Public Utility Transfers and Water Charges Bill [Money] (Hansard, 21 October 1987)

§ Mr. John Maxton (Glasgow, Cathcart)
I am aware that any money resolution is rather limited in its extent. Although the Bill is largely concerned with matters relating to England and Wales—the sections of the Bill on water apply entirely to England and Wales; Scottish water is controlled by the local authorities — it also covers the South of Scotland Electricity Board and the North of Scotland Hydro-Electric Board. However, we had no Scottish input in the Second Reading debate.
We have a different system of electricity supply in Scotland. Recently I was at a reception given by the CEGB and it had a big graph on the wall together with a flow chart showing electricity flowing from its system into Scotland. I had to point out that that was totally wrong and that the flow should be the other way round—England gets a lot of electricity from the South of Scotland Electricity Board.

§ Mr. George Foulkes (Carrick, Cumnock and Doon Valley)
On a point of order, Mr. Deputy Speaker. I cannot hear my hon. Friend properly because of the gaggle of English Tory twits at the end of the Chamber. Would you please instruct them either to get out or to sit down?

§ Mr. Deputy Speaker (Sir Paul Dean)
I hope that right hon. and hon. Members who are not listening to the debate will carry on their conversations outside the Chamber.

§ Mr. Maxton
Of course, I hope that the hon. Members who are speaking at the end of the Chamber will listen to the debate rather than leave. They might learn something for a change.
There is a Scottish element to the Bill and it is right that we should have a debate, however limited it might be, on the Scottish aspect. Yet again we are seeing Scottish business, related to Scotland under the powers of the Secretary of State for Scotland, included in an English Bill. That limits the opportunity for hon. Members representing Scotland to debate the Bill and that we all deplore.
We in Scotland also deplore the fact that the SSEB and the North of Scotland Hydro-Electric Board arc included in the Government's privatisation schemes because—I say it again, and I shall keep saying it—the Government have no mandate in Scotland to carry out such legislation for Scotland. The Scottish people firmly rejected the philosophy of the Conservative party. It lost 11 seats in Scotland and is down to a rump of 10. A mishmash of Ministers is left as a result of the election, and the fact is that they do not have the backing of the Scottish people for what they propose to carry out.

§ Mr. John Home Robertson (East Lothian)
Where is the Secretary of State for Scotland?

§ Mr. Maxton
He is not here. He should be here to answer some of the questions that I wish to put to him.
The Bill is enabling legislation. It gives the Secretary of State and the electricity boards the power to carry out certain functions prior to privatisation. If that is so, perhaps the Minister can tell me why the Secretary of State has already appointed as legal advisers to the SSEB McGrigor Donald (Solicitors) of Glasgow, although I am delighted to see a constituent of mine being given that task. I should like to know why the SSEB has already appointed merchant bankers Noble Grossart to advise it on privatisation. Under what powers are the SSEB and the Secretary of State undertaking this expenditure? As I read the Bill, they have no power to undertake such expenditure until the Bill becomes law. On what authority has the SSEB started down that road at this time?
It appears that the Secretary of State for the Environment will reply. I should prefer it if it were the Minister of State, Scottish Office, because the two electricity boards are his responsibility, not that of any other Minister. It would be right for him to reply to the debate.

§ Mr. Nigel Griffiths (Edinburgh, South)
Does my hon. Friend share my concern that while we are having a debate of such importance to Scotland the so-called Secretary of State for Scotland is in Japan and is not here to reply to the grave allegations that my hon. Friend is making about the economy and the supply of electricity to Scotland?

§ Mr. Maxton
I agree. I think that all my hon. Friends will accept my point that the reply to my speech must be made by the Minister of State, Scottish Office, not by the Secretary of State for the Environment, whose Department has nothing to do with the electricity supply industry. He is here only to deal with the parts of the Bill on water. I hope that the Minister of State is taking notes and will reply to the debate.
Other expenditure may be undertaken by the Secretary of State and the SSEB before privatisation. One assumes that there will be some advertising early on. Perhaps the Secretary of State himself will undertake some of the advertising. Millions might be spent on a campaign to sell off the SSEB and the North of Scotland Hydro-Electric Board. Millions of pounds have been spent on the BP and British Gas advertising campaigns—although I suppose that it will be not Sid but Jock they are looking for. Such a campaign will be mounted again at enormous expense to the SSEB and the North of Scotland Hydro-Electric Board. I am sure that most Scottish people would prefer the money to be spent on reducing electricity prices in Scotland. One also assumes that some money will be spent to underwrite the issue of South of Scotland Electricity Board stock. I assume that it will cost much more to underwrite the privatisation measures now than it did before the recent collapse of the stock market. Many stockbrokers will find that they get burnt fingers or perhaps find themselves facing a major disaster as a result of the BP issue. They will demand much higher prices for the SSEB flotation than they did for the BP flotation about which they thought they were sitting pretty and there would be no problem.
I know that some of my hon. Friends want to take part in this short debate, so I shall bring my remarks to an end. 831 However little money is to be spent by the Secretary of State and whatever money will be spent on the SSEB and the North of Scotland Hydro-Electric Board, the Scottish people have said that they would prefer that money to be spent on ensuring that industry comes to Scotland to create jobs and on ensuring that those who are old and weak and who need electricity during the winter for appliances to keep themselves warm get that electricity at a price they can afford. We should remember that the SSEB and the North of Scotland Hydro-Electric Board may become one body under privatisation. So much for competition.

§ Mr. Brian Wilson (Cunninghame, North)
Does my hon. Friend agree that the concern about the North of Scotland Hydro-Electric Board is that it is unique in having a special social remit written into the legislation which is incapable of protection under privatisation? Does he agree that the whole concept, as advanced by Tom Johnson in more civilised times, is likely to be thrown away in this lunatic idea of privatising a body such as the North of Scotland Hydro-Electric Board and the social remit that goes with it?

§ Mr. Maxton
I agree entirely with my hon. Friend. In fact, the North of Scotland Hydro-Electric Board has a remit to supply electricity to remote areas such as the Highlands and islands of Scotland at a disproportionate cost for each individual user if they had to pay the full cost. One could envisage a situation after privatisation, particularly if there is one large electricity board run from the central belt of Scotland by people unaware of the social problems, where the special social remit would be ignored. I know that when the electricity supply in the south of England is hit by a major storm there is an outcry and people down here, quite rightly, feel deprived when they are without electricity. However, in the Highlands and islands a major storm is not unusual and the electricity supply is often threatened. Who will meet the enormous ongoing cost of ensuring that the supply in the north of Scotland is maintained? Will it be the privatised board, whose major concern will be profit, or will the state still have to pick up that cost without any return through the electricity supply industry?
The people of Scotland would prefer every penny that is spent on the privatisation of the electricity supply industry in Scotland to be spent on ensuring that they get electricity at a price they can afford and that industry gets electricity at a price that ensures it is competitive with the rest of the world. That is what the Scottish people want. That is what they voted for in the general election on 11 June. In my view, the Government should withdraw all the proposals in the Bill relating to Scotland and leave the South of Scotland Electricity Board and the North of Scotland Hydro-Electric Board alone.

Several Hon. Members
rose——

§ The Secretary of State for the Environment (Mr. Nicholas Ridley)
I do not want to deny hon. Members their fun——

§ Mr. Foulkes
On a point of order, Mr. Deputy Speaker. Is it in order for the Minister to reply to the debate before it is concluded? There are hon. Members on the Conservative Benches — kilted and otherwise — and on the Opposition Benches who wish to contribute. It does 832 not seem appropriate for the Minister, however garrulous and arrogant he may be, to reply before he has heard the debate. Surely it would be more appropriate for you to call hon. Members from the Back Benches, Mr. Deputy Speaker, so that the Minister can give a more comprehensive, if inarticulate, reply.

§ Mr. Deputy Speaker
The Minister has risen and I have called him.

§ Mr. Ridley
I simply wished to inform the hon. Member for Glasgow, Cathcart (Mr. Maxton) that the money resolution, which I quote, authorises the payment of money provided by Parliament of any administrative expenses incurred by the Secretary of State in consequence of that Act. In this case, the Act means this Bill. The only administrative expenses incurred under the Bill are mine, not the Secretaries of State for Scotland or Energy. I incur administrative expenses in the sense that the metering trials could cost my Department and the Welsh Office £22,000 in 1988–89 and perhaps £15,000 each year for the duration of the trials. That is about £2,000 per scheme. As the hon. Gentleman knows, these trials are all to be held in England. We might also need to employ consultancy services that could cost about £10,000 a year for five years.
Those are the sums of money that Parliament is being asked to approve as a consequence of this Bill. Any money that might be spent by the water authorities or the electricity boards can be spent under powers in other statutes. Therefore, the passage of the Bill in no way affects what the Scottish, Welsh or English water or electricity authorities might spend. It is simply a question of asking the House to authorise me and my right hon. Friend the Secretary of State for Wales to pay some small administrative expenses — and "administrative" is the word in the resolution before the House — for the metering trials.
Although the hon. Gentleman made a fine speech, which I much admired — and I would not wish to intervene in Scottish politics — I have to say that I suspect that these issues do not arise on the money resolution, and I ask the House to pass it without becoming too excited by the late-night appearance of the Scots, which is becoming rather a plague for those of us from England.

§ Dr. Norman A. Godman (Greenock and Port Glasgow)
The right hon. Gentleman referred to administrative expenses, but is not the Department of Health and Social Security involved, given the important relationship between that Department and the health boards on, for example, direct payments?

§ Mr. Ridley
No. Each Bill presented to Parliament that might give rise to new spending has in its money resolution the suggested authorisation for Ministers to spend on items on which they have not previously been given authority by Parliament to spend. In this case, neither my Department nor the Welsh Office has authority to spend money on consultancies and the various small administrative expenses for the water metering trials. That is what the money resolution seeks to grant to us. In no way does it affect other Departments, let alone the Scottish Office, the electricity boards, the water authorities or anyone else.

§ Mr. Maxton
rose——

§ Mr. Ridley
I have finished my speech. I shall give way to the hon. Gentleman, but I make it clear that I am giving way within a speech which has already come to an end.

§ Mr. Maxton
If the right hon. Gentleman thinks that the late-night appearance of Scots only four months after the general election is a plague, I have to tell him that he ain't seen nothing yet.
If the right hon. Gentleman looks closely at the money resolution, he may see some examples of where the Secretary of State for Scotland will incur administrative expenditure. For instance, I cannot see how two separate boards established by separate legislation could be merged into one board unless the Secretary of State for Scotland carried out a function which will be his rather than the function of either board. Therefore, he will incur administrative costs, not someone else.

§ Mr. Ridley
That is incorrect. The only point of the Bill in relation to electricity is to give the electricity boards in England and Scotland the legal power to spend money in preparation for privatisation. They do not require financial resolutions to do that. They need the vires. The Secretary of State for Scotland will not incur expenditure because the Scottish electricity boards may spend a little money on preparing for their privatisation. In no sense does the money resolution apply to the Secretary of State for Scotland — nor does it apply to the Secretary of State for Energy—in relation to expenditure by those Departments or electricity boards.
I repeat to the hon. Gentleman that the money resolution, if the House is wise enough to approve it, will give the Welsh Office and my Department the power to contribute to the administrative costs of the metering authorities.

§ Mr. John Home-Robertson (East Lothian)
The House will have enjoyed that Back-Bench contribution from the Secretary of State for the Environment, and we look forward to the definitive reply on behalf of the Government from the hon. Member for Tayside, North (Mr. Walker). I presume that he is speaking on behalf of the Government on Scottish affairs. When replying to the debate, perhaps he will explain the impact of clause 1 on Scotland. Subsection (7) states that 'electricity board' means the Central Electricity Generating Board, an Area Board, within the meaning of the Electricity Act 1947, the North of Scotland Hydro-Electric Board or the South of Scotland Electricity Board. But the only reference to "electricity board" in the remainder of clause 1 is in subsection (1), which refers to an electricity board in England and Wales. How an electricity board in England and Wales can include either the North of Scotland Hydro-Electric Board or the South of Scotland Electricity Board is not entirely clear to the Opposition. We look forward to an explanation from the hon. Member for Tayside, North.
The money resolution states: That, for the purposes of any Act resulting from the Public Utility transfers and Water Charges Bill, it is expedient to authorise the payment out of money provided by Parliament of any administrative expenses incurred by the Secretary of State in consequence of that Act. My hon. Friend the Member for Edinburgh, Central (Mr. Darling) muttered earlier that expenses are already being incurred by electricity authorities in Scotland, preparing for privatisation, whether the Secretary of State 834 acknowledges it or not. We have seen many advertisements hyping the corporate image of the SSEB, presumably to make it attractive to prospective investors. As my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) said, most electricity consumers in Scotland would far rather the SSEB used its scarce resources to minimise the cost of electricity to its consumers than preparing to do the Government's dirty work in an area where the Government have no democratic mandate to carry out policies of privatisation or anything else.
I may say in passing that we have a nuclear power station at Torness in my constituency—my hon. Friend the Member for Cunninghame, North (Mr. Wilson) would make the same point in relation to the Hunterston power station — and there is a great deal of alarm at the prospect of privatisating nuclear installations. I have yet to hear that any private investors are falling over each other to take on the financial responsibility and commitment that will be involved not only in the operation of nuclear power stations but in the long-term commitment to decommissioning nuclear installations, however long a period that may involve.
A whole stack of issues is related to the general principle of the Bill, but I do not want to dwell on them at this stage because we are supposed to be talking about the money resolution. There are Scottish aspects of the resolution that should be answered by the Government. The Secretary of State has characteristically refused to do that. Money will be spent on administrative expenses, if not on other aspects of the legislation. That is not appropriate and there is no mandate for it. Why on earth are the Government going ahead with it? We look forward to hearing a reply on behalf of the Government from the hon. Member for Tayside, North.

§ Mr. Bill Walker (Tayside, North)
The hon. Members for East Lothian (Mr. Home Robertson) and for Glasgow, Cathcart (Mr. Maxton) alluded to the North of Scotland hydro-electric board. Neither of those two hon. Gentlemen represents constituencies where that board operates. They should not say that that applies in my case. The hydro-electric board operates in parts of my constituency.

§ Mr. Wilson
Will the hon. Gentleman give way?

§ Mr. Walker
I shall give way to the hon. Gentleman in a moment.
Because of what I have said, I can stand here this evening and say that I have had the endorsement of the voters of Tayside, North. I still enjoy the largest percentage of the vote of any Conservative Member in Scotland. Because of that and because the North of Scotland hydro-electric board is such an important employer and so vital to my constituency, I say to my right hon. and hon. Friends on the Front Bench that I welcome the contents of the money resolution, which will ensure the administrative expenses that will be incurred, and make it possible eventually to privatise the board.

§ Mr. Wilson
Given the way in which the hon. Gentleman is dressed, I thought he was going to give us a rendition of the hiking song. If so, and if he goes through the litany of the Scottish islands, he might realise that Arran is in my constituency, and within the remit of the North of Scotland hydro-electric board.

§ Mr. Walker
As the hon. Gentleman is new to the House, he does not realise that interventions are not speeches. I alluded to the speeches made by the two Opposition Members that I have mentioned. If the hon. Gentleman waits a little longer, he will realise that we have a format for dealing with these matters, and he will then realise what I said.

§ Mr. George Foulkes (Carrick, Cumnock and Doon Valley)
As my hon. Friend the Member for Cunninghame, North (Mr. Wilson) says, the hon. Member for Tayside, North (Mr. Walker) was wrong about Arran, but he is wrong about many things, so why should he miss out Arran?
It is always a great pleasure and joy to follow the hon. Member for Tayside, North, representing as he does 10 per cent. of the Scottish Conservative party in Parliament, He has a great, wide and varied experience, and it is a great tragedy and loss to Scottish government that he is not part of the Scottish Office team. People who have been described variously as fanatics and incompetents — I would not use such terms—are there instead.

§ Mr. Bill Walker
I should like the hon. Gentleman to be aware that there are some hon. Members who, unlike him, are not prepared to do anything in order to climb the greasy pole—[Interruption.]

§ Mr. Foulkes
Tempted as I am to ask the hon. Member to withdraw that disgraceful slur against the hon. Members for Stirling (Mr. Forsyth) and for Edinburgh, West (Lord James Douglas-Hamilton), I shall let it lie.
Reluctantly moving away from the hon. Member for Tayside, North, I must say that I am surprised, nay, bewildered— if Dame Edna Everage will excuse the use of that expression—at the reluctance of the Secretary of State for the Environment to debate the motion. The Government are noted for their concern about public expenditure, limiting expenditure, every kind of control, making sure that the PSBR is kept down, and so on. I thought that they would be eager to subject to parliamentary scrutiny any expenditure, however modest and carried out by whatever Department or Secretary of State for whatever purpose.
It is amazing that the Secretary of State for the Environment, who is one of the architects of the Government's policy on public spending control, is so reluctant to have democratic scrutiny. I thought that he would be encouraging us, welcoming our questioning. We want not only a detailed explanation from the Secretary of State but justification for the expenditure. Explanation to Parliament is essential, but justification for expenditure, beyond mere explanation, is even more important.
The Secretary of State said that the money resolution was relatively narrow, was specific to him as Secretary of State for the Environment and covered only water metering and some other matters. However, you, Mr. Deputy Speaker, and the eminent Clerks who advise you know that the resolution is not specific to the right hon. Gentleman. It is general; it says only "the Secretary of State". In this case, that could be the Secretary of State for Wales or the Secretary of State for Scotland.
The words of the Secretary of State for the Environment will be recorded in Hansard and we have 836 some faith in what he says, but that will not be the law of the land or a resolution of the House. The resolution will mention only "the Secretary of State".
Despite the fact that the Secretary of State for the Environment has said that the resolution will cover only metering trials and consultancy, those matters are not mentioned. The right hon. Gentleman or other Ministers could get involved in other kinds of expenditure. To coin a phrase that I am sure has been heard before, we are giving the Secretaries of State blank cheques. I am sure that my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) has heard that phrase before. He may have coined it in one of his more eloquent moments. I am sure that the last thing the Secretary of State would want the House to endorse is the giving of blank cheques to any Secretary of State — even himself — given that from time to time he may not have the same kind of self control that he in his more wiser moments might wish to have.

§ Mr. Wilson
More wiser?

§ Mr. Foulkes
I am sorry. At this time of night my English tends to deviate from being excellent, as my hon. Friend the Member for Cunninghame, North rightly says.

§ Mr. Norman Buchan (Paisley, South)
Even Shakespeare approved of the double intensive.

§ Mr. Foulkes
I am told that the double comparative is endorsed by the English bard.

§ Mr. Buchan
"the most unkindest cut …"

§ Mr. Foulkes
The Minister says that we are dealing only with metering trials. He gave us a very general, off the cuff, ad hoc indication of how much these metering trials would cost. In fairness to the House, we need more detail of what the trials involve. We were also told that there will be all sorts of consultancy. We know what happens with consultancies. Friends of the Tory party get roped in and are paid thousands of pounds to tell well-versed officials what they already know. By picking the brains of the officials in the Departments the consultants produce reports saying exactly what the officials could have told the Secretary of State at the beginning of the discussion. I hope that the Secretary of State will give us a clear indication of exactly what these costs involve. We need more detail.
I shall now turn briefly to the principle behind this expenditure, why we are being asked to spend this money, however small, for whatever purpose and spent by whatever Secretary of State. In a very lucid moment when talking about the free market concept of Government hon. Members one of my hon. Friends said: If Adam Smith were here today he would be turning in his grave.

§ Mr. Buchan
Who was it?

§ Mr. Foulkes
I will not say. There has been a perversion of the theories of Adam Smith by the Adam Smith Institute. The hon. Member for Stirling (Mr. Forsyth) is the architect not just of privatisation but of that dreadful excrescence that we have in Scotland and which will come to England—the poll tax. Councillor Douglas Mason is one of the gurus. The hon. Members for Eastwood (Mr. Stewart) and for Darlington (Mr. Fallon), who are both here, and the director of the Adam Smith Institute, Dr. "Mad" Madsden Pirrie, are all from that hotbed of the radical Right and its perversion of all that Adam Smith 837 stood for — the twisting of Adam Smith's ideals — St. Andrew's university. I know that others such as my hon. Friends the Members for Hamilton (Mr. Robertson) and for Kirkcaldy (Dr. Moonie) made better use of the education provided by that noble institution. It is notable that many people who espouse the Right-wing cause and are the architects of this privatisation came from St. Andrew's university. That place certainly has something to answer for.

§ Mr. Bill Walker
On a point of order, Mr. Deputy Speaker. I am trying to follow the debate, but I cannot see how the hon. Gentleman's comments have anything to do with the money resolution.

§ Mr. Deputy Speaker
I am also beginning to get uneasy. The hon. Gentleman is straying and must restrict his remarks to administrative expenses.

§ Mr. Foulkes
I totally accept, as I always do, Mr. Deputy Speaker, your comments, even though they were prompted by an hon. Member whose advice I respect rather less than I respect yours.
As I said earlier, the money resolution is drawn so wide that it is not what the Secretary of State says it is. It relates to any Secretary of State. The Bill does not simply refer to water privatisation. It could also refer to electricity privatisation. Therefore I submit that we can talk about the possible expenditure because any Secretary of State is to be given very wide powers to spend money on administrative purposes for any privatization.
My hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) was right to talk about possible expenditure by the Secretary of State for Scotland in the preparation for the sell-off of the South of Scotland electricity board. My hon. Friend referred to the fact that the Secretary of State for Scotland is seeking professional advice. I hope that that professional advice is better than that sought by the Secretary of State for Energy in relation to the BP sell off.
My hon. Friend the Member for East Lothian (Mr. Home Robertson) mentioned that my hon. Friend the Member for Cunninghame, North may be worried about a possible private enterprise firm taking over a nuclear power station. Like my hon. Friend the Member for Cunninghame, North, I live close to the Hunterston power station. The thought that any private operator might take over the operation of Hunterston sends shivers down my spine. The thought of Townsend Thoresen running that power station really sends the shivers down the spine of anyone who has knowledge of the way in which these private enterprise companies operate by maximising profits and being unconcerned about safety. That is how they would act in such a situation.

§ Mr. Maxton
I hope that my hon. Friend will agree that one of the administrative costs that the Secretary of State 838 must carry prior to the privatisation of the SSEB in particular, is an investigation into how the security of nuclear installations will be maintained and at whose cost once the nuclear power stations are in private hands.

§ Mr. Foulkes
I had not thought fully about that and I am grateful to my hon. Friend for elaborating on that point.

§ Mr. Andrew Welsh (Angus, East)
My hon. Friend has gone on at great length about his total opposition to this measure. Will he give us the guarantee that tonight he and his Front Bench colleagues will vote against it?

§ Mr. Foulkes
I am glad that the hon. Gentleman described me as his hon. Friend. I am very pleased to accept that accolade. Just as his party gives us advice about civil disobedience and does not want to lead anything that will follow, I will give his advice the same kind of weight that the people of Scotland gave it at the general election.
With regard to the question of the expenditure by the electricity boards in Scotland—or at least, expenditure by the Secretary of State on behalf of the electricity boards—we and even the hon. Member for Angus, East (Mr. Welsh) in his more enlightened and wiser moments—which occur from time to time—would be interested to know whether expenditure could be authorised under the money resolution for public relations and publicity? Will it be possible for the Secretary of State for Scotland to employ public relations consultants under the terms of the resolution to try sell to the Scottish people, to "propagandise" to the Scottish people, any advantage, detail or other information about privatization?
I am grateful for the opportunity to say a few words. I had intended to say a lot more, but clearly time is limited and other hon. Members may want to speak. If no one else appreciates it, I hope that the hon. Member for Galloway and Upper Nithsdale (Mr. Lang), who has the Galloway hydro-electric scheme in his constituency just over the border from my constituency, will appreciate the value of that scheme and the vital importance of balancing the generation of energy with maintaining the environment and its integrity without spoiling it. I hope that even he will understand that that sort of balance between energy generation and protection of the environment can be maintained only by a public utility that takes account of all concerned. It will not be maintained by a private enterprise that is dedicated to making a quick buck in the form of private profit. It is that to which we are addressing ourselves and not merely the few thousand pounds to which the Secretary of State would have us limited.