douglas) referred to the problem of a private company serving the interests of the region. For industrial consumers, as has been shown in this period of falling oil prices, competition from other fuels ensures that consumers obtain proper services. On the question of tariffs, the hon. Gentleman failed to recognise that the Director General of Gas Supply is charged under the Bill to observe the need to avoid preferences and to ensure fairness between different areas. I stress that point also to my hon. Friend the Member for Edinburgh, Central.

There might have been more of an argument if hon. Members could have said, as I thought my hon. Friend the Member for Edinburgh, Central was about to say, that the new clause would lead to more competition. In fact, because there would still be a monopoly supplier in each region there would be no more competition than there would be among the various regions of British Gas. I believe—here I am absolutely at one with the right hon. Member for Salford, East—that the result would be differential pricing. I have dealt with the false analogy with electricity suggested by the hon. Member for Dundee, East. The fact that Scotland has far more scattered communities probably than any other region means that British Gas must provide special supplies of liquid natural gas, and so on. I accept that Scotland has problems, but without an integrated British Gas those problems could lead to much higher costs.

I believe that the new clause would do nothing to serve the interests of Scottish consumers. Having listened to those who spoke in favour of the new clause, I am left wondering what they really want. My hon. Friend the Member for Edinburgh, Central wants a strong British Gas to go out into the world market, but British Gas is already in the world market. Representatives of British Gas have accompanied me on trade missions and British Gas provides consultancies, advice and services overseas. Breaking down that integrated industry within the United Kingdom would not serve the best interests of British Gas or its consumers in this country.

The hon. Member for Glasgow, Maryhill (Mr. Craigen) asked the hon. Member for Dundee, East whether the proposed system would apply just to marketing or whether it would apply to franchising. The reply was, in effect, that the pool of gas would simply be divided up somehow. When the hon. Member for Dunfermline, West asked whether the companies would be subsidiaries of British Gas or whether they would be independent companies, the hon. Member for Dundee, East said that there would be centres of authority in the regions. That is woolliness of the first order. To accept the new clause would be to buy a pig in a poke. It would not be in the interests of consumers in Scotland and it would certainly not be in the interests of Scotland.

Mr. Wilson

I cannot allow the debate to end on the farcical note struck by the Minister, who suggested that I did not know what I was after. He clearly does not appreciate the idea of breaking up the centralised system that he has in force, and I am surprised at the way in which the Labour and Conservative parties seem at one in trying to maintain the Goliath of British Gas.

I am even more surprised to hear the right hon. Member for Salford, East (Mr. Orme), for whom I have great respect, talking about the benefits of British Gas—from which I do not dissent—but failing to realise that British Gas plc will be completely unlike the previous organism and therefore that he cannot make judgments about how this creature will react on the basis of what has gone before.

Then there is the strange situation of the hon. Member for Dunfermline, East (Mr. Brown). Apparently Scottish Labour Members are all in favour of decentralisation but are not prepared to vote for it. Sooner or later they will have to make up their minds. It is a Labour party tradition that everything should be organised from the centre, but I thought that they had been breaking away from that. I am very disillusioned by the attitude that they have adopted.

I am rather more cynical, of course, about the Government's stance on these matters. The Minister raises the question of differential pricing, but fails to acknowledge what was well known in Committee—that remote communities which are not connected to the main gas grid are charged a premium price for the liquefied gas provided. Is the Minister about to give an assurance that those communities will be provided with gas at the standard rate? If not, there is a huge hole in his argument about benefits.

As for the parallel with the network or grid, we already have that in the electricity supply industry. The North of Scotland Hydro-Electric Board and the South of Scotland Electricity Board work together harmoniously on joint projects but still maintain their independence. They export power to each other and to the Central Electricity Generating Board, which in turn is linking up with Electricité de France, so it is possible for independent, autonomous companies to work in an international framework. If that is correct for the electricity supply industry, it seems self-evident that we could do so in relation to gas. The fact is that the Government want to keep a centralised gas corporation and the Labour party, which its leader has just desrcibed as a party of devolution, still wants to keep the power at the centre by having a huge organisation with 7,000 employees at its headquarters with all the tentacles coining out of London.

I hope that those hon. Members who believe in decentralisation, competition and a good service being offered within the gas industry will vote with me because I intend to press this matter to a Division.

Question put, That the clause be read a Second time:—

The House divided: Ayes 22, Noes 228.

Division No. 103] [7.15 pm
Beith, A. J. Parry, Robert
Bruce, Malcolm Ross, Stephen (Isle of Wight)
Canavan, Dennis Skinner, Dennis
Cartwright, John Steel, Rt Hon David
Craigen, J. M. Stewart, Rt Hon D. (W Isles)
Freud, Clement Thomas, Dafydd (Merioneth)
Hancock, Michael Wainwright, R.
Howells, Geraint Wallace, James
Hughes, Simon (Southwark) Wrigglesworth, Ian
Maclennan, Robert
Marshall, David (Shettleston) Tellers for the Ayes:
Meadowcroft, Michael Mr. Gordon Wilson and
Owen, Rt Hon Dr David Mr. Archy Kirkwood.
Aitken, Jonathan Bowden, A. (Brighton K'to'n)
Amess, David Bowden, Gerald (Dulwich)
Ancram, Michael Boyson, Dr Rhodes
Atkins, Rt Hon Sir H. Brandon-Bravo, Martin
Atkins, Robert (South Ribble) Bright, Graham
Baker, Nicholas (Dorset N) Brittan, Rt Hon Leon
Baldry, Tony Brown, M. (Brigg & Cl'thpes)
Banks, Robert (Harrogate) Browne, John
Batiste, Spencer Bruinvels, Peter
Beaumont-Dark, Anthony Bryan, Sir Paul
Bellingham, Henry Buchanan-Smith, Rt Hon A.
Benyon, William Buck, Sir Antony
Best, Keith Butler, Rt Hon Sir Adam
Biffen, Rt Hon John Butterfill, John
Biggs-Davison, Sir John Carlisle, John (Luton N)
Blaker, Rt Hon Sir Peter Carlisle, Kenneth (Lincoln)
Body, Sir Richard Cash, William
Boscawen, Hon Robert Chapman, Sydney
Chope, Christopher MacGregor, Rt Hon John
Churchill, W. S. MacKay, Andrew (Berkshire)
Clark, Dr Michael (Rochford) Maclean, David John
Clark, Sir W. (Croydon S) McNair-Wilson, P. (New F'st)
Clarke, Rt Hon K. (Rushcliffe) Madel, David
Cockeram, Eric Maples, John
Colvin, Michael Marshall, Michael (Arundel)
Conway, Derek Mates, Michael
Coombs, Simon Mather, Carol
Cope, John Maude, Hon Francis
Cormack, Patrick Merchant, Piers
Corrie, John Meyer, Sir Anthony
Critchley, Julian Miller, Hal (B'grove)
Currie, Mrs Edwina Mills, Iain (Meriden)
Dicks, Terry Miscampbell, Norman
Dorrell, Stephen Moate, Roger
Douglas-Hamilton, Lord J. Monro, Sir Hector
Dover, Den Morrison, Hon C. (Devizes)
du Cann, Rt Hon Sir Edward Moynihan, Hon C.
Durant, Tony Needham, Richard
Eggar, Tim Nelson, Anthony
Emery, Sir Peter Neubert, Michael
Evennett, David Nicholls, Patrick
Eyre, Sir Reginald Normanton, Tom
Fookes, Miss Janet Norris, Steven
Forman, Nigel Onslow, Cranley
Forth, Eric Ottaway, Richard
Fowler, Rt Hon Norman Page, Sir John (Harrow W)
Fry, Peter Page, Richard (Herts SW)
Galley, Roy Parris, Matthew
Gardiner, George (Reigate) Patten, J. (Oxf W & Abgdn)
Garel-Jones, Tristan Pattie, Geoffrey
Glyn, Dr Alan Pawsey, James
Goodhart, Sir Philip Peacock, Mrs Elizabeth
Gorst, John Percival, Rt Hon Sir Ian
Gow, Ian Porter, Barry
Gower, Sir Raymond Powell, William (Corby)
Greenway, Harry Powley, John
Gregory, Conal Prentice, Rt Hon Reg
Griffiths, Sir Eldon Price, Sir David
Grist, Ian Pym, Rt Hon Francis
Grylls, Michael Raffan, Keith
Gummer, Rt Hon John S Raison, Rt Hon Timothy
Hamilton, Hon A. (Epsom) Rathbone, Tim
Hamilton, Neil (Tatton) Rhodes James, Robert
Hampson, Dr Keith Rhys Williams, Sir Brandon
Hannam, John Ridley, Rt Hon Nicholas
Harris, David Ridsdale, Sir Julian
Hayhoe, Rt Hon Barney Roberts, Wyn (Conwy)
Heddle, John Robinson, Mark (N'port W)
Henderson, Barry Roe, Mrs Marion
Heseltine, Rt Hon Michael Rossi, Sir Hugh
Higgins, Rt Hon Terence L. Rost, Peter
Hind, Kenneth Rumbold, Mrs Angela
Hirst, Michael Ryder, Richard
Holland, Sir Philip (Gedling) Sackville, Hon Thomas
Holt, Richard Sainsbury, Hon Timothy
Howarth, Alan (Stratf'd-on-A) Sayeed, Jonathan
Howarth, Gerald (Cannock) Shaw, Sir Michael (Scarb')
Howell, Rt Hon D. (G'Idford) Shepherd, Colin (Hereford)
Howell, Ralph (Norfolk, N) Shepherd, Richard (Aldridge)
Hunt, David (Wirral W) Silvester, Fred
Irving, Charles Sims, Roger
Johnson Smith, Sir Geoffrey Skeet, Sir Trevor
Key, Robert Smith, Sir Dudley (Warwick)
Latham, Michael Smith, Tim (Beaconsfield)
Lawler, Geoffrey Speller, Tony
Lawrence, Ivan Spencer, Derek
Leigh, Edward (Gainsbor'gh) Spicer, Jim (Dorset W)
Lennox-Boyd, Hon Mark Spicer, Michael (S Worcs)
Lester, Jim Stanbrook, Ivor
Lewis, Sir Kenneth (Stamf'd) Stanley, Rt Hon John
Lightbown, David Steen, Anthony
Lilley, Peter Stern, Michael
Lloyd, Ian (Havant) Stevens, Lewis (Nuneaton)
Lord, Michael Stewart, Andrew (Sherwood)
Luce, Rt Hon Richard Stewart, Ian (Hertf'dshire N)
McCrindle, Robert Stokes, John
McCurley, Mrs Anna Stradling Thomas, Sir John
Macfarlane, Neil Sumberg, David
Taylor, John (Solihull) Waller, Gary
Taylor, Teddy (S'end E) Ward, John
Temple-Morris, Peter Wardle, C. (Bexhill)
Thomas, Rt Hon Peter Warren, Kenneth
Thompson, Donald (Calder V) Watson, John
Thompson, Patrick (N'ich N) Watts, John
Thorne, Neil (Ilford S) Wheeler, John
Thornton, Malcolm Whitney, Raymond
Townend, John (Bridlington) Winterton, Mrs Ann
Twinn, Dr Ian Winterton, Nicholas
van Straubenzee, Sir W. Wolfson, Mark
Vaughan, Sir Gerard Wood, Timothy
Viggers, Peter Woodcock, Michael
Waddington, David Young, Sir George (Acton)
Waldegrave, Hon William
Walden, George Tellers for the Noes:
Walker, Bill (T'side N) Mr. Peter Lloyd and
Walker, Rt Hon P. (W'cester) Mr. Gerald Malone.

Question accordingly negatived.

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