Commons Sitting of 13 December 1988

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRAYERS

  PRIVATE BUSINESS
  NEWCASTLE UPON TYNE TOWN MOOR BILL [Lords]
  Read the Third time, and passed, with amendments.
  HARWICH HARBOUR BILL [Lords]
  Bill considered.
  Amendment agreed to.
  To be read the Third time.

Oral Answers to Questions
  HEALTH

    Bypass Operations
    Mr. David Shaw: To ask the Secretary of State for Health how many coronary bypass operations have been performed each year for the last 10 available years.
    The Minister of State, Department of Health (Mr. David Mellor): Figures on the number of cardiac surgery operations are collected annually by the Society of Cardiothoracic Surgeons. According to its returns, the number of coronary artery bypass grafts carried out in the United Kingdom in 1977 was 2,881, and in 1985, the latest year for which figures are available, it was 11,800. That is a rise of 310 per cent. over the period.
    Mr. Shaw: Is my hon. and learned Friend in a position to confirm that part of the increase has come about because money is available from the waiting-list fund? Is he aware that in one hospital in America—Houston medical centre—more than 3,000 operations are done each year by Dr. Denton Cooley who achieves greater utilisation of the operating theatres by having no trade unionists working in them?
    Mr. Mellor: We have been giving priority to coronary bypass grafts for some years, and it is because of that that the numbers have increased so much. It is correct to say—I am grateful to my hon. Friend for drawing attention to this—that about 500 additional such operations have been made possible by the waiting-list fund.
    As for the utilisation of operating theatres, we can certainly learn from the experience of others; there is a pertinent Public Accounts Committee report on that point.
    Mrs. Mahon: Before the Minister gets carried away with self-congratulations, will he join me in congratulating Councillor Eddie Scott of Calderdale, who has taken a principled stand by not going private in spite of a waiting
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    list of 18 months for a bypass operation? Will the Minister give Councillor Scott and people like him some hope of relief from pain—and, in some cases, some hope of life—by increasing still further the money spent on this vital operation, which, the House realises, was nothing like as advanced in 1977 as it was in 1987?
    Mr. Mellor: I am sorry that the hon. Lady thought that I was congratulating myself. I was asked for the figures and gave them. I accept what she said in two respects. First, we need to carry out more of these procedures and are pressing regions to do that. Secondly, I am sad to say that there are districts in this country in which too many patients are made to wait more than a year for treatment. That is not acceptable, and I assure the hon. Lady that we are applying pressure especially to those districts to ensure that waiting lists are brought down. With major procedures such as this people should have to wait the shortest possible time; we shall work to that effect.
    I do not know about the particular case that the hon. Lady mentioned, but if she writes to me about it I shall be happy to consider it.

    Royal Devon and Exeter Hospital (Radiation)
    Mr. Speller: To ask the Secretary of State for Health what arrangements he has made for further medical checks and treatment of patients from North Devon who received excessive radiation during 1988 from the radiography department at the Royal Devon and Exeter hospital; when they may expect the first payment of any financial provision; when he expects to receive and reach a conclusion on the reports by independent specialists; what steps he has taken to ensure that treatment now being given is of the highest standard; and if he will make a statement.
    The Parliamentary Under-Secretary of State for Health (Mrs. Edwina Currie): These are matters for the Exeter health authority. The report of the independent inquiry by Sir Bryan Thwaites and the conclusions of the medical assessments by Professor Joslin were published by the Exeter health authority on 6 December. All the recommendations have been accepted and are being implemented. I am satisfied that the care and treatment of cancer patients in the Royal Devon and Exeter hospital is being restored to the highest standards.
    Mr. Speller: Does the Minister recall saying in June that there would be no whitewash? May I congratulate her on the fact that both reports indicate no whitewash and are a complete and honest statement of the sad facts.
    Perhaps we should be thinking of insurance within health authorities. It is ludicrous that anyone should suggest that a local health authority can bear the vast costs that are certain to be incurred in this instance.
    Finally, may I ask for my hon. Friend's assurance that she and her Department approve of and are satisfied with the procedure carried out by that health authority at present.
    Mrs. Currie: First, I thank my hon. Friend for those remarks which I am sure will be appreciated by all concerned.
    Secondly, in answer to my hon. Friend's last question, as I have said, we are sure that provided that all the details

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    and recommendations are implemented the standards at Exeter will speedily be restored to what they should have been in the first place.
    Thirdly, with regard to insurance, it has long been Government policy—both of this Government and previous Governments—that the public authorities do not take out insurance. It certainly works out cheaper in the long run if they are self-insuring. I understand that the health authority has not yet worked out the details of offers in individual cases of compensation, but has already made payments to meet reasonable expenses of the patients concerned.
    Sir Peter Emery: Does my hon. Friend accept that the Devon health authority has been very caring since the accident in trying to look after the patients affected? Does she approve the concept that I put to her that a panel of three, preferably composed of a retired High Court judge, an expert in cancer and an expert in medical compensation, should assess the claims of those people, not to take away their legal rights, but to try and ensure that compensation is paid quickly? That would ensure that those affected are not put to exorbitant costs by solicitors who must be mindful of the fees available when dealing with protracted cases of legal compensation.
    Mrs. Currie: I am grateful for the suggestions that have been made by my hon. Friend and other hon. Members about the possibility of using independent assessors. May I refer my hon. Friend to the statement made by the chairman of Exeter health authority on 6 December in which he said that
    "the Authority intends to deal with those claims as expeditiously as possible in a way which will cause as little distress to patients and their families as the circumstances will allow. The Authority has instructed its solicitors to reflect this desire".
    Mr. Campbell-Savours: The Minister should be sacked.
    Mrs. Currie: The hon. Gentleman may not be interested in cancer patients in Exeter, but Conservative Members are.
    On that basis, I hope that my hon. Friend will accept that, although it does not appear that we shall need independent assessors at this time, we appreciate the constructive approach of patients' legal advisers.
    Mr. Galbraith: These are tragic events that we all have a duty to ensure do not occur again. Does the Minister agree that such cases highlight the importance of clinical physicists and others in the Health Service involved in the provision of health care? Does she also agree that, over the years, the salaries of such groups have deteriorated in comparison with those of people in comparable professions outside? Will she therefore reconsider her Department's position and once again consider including in the pay review body's consideration clinical physicists and biochemists? If she does not, I fear that the position will continue to deteriorate and we may yet have other cases such as those in Exeter.
    Mrs. Currie: We regard our hospital physicists and other hospital scientists as very important. The reports make that view plain, but they do not blame low pay for the mistakes. In our view, the mistakes were more the result of carelessness and incompetence than anything else.
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    An offer has been made through the Whitley councils to the physicists. They have not accepted it and discussions are continuing.

    RAWP
    Mrs. Maureen Hicks: To ask the Secretary of State for Health if he will make a statement on future funding of regional health authorities under the resources allocation working party.
    Mr. Colin Shepherd: To ask the Secretary of State for Health what plans he has to make changes to the resource allocation working party formula.
    The Secretary of State for Health (Mr. Kenneth Clarke): I hope to be able to announce the 1989–90 resource allocations to regional health authorities shortly. When the National Health Service management board's report on the review of the resource allocation working party formula was published, the then Secretary of State for Social Services said that the Government would consider the report within the context of the wider review of the NHS. That remains the position.
    Mrs. Hicks: Does my right hon. and learned Friend agree that a mockery is made of the assessment formula for regional health authorities when Brighton and Wolverhampton are placed in the same league of social deprivation? May I have his much-needed assurance that if the RAWP is genuinely to fulfil its aim of reflecting the relative needs of the population, as I know that he would wish, he will consider most carefully the method of assessment, and especially its implications for the west midlands? Under current figures the west midlands stands to lose £23 million, which would be a disaster.
    Mr. Clarke: My hon. Friend has raised this matter with me on a previous occasion. I know that she and other west midland Members are concerned. We are considering the review body's recommendation of a package of changes. It is true that the west midlands sees itself losing some of its proposed share of resources under the RAWP formula. We thought it best to examine the re-allocation of resources within the context of the review of the service, which is now taking place. We shall present our conclusions when we are able to announce the results of the review.
    Mr. Shepherd: Does my right hon. and learned Friend agree with the concept that morbidity is a better measure of the needs for the elderly than the standard mortality rate, especially in Herefordshire where there is a much greater than average number of elderly and very elderly among the population? Is he aware that there is substantial concern that a national expenditure rate as a means of measurement does not accurately reflect the different economic health of the elderly, for example, of Eastbourne, Hereford and Sandwell? Will my right hon. and learned Friend give careful consideration to these matters and engage in more work on them before he accepts the review?
    Mr. Clarke: With allocations that are based on complex formulae, it is always possible to have serious argument on precisely what criteria should be used. My hon. Friend makes two valid points, especially from the point of view of the Hereford health authority, which comes within the

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    West Midlands regional health authority. In the past, the RAWP allocation has helped to remove some of the wide variations in allocations between different parts of the country. We must be sure that future allocations proceed on a fair basis and accurately reflect, as far as possible, varying needs across the country.
    Mr. Ashley: Is the Minister aware that Stoke-on-Trent hospitals are already operating a red alert, before the onset of winter? They desperately need assistance from the resource allocation working party. Any changes in the formula that help better-off areas are bound to damage Stoke-on-Trent and other poorer areas. Surely that is unacceptable.
    Mr. Clarke: Stoke-on-Trent and many other areas were historically under-provided compared with more prosperous parts of the country. Since the Government have been in office, they have done extremely well. That is because we have applied the RAWP formula to the distribution of resources. We have brought all regions much closer together financially than they were before we took office. Most of the disparities between districts have been narrowed to a large extent. We must now examine the recommendations and ensure that we arrive at the fairest system possible for the allocation of resources.
    Mr. Campbell-Savours: Can the moneys that are made available under the RAWP formula be re-examined in the light of the recent public hysteria over salmonella, and can additional resources be expended in particular areas? Bearing in mind the statement by the Secretary of State's junior Minister, is it not about time that the hon. Lady was sacked? She has frightened the British people.
    Mr. Clarke: The future of the RAWP formula is of serious concern to those who live in the Northern regional health authority areas and in areas within the hon. Gentleman's constituency. He does no service to his patients or constituents by taking the opportunity to ask a frivolous supplementary question on a serious topic.
    Mr. Andrew Mitchell: In any review of the RAWP procedure, will my right hon. and learned Friend bear in mind that the Nottingham health authority, which covers the areas which he and I represent, is still about 5 per cent. short of the RAWP target? Will he bear in mind that if it is able to make up that percentage, it will be able to do much more in furtherance of the excellent progress that has been made over the past seven years to secure an even better health service in Nottinghamshire?
    Mr. Clarke: I am grateful to my hon. Friend for reminding me that Trent will do even worse than the west midlands under the proposals that have been made by the RAWP review procedure. Reactions vary according to which part of the country people come from and the impact that the review procedure proposals will have on their region. We have done a great deal in the past, and this has helped Nottingham to open a new teaching hospital. That has been possible with the extra moneys that it has received. We must now hold the balance and arrive at the fairest method of distribution for the future. That will not he a method that reverses all that we have done over recent years to remove the old inequalities.
    Mr. Robin Cook: Does the Secretary of State appreciate that it is rather a weird definition of deprivation that has the net effect of taking cash away from the north-east and
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    the north-west and redistributing it to the south coast and East Anglia on the ground that those areas are more deprived than Merseyside and Tyneside? Does he not also appreciate that he will bring the whole RAWP process into disrepute if that formula is now to be fixed in exactly the same way as the rate support grant formula is now rigged?
    Mr. Clarke: The Health Service management board comprised a wide range of people including the regional chairmen of regions the length and breadth of England. Its report is an attempt to revise the criteria of the original RAWP allocation to reflect objective scientific study. It proves that it is almost impossible for anyone to get it right. There are losers and gainers in the north and the south and we have to ensure that whatever method we finally arrive at is fair and broadly acceptable to the bulk of the population.

    Pay and Conditions (Appeals)
    Mr. McCrindle: To ask the Secretary of State for Health what is the average time taken for an appeal concerning pay and conditions, including grading, in the National Health Service to be heard; and if he will seek to reduce the time taken.
    Mr. Kenneth Clarke: We do not collect information centrally on the average time taken to process appeals. However, on 5 December I wrote to regional health authority chairmen asking health authorities to adopt a range of measures aimed at ensuring that the appeals process works quickly and effectively.
    Mr. McCrindle: Is it not becoming clear that the Royal College of Nursing was absolutely right to resist industrial action and to pursue claims through the appeals procedure? Is my right hon. and learned Friend satisfied that all health authorities are moving to hear those appeals at the same speed? Has any consideration been given to hearing a number of those appeals together to expedite a solution to the problem?
    Mr. Clarke: The Royal College of Nursing always pressed for the regrading arrangement and the new grading structure. Since we introduced it, the college has tried to help with difficulties and has discussed with me means by which we speed up the appeals process. I am sure that all the authorities will try to proceed as quickly as possible. The difficulty is that a few are flooded out by many speculative appeals which people have been encouraged to put in when there is no real basis for claims. We believe that the appeal process, properly implemented, can deal with legitimate grievances and, I hope, sort them all out by the spring of next year.
    Mr. Fearn: Can the Minister confirm that the Royal College of Nursing and the Royal College of Midwives and the unions have received the guidelines? When will he talk to the unions?
    Mr. Clarke: I have made it clear that I will not talk to representatives of the Confederation of Health Service Employees and the National Union of Public Employees while they are still trying to organise industrial action. I know that not much industrial action is still taking place, but they have not yet withdrawn their attempts to stir it up. I cannot have discussions with anyone in which I seek to substitute myself as Secretary of State for the

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    management side of the Whitley council. The regrading exercise was worked out through negotiations between the management side and the staff side and includes all the trade unions of the appropriate Whitley council. The money was set by the review body, that was accepted by the Government and we provided the cash to fund it. In due course I have no doubt that I will have talks on relevant matters with union leaders, but I will not re-open the Whitley council negotiations with people who are trying to cause strikes at the expense of patients.
    Mr. Favell: Does my right hon. and learned Friend agree that in future, questions of pay should be dealt with on a local basis? To resolve local difficulties such as the shortage of intensive care nurses in Birmingham by imposing a national solution is clearly incorrect. The private sector will not resolve Birmingham's problems by imposing a solution suitable to Bristol or Burnley.
    Mr. Clarke: I have strong sympathy with my hon. Friend's views and his point applies to the way in which the pay and terms and conditions of a wide range of staff are settled in the National Health Service, which is too centralised and too monolithic at the moment. We have put proposals to the review body on nurses' pay for a small experimental fund next year which can be used to try to devise methods for more local discretion in settling pay to meet particular improvement needs. I wait to see what response that receives from the trade unions and I wait to hear the recommendations by the review body.
    Mr. Crowther: Does the Secretary of State appreciate that in the case of Rotherham health authority, any successful appeals, of which there should be a great number because of the many anomalies that have been created, will inevitably result in a reduction in patient services on the present allocation of resources? Does he believe that it is proper to refuse to fund successful appeals knowing that patients will suffer? Is it not better to ensure that both staff and patients are treated fairly?
    Mr. Clarke: No, we provided full funding for the nurses' award after the grading exercise was completed and we used the health authorities' own figures to arrive at the figure for full and final funding. I have no reason to believe that Rotherham district health authority has made huge numbers of mistakes in applying the grading structure to its particular staff, although it will no doubt find individual mistakes and correct them. I am quite satisfied that the deal can be implemented without any threat to patient care.

    Health Promotion (Women)
    Mr. Rowe: To ask the Secretary of State for Health how he is encouraging health promotion schemes for women.
    Mrs. Currie: We are very proud of the action that we have taken to promote women's health. We have implemented screening programmes for breast and cervical cancer to reduce the number of women who die each year from these diseases. The maternal death rate continues to fall. The Health Education Authority is planning to give more prominence to women's health. In June, we sponsored both a debate in this House and a
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    national conference, and this year we are supporting a large number of national voluntary organisations concerned with women's health.
    Mr. Rowe: I thank my hon. Friend for that reply. Although it is true that deaths from cervical cancer have fallen by about 14 per cent. in the past 10 years, the number of deaths is still higher than it should be. Can we hope for improvements in that figure over the next few years?
    Mrs. Currie: Yes, it is our hope that the new national call and recall system, which is implemented throughout the country, will bring about a reduction in the toll from this particular preventable cancer.
    Mr. Lofthouse: As the Minister still holds the view that most of the eggs in this country are contaminated by salmonella, why has she not included the advice not to eat eggs in her advice for women, under the health promotion scheme?
    Mrs. Currie rose—
    Hon. Members: Come on.
    Mrs. Currie: The hon. Gentleman asked a question and he will get the answer. The Government's view is as follows. Although the risk of harm to any healthy individual from consuming a single raw or partially cooked egg is small, it is advisable for vulnerable people such as the elderly, the sick, babies and pregnant women to consume only eggs that have been cooked until the white and yolk are solid—in other words, hard boiled.
    Dame Jill Knight: May I ask my hon. Friend to assure the House that she is as concerned about the health of men at risk as about the health of women at risk?
    Mrs. Currie: Yes, very much so. As my hon. Friend will be aware, the main thrust of the heart disease programme—the "Look After Your Heart" campaign—is directed at middle-aged men. I was concerned that we were not doing enough for the health of women and I hope that we have put that right.

    Nurses (Grading)
    Mr. Cox: To ask the Secretary of State for Health what is the number of hospitals where staff are in dispute over the 1988 pay award regarding nurses' grading.
    Mr. Kenneth Clarke: I understand that some appeals against individual gradings have been registered in most, if not all districts. That is hardly surprising in the regrading of some half a million nursing and midwifery staff.
    Mr. Cox: That reply does not reflect the grave dissatisfaction and sense of injustice that nurses throughout the country feel over their grading in the recent pay award. Does the Secretary of State accept that if dedicated people, such as midwives and nurses working in intensive care units, take such action, that is a real expression of their sense of injustice? Does he accept that, if the matter is to be resolved, nurses must be heard and must not be subject to the abuse and attacks that he and other Ministers in his Department have heaped on them in recent weeks? When will the Secretary of State listen to what the nurses are saying and act on that?
    Mr. Clarke: It must come as a considerable disappointment to the hon. Gentleman that comparatively few nurses have taken industrial action anywhere, and that action is undoubtedly on the wane. That is not surprising when one considers that the pay increase for the profession as a whole is 17·9 per cent. and in London, the hon. Gentleman's own part of the world, there have been supplements of 5 per cent. to 9 per cent. on top of that. The nursing profession has received its biggest pay award in the history of the National Health Service.
    Mr. Redwood: Does my right hon. and learned Friend agree that one of the lessons of the regrading exercise is that matters could be much better managed if the districts had all the necessary powers to recruit, retain and motivate staff and were not second-guessed by the regions?
    Mr. Clarke: We have a system of national pay bargaining, from which the regrading exercise emanated in the first place. The exercise started with a national agreement between six trade unions—including the two now organising strikes—and management. I am very much in favour of having much more discretion at district level. However, in a large organisation such as the Health Service, there has to be a national structure in which sensible local discretion can be set. I shall be very glad if we make progress in that direction this year, but we shall have to wait for the response of the review body to our modest suggestions.
    Rev. Martin Smyth: Does the Secretary of State acknowledge that we are not only talking about the problem of applying the decisions at national level, and that at district level, too, there seem to be anomalies in the grading structure? Does he realise that, although there may not be much industrial action, there is deep unrest throughout the nursing services, which is spreading in particular to health visitors and school nurses?
    Mr. Clarke: I do not accept that there are anomalies. I accept that difficulties arise when people who have all previously been paid the same rate find themselves paid at three different rates according to the grade of the post that they originally held. For midwifery sisters, that can mean the difference between an increase of £500 and an increase of £4,500 a year, and people naturally feel strongly about the grading of their posts. The regrading exercise has been conducted in line with a UK—wide agreement and we have a perfectly satisfactory appeals process to ensure that individual cases are sorted out and that nurses and midwives are put where they belong in the new structure.
    Mr. Conway: Is my right hon. and learned Friend aware that during my hospitalisation last month at the eye, ear and throat hospital in Shrewsbury, a number of members of staff commented about the grading system—one of them starting to do so as early as ten past six in the morning? Although they had genuine grievances, which, after a few days, I could understand in some detail, they continued to give the benefit of their expertise and compassion to the patients, and that is the significant factor. They were not led astray by union agitators or persuaded to demonstrate. My right hon. and learned Friend is absolutely right not to be drawn down the path proposed by COHSE and NUPE, which would be a betrayal of the nurses, sisters and midwives who have stuck by their patients rather than deserted to the picket lines.
    Mr. Clarke: I agree with my hon. Friend. For the reasons that I have just given, many nurses were inevitably disappointed by the outcome of this year's grading review, although they have all received substantial pay increases. Even so, most of the nurses who were disappointed would treat with contempt attempts to persuade them to take strike action against their patients to get themselves put on to a higher grade. That is why the action taken by COHSE and NUPE has been so unsuccessful throughout the country.
    Mr. Robin Cook: Is not the Secretary of State worried by the fact that, by 28 December, 40 of the 50 midwives at north Middlesex hospital will have resigned? Does he really believe that he can provide a maternity service with those who remain? Does he not realise that the departure of those midwives and of many disillusioned nurses and midwives could be averted if he accepted the unions' offer to go to binding arbitration? If he is so confident of his case, why is he so afraid of arbitration?
    Mr. Clarke: I am pleased to hear that talks with the midwives at north Middlesex hospital have resumed. They are plainly dedicated people, and I hope that they will reconsider their present declared intention and continue to work at the hospital. Meanwhile, they are arguing that they should all be put on the higher grade, which would mean an increase of almost £2,000 a year over arid above the £2,000 a year increase that they have already received. That would simply not be consistent with the agreement reached with all the unions, including the Royal College of Midwives earlier this year. We followed the review body's recommendations and I see no reason at this stage to go to arbitration. The regrading deal was carried out in line with the agreement that we had with the unions and has been accepted by the review body. It has been finished and implemented. We should be looking to next year rather than trying to arbitrate on a settled matter.

    Oxford Regional Health Authority
    Mr. Baldry: To ask the Secretary of State for Health when he next expects to visit the Oxford regional health authority to discuss its future plans.
    Mr. Mellor: My hon. Friend the Under-Secretary of State will be conducting the annual review of the Oxford regional health authority on 15 February 1989 when she will discuss the region's performance in 1988–89 and its plans for next year.
    Mr. Baldry: Is it not true that the Oxford regional health authority is taking a number of new initiatives, including community-oriented mental health facilities, better health promotion and better information for the disabled throughout the region? Are not those just a few examples of the initiatives that the region is taking, not only on its own, but in conjunction with the voluntary and private sectors, and are not those, in turn, indicative of the increasing number of initiatives that regions throughout Britain are taking to promote better health care?
    Mr. Mellor: I thank my hon. Friend for his constructive interest in the health services in his area, which extends, among other things, to chairing meetings about income-generation schemes which are greatly valued. The Oxford regional health authority has the largest increase in population of any region and it is extremely impressive

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    that it has managed to cope with that and bring forward those fresh initiatives. Among the many that my hon. Friend mentioned, all of which we commend, I particularly commend the authority's impressive record of keeping all its districts up to or over the 90 per cent. target rate for vaccinations, so much so that it is now aiming for 95 per cent.—something which other regions could usefully emulate.
    Mr. Andrew Smith: Is the Minister aware that earlier in the summer I raised with the Government the impending crisis in the Oxford region resulting from the chronic understaffing, high vacancy rates and high staff turnover at the regional blood transfusion centre? Is he further aware that this week in the Oxford region a circular is being distributed which warns of the partial suspension of some of the services of that critical centre? That will have a disastrous effect on the blood service and some other services such as tissue typing. Will the Minister convene an urgent meeting with me, the regional health authority and other interested Members in the region so that we can get that critical service back on the footing on which it should be for all the region's population?
    Mr. Mellor: The blood transfusion service is important in any region. Without notice, I cannot comment on the hon. Gentleman's precise points, but I am available to any hon. Member to discuss such important services and I shall be happy to see him.
    Mr. Page: When my hon. Friend the Under-Secretary of State visits Oxford regional health authority to discuss its future plans, will she canvass its views on the need for compulsory clinical assessment of the work of consultants within that region? The British Medical Association has been established for over 130 years and the royal colleges for centuries more and there is still no compulsory clinical judgment on consultants' work. When my hon. Friend visits Oxford will he see whether it is prepared to become a trial area to assess the work of consultants?
    Mr. Mellor: My hon. Friend refers to medical audit, in which there is growing interest in Britain. We have recently announced the expenditure of a further £250,000 on research into medical audit, the techniques of which are helpful to the development of a good Health Service. Everyone stands to gain from that, not just people in Oxford.

    Pensioners (Health)
    Mr. Darling: To ask the Secretary of State for Health if he plans to add to the advice given by his Under-Secretary of State, the hon. Member for Derbyshire, South (Mrs. Currie) at Reading, to pensioners on keeping healthy during the winter months.
    Mr. Hardy: To ask the Secretary of State for Health if he has received any representations from pensioners or pensioners' organisations about the advice given by the Under-Secretary of State, the hon. Member for Derbyshire, South (Mrs. Currie) at Reading on the subject of keeping healthy during the winter.
    Mrs. Currie: On pensioners' health day in Reading the Government drew attention to simple advice on self-help which can make a difference to winter mortality. For the second year running we have a "Keep Warm, Keep Well"
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    campaign, involving the five Government Departments and voluntary organisations, which is proving to be very effective. We have received around 400 letters on the topic. The telephone helpline, run by Help the Aged, is now receiving over 700 calls per week. We are very pleased with the success of the campaign.
    Mr. Darling: On reflection, does the hon. Lady consider that her remarks were ill-judged and stupid? For how much longer will she be allowed to act as court jester, deflecting attention from the fact that for many pensioners this Christmas the choice will be between heating their houses and eating? Is she aware that the best Christmas present that she could give most pensioners, and, indeed, many Conservative Members, would be a month's silence.
    Mrs. Currie: The hon. Gentleman seems to have forgotten that the worst winter in recent years for excess winter mortality and hypothermia was 1979. If the Opposition had their way, there would be no such campaign. There was no campaign in the 1970s when winter mortality was much higher than now. The advice is plain common sense and the Opposition would do better to back it.
    Sir Michael McNair-Wilson: I congratulate my hon. Friend on her advice for the elderly. Will she confirm that about 20 per cent. of body heat can be lost through the top of the head and that if one wore a hat, the heat loss would be reduced.
    Mrs. Currie: My hon. Friend would look very fetching in a woolly hat.
    Mr. Hardy: Will the rather expensive and perhaps hard-boiled Under-Secretary restrict her more extravagant comments to cold days since the heat of the anger that she usually arouses may produce more gigajoules than a woolly hat?
    Mrs. Currie: The hon. Gentleman is being niggardly in his approach to the "Keep Warm, Keep Well" campaign, which is proving to be popular. We printed 750,000 leaflets on the subject and already demand has been sufficient for us to order a reprint. I am pleased with the way the campaign is going.
    Mr. Bill Walker: Is my hon. Friend aware that in Scotland where we frequently have low temperatures, grandmother's remedies are often the best? Among the remedies that grandmothers in Scotland regularly suggest is that one should wear wool mittens, wool socks and wool hats. In cold weather that helps to keep the elderly warm.
    Mrs. Currie: I am glad to receive that further advice. My right hon. and learned Friend the Secretary of State for Scotland also has a campaign in Scotland for keeping warm in winter, and that is going very well.
    Mrs. Margaret Ewing: Given that any attempts made by pensioners to assist themselves to guard against the cold must, of necessity, be cash-limited, is the Minister at least prepared to discuss the possibility of implementing a continuous cold climate allowance for the winter months?
    Mrs. Currie: That question should be referred in some detail to my right hon. Friend the Secretary of State for Social Security. There is no doubt that elderly people and others can keep their homes warmer if they have them

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    insulated. One organisation supporting the campaign is Neighbourhood Energy Action, which has already insulated over 500,000 homes and would like to do more.
    Mr. Ian Bruce: Does my hon. Friend agree that she should add to the advice she gave about keeping warm in one's own home? The one thing from which pensioners have suffered most grievously—some of them are still suffering—is the inflation that ruined their savings back in Socialist days, and the best advice she could give is for them to ensure that we keep a Conservative Government.
    Mrs. Currie: Yes, that is good advice. There is no doubt that whoever we are talking about, they would be well advised to ensure that they do not get cold in winter, especially when they go out. Chills can promote heart disease and may bring on strokes, and that is what causes most of the excess winter mortality.

    Community Care
    Mr. Patchett: To ask the Secretary of State for Health what representations he has received on the implementation of the recommendations of Sir Roy Griffiths' report on community care.
    Mr. Kenneth Clarke: We have received over 250 representations from hon. Members, organisations and members of the public about Sir Roy's recommendations. We are studying all of them carefully, as we frame our own proposals.
    Mr. Patchett: Does the Secretary of State agree that the weight of opinion is with Sir Roy Griffiths in maintaining that the local authorities are best placed to assess local needs, set priorities and monitor performance? Will he make a categorical statement to that effect?
    Mr. Clarke: I have just told the House that we are still considering our own proposals. We have had a variety of responses from all the representations I have described. Everyone agrees that there is a serious problem. We have to look at how best to provide care in the community and how best to arrange responsibility for it. We have to look at all the various models put before us before we can come to a definite conclusion.
    Sir George Young: My right hon. and learned Friend will know how anxiously his decision on the Griffiths' report is awaited, not just by statutory bodies but by voluntary organisations. Can he tell the House when he hopes to reach a decision?
    Mr. Clarke: I realise that it is essential that we reach conclusions as soon as we can. It is an important matter, and I believe that few people think that the status quo is highly satisfactory. It will be some time next year—I hope, early next year—before we can reach any final conclusions,because the reactions we have received are so varied and there are a number of options before us.
    Mr. Tom Clarke: The Government have dilly-dallied over the Griffiths report, which was published the day after the Budget. Is not the Secretary of State worried that the growth of uncontrolled expenditure by the taxpayer on private residential homes that Sir Roy identified has now reached the £1 billion mark? Is it fair that the chaos in community care that so worried Sir Roy should continue,
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    particularly in view of the Government's clear opposition to a democratic role for local government, which Sir Roy himself accepted?
    Mr. Clarke: There has been a huge increase in public expenditure of all kinds on care in the community, most of which reflects the increased priority that the Government have been giving it. I accept that we must look at the situation again, to ensure that there are clear responsibilities for delivering the care and that the right relationship exists between all the various agencies involved. We shall announce our conclusions as quickly as we can.

  PRIME MINISTER

    Engagements
    Dame Jill Knight: To ask the Prime Minister if she will list her official engagements for Tuesday 13 December.
    The Prime Minister: This morning I visited St. George's hospital in Tooting to visit some of those injured in yesterday's train crash, and to thank the hospital staff and the emergency services. In addition to my duties in the House, I shall be having meetings with ministerial colleagues and others later today. This evening I hope to have an audience of Her Majesty the Queen.
    Dame Jill Knight: Will my right hon. Friend take this opportunity, in the aftermath of yesterday's appalling rail crash, to record the thanks of the whole House, first, to the emergency services and secondly, to the master and boys of Emanuel school who happened to be passing when the accident occurred?
    As it is now emerging that rail passengers who have to stand appear to be most at risk, will my right hon. Friend ensure that that aspect is thoroughly considered in the Government inquiry?
    The Prime Minister: Yes, I gladly respond to my hon. Friend's remarks, and the whole House will wish to record its congratulations and thanks to the emergency services and to the hospital staff for the excellent work that they did yesterday. I thank also those of Emanuel school who saw quickly what was happening, and who were thoughtful and swift in their reactions. They are a credit to the young people of our country.
    I take note of my hon. Friend's third point concerning standing passengers. It is our purpose that all matters relating to the accident shall be considered in the public inquiry.
    Mr. Kinnock: I join the Prime Minister in expressing my deep sorrow for the pain and grief suffered by those hurt in yesterday's accident, my sympathy for their loved ones, and my admiration for and thanks to those in various capacities who helped the injured. I am sure that the whole House will want to return to that question, which is one of deep public concern.
    I wish to raise with the Prime Minister another matter of public concern. It is now clear that by her performance in the House and in Rhodes, the right hon. Lady threw away the possibility of securing the extradition of Patrick Ryan—[Interruption.]
    Mr. Speaker: Order.
    Mr. Kinnock: Will the Prime Minister take the advice offered by myself and by others, and consider proceedings

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    under the Criminal Law (Jurisdiction) Act 1976, especially since the Irish Attorney-General commented in his statement today that the charges are of a most serious kind and should be investigated by a court?
    The Prime Minister: The Government utterly repudiate the assertion that Patrick Ryan would not receive a fair trial in this country. The effect of the Irish decision is that a person accused of very serious crimes will not now be brought to answer them in an English court of law. That underlines how right we were to say that the existing extradition arrangements are inadequate, and we look to the Irish Government to honour their pledge to re-examine them.
    As to the possible trial of Patrick Ryan in the Republic of Ireland, we do not absolutely exclude that, but only two of the four charges are covered by the Criminal Law (Jurisdiction) Act. There would be problems over the security of witnesses, whom we could not compel to go to the Republic. If the case failed because of the absence of witnesses, we could not subsequently try Patrick Ryan in our own jurisdiction.
    Mr. Kinnock: The Prime Minister can repudiate as much as she likes. She is faced with the fact that Patrick Ryan will not be extradited to Britain and it is primarily her fault. I understand that the Prime Minister is very disappointed; that feeling is shared by many others, including myself. But she is also culpable. She blew the possibility of extraditing Patrick Ryan. May I ask whether she will ensure that both she and the Attorney-General will avoid making again the errors so far committed—errors of judgment, fact and conduct?
    The Prime Minister: Let me answer the right hon. Gentleman by pointing to the facts. The Irish Extradition (Amendment) Act 1987 itself requires the Irish Attorney-General to state that he is satisfied that the United Kingdom prosecuting authorities have sufficient evidence on which to prosecute. I understand that the Irish Attorney-General agrees that that is so. He made his decision on an entirely different ground.
    In Ryan's case the extradition proceedings in Belgium were in public, and wide publicity had been given to the nature of the charges and the allegations on which they were based before extradition from Ireland was ever requested.
    May I make a third point—[Interruption.] Yes, because these points must be made. The extradition proceedings were held in public, with the allegations. Moreover, as the right hon. Gentleman is aware, the Irish Attorney-General could have backed the warrant within three days, which is the time for which his provisional warrant runs. He could have done that long before the question ever arose in the House.
    Mr. Kinnock: All that the Prime Minister has said about Belgium and the conduct of affairs there was well known a fortnight ago. Why, then, was she so poisonous about the conduct of affairs by the Irish Government?
    If the Prime Minister is quoting from the Irish Attorney-General why does she not draw attention to the fact that he also said that the matter does not end at extradition? He said:
    "The charges which have been brought against Patrick Ryan are of a most serious kind, and they should be
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    investigated by a court. The Criminal Law (Jurisdiction) Act 1976 provides a means whereby certain serious offences committed outside this jurisdiction may be tried here."
    that is, in Ireland.
    "Such a trial may … take place before a court of three judges … Heavy penalties are prescribed by Irish law for those offences."
    Is it not still the case that because she cannot [Interruption.]
    Mr. Speaker: Order. Let us hear the Leader of the Opposition.
    Mr. Kinnock: Is it not the case that because the Prime Minister cannot get everything that she wants she is going to settle for nothing?
    The Prime Minister: The fact is that the Irish Attorney has refused to back our warrant on grounds that do not arise from the 1987 Act. The result is that someone accused of very serious crimes will be at liberty in the Irish Republic. I notice that the right hon. Gentleman does not put his weight behind trying to secure the extradition of Ryan.
    Mr. Butler: To ask the Prime Minister if she will list her official engagements for Tuesday 13 December.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Butler: Does my right hon. Friend believe that a permanent postal monopoly can be justified if this vital public service is continually undermined by strikes?
    The Prime Minister: I am very pleased that some 60 per cent. of Post Office counter staff continued to work. That is very good news. However, I agree with my hon. Friend that if we continue to experience sporadic troubles the permanent monopoly of the Post Office will come under review, and, we shall have to consider a reduction in the present level of £1.
    Dr. Owen: It is obviously a quite unacceptable insult to the people of this country to say that Patrick Ryan would not receive a fair trial in Britain. That belief should be conveyed to the Irish Government as coming from everyone—[Interruption.]
    Mr. Speaker: Order. It is a very serious matter.
    Dr. Owen: Furthermore, is it not bound to mean that the Anglo-Irish Agreement is now questioned by everyone in Britain? Will that also be conveyed to the Prime Minister of the Irish Republic?
    The Prime Minister: I am very pleased that the right hon. Gentleman agrees with us in repudiating utterly the assertion that Patrick Ryan would not receive a fair trial in this country. Of course he would, but the arrest of anyone on charges of that nature inevitably will receive front-page treatment. It would be a matter for the courts if there were any prejudice to the trial which inevitably would be heard very far from the time that we had the problem. We must use the Anglo-Irish Agreement to make our point vigorously to the Irish Government on this matter. At the time, the Irish Government promised to review their 1987 extradition Act if it was not working satisfactorily. It is not working satisfactorily, so we shall call in that promise for them to honour.
    Mr. Gow: Have we not conferred upon the Government of the Irish Republic, by treaty, a place of special privilege in relation to Northern Ireland? Since Northern Ireland has suffered more grievously than any other part of the United Kingdom at the hands of terrorists, is it not a signal irony that the Irish Government are presently the harbourer of a suspected terrorist?
    The Prime Minister: My hon. Friend makes his point very cogently. Under the Anglo-Irish Agreement we can tackle the Republic of Ireland about matters of security just as much as they can tackle us. The difficulty is that the Republic of Ireland unilaterally passed a different extradition Act, when we already thought that arrangements had been agreed between us. That Act is not working properly, and the decision taken under that Act, not for any reasons within it, has caused the present trouble.
    Mr. Mallon: Does the Prime Minister remember her elegant words in 1964 at the Conservative party conference when she said:
    "Any country or Government which wants to proceed towards tyranny starts to undermine legal rights and undermines its own law."?
    Does she agree that if the Irish Government tried to bypass their extradition laws, which exist to protect the rights of their nationals, they would be undermining their own law? When do her Government intend to sign the European convention on the suppression of terrorism?
    The Prime Minister: The Act to which the hon. Gentleman refers gives two grounds for refusing extradition. Those are not the grounds which the Irish Attorney-General has used. He has used nothing related to those grounds. He has chosen something totally different, which is a great insult to all British people. We must make that very clear, and I hope that the hon. Gentleman will look at the Act and agree with us.
    Mr. Marland: Is my right hon. Friend aware how widespread devastation in the egg industry has become? The Sunday papers tell us that 10,000 people will become redundant before Christmas and millions of egg-laying hens will be slaughtered prematurely. All this has occurred because of the ill-considered and negligent remarks of one of her junior Ministers. Does my right hon. Friend agree that one more redundancy should be added to that list, that of the Parliamentary Under-Secretary of State for Health, the hon. Member for Derbyshire, South (Mrs. Currie)?
    The Prime Minister: So far this year 49 cases of salmonella affecting just over 1,000 people have been traced to eggs. That is why the Government have taken steps in conjunction with the industry to issue codes of practice. Those figures demonstrate that there is a problem.
    The Chief Medical Officer has issued guidance, most recently on 5 December, stating that the risk to normally healthy people from eating cooked eggs was very small, although they should avoid eating food with raw egg in it. For vulnerable groups, such as babies, the elderly and pregnant women, eggs should be cooked until the white and yolk are hard. [Interruption.] It is our duty to give advice. That is what the Chief Medical Officer has said and it is my duty to repeat it. We shall continue to reassure—[Interruption.]
    Mr. Speaker: Order. These are matters of grave concern not only to the House but to those outside it.
    Dr. Reid: To ask the Prime Minister if she will list her official engagements for Tuesday 13 December.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Dr. Reid: The Prime Minister started her Question Time by congratulating hospital staff. Is she aware that many nursing staff in Lanarkshire and throughout the country have been denied fair grading because they have been deemed to be working under supervision, even when the supposed supervisor is off duty, asleep and at home? Does the right hon. Lady agree that there can be no adequate supervision when people are miles apart and completely out of touch with each other? Does not her relationship with the Chancellor of the Exchequer prove that very point?
    The Prime Minister: The grading structure was agreed between the management side and the nursing staff and went before the review body. The review body added an amount necessary to implement that structure. That was not sufficient, so my right hon. and learned Friend the Secretary of State for Health and my right hon. Friend the Chancellor provided an extra amount. Together. the sums came to nearly £1 billion. The structure and the money have to be applied through the regions and the districts. There is no way in which Government can undertake the regrading of 500,000 nurses. The overwhelming majority of nurses are more than satisfied with the extra that they have received, which is considerable—an average of 18 per cent., and the highest amount that they have ever had.

Patrick Ryan
3.31 pm
Mr. Neil Kinnock: May I through you, Mr. Speaker, ask the Government whether today or, at the latest, tomorrow, they will make a statement to the House about the Ryan affair and the statement of the Irish Attorney-General?
Mr. Speaker: This news was not received until after 1 o'clock today. Whether statements are made about it is a matter for the Government.

Public Expenditure (Scotland)
3.32 pm
The Secretary of State for Scotland (Mr. Malcolm Rifkind): With permission, Mr. Speaker, I wish to make a statement about the allocation of my public expenditure provision in the next three years. An annotated table showing the allocations for each service is available in the Vote Office and I am arranging for it to be published in the Official Report.
The continued success of the Government's management of the economy has allowed public expenditure to increase at the same time as its proportionate claim on national resources has fallen. As a result, planned provision for my Scottish programmes in 1989–90 will amount to almost £9 billion, 6 per cent. over planned expenditure for the current year.
We have already announced our proposals to integrate training and enterprise development functions in Scottish Enterprise. Detailed provision for Scottish Enterprise will appear in my future public expenditure plans. In the meantime, I have increased next year's provision for both net and gross expenditure on the industry programme, compared with the plans announced last year as well as with the actual level of this year's spending. Within the total, the Scottish Development Agency will have an enhanced budget of over £150 million. There will also be substantial budget increases over the current year of £2·5 million for the Highlands and Islands Development Board and £1 million for the Scottish tourist board. The HIDB will expand its advance factory programme to provide premises for small businesses.
I have been very impressed by the effectiveness of small factory units and industrial workshops in encouraging the promotion of small-scale economic development and employment. There is a strong demand for this type of industrial unit and considerable evidence that the supply of units is not keeping pace.
I am very glad, therefore, that in 1989–90 the SDA plans to provide 180 such units at a cost of about £6·5 million, and I am glad to announce that I am allocating an extra £5 million to local authorities to allow for an increase in the building of small factory units and industrial workshops. This represents a 31 per cent. increase in planned provision, and would allow local authorities to construct about another 140 units. This increased allocation, taken with the commitment of the resources to this purpose by the SDA, the HIDB and the new towns, will go a long way to easing the constraints on further expansion in this area.
I have once again identified the health programme as a priority area. Planned expenditure in 1989–90 will be £2,683 million, which is £182 million or 7·3 per cent. greater than in 1988–89. The Health Service will also benefit from savings in superannuation contributions and from further efficiency savings. Following a report from the Government Actuary, a copy of which I am making available in the Library, NHS employers' superannuation contributions will be reduced by 2 per cent. to 5·5 per cent., and this will produce savings of about £24 million per year. Together they produce a further £60 million for patient services. This means that, in total, additional resources of

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about £240 million, an increase of nearly 10 per cent., will be available to the NHS in 1989–90 compared to the current year.
These additional resources will allow me, first, to fund a further major initiative to reduce waiting lists. I propose to make available at least £4·5 million for this purpose—an increase of 50 per cent. over the current year—which I estimate will, in broad terms, allow an additional 10,000 in-patients, 5,000 day patients and 40,000 out-patients to be treated. Moreover, I stand ready to allocate a further £2·5 million on top of that sum, making a total of £7 million in all, if health boards come forward with enough good quality projects specifically directed to the reduction of waiting lists. The boost in NHS resources will also allow a 25 per cent. increase in capital expenditure, and increased expenditure on medical developments, on services for the elderly, the mentally ill and mentally handicapped, and on the treatment of patients with AIDS. My decisions for 1989–90 will bring the increase in resources for the Health Service in real terms since 1979 to 34 per cent.
Next year will see the start of Scottish Homes. I am determined that the new body should make a major contribution to Scottish housing from its first day. It will have gross planned expenditure, including loan repayments, of £349 million in 1989–90. This is an increase of £86 million over the comparable planned expenditure of the Scottish Special Housing Association and the Housing Corporation in the current year. Scottish Homes will in particular be able to play a major role in the regeneration work of the urban partnership in the four priority peripheral estates. Next year also, gross local authority provision for investment in housing is planned to increase by 12 per cent. This gives the lie to any claim that local authority provision has been cut to provide resources for Scottish Homes.
I have made substantial extra provision for roads and transport—14 per cent. more than for this year and £40 million more than the previous plans for 1989–90. Planned expenditure increases to £750 million in 1991–92. This will allow a good start to be made on upgrading the A74 to a motorway, as we promised in our manifesto. This is a major project which involves substantial planning in order to create a road of motorway standard. Planning work is going ahead as fast as possible and advance works may start before the end of 1990. Other roads will continue to be improved.
Programmes protecting the environment will be significantly increased in 1989–90. I have made a 14 per cent. increase in capital investment in the water services next year. That will enable local authorities to make more rapid progress in meeting higher quality standards for water supplies; to improve further the quality of our rivers and coastal waters; and to improve the condition of some bathing waters. Additional funds have been allocated to increase archaeological survey and excavation in areas of rapidly changing land use.
Provision for education in 1989–90 will be increased to £2·354 million, or 7·6 per cent. more than the equivalent figure for this year. The major part is for local authority current expenditure, which goes up by 7 per cent. to £1,793 million. Provision for local authority capital is increased by 9·4 per cent. Also, this increase, among other things, will enable me to support our educational initiatives by appropriate training, to expand the number of assisted places in schools, to respond positively to interest in setting
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up Scottish technology academies, and to enable centrally funded colleges to improve both their equipment and the infrastructure of their educational provision.
The growing demands on the social work services are also fully recognised in this settlement. Increased provision of 13 per cent. will put local authorities in a very strong position to respond to the demographic and other pressures in this area. In addition, through direct funding of community service orders, which I am to introduce for the first time next year, I am planning for a further 600 orders in each of the next three years to make this alternative to custody more widely available to the courts.
Resources are being provided to increase staff numbers and to enhance training in the prison service. As part of our fight against drug-related crime, a third wing of the Scottish crime squad is being set up. I have also decided to invest additional resources in the court building programme to allow the new Edinburgh sheriff court to proceed and to overcome the inefficiencies of court business taking place in six different locations in the city.
Many positive benefits will accrue to Scotland as a direct consequence of the new allocations that I am announcing today. In many of the initiatives which we have launched in recent years, we have asked both the private sector and the public sector in Scotland to collaborate to the best advantage of the Scottish people. The allocations I have announced today, to Scottish Homes, to the SDA, to the National Health Service in Scotland and elsewhere are in the context of public expenditure actually falling as a proportion of national resources. It is therefore as a consequence of the contribution that the private sector is making to the wealth of the country that we can afford to enjoy these improvements in the public services.
Mr. Donald Dewar: The Secretary of State normally accuses me of having a mean, ungracious and Presbyterian approach to his attempts to represent himself as a reincarnation of Lady Bountiful, deploying favours to the people of Scotland. He will be glad to know that, on this occasion, 1 welcome some aspects of the statement, but, first, I shall make a preliminary point.
The right hon. and learned Gentleman has confirmed that the planned provision for 1989–90 is £8·97 million, as announced in the Autumn Statement. If we compare that with the estimated outturn for 1988–89, it represents a cut in real terms of £200 million. If hon. Members are interested, they will find that helpfully set out in table 1·10 of the Autumn Statement by the Chancellor of the Exchequer. I recognise that the right hon. and learned Gentleman will argue that plans for next year will not hold, but the Chancellor's figures make it clear that the Government's intentions are anything but generous.
I make it clear that Opposition Members welcome any increased expenditure for the Health Service, but I must say to the right hon. and learned Gentleman that it is not all above board. Will he accept that there will be some understandable cynicism about an increase that includes a reduction in employers' contributions to the superannuation fund and savings that will allegedly take place arising from the privatisation exercise that is being conducted? Will he confirm that any benefit in cash from the sacrifices of staff, who have had to apply for their own jobs at

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considerably inferior terms and conditions, are now being captured by the Secretary of State and paraded as an increase in public spending?
The right hon. and learned Gentleman talks about an increase of £240 million over planned expenditure in 1988–89. However, will he confirm that, if that is to be a fair comparison, he should include the £105 million which the Health Service pay settlement—and the nurses' pay settlement in particular—cost in Scotland in 1988–89? Will he accept that, on looking at the increase that he has announced, it is only prudent to take account of inflation and the additional 3·5 per cent. that the National Association of Health Authorities calculates must be included for demographic factors and other additional aims and perfectly fair objectives as outlined in the SHAPE and SHARPEN reports? If all such factors are taken into account, I suspect that, in real terms, Health Service expenditure is standing still and little better.
I strongly welcome, however, the £4·5 million for reducing waiting lists. My hon. Friend the Member for Strathkelvin and Rearsden (Mr. Galbraith) has been hammering away at that theme for a considerable time and I am extremely glad that, on this occasion at least, there has been some reaction. I hope that the right hon. and learned Gentleman will continue to listen.
I vehemently hope that there will be sufficient room in the new budgets to ensure that health boards can settle the outstanding disputes on the regrading process in the generous spirit that was, clearly, originally intended.
In other areas there is much less pleasant news. Expenditure on education goes up modestly in real terms next year, but then falls in real terms in the following two years. I do not understand how the Secretary of State can take the extremely optimistic line that he has adopted on industry. He knows that, in 1989–90, there will be a cash increase of £10 million, but, if the GDP deflator is applied, does he confirm that that means a decrease of £4 million? If one does the same sum for the following year, there will be a decrease of £9·5 million and in 1991–92 there will be a decrease of £17 million.
On housing it is the old story. We are told that there will be a lot more cash available, but, of course, the Government's contribution will fall in every conceivable way. What the Secretary of State has done is assume higher and higher receipts from sales and from the disposal of property. Next year, in cash terms, the Government's contribution, the net figure in the table attached to the statement, will be cut by £40 million and, in real terms, by £69 million. In the following two years of the three-year period dealt with, that reduction is followed by drops of £50 million and £32 million in real terms. If the Secretary of State is honest when he says that he wants to mount an attack on the housing problems of the nation, it is obvious that he should rethink the strategy and his contribution to the effort.
This statement is nothing like as generous as the right hon. and learned Gentleman has represented. It is full of throwaway lines that are scattered through the statement, which hardly bear examination. I was interested in the image of the Scottish crime squad with a third wing. That is a curious anatomical happening and one is moved to ask whether it will fly.
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More seriously, of course we are pleased that, for example, there will be a 14 per cent. increase in the capital spending on the water services. That is balanced by the fact that, if one considers the other environmental services, there is a total cut in real terms between this year and next of £21 million.
In view of the coming debate on electricity privatisation, will the right hon. and learned Gentleman note that, by 1990–91, the loss of revenue from debt repayments and so on from the electricity industry will be in the region of £200 million according to the Secretary of State's figures. If the spending projections are adjusted to take account of that, the Scottish Office net . budget in 1991–92, in real terms, will be below the figure for 1988–89 by some £263 million.
I suggest Mr. Speaker, if not to you, at least to the House, that when dealing with the right hon. and learned Gentleman the term generous often has a special and rather sinister meaning.
Mr. Rifkind: If the hon. Member for Glasgow, Garscadden (Mr. Dewar) is disposed to describe my statement as nothing like as generous as I am suggesting, I think that that is his coded way of saying that he has concluded that it is pretty generous.
. I will respond to the points that he raised. First, he made his usual response by seeking to compare planned provision for next year with the outturn this year. He is perfectly entitled to make that comparison as long as he appreciates that, in the past 50 years, there has never been a year when outturn and planned provision have been the same. Therefore, if outturn has been greater than planned provision in the past—unless the world has changed by an even greater extent that he and I believe likely—it is certain that outturn next year will turn out to be different from the planned provision.
The proper comparison to make is between planned provision today with what we were planning a year ago. I do not believe that he disputes the interpretation and conclusion that we have reached.
With regard to the Health Service, the hon. Gentleman made some reference to the fact that some of the improvements in the Health Service expenditure were being funded by efficiency savings and by reductions in NHS employer contributions. Let me make it clear that the improvements in no way affect the pension entitlements[Interruption.] I am not suggesting that the hon. Gentleman said that, but, for the purposes of the public who may think that such a—[Interruption.] I am delighted that the Opposition were thinking no such thought and that no one wished to suggest otherwise. Nevertheless, I put on record the fact that the reduction in employers' superannuation contributions has no implications for the pension entitlements of their former employees. This means that an extra £24 million will be available for worthwhile improvements in the Health Service.
As for the reduction in the waiting list, I can understand the hon. Gentleman wanting to give a bit of shadow glory to his hon. Friend the Member for Strathkelvin and Bearsden (Mr. Galbraith), but I must inform him that the Government's interest in and determination to deal with the waiting list long preceded the hon. Gentleman's elevation to his current post. In the past two years the Government have given priority to this area: in 1987, £3·6 million was allocated for a crash programme of action, and in the current year a further £3 million was set aside

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to fund projects for this purpose. As a consequence, there have already been welcome reductions in the waiting lists, which were inflated in the past as a result of industrial action which the Opposition continually failed to condemn.
Finally, the hon. Gentleman mentioned housing, and correctly pointed out that one of the reasons why we can make such a generous provision for it in Scotland has been the enormous response by the Scottish public to the opportunities to acquire the ownership of the homes in which they live. We are constantly having substantially to revise upwards the receipts that will be available to local authorities and others as a result of the policy that has been applied. As we said all along, the benefits from the right to buy would accrue not only to people who exercised that right but to local authorities, the SSHA and others in the form of resources for their housing stock. I am happy that that is what is happening now.
I welcome the hon. Gentleman's endorsement of the overall strategy for public expenditure.
Mr. Allan Stewart: I want to ask a detailed point about the roads programme. I welcome what my right hon. and learned Friend said about the A74, but does he agree that parliamentary answers elicited by the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) have clearly shown that the A77 is Scotland's most dangerous road? I hope that the programme for that is not jeopardised in any way.
More generally, is my right hon. and learned Friend aware that, as the hon. Member for Glasgow, Garscaden (Mr. Dewar) listed his welcomes for the statement, some of us became positively alarmed? I hope my right hon. and learned Friend can reassure the House that this is a prudent increase in public expenditure standing in marked contrast to the record of the last Labour Government. Such was their inefficiency in running the economy that they reduced public expenditure in Scotland in real terms by 4£5 per cent. in their last three years in office.
Mr. Rifkind: The Government have stated throughout the United Kingdom that our objective is that public expenditure should represent a falling proportion of national resources; but because of the healthy state of the economy and the contribution of the private sector to its regeneration, in Scotland, as in England and Wales, it is possible to provide more for the Health Service and other public services.
As for the A77, I acknowledge that there are requirements for many roads other than the A74. My hon. Friend will have noticed that he fought the last general election on a manifesto that recognised the overriding priority of upgrading the A74 to motorway standard. I have today announced an increase of 14 per cent. in the roads programme for next year, a good proportion of which will be available for other road projects that may be necessary.
Mr. Charles Kennedy: Does the Secretary of State agree that these welcome increases, where appropriate, from central Government will by no means overcome many of the real and legitimate problems being encountered nearer the local and community level by local authorities, and by health boards in particular? In that context, will he give an undertaking—or at least a sign—that if the outcome of the outstanding appeals to do
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with nurses' regrading requires further adjustment of the health figures, he will give an open-minded response to health boards?
As regards housing expenditure for local authorities, will the right hon. and learned Gentleman bear in mind the fact that the reductions in housing benefit have left many local authorities throughout Scotland—I quote Inverness as a local example—having to increase rents and put their repairs budget on an emergency or standstill basis because of the inadequate income they are now receiving? Will he also be sympathetic to that problem?
Finally—this is a matter close to my heart—will the Secretary of State at least indicate that, in his roads expenditure totals, he is not closing his mind to the much-needed bridge to Skye?
Mr. Rifkind: So far as the latter point is concerned, the hon. Gentleman will be aware that there have been discussions with the Highland regional council and various ideas are being discussed as to how such a bridge, if it were appropriate, might be financed. We may see progress on those matters.
With regard to the health aspects of the hon. Gentleman's question, for the reasons that I have mentioned relating to both the efficiency savings and the savings from NHS superannuation contributions, the Health Service in Scotland has an increase of resources available for expenditure of almost 10 per cent. It should therefore be possible for any minor adjustments as a result of appeals to be absorbed within the existing provision, which itself represents a generous increase.
Mr. Bill Walker: Does my right hon. and learned Friend accept that the increases that he has announced today in those special programmes—the Scottish Development Agency, the roads programme, the housing programme and, more importantly, the Health Service—will be very welcome? They are welcome because we recognise that they result from the growth in the economy which the Government have handled effectively and well. Who would have believed us in 1979 if we had said to the public of Scotland that there would be a 34 per cent. increase, over and above the rate of inflation, in Health Service expenditure in Scotland? That is what we have achieved and we should be trumpeting it from the rooftops.
Mr. Rifkind: My hon. Friend is correct in saying that in any country the improvement of provision in the public services, such as health, housing and education, can be achieved only if the private, wealth-creating sector of the economy is successful. That lesson has now been learnt in the Kremlin, but has still to be learnt in Labour party central office.
Mr. Ernie Ross: The Secretary of State must know that we cannot run the National Health Service in fits and starts. If he is to have these bursts of enthusiasm and give more money to tackle waiting lists, because he genuinely wants to tackle the problem, he must realise that, when he last gave money for that purpose, many health authorities were constrained by the fact that they did not have the proper back-up facilities to take advantage of those additional funds. We do not want bursts of enthusiasm; we want sustained, necessary

777
expenditure in the health services to allow them to build up teams around the surgical teams that he claims to want to help.
Will he also answer the question posed by my hon. Friend the member for Glasgow, Garscadden (Mr. Dewar) relating to the fact that part of the money comes from the salary cuts that are being borne by those Health Service employees who are now the employees of private companies?
Mr. Rifkind: I agree with much of what the hon. Gentleman said in the earlier part of his remarks, but there have been sustained increases in expenditure. The problem with regard to waiting lists is that there have been occasional explosions in their size because of industrial action. But for the industrial action that has taken place over the years, waiting lists in Scotland would be far less than they are at present. Occasionally, therefore, it is necessary for us to try and deal with those unexpected bursts through initiatives of the kind that the Government have promoted.
With regard to the second part of the hon. Gentleman's question, the Health Service does not exist for its employees. Its employees are entitled to proper remuneration and should provide those services that they are contracted to provide. However, the House should agree that efficiencies can be achieved in the Health Service and in other areas of expenditure. If, by so doing, we can provide an improved quality of service for patients, that must be desirable and in the interests of the NHS.
Mr. Alex Salmond: May I suggest to the Secretary of State that Opposition Members do not like comparing his previous plans with his present plans because he has the statistical habit of setting his plans low? That is the only way in which he can announce any increases. If we compare the net outrun for the year with the right hon. and learned G Gentleman's plans, we find that there are reductions in Scottish public expenditure. There is a reduction of £80 million if a comparison is made with the revised outrun, or one of several hundred million if a comparison is made with the Autumn Statement outrun. Will the right hon. and learned Gentleman tell us where he expects the cuts will fall?
Did the Secretary of State notice an article in Scotland on Sunday—it was written by his erstwhile colleague Michael Ancram—that complained about those who talk about Scottish expenditure without reference to
"the exploitation of Scottish-based assets"?
Does he look forward to the day when we can talk about Scottish spending with reference to Scottish revenue and Scottish assets, and not his statistical juggling?
Mr. Rifkind: I can understand why the hon. Gentleman made the most urgent exit from a banking career that he was able to find. If his understanding of economics is explained in his remarks this afternoon, the longer he stays away from banking, the better for the Scottish banking industry.
Mr. Dennis Canavan: There speaks the jailed lawyer.
Mr. Rifkind: I can only say—
Mr. Canavan: I would not want the Secretary of State to defend me in the courts.
Mr. Rifkind: If I defended the hon. Gentleman, I might not mind too much what the verdict was.
I say to the hon. Member for Banff and Buchan (Mr. Salmond) that the announcements that I have made today represent to any but the most twisted mind a generous increase in public expenditure in Scotland.
Mr. David Lambie: Like my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar), I welcome the extra expenditure on the roads programme and on water and sewerage services. The Secretary of State will be aware that most of the priorities for spending the extra cash will be determined by local authorities, including regional councils. Will he give a guarantee that he, along with the other Ministers in his Department, will ensure that Strathclyde regional council, over which my constituents and I have little control, determines priorities for extra expenditure on roads so as to include the provision of a motorway system from north Ayrshire to the main motorway system and the upgrading of the A737, along with the extra provisions for water and sewerage departments, so that the people of Cunninghame have a pure water supply for the first time since 1975? Let us clear up the pollution on the beaches of Ardrossan, Saltcoats, Stevenston and Irvine.
Mr. Rifkind: I never cease to be amazed. The hon. Gentleman has built a career under successive Labour and Conservative Governments on accusing those Governments of interfering with the rights of local authorities. He has now made an impassioned plea to me to insist that the Strathclyde regional council ceases to use it discretion and instead uses his or mine when expending its resources. I shall pass on the hon. Gentleman's views.
Mr. Andy Stewart: May I offer my congratulations to my right hon. and learned Friend on his announcements today about Scotland, which will make my constituents green with envy? Does he agree that the best way to continue funding extra resources is for the entire United Kingdom to work together as one, bearing in mind that eight out of every 10 taxpayers live in England?
Mr. Rifkind: If my hon. Friend examines the resources that are being made available for his constituents in Sherwood and the announcements that have been made by my right hon. Friends in other Departments, he will find that improvements in the Health Service, housing provision, education provision and other areas of expenditure are to be found throughout the United Kingdom. They are explained by the increased wealth of the private sector. I am happy to say that the private sector in England has made a contribution to the improvement in national wealth.
Mr. Michael J. Martin: I hope that the Scottish Development Association will carry out the Secretary of State's wishes and do something about unemployment. I was informed only last night that an unemployed family in my constituency had to have a sheriff's warrant sale. This took place only 14 days before Christmas. That is what people in the cities and throughout Scotland are having to tolerate. I hope that the SDA will do something to get unemployment sorted out.

779
I have heard hon. Members on both sides of the House talk about roads. There are so many roads in my constituency that many of them could be put in the rest of Scotland and Springburn would still have plenty left. There are people who are living on islands, as it were, who are trapped by motorways, dual carriageways and bypasses. If the Secretary of State is serious about the environment, he should examine inner-city road building plans.
Mr. Rifkind: I have enormous sympathy with what the hon. Gentleman has just said. I believe strongly that if we are to try to encourage a better quality of life in the urban environment, we must realise, especially the planners, that towns and cities are built for those who live in them and not for the vehicles that they occasionally use. It is unfortunate that in the planning of some new towns, and of some of the projects for urban regeneration, assumptions have been made on the car usage of those who will live in these areas, when a significant proportion of them do not have access to their own vehicles. The quality of their life would be greatly enhanced by their ability to walk to wherever they need to go without risk to life through traffic or the dehumanising effect of major road networks in town centres. Sometimes this cannot be avoided, but when it can it should be.
Mr. Dick Douglas: Will the Secretary of State reflect on his remark about the Health Service not being made for its employees? There is much merit in that remark, but NHS employees cannot exist on a diet of praise whenever there is an emergency, such as the recent rail crash. It is all very well to praise public servants, but they cannot exist on such a diet. They must be properly remunerated. They should not have to buy their jobs, as they are doing in Fife, by accepting inferior standards of employment and reneging on long-won trade union agreements. That is not what we would expect from respectable public employees. When will the right hon. and learned Gentleman meet the Dunfermline district council, with me, to discuss urban renewal within Dunfermline? These matters do not come within the orbit of the four cities that he mentioned earlier.
Mr. Rifkind: I look forward to hearing from the hon. Gentleman on his proposals for Dunfermline.
I accept that Health Service employees are entitled to proper remuneration for the work that they do. They will be aware that significant increases in pay have been given to a high proportion of those who work in the NHS. For example, nurses have a standard of living that is infinitely higher than anything that they have obtained previously.
As for competitive tendering, it does not necessarily follow that the levels of expenditure for the provision of certain ancillary services that have prevailed in the past have been the best use of public resources. It is for health boards to decide whether the quality of service that is required for health services in their area can be better achieved in another way. We have required them to go out to competitive tender. The fact that many health boards have decided at the end of the day to opt for in-house contract while some have gone for the private sector illustrates that they are left with the discretion to reach their own considered conclusion on these matters.
Mr. John Townend: Will my right hon. and learned Friend tell the House how much the
780
Exchequer would save if public expenditure per head in Scotland was reduced first to the level of that in the north of England and, secondly, to that in England as a whole?
Mr. Rifkind: I do not think that we have reliable figures on the level of public expenditure per head in the north of England. It might be interesting to ascertain the figures. My hon. Friend is entitled to say that Scotland, Northern Ireland and Wales have higher levels of public expenditure than the English average, and have had them for many years. Whether that applies with equal force to each part of England is another matter. There may be variations within England, given the overall size of the population in that part of the United Kingdom.
Mr. David Marshall: I welcome the Secretary of State's announcement of the upgrading of the A74. I hope that the work will be carried out as soon as possible. Has the right hon. and learned Gentleman made any additional moneys available to Strathclyde regional council to enable it to make additional payments under section 20 to ScotRail to enable it to carry out necessary improvements to rail services within Strathclyde?
Mr. Rifkind: As far as I am aware, we have not yet determined individual allocations to specific local authorities. I have announced today the global resources that are available. We shall be considering the respectwe priorities of individual authorities over the next few weeks.
Mrs. Maria Fyfe: Perhaps the Secretary of State will begin his afternoon's work by telling that twit on the Conservative Back Benches, the hon. Member for Bridlington (Mr. Townend), that public expenditure is higher per head in Scotland because there is higher unemployment and more poverty—
Mr. Speaker: Order. I do not think that "twit" is a very elegant word to use in the Chamber.
Mrs. Fyfe: If it is ruled that it is an unparliamentary expression, I will call the hon. Member for Bridlington an ill-informed gentleman, if that is better.
In connection with the resources that the Secretary of State referred to in his statement, will he spend a small sum to buy the Minister responsible for education and health a copy of the EEC "Childcare Network" report which the Minister admitted that he had not heard of at the last Scottish Question Time? I assume that the Minister has not found the time or taken the trouble to read that report, as he has failed to make any response to it.
I will remind the Secretary of State about the contents of the report. All member states of the EEC have formed a network of childcare experts which published its report a few months ago. The report found that British childcare levels were the worst in Europe and that the level of childcare support in Scotland was worse than in the rest of Britain. What resources will the Secretary of State provide to solve that problem? Is it not a disgrace that he has not referred to a penny of support for care for the under-fives in Scotland?
Mr. Rifkind: I have already indicated the level of increases available for education and other matters involving the care of children. The hon. Lady might like to reflect on that. With regard to the earlier part of her question, unemployment in Scotland is considerably lower than unemployment in the north of England, but as yet we

781
have no reason to believe that public expenditure in the north of England is any higher than in Scotland. Indeed, it may be less. The hon. Lady would be ill-advised to take that comparison too far.
Mr. Nicholas Bennett: Has my right hon. and learned Friend seen the answer in yesterday's Hansard which shows that net disposable income in Scotland, after taking account of housing costs, is higher than in the north of England, the midlands, Wales and Northern Ireland? As public expenditure is also higher in Scotland, is it not the case that the taxpayers of England and Wales are making a net contribution to Scottish expenditure?
Mr. Rifkind: My hon. Friend is correct to state that the net disposable income of those in employment is higher in Scotland than in most of the rest of the country outside the south-east. In the United Kingdom we do not think in terms of English, Scottish or Welsh taxpayers; we think of United Kingdom taxpayers and decisions of the United Kingdom Government on how the resources should be used. Some hon. Members prefer to consider this on a sectional or separatist basis, but they represent an insignificant minority.
Mr. Harry Ewing: Is the Secretary of State aware that it is rather pitiful to see him joining his English Back Bench colleagues in the comparison between English and Scottish expenditure per head of population? Is the Secretary of State aware that in relation to health, only Finland has a higher number of deaths from cardiac failure per head of population than Scotland? Is he aware that no other country has a higher number of deaths from respiratory illnesses per head of population than Scotland? Is he also aware that our infant and perinatal mortality rates are third from the top of a rather dubious league? The reason that we get the money for the Health Service is that we have the problems.
Mr. Rifkind: The hon. Gentleman is correct and I am bound to add that if in 1988 that is true, notwithstanding a 34 per cent. increase in real terms since the Government came to office, one must ask what priority was given to those issues by the Labour Government of which he was a Minister responsible for health in the Scottish Office.
Mr. Canavan: Will the Secretary of State remind his hon. Friends the Members for Bridlington (Mr. Townend) and for Sherwood (Mr. Stewart) that since the Government came to power they have had the advantage of £62 billion of North sea oil revenues, much of which has come from Scotland not just for geographical reasons, but because of the efforts of Scottish enterprise and Scottish working-class people many of whom have given their lives? The result is that the Chancellor of the Exchequer down here has been able to impose a morality throughout the United Kingdom which is like Sherwood forest in reverse; the Government are robbing the poor to pay the rich by dishing out tax concessions to the rich friends of the Tory party instead of giving money to the National Health Service in Scotland and elsewhere in the United Kingdom to enable a fair implementation of the nurses' grading review.
Mr. Rifkind: As usual, the hon. Gentleman is light years out of touch with the real world. If today I have been able
782
to announce a massive increase in resources for the Health Service in Scotland, which is comparable to that throughout the United Kingdom, and if that has come about because of the increased prosperity of the private sector in the United Kingdom economy, the hon. Gentleman should appreciate that without a thrusting, thriving and successful private sector, it is impossible to improve the quality of public services. He must remember that, because he was most critical of the Labour Government's inability to fund the public services. The main reason for that was because of the poor condition of the British economy at the time.
Mr. Tony Favell: It is unfortunate that comparisons have been made in public expenditure between various parts of the United Kingdom. Does my right hon. and learned Friend agree that, thanks to the Labour party, Scotland is getting the reputation of having a handout mentality? Scotland's great contribution to the United Kingdom and the world was on the back of individual contributions to commerce, industry, insurance, the law and banking, not through public expenditure.
Mr. Rifkind: I have no doubt that we need a healthy balance between the major contribution that Scottish enterprise in its wider sense and the private sector as a whole can continue to make to the regeneration of the economy. We have always emphasised that in Scotland as elsewhere in the United Kingdom, it is through the regeneration of the private sector that we can afford the major resources available for improvements in the Health Service and elsewhere. That is not a Scottish phenomenon; it is common to the United Kingdom as a whole. I believe that there is a continuing change in the attitude of people in Scotland to the role that the private sector can play. Given the nature of Scottish history, as my hon. Friend said, it would be surprising if that was not the case.
Dr. Norman A. Godman: With regard to the allocation of funds for the SDA, I sincerely hope that Inverclyde will be treated with some sympathy—aye, and perhaps a splash of generosity. May I remind the Secretary of State that east Greenock has the highest level of unemployment in the Strathclyde regional council area? May I also point out that the Inverclyde initiative has done little or nothing to dent that scandalously high level of unemployment? No employer of any size has come to the lower Clyde since the initiative was set up. Will the Secretary of State give me an honest answer to this question: when are we to see a decent improvement in the economy of the lower Clyde?
Mr. Rifkind: The hon. Gentleman will be well aware that each of the initiatives suggested by those who live in Inverclyde has been responded to positively by the Scottish Office and the Government. In particular, the establishment of the Inverclyde enterprise zone has already led to a significant number of inquiries from people contemplating investment in Inverclyde and the consequential employment that would flow as a result.
Obviously the benefits will not come overnight. We are completing the designation of the enterprise zone and the SDA has acquired some of the land that Scott Lithgow no longer requires to adapt it as suitable for investment. As the hon. Gentleman would be the best qualified to inform the House, one of the curious and rather difficult factors

783
about Inverclyde is that, although, as he rightly says, it has high unemployment, because of its topography it has very few sites available for a major inward investor without work being carried out by the SDA and others to improve potential sites to make them suitable for investment. Problems must be overcome, but if the hon. Gentleman considers the matter he will agree that an enormous amount is going on on the ground to solve the problems.
Mr. Tom Clarke: When the Secretary of State referred in his statement to the elderly, mentally ill and mentally handicapped, did he not regret that he has not yet found the limited resources to introduce the section of the National Health Service (Amendment) Act 1986 which would have introduced joint planning in Scotland? Is that not a pity because, apart from the fact that virtually every voluntary organisation in those areas that I know of supports the proposal, the introduction of that section of the Act would simply take Scotland to the level of participation which has rightly been enjoyed by England and Wales for more than a decade?
Mr. Rifkind: We have made significant progress in that area and the voluntary arrangements currently available are leading to real improvements. Obviously I will carefully consider the points that the hon. Gentleman has made.
Mr. Neil Hamilton: Does my right hon. and learned Friend agree that his statement today should be particularly welcomed by all who believe in high and rising levels of public expenditure? Does that not also demonstrate the value to Scotland of the Union with England? Is it not therefore surprising that the hon. Member for Glasgow, Garscadden (Mr. Dewar) should be so churlish in his response this afternoon? Without the union with England, the Labour party would be even more embattled and unelectable than it is.
Mr. Rifkind: I have to say that I do not think that the hon. Member for Garscadden was churlish. By his standards, he gave an almost effusive welcome.
Mr. Jimmy Wray: Does the Secretary of State agree that his statement is hypocritical as far as nursery education is concerned? That is one item on which the Government say that they are spending 26 per cent. more. Can the Secretary of State tell me why it is that, although, in 1977, 29,000 children received nursery education and now in 1988, 38,000 children receive nursery education, the Government are spending £300,000 less on Scottish nursery education and £3 million less than in 1977 in Strathclyde region?
Mr. Rifkind: The hon. Gentleman's comments on local authority expenditure may say something about the priorities of the local authority in question. Strathclyde regional council is probably responsible for more resources than any other local authority in Scotland or, probably, in the United Kingdom as a whole. If it does not attach the importance to nursery education that the hon. Gentleman wishes, he should address his comments there.
Mr. John McAllion: Will the Secretary of State tell us whether he has included in the allocations this afternoon a sum to cover the cost of the latest scheme promulgated by the Scottish National party on Tayside regional council? It recommends that people who pay poll tax in full and early should be given a 5 per cent. discount.
784
When it was pointed out to the nationalists on Tayside by an official that the costs of their scheme for helping the better off would have to be borne by the poor, the nationalists responded by saying that they were a party that represents the rich as well as the poor. I know that the Secretary of State does not share their point of view and I ask him, if money is made available, to ensure that their madcap scheme never comes into being.
Mr. Rifkind: The hon. Gentleman must understand that he has put me in a very difficult position. I have to say that it does not surprise me that the nationalist party should behave in a way that is so inconsistent with its theoretical position. Angus district council, for example, which is the only council that is under nationalist control, will co-operate fully in collecting the community charge; and now that the nationalists on Tayside, as the hon. Gentleman has claimed, wish to provide incentives to ensure that the community charge is raised as quickly and as smoothly as possible, I look forward to welcoming their continuing support in every possible way.
Mr. Tony Marlow: I wonder whether I could ask my right hon. and learned Friend if he can explain kindly to my English constituents why it is that per capita expenditure in Scotland is, and always has been, much higher than it is in England. I think he can reassure them that it is not because the Government are trying, to reward Scotland for a predilection for voting Socialist, but perhaps has something to do with the fact that Scotland is heavily over-represented in the House, which enables a massive distortion in the pressure for the allocation of public expenditure. May I suggest to him, as a member of a Cabinet that wishes to cut public expenditure, that the easiest way to do that would be to cut the number of hon. Members from Scotland in the House? Could he further say that, if there is any party in the House that has any silly ideas for tinkering with the proposal for devolution, the condition precedent for anything like that taking place would be a massive reduction in Scottish seats in the House?
Mr. Rifkind: I have to say to my hon. Friend that he is certainly right in saying that institutional arrangements for the representation of Scottish constituencies in Parliament have not done any harm with regard to the allocation of resources in the United Kingdom over the years, but he must bear in mind that the nature of many Scottish constituencies is somewhat different, from a geographical point of view, from his own slightly more compact constituency. Although Scotland may have only 9 or 10 per cent. of the population in the United Kingdom, its land mass represents 30 to 40 per cent. of the total land mass of Britain and, as a consequence, expenditure on roads, houses, schools and health cannot have the same benefits of scale that are sometimes available to his constituency and, perhaps, mine.
Mr. George Foulkes: I am grateful to you, Mr. Speaker, for restoring me to my traditional position of sweeper.
Does the Secretary of State recall his visit to Cumnock and Doon Valley in the summer? If he does, he will be aware that the people of Cumnock and Doon Valley will judge whether he is to be considered a Santa Claus or a Scrooge in the light of his statement, and on the basis of whether it will enable the Cumnock and Auchinleck

785
bypass, which was so drastically cut from the programme last year when everything was ready to go ahead, to be restored to the programme? Can he give me an assurance that it will go ahead in the next financial year, and can he say whether, in his extensive provisions, he has made just a modest little contribution for an appropriate celebration when Heart of Midlothian return with the UEFA cup?
Mr. Rifkind: I will bear in mind the latter suggestion on the likely achievements of that football club, which is well known to me. My visit to Cumnock and Doon Valley was a very pleasant experience and I have become familiar with the perspective of the hon. Gentleman about the needs of his constituents. Matters involving the individual allocation to local authorities have still to be determined. I shall bear the hon. Gentleman's comments in mind.
Mr. Ernie Ross: On a point of order, Mr. Speaker. I wonder whether you heard, when my hon. Friend the Member for Dundee, East (Mr. McAllion) was making a

£million

1988–89

1989–90

1990–91

1991–92

Cm. 288-II1 provision

Cm. 288-II1 provision

Revised provision2

Cm. 288-II1 Provision

Revised provision2

provision2

Net

Gross3

Net

Gross3

Net

Gross3

Net

Gross3

Agriculture

197

198

211

204

205

210

200

200

210

210

Industry

267

289

261

277

307

260

280

310

280

310

Tourism

15

16

16

17

19

20

20

20

20

20

Transport

615

616

660

700

701

680

740

740

750

750

Housing

639

882

698

599

1,057

720

640

1,020

680

1,150

Other environmental services

693

750

710

706

768

740

720

780

750

800

Law, order and protective services

681

692

692

741

744

710

760

760

780

780

Education

2,186

2,188

2,226

2,354

2,360

2,290

2,400

2,400

2,480

2,480

Arts and libraries

88

88

94

95

95

100

100

100

100

100

Health and social work

2,830

2,838

2,948

3,182

3,189

3,070

3,310

3,320

3,450

3,460

Other public services

125

125

130

122

122

130

130

130

140

140

LA current expenditure not allocated to services

40

40

41

37

37

40

40

40

40

40

Nationalised industries external financing

134

134

-74

-61

-61

-190

-210

-210

—

—

48,510

8,856

8,610

8,973

9,543

8,780

9,130

9,610

9,680

10,240

Note: Figures for 1990–91 and 1991–92 are rounded to the nearest £10 million.
1 White Paper (Cm. 288-II) figures adjusted for pre-survey changes.
2 Figures reflect survey changes and changes since the Autumn Statement. Some figures may be subject to detailed technical amendment.
3 Gross provision consists of total net provision plus capital receipts and for housing, from 1989–90, some Scottish Homes' loan repayments.
4 The figure differs from the net outturn figure of £8,720 million shown in the Chancellor's Autumn Statement for 1988–89; the main differences are continued spending by local authorities above the level provided for and NHS pay settlements.]

STATUTORY INSTRUMENTS, &c.
Ordered,
That the draft Grants by Local Housing Authorities (Appropriate Percentage and Exchequer Contributions) Order 1989 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Neubert.]
factual statement referring to the comments, on the record, of the SNP on Tayside regional council, that the hon. Member for Banff and Buchan (Mr. Salmond) said, "It's all lies." I am sure that you would want him to explain that he was not suggesting that my hon. Friend was telling lies when he gave that factual report.
Mr. Speaker: I did not hear that.
Mr. Salmond rose—
Mr. Speaker: Let me deal with the matter. I was listening carefully to the hon. Member for Glasgow, Maryhill (Mrs. Fyfe) and I was trying to interpret "twit"—what I understood to be an endearing term in Scotland although it is less so in England—so I did not hear what else was going on. Does the hon. Member for Banff and Buchan want to correct that?
Mr. Salmond: Yes. The word I used was "rubbish" and I am happy to stick to that.
Mr. Speaker: In that spirit, we shall move on.
[Following is the table:

Orders of the Day

  Electricity Bill
  Order read for resuming adjourned debate on Question [12 December], That the Bill be now read a Second time.
  Question again proposed, That the Bill be now read a Second time.
  [Relevant documents: Third report of the Energy Committee of Session 1987–88 on the Structure, Regulation and Economic Consequences of Electricity Supply in the Private Sector (House of Commons Paper 307), and the third special report of the Committee of the same Session containing the Government's observations on the third report ( House of Commons Paper 701).]
  Mr. Speaker: There were some inordinately long speeches earlier yesterday afternoon. I propose, therefore, to limit speeches to 10 minutes between 6 pm and 8 pm today. I hope that right hon. and hon. Members who are called after that time will endeavour to keep to that limit, because it enables all who wish to be called to be accommodated.
  I must announce to the House that yesterday, I selected the reasoned amendment in the name of the hon. Member for Banff and Buchan (Mr. Salmond).
  4.28 pm
  The Secretary of State for Scotland (Mr. Malcolm Rifkind): As I listened yesterday to the opening speech of the hon. Member for Sedgefield (Mr. Blair), I could not help but note that he presented himself as a champion of the consumer and based many of his arguments on benefits that the consumer would enjoy if a Labour Government could be elected or if Labour policies could be pursued.
  In the kindest and gentlest way possible, I exhort the hon. Member for Glasgow, Garscadden (Mr. Dewar) not to be tempted in a similar direction. If he sought to present himself as a champion of the Scottish consumer, I should have to remind him that, under the present Government, electricity prices in Scotland have increased by the equivalent of 2 per cent. in real terms, whereas from 1974 to 1979 they increased by no less than 20 per cent. in real terms. That phenomenon was repeated throughout the United Kingdom.
  Let us judge the Opposition not by their words but by their deeds, because that will provide us with a fine basis on which to determine the implications for the consumer. An additional factor is that the Bill allows for the first time for compensation to be given to the consumer in the event of an inadequate service being provided. I understand that the Opposition are to vote against that provision, which is unprecedented in this country.
  I listened with great care yesterday to the hon. Member for Glasgow, Cathcart (Mr. Maxton) who, having made his contribution to the debate, appears to have decided that it was not necessary to be present for the second day. [HON. MEMBERS: "He is here."] We should be very pleased indeed if the hon. Gentleman could return every time we mentioned his name. He bewailed the fact that there was not to be a separate Scottish Bill and implied that the Government had made an improper and unacceptable decision in that respect.
  I wished to be absolutely fair to the hon. Gentleman, so I examined his argument, which I found totally devoid of
  788
  coherence. He did not at any time explain, for example, why it was acceptable for the Labour Government to bring together 53 Scottish undertakings with 500 English undertakings in a single Act of Parliament in 1947, but unacceptable for a Conservative Government to return to the private sector, in a much simpler way, the consequences of that nationalisation.
  I presume that the hon. Member for Cathcart has paid the Bill cursory attention and will know that, of 103 clauses, only five refer exclusively to Scottish affairs. That means that, if we had accepted his advice, we should have burdened the House with two major Bills, largely identical in form and substance.
  Mr. George Foulkes: The Secretary of State will recall that one of my questions yesterday elicited that response from the Secretary of State for Energy. To read the Glasgow Herald and The Scotsman one would have thought that I was not here yesterday, but we are getting used to that. If the hon. Member for Glasgow, Govan (Mr. Sillars) had asked the question, we should all have read about it on the front page of every newspaper.
  Does not the Secretary of State agree that the arguments advanced yesterday by my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) were valid? When the industry was nationalised, we had one Minister and one Department to deal with it. Now, however, the Secretary of State for Scotland has separate responsibilities. The reason that he did not want to have a separate Bill for Scotland was that he would have had to appoint a Scottish Committee to consider it. He does not have the troops to man Scottish Standing Committees, just as he does not have the troops to man the Select Committee on Scottish Affairs. Why does not the right hon. and learned Gentleman come clean?
  Mr. Rifkind: The hon. Gentleman said that he was puzzled that his remarks did not get into the press; his most recent contribution provides us with a convincing explanation for that. As I have tried to explain, 98 of the 103 clauses do not refer specifically to Scotland, so to insist on a separate Bill of a comparable size would therefore have been absurd. It was certainly not the policy pursued by the Labour Government when it nationalised the industry, in a much more complex way, in 1947, and I do not recall the Labour party objecting to that decision.
  Mr. Alexander Eadie: The Secretary of State has argued positively and specifically that there should be only one Bill. Perhaps he will explain why, when I raised the matter earlier this year, he told the House that he and his right hon. Friend the Secretary of State for Energy had not yet made up their minds.
  Mr. Rifkind: We had not made up our minds then because we wanted to identify the extent of the difference between a Scottish Bill and an English Bill. We decided that it would be pretty silly for the United Kingdom Parliament to deal with two major Bills 97 per cent. of whose provisions were identical. I suspect that the hon. Member for Midlothian (Mr. Eadie) might have reached the same conclusion had he thought about the matter. I recollect that, at the beginning of the last Labour Government's period of office, they proposed to introduce provisions for elected assemblies for Scotland and Wales in a single Bill. It took several months, if not years. of

  789
  argument to persuade them that that was not entirely appropriate. Opposition Members should look to their own record.
  I shall concentrate on the elements of the electricity industry that are distinctive to Scotland, but first, I shall comment on the main thrust of the Opposition's arguments yesterday. It emerged clearly from the eloquent speech of the hon. Member for Sedgefield that the Labour party in the 1980s remains wedded to the concept of monopoly. We have known for many years that monopoly, whether private or public, is undesirable if it can be avoided. The Monopolies and Mergers Commission exists precisely to try to prevent the emergence of unnecessary monopolies.
  I had hoped that the Opposition would address the matter from the same starting point as the Government: we have had a state monopoly for 40 years and if it is possible in any way significantly to diminish the monopoly element in the electricity industry we should do so. We should not be divided on that on a doctrinal basis.
  The Government have never sought to suggest that electricity is an industry that can be considered suitable for the application of classical concepts of competition. Of course that is not possible, and of course aspects of the electricity industry are natural monopolies. Nevertheless, it is clear that under the Bill it will be possible to introduce real competition in a number of sectors of the electricity industry for the first time. For example, independent generators will have the opportunity to come forward, and in various parts of the United Kingdom there will be competition between generators.
  In addition, industrial bulk purchasers of electricity will have the opportunity to choose where to purchase their electricity. [HON. MEMBERS: "In Scotland?"] The provision will apply in Scotland. If hon. Members had read the Bill, they would know that provision for common carriage for electric power applies throughout the United Kingdom, and that bulk purchasers in Scotland will not be obliged to purchase all their electricity from the generator in their area. In addition, the opportunity available to Scotland to export surplus electricity will mean considerable competition as regards the best terms for that, which will be of considerable benefit to the Scottish consumer.
  No one has suggested for a moment that perfect competition will be available in the electricity industry. The hon. Member for Sedgefield seems to suggest that, if we cannot have perfect competition, a monopoly is preferable. That is totally at variance with the experience of the rest of the Western world, and against the interests of the British public, whether in Scotland or in England.
  The Opposition's assumption that the electricity industry under state control has had a perfect record of planning for the future needs to be examined. [HON. MEMBERS: "No one has said that."] I am sorry, but the hon. Member for Sedgefield said specifically that the whole purpose of nationalisation was to get away from 80 per cent. over-capacity in the electricity industry. I have to inform the Opposition that over-capacity is not a problem of the past. In England there is under-capacity and in Scotland there is not 80 per cent. but almost 100 per cent. over-capacity. That offers considerable benefits to the Scottish electricity industry. As a Scottish consumer I am
  790
  not complaining about that phenomenon, but whether the British taxpayer has benefited from that system is another matter.
  Mr. Rhodri Morgan: Does the Secretary of State accept that if, at any time in the past three years, with the opening of Torness coming up, he could have doubled the size of the interconnectors, Scotland would be exporting 2 GW instead of 1 GW to England, and the problems of the Scottish coal mining industry in the past two years would have been solved? The right hon. and learned Gentleman must accept responsibility for planning alongside the Secretary of State for Energy in the past two years.
  Mr. Rifkind: The hon. Gentleman has misunderstood my point. Electricity consumers in Scotland demand less than 6,000 MW. As a consequence, we have doubled the capacity in Scotland, and it now stands at 12,000 MW.
  Mr. Morgan: The same problem applies in Wales.
  Mr. Rifkind: The hon. Gentleman confirms my point, that state control and central planning have not led to a rational distribution in the provision of electricity capacity, which the hon. Member for Sedgefield implied was the purpose of nationalisation in the first place.
  The third factor is that, as long as an industry is ultimately controlled by the state and by Ministers, there will inevitably be political interference in the running of that industry. That has been the experience of all nationalised industries, whether under a Labour or a Conservative Government.
  One of the electricity industry's crucial requirements is that, as with every other industry in the private sector in the United Kingdom, it should be able to make its own investment decisions based on its investment needs and on the resources that it can raise in order to fund that investment. But the House must be aware that, under successive Governments over many years, the borrowing limits of nationalised industries have in part been determined by their investment requirements and in part by the Government's overall public expenditure policy. It must be the case that the electricity industry, unlike those in the private sector, has been penalised in that it has not been able to plan on the basis of its requirements exactly what its investment requirements may be.
  Mr. A. J. Beith: What else are the provisions in the Bill relating to nuclear power, except a means of preventing the privatised companies from making their investment decisions and political interference by the Government in the industry's investment decisions?
  Mr. Rifkind: The hon. Gentleman is right to say that specific powers in certain aspects of the industry remain available to Governments, but I hope that he is not suggesting that complete control over all the industry's investment decisions is preferable.
  We have never said that the Government should wash their hands of all matters involving the electricity industry, which has strategic importance in the United Kingdom, as the Bill makes abundantly clear. My point is that, until now, all the industry's investment decisions have been subject to Government control. The fact that in future that will apply to one specific area—nuclear power—is considered a significant improvement by the industry.

  791
  Let me deal now with the specific conclusions that we have reached on the implications of privatisation for the electricity industry in Scotland. We start with three specific features that are peculiar to the industry in Scotland. First, Scotland has a diversity of resources for electricity generation hardly to be found in any other part of the United Kingdom. Oil, coal, hydro, and nuclear are in abundance. That is peculiar to north of the border.
  Secondly, as I have already said, we have a surplus capacity which is unprecedented in the United Kingdom and which offers substantial opportunities, as the hon. Member for Cardiff, West (Mr. Morgan) said, through the development of the interconnector, for export to other parts of the kingdom which do not have such a surplus.
  Thirdly, Scotland has a substantial nuclear capacity. Over 50 per cent. of Scotland's electricity requirements will be provided by the nuclear part of the industry when the Torness power station has been commissioned.
  It is against that background that we examined the precise and proper way to privatise the industry in Scotland. The first question that had to be examined was vertical integration. For a number of years, Scotland's industry has been administered on the basis of vertical integration of generation, transmission and distribution. We did not automatically assume that that was essential; we looked at the matter with an open mind to see whether it made sense in the Scottish context to divide generation from transmission and distribution.
  We came to the conclusion that that would be inappropriate, for two reasons. First, the size of the Scottish market makes it inappropriate. Electricity demand in Scotland is equal to about the equivalent of one English board. Therefore, to divide generation from transmission and distribution would have created relatively small companies whose prospects of economic viability would have been far more uncertain. In addition, we would have had to take into account the fact that, in the north of Scotland, in the area of the Hydro Board, a proportion of the hydro power is dedicated in terms of distribution to particular parts of the north of Scotland, from which it could not be physically separated. For those reasons, plus Scotland's particular demography, we concluded that vertical integration made sense and should be continued.
  The next question was whether there should be a single Scottish private company or two. I am bound to say that our announcement that we had concluded in favour of two Scottish companies was widely welcomed on both sides of the House by all political parties. It was not an easy decision, because, while there was a natural desire to prevent the creation of a single private monopoly in Scotland of the kind that would have been achieved if the South of Scotland electricity board's proposal had been adopted, there was on the other hand a recognition that electricity generation in Scotland had been developed on the basis of a single market and, particularly with regard to nuclear power, on the basis that it would be available to consumers in all parts of Scotland.
  It was on that basis that we put forward the proposals that we announced in the White Paper and subsequently —the creation of two companies in Scotland based on the SSEB and the North of Scotland Hydro-Electric Board, but with certain exchanges on a contractual basis of capacity and other such matters. In addition, a nuclear company was to be created, wholly owned by the south company and the north company, in order to ensure
  792
  availability throughout Scotland of nuclear power in a form that meets the requirements of the Scottish consumer.
  We took account of the fact that, until now, there has been a joint generating agreement which has had certain advantages through the application of the merit order scheme, but which has also had certain disadvantages because it has concealed the costs of the two parts of the industry, which is undesirable from the consumers' point of view. Therefore, we sought to develop a system which enabled the merit order approach to continue for the benefit of the consumer, but which created a new transparency with regard to the respective costs of the generation of electricity in the two companies. That can only be to the benefit of the public.
  As a result of the decision to create two companies, we have had to consider the role of the regulator. We have accepted from the beginning that in Scotland, as in England and Wales, where there is not proper competition throughout the industry it is necessary to have a director general to deal with regulation and for him to have the primary responsibility of ensuring that, in those aspects of the industry where competition does not apply, the consumer should be properly protected and that other matters should be properly dealt with.
  As we have made clear, the director general is a joint appointment by my right hon. Friend the Secretary of State for Energy and me. I noticed that last night the hon. Member for Cathcart expressed some anxiety, incredulity or dubiety about how the director general could be answerable to two Secretaries of State. This is not an unusual phenomenon. The Forestry Commission is answerable to three Secretaries of State in respect of its functions in the various parts of the kingdom. There is no reason why that should not apply in the case of the director general. He will have an office in Scotland, as in England, along with a staff to service the requirements of regulation north of the border. There is no reason to believe that his responsibilities will not be effectively carried out.
  To consider, instead of that arrangement, having a separate Scottish director general would have been foolish because, in practice, they would have had to work so closely together as to make the separation of their responsibilities one of form rather than substance. If Scotland is to benefit from the substantial export of surplus electricity south of the border, clearly, the questions of regulation, especially of the interconnector and of matters of equal interest to consumers both north and south of the border point to the sort of system proposed in the Bill.
  Mr. Jimmy Hood: Given that there is to be joint responsibility between the Secretary of State for Energy and himself, will the Secretary of State for Scotland say who will have the casting vote if they disagree?
  Mr. Rifkind: Which board is the hon. Gentleman talking about?
  Mr. Hood: If the two Secretaries of State disagree, who will have the casting vote?
  Mr. Rifkind: My right hon. Friend the Secretary of State for Energy and I live in almost total harmony from one day to the next. In the improbable scenario to which the hon. Gentleman refers, and on the rare occasions when

  793
  Ministers do not agree with one another, there are governmental procedures for resolving problems. There are precedents, even if they do not apply in this context. I advise the hon. Gentleman not to worry too much about that. I am sure that we shall be able to devise an appropriate procedure whereby agreement will be reached.
  Mr. Hood: Will the Secretary of State send me written details of the procedure, because I would be interested to see them?
  Mr. Rifkind: I shall certainly consider that constructive request, but the hon. Gentleman must appreciate that, as his question is hypothetical, so my answer will be based on an improbable hypothesis.
  The role of the regulator is specified in a number of detailed ways in the Bill. I wish to comment particularly on the non-fossil fuel obligation and the attendant levy which is dealt with in the Bill.
  Liability for a non-fossil fuel obligation applies in principle throughout the United Kingdom but there is no need in the foreseeable future for an order applying it to Scotland because of the high level of nuclear capacity in Scotland, which will be substantially enhanced when Torness becomes available.
  Clearly, there will be no need in the foreseeable future for any additional provision for non-fossil fuel. That also applies to the levy, which is a consequence of the non-fossil fuel obligation. Any exports that the Scottish industry may make to the distribution companies in England—this also applies to exports from elsewhere in the United Kingdom or from France—would be subject to that requirement in order to ensure a proper competitive relationship between those supplying the electricity industry.
  Mr. Foulkes: Would it be permissible for an English generating company to build a generating station in Scotland, in particular a nuclear power station?
  Mr. Rifkind: It is possible for anyone wishing to introduce new generation to seek to do so. They must obtain a licence from the director general. The rules governing the provision of such a licence in Scotland will be no different from those elsewhere in the United Kingdom. Whether, in the next few years, anyone is likely to wish to invest in a new nuclear power station in Scotland is another example of a hypothetical question. The legal procedure to be followed is clear.
  As hon. Members will have seen from the Bill and the information provided with it, the capital restructuring that may be required in Scotland is significant, and different from that in England and Wales. Largely as a consequence of the over-provision of capacity in Scotland, there is a high level of debt there. It stands at £2,700 million at present. As the House will have seen, the Bill provides for the Secretary of State to have the power, if he so chooses, to convert some of that debt into equity or debentures or to alter the capital structure of the companies in question before flotation takes place. No decisions have been reached on that at present, but those matters will have to be addressed in order to ensure that important public assets are dealt with in a responsible and constructive way.
  I shall now deal with the opportunities that will exist for Scotland and many English regions as a result of privatisation.
  Mr. Dick Douglas: I hope that I am not interrupting the Secretary of State just as he is about to move on the coal industry and his responsibility, together with the Secretary of State for Energy, for ensuring the future of deep mining in Scotland. Surely, before Christmas, he will say something about the threat hanging over Longannet and other deep mining complexes in Scotland.
  Mr. Rifkind: There are opportunities, challenges and concerns facing the coal industry in Scotland. We have seen a substantial expansion of the opencast sector of the industry.
  Dr. Lewis Moonie: What opportunities are there for deep mining?
  Mr. Rifkind: If the hon. Gentleman will listen, I will tell him.
  Over the past 10 years, there has been tremendous growth in the opencast sector, so that it is now producing over 50 per cent. of the coal mined in Scotland. The latest decision on the Kilroot power station in Northern Ireland provides further welcome opportunities for coal from the Ayrshire fields. The decision on that was welcomed by Members representing the area as good news for employment.
  Clearly, we hope to see a substantial future for the deep mining sector. Exports of surplus capacity provide the best prospects. If the two Scottish companies can export a significant proportion of their surplus electricity, it should be possible to see a significant demand for deep-mined coal in Scotland. Much of the answer to the problem lies with the coal industry through improvements in productivity and the quality of coal produced from the deep-mined pits. I hope, together with the hon. Member for Dunfermline, West (Mr. Douglas), that it will be possible to see real developments which will secure the future of those pits. I cannot give any guarantee, but I believe that it will be influenced by the success in exporting surplus electricity in the way I have suggested.
  One of the most difficult aspects of the Opposition's view to understand is the implication of nationalisation and privatisation for regional policy. Over the years, we have seen a policy of nationalisation pursued by Labour Governments. Whatever the doctrinal or ideological reasons for that or whatever economic justification they may feel their arguments have had for the United Kingdom, there can be little doubt that one of the consequences of nationalisation was the diminution of the private sector in Scotland, Wales and many of the English regions.
  In successive nationalisations, we have seen the amalgamation of large numbers of private sector companies, many of them in the regions, and, as a consequence, the concentration of control in the hands of the Government of the day in London. Scottish Members, Welsh Members and hon. Members representing the English regions have been concerned that that has been a weakening factor for the economy of their regions.
  Mr. Alex Salmond: Would the Secretary of State care to estimate the percentage diminution of the Scottish private sector during his tenure of office?
  Mr. Rifkind: Nothing that the Government have done in terms of legislation has led to the loss of a single private

  795
  sector company. Under successive Labour Governments, the opposite has taken place. For example, we know that the nationalisation of the electricity industry led to the nationalisation of some 53 separate Scottish undertakings, some of them municipal and others in the private sector. We know that, when British Shipbuilders was nationalised in 1977, it led to the loss of private sector companies such as John G. Kincaid in Greenock, Swan Hunter at Wallsend, Cammel Laird in Birkenhead and other companies in various parts of the United Kingdom.
  When British Steel was nationalised in 1967, it led to the transfer of control to London of Dorman Long and Company and of Colvilles, both from Scotland, of Richard Thomas and Baldwins and the Steel Company of Wales, and of the Consett Iron Company in north-east England. On each occasion that there has been nationalisation, one consequence has been the erosion of the private sector in the English regions and in Wales and Scotland. One of the consequences of privatisation will be a significant move in the opposite direction.
  It is not just I who take that view. I am sorry that the hon. Member for Gordon (Mr. Bruce) is not present in the Chamber today. Although, as I understand it, there was a limit on the time available to him in yesterday's debate, I am sorry that he did not repeat the remark he made in Central hall, Westminster, on 12 March, when he remarked that the privatisation of the electricity industry
  "would create powerful corporate headquarters in Scotland, Wales and the regions, which could be engines of growth for these economies."
  I am delighted that that is the view of the SLD's energy spokesman. One must assume that its members will go into the Government lobby this evening to help facilitate the creation of powerful corporate headquarters in Scotland, Wales and the English regions; if they choose not to do so, I shall be interested to know how they reconcile that decision with their own interpretation of the benefits that the Bill will bring.
  Mr. Salmond: If the Secretary of State will not say why he has allowed the diminution of Scottish private sector companies, will he say why, if he is asserting that privatisation means Scottish control, he did not argue for a Scottish Telecom, Scottish Gas or Scottish Steel?
  Mr. Rifkind: Since the hon. Gentleman and his party came to slightly greater prominence in the last few months, most of Scottish industry has been pointing out how disastrous it would be for the Scottish private sector if his party's views were ever translated into policy. I would be more impressed by the hon. Gentleman's comments if he were not pursuing a policy disastrous for new as well as existing investment in Scotland.
  As to previous privatisation, we always seek to identify where it makes sense to implement separate Scottish or English privatisation, but as most right hon. and hon. Members believe in a united kingdom, it is not always appropriate or sensible to split an existing industry. In the case of electricity, we already have a Government-controlled structure of individual Scottish companies, so privatisation presents an exciting opportunity to see two new major Scottish companies established north of the border. The electricity industry has not been part of the Scottish private sector for 40 years. As a result of the Bill, it will be a major part of it, and those who wish to encourage the growth of Scottish-based companies welcome that.
  Mr. Alistair Darling: Does the Secretary of State accept, that while the companies' headquarters may be in Scotland, Scotland does not have enough money to buy the companies? The lion's share of the issued shares will probably be owned outside Scotland and possibly abroad. The Government are merely transferring an electricity industry that we now own collectively to individuals who have little or no interest in Scotland.
  Mr. Rifkind: The hon. Gentleman now uses arguments contrary to those that he used previously. He will acknowledge that the headquarters of the Scottish electricity industry must be based in Scotland. As a consequence, the industry's requirements will be serviced from within Scotland. As to ownership, both consumers and employees of the Scottish electricity companies will have an opportunity to acquire shares. I cannot anticipate, any more than the hon. Gentleman can, how they will respond to that opportunity. The hon. Gentleman will recall making the same criticisms with regard to the privatisation of the Scottish Bus Group. He now has egg on his face because of the response of the group's employees, who wish to acquire ownership of the companies in which they work.
  There are 5 million Scottish consumers north of the border who will have an opportunity to acquire shares, as will Scottish financial institutions and those who work for the industry. If the hon. Gentleman takes the view—
  Mr. Norman Hogg rose—
  Mr. Rifkind: If the hon. Gentleman will not allow me to finish my remark, I can hardly be expected to give way to him.
  I cannot predict what proportion of the electricity industry will be acquired by shareholders resident in Scotland. I can predict that the industry's privatisation will create Scotland's two largest private sector companies and make an enormous contribution to the growth of private sector enterprise north of the border.
  Mr. Hogg: Has the right hon. and learned Gentleman noticed that the headquarters of both Scottish electricity boards are already located in Scotland? Also, where does he get his figure of 5 million consumers? Scotland has a population of fewer than 5 million people, and even allowing for that tiny part of the north of England that is supplied by the SSEB, the boards' consumers cannot possibly total 5 million. Finally, given that the North of Scotland Hydro-Electric Board accounts for only 2·5 per cent. of the nation's consumers, how many of them does the Minister estimate will purchase equity in the new companies?
  Mr. Rifkind: The creation of a private sector hydro-electric company presents an exciting opportunity to the north of Scotland. It will be by far the largest company there. As hydro-electric power has often been seen as a resource that comes from the north of Scotland, and as a renewable source in the Highlands and Islands, I thought that the hon. Gentleman would welcome the opportunity that the Bill provides for the people of the Highlands and Islands, and of Scotland generally, to acquire at least a proportion of the company providing their electricity.

  797
  I conclude by referring to remarks made in the House on 3 February 1947 by the then Minister of Fuel and Power, Mr. Emanuel Shinwell, when moving the Second Reading of the Bill nationalising the electricity industry:
  "Electricity is an all-pervading service, and if it is to be satisfactory we must maintain the closest contact with local requirements, together with a sense of local responsibility … It is far from my desire that problems which can be settled locally shall be taken to London."—[Official Report, 3 February 1947; Vol. 432, c.1410.]
  Mr. Shinwell's solution, and that of the then Labour Government, was to nationalise 560 separate electricity undertakings and to transfer control of them to London. The Conservative Government of the 1950s broke up that state monopoly to some extent by the creation of the South of Scotland electricity board with headquarters in Scotland and answerable to the Secretary of State for Scotland. It is entirely appropriate that it should be another Conservative Government that propose taking that policy one stage further and creating two new Scottish electricity companies to meet the requirements of Scottish consumers in a more efficient, successful and dynamic way than it has been possible to enjoy for the past 40 years.
  5.8 pm
  Mr. Donald Dewar: If at some point during the course of this evening I descend into a strangled squeak, it will not be due to any lack of conviction in the arguments I advance.
  I was not greatly impressed by the arguments used by the Secretary of State, and I hope that he will not resent me saying so—although I give him praise for making a better speech than did his Minister of State last night.
  Responding to last night's debate, the hon. Member for Galloway and Upper Nithsdale (Mr. Lang), argued, almost as the theme of his speech, that the Government are privatising the electricity industry "because we bother". It would be overstating the case to say that that was a memorable comment.
  The Minister of State, Scottish Office (Mr. Ian Lang): I am grateful to the hon. Gentleman, who has obviously caught my affliction, for allowing me to intervene. If he is to quote me, perhaps he will kindly do so accurately.
  Mr. Dewar: The Minister said, "We bother", and then went on to speak of anything and everything except electricity privatisation. I thought that I would help him by trying to discover why the Government have bothered to take this course. I want to examine the rationale, and to look for some of the answers that Ministers have been unable to provide.
  As I understand it, the crux of the Government's argument is that, although privatisation may not produce "classical" competition, it at least produces useful competition. Competition is of course a slogan with which Ministers are at home, but it is not one that is universally applicable, and I consider it particularly inappropriate when applied to the electricity industry.
  The Secretary of State for Scotland criticised the industry's record, suggesting that it had either been negligent in some way or had simply not responded properly to market forces, with the result that we had been left with a heavy over-capacity. As one of my hon. Friend's
  798
  pointed out, that was a rather odd argument, particularly as one of the few props on which it is balanced in Scottish terms is over-capacity in relation to the interconnector and the possibility of sales south of the border.
  In any event, perhaps the Minister will agree with me that the electricity industry in Scotland has been—if I may coin a phrase—"efficient, well-managed and successful" in recent years. I use those words because the Minister used them in March this year. This is not a case of the industry having to hang its head in shame; it has done splendidly, and the Minister has said so. We are left with the assumption that, splendidly though it has done, it could do better under what I suppose would be called the spur of competition.
  Mr. Beith: I am grateful to the hon. Gentleman for giving way, and I hope that he can now rest his voice for a moment.
  Why is the hon. Gentleman so fulsome in joining in the Minister's praise of the SSEB, which has built nuclear capacity fat in excess of demand and in defiance of the wishes of many of the communities in which it has been based?
  Mr. Dewar: I do not know which communities the hon. Gentleman means, but I hold to my general point that the electricity industry has served the communities well in the broader sense. I will not be put off by the hon. Gentleman, who is very much in the second division of the Scottish league.
  Let us look at the arguments on competition which the Secretary of State has used, and to which he has very fairly referred today. On 2 March he said:
  "I do not consider that it would be acceptable to create a single monopoly which would place the ownership and control of the entire Scottish industry in a single set of hands, whether or not involving a regional sub-structure."—[Official Report, 2 March 1988; Vol 128, c. 977.]
  That was a rejection of the case argued by the SSEB, which wished for one company in Scotland with two wholly owned operating subsidiaries. The right hon. and learned Gentleman invited us to assume that, while a monopoly supplier and generator would not do, if by some sleight of hand or alchemy that single monopoly were split into two monopolies, complete in their own right, Scottish consumers would be given the necessary advantages. As an argument, that is rather lame, as I think the right hon. and learned Gentleman recognises.
  The Secretary of State returned to the argument on 7 March, however. On that occasion he unveiled for the first time the argument to which he referred today, the argument about non-classical competition. He said:
  "I must advise those hon. Members"—
  that is, those who had made a mockery of his arguments— "that they start from a false premise, so it is not surprising that they reach a wrong conclusion. They start from the false premise that the Government are somehow maintaining that it is possible to achieve classical standards of competition in the electricity industry… my right hon. Friend the Secretary of State for Energy made it clear that, in transmission and distribution, we are dealing with natural monopolies."—[Official Report, 7 March 1988; Vol. 129, c. 117]
  I am sure that he did make it clear, and for once he got it right: we are dealing with natural monopolies. Now, with great tenacity but no conviction, Ministers maintain that we are not dealing with natural monopolies, and that a form of useful competition is being achieved. That was given very short shrift by the House and by the Select Committee.

  799
  On 2 March the Secretary of State went on to say:
  "The two-company structure will provide competitive pressures within the industry in Scotland. In the short term, there will be potential for competition by comparison—".
  At that point he was interrupted by laughter, an unusual accolade for one of his efforts. He continued:
  "—by which means customers will have a basis for comparing and assessing the prices and service they receive. By helping to ensure effective regulation of prices, this will be an important gain for the consumer."—[0fficial Report, 2 March 1988; Vol. 128, c. 977.]
  If the Secretary of State believes that, he is the only person who does. The Select Committee on Energy, chaired by the hon. Member for Havant (Sir I. Lloyd) and with a Conservative majority, pointed out that yardstick competition was largely meaningless. That was a pretty fair and balanced summation.
  I am prepared to concede that in theory there may be some marginal advantages for large industrial consumers, but only for a small handful, certainly in Scotland. Almost all other industrial consumers, and certainly all domestic consumers, will see the "competition by comparison" argument as empty and rather cruel nonsense. I believe that even in Government circles there is a lack of confidence about it. In their response to the Energy Committee report, at paragraph 62, the Government refer to
  "Indirect competitive pressures… The key role of the Director in analysing and publicising the performances of the two companies"—
  here they strike a rather anti-climactic and unconfident note—
  "should not be under-estimated."
  It probably should not be underestimated; it would certainly be very difficult to overestimate it. I should have thought that if it exists at all it is at the margin of the edge of any reasonable argument.
  Let us suppose that I am a domestic consumer in the city of Glasgow—part of which I happen to represent—and, following the advice of the Secretary of State, do a comparative study in depth. I get hold of all the regulatory tables and figures and come to the conclusion that the privatised monopoly that services me is not doing the job that it should be doing. What can I do? I challenge the Secretary of State for Scotland to tell me what I can do except continue to take the electricity and nurse my anger to keep it warm.
  Mr. Rifkind: May I make two points? First, certainly nothing could be done at present. Secondly, under the Bill, for the first time the consumer will be entitled to compensation if he is receiving inadequate services from his electricity company. I understand that the hon. Gentleman is proposing to vote against the Bill containing those provisions.
  Mr. Dewar: If I can find a chartered accountant who will, on an analysis of financial performance, return on capital, assets and tariffs conclude that the SSEB—or a successor private company—is doing worse than, let us say, the East Anglia board, can I lodge a claim for compensation?
  Mr. Rifkind: First, the hon. Gentleman knows perfectly well that we were talking about standards of service. Secondly, he should remember that bulk purchasers of electricity will indeed be able to change their source of supply, which they certainly cannot do now. Again, the
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  hon. Gentleman is saying that, because perfect competition is impossible, we should stick with total monopoly.
  Mr. Dewar: I do not think that for the vast majority of consumers there will be any competition worth talking about. The advantages being advertised simply do not exist, and the Government should face up to that.
  The Government have been caught in complete confusion over their arguments. On the one hand they boast that privatisation will be an enormous asset: they have to do that to bolster the competition case. On the other hand they boast that regulation will stop or at least limit the damage that would result if competition actually existed.
  The major point that the Secretary of State is making again and again—he made it, fairly, during this debate—is that Government interference in the electricity industry is a bad thing, as are inhibitions placed on managerial judgment; that they should be done away with, and would be at least diminished by privatisation.
  On 7 March, the right hon. and learned Gentleman referred to the inevitability that
  "any industry controlled by Government is subject to interference from Government."—[Official Report, 7 March 1988; Vol. 129, c. 116.]
  There is some truth is that, although interference is a pejorative way of putting it, yet in almost every speech the Minister will be spiriting up as a reassurance the all-embracing omnicompetent registrar, suggesting that he will protect us against the dangers and the damage that could result from competition and from handing over an essential service to a company that is run on the basis of profit and the interests of the shareholders.
  Paragraph 29 of the Select Committee report states:
  "There will be a price control formula which will limit the price to be charged to consumers."
  We are being reassured that there will be someone to limit the price rises that we would have expected if we merely handed over a natural monopoly to a group of directors with a legal duty to maximise profits for the shareholders. That is the essence of our case. The Government are asking a group of directors, a private company, a profit engine to act in a way not normal to such an animal. On one hand the Government are saying, "That is what we are creating," and on the other hand they are rushing to stop it acting in the way for which it was built by appointing an all-powerful registrar.
  Non-classic competition simply will not do. As the Secretary of State for Energy said, it is a natural monopoly, and natural monopolies force up profit margins and prices and have to be regulated. That is the catch 22, the inconsistency in the Government's case which has not been answered properly.
  Mr. Allan Stewart rose—
  Mr. Dewar: I am happy to give way to the only Scottish Conservative Member in the House.
  Mr. Stewart: Does the hon. Gentleman agree that, whatever may be the case about distribution, generation is certainly not a natural monopoly?
  Mr. Dewar: It will be an actual monopoly in Scotland. If the hon. Gentleman dislikes that, no doubt he will table a relevant amendment to the Bill when the opportunity arises.

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  I now turn to the arrangements for the regulator—a rather odd and distinctive argument. The Bill is silent here, and I take the Minister's point that it is not necessary to spell out which Secretary of State will be in control or which Secretaries of State will have a finger in the pie. However, there is a case for a separate regulator for Scotland. The arguments were set out perfectly well in the Select Committee's report to which I have referred. Paragraph 60 of the Select Committee report makes it clear that there will be a separate office in Scotland and a separate Scottish official who will
  "be responsible to the Secretary of State for Scotland for all he does in relation to the Scottish industry."
  Logically, there should be a separate regulator. It is not a matter of enormous principle, but that would be the sensible, practical approach. I certainly prefer the views of the Select Committee to those of the Secretary of State.
  I am disappointed by what the Secretary of State had to say about the independence of the companies being created in Scotland. I make my point more forcibly because my disappointment was sharpened by the trailing in the press of the important and exciting things that the Secretary of State would say. Today's edition of The Scotsman remarked that he would
  "outline the powers that will be taken to act as a barrier to a takeover from abroad or from England."
  However, we received only an interesting account of the possibilities of share ownership in Scotland, but no guarantees as to how the control or the independence of the companies would be maintained.
  This is not a minor point, and as the Secretary of State knows it is spelt out again in paragraph 14 of the Select Committee report:
  "The electricity industry is of considerable strategic importance. The new companies will therefore be protected from unwelcome takeover by the retention by Government of a special share."
  We are entitled to a good deal more detail than that. Perhaps the Minister who replies to the debate will say something about it, as presumably it applies in England as it does in Scotland.
  The Scottish companies will be small—certainly the northern company will be small by international or United Kingdom standards—and I should have thought that they will be open to a predatory raid. I hope that we shall hear something about the defences that will be put in place and how those defences will be manned. I am sure that the Minister will accept that there is cynicism in Scotland, particularly after the Britoil experience, about golden shares and the reserve of powers to Ministers. It is very important that those matters are spelt out adequately during the passage of the Bill.
  Perhaps the Minister, or the Secretary of State for Energy, will say a few words about the terms and conditions of the sale and when the Scottish companies are likely to be on offer. Has a running order been decided? I am told, and there are certain strong rumours, that four English distribution companies will go first, then one of the generating companies and then possibly one or both of the Scottish companies. It would be fair and useful if we were told about those decisions, if they have been taken.
  I was also disappointed that the Secretary of State remained pretty mum about the interconnector. We all know that its present capacity is equivalent to 850 MW and that plans or a scheme propose its expansion to 1,600
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  MW. Obviously that is immensely important in terms of the coal burn in Scotland and the capacity of the Scottish power generating industry. I am told that the cost will be £ 180 million. I am not sure whether it will go ahead before privatisation, or if not, whether the English distribution companies or the Scottish Office will make a contribution to the costs. Again, we should know about that if we are to have an informed debate about the future.
  Mr. George Robertson: My hon. Friend makes some very cogent points about the Scottish dimension of this important Bill. Will he reflect on the absence from the particularly Scottish dimension of the debate and the previous debate, when Scottish public expenditure was considered, of the brand-new hon. Member for Glasgow, Govan (Mr. Sillars)? The hon. Member for Govan told the House, and constantly has been telling Scotland, about the way in which he would oppose the Conservative Government. He has not been here this afternoon, but I was telephoned by an irate constituent who saw the hon. Member for Govan at 1.30 pm today doing his Christmas shopping in Marks and Spencer in Argyll street, Glasgow. [Laughter.] Is it not amazing that on the very afternoon when the Secretary of State is making his diabolical statement about public expenditure, the man who was going to take Parliament by storm—the hon. Member for Govan—is not here?
  Mr. Dewar: Occasionally, I think that we hear to much about the detailed doings of the hon. Member for Glasgow, Govan (Mr. Sillars). However, I share my hon. Friend's astonishment, particularly as the hon. Member for Govan might have seen Christmas as an unpleasant English importation into Scottish culture.
  Mr. Salmond: I am having some difficulty with my arithmetic. I was trying to do a quick count of the number of missing Scottish Labour Members. I do not know whether they are doing their Christmas shopping, but perhaps the hon. Member for Glasgow, Garscadden (Mr. Dewar) will help me and give me the official version of where they are?
  Mr. Deputy Speaker (Mr. Harold Walker): Order. Interventions do not help us get on with the debate. Many right hon. and hon. Members seek to take part in a debate and interventions will have to be taken into account to determine who catches the eye of the occupant of the Chair.
  Mr. Dewar: I promise you, Mr. Deputy Speaker, that it is not my fault. I am doing my best.
  I turn back to the much less interesting subject of the debt structure of the SSEB, which is about £2·7 billion. It is not often remembered that the debt of the north of Scotland board is just as heavy pro rata as that of the southern board, which is not surprising as it has pooled generation and distribution costs. Despite what the Minister said about no decisions having been taken, I hope that he will at least note that we expect to have some details of what is intended, at least in Committee. Clearly, the amount that will be written off will affect the price of the share offer and have an impact on people's ability to afford electricity. I hope that the Minister will be more forthcoming.
  Last Friday, in The Scotsman under the byline of Mr. Keith Aitken, the industrial editor, there was an interesting report of a meeting in Torness held by Mr.

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  Donald Miller, the chairman of the SSEB. The burden of Mr. Miller's remarks was that the company cannot be privatised
  "unless the Government writes off a large part of the £2·2 billion debts it incurred in building them."
  He was referring to nuclear power stations. Clearly, the electricity board is as anxious as hon. Members. I hope that in Committee we shall hear more from the Minister.
  I turn to the important matter of nuclear power. The Secretary of State has decided that there will be a nuclear company which will hold all the nuclear capacity of the south board and will be wholly owned by the south and the north companies in a 75:25 proportion—there has been some debate about the precise proportion. I understand that the minority position of the north board will be protected in the memorandum and articles of association and that there will be reserved functions—it sounds a little like the voting structure of the EEC. I gather that there will be reserved functions in terms of capital expenditure, pricing policy and so on, where the unanimity rule will apply. Apart from that, the company will run as a normal company. The Minister may want to say something about that point.
  I should like the Minister to address his mind to the extraordinarily strong words uttered by Mr. Donald Miller, the SSEB's chairman, when dealing, not with the physical dangers but with the financial dangers of having an electricity board concerned with a substantial nuclear presence. Mr. Miller was blunt, strong and almost brutal on the subject. He said that there were a large number of uncertainties and unquantifiable possible costs which were dependent upon Government policy and the pricing policies of British Nuclear Fuels plc and which could create problems for any private company trying to operate. As the Secretary of State knows, Mr. Miller has good reason for fearing that problem. The SSEB's annual report for the last financial year shows a trading profit of about £13 million, which was promptly converted into a loss of £70 million because of the costs of transferring Chapelcross to Cumbria, the reprocessing costs—which the board had planned to postpone for decades but was told by the Government it could not—and the ever-escalating BNFL reprocessing charges.
  Mr. Miller's message to the Secretary of State—it is important in view of its source —is that, unless he gets an undertaking that clause 88 will be fully implemented and the taxpayer will underwrite any of those bills as and when they come and unless he gets what he declares to be the "ultimate insurance", the company will be unsellable. Mr. Miller says that those assurances
  "will have to be signed and sealed before one writes a prospectus—otherwise it will not be worth writing."
  That is a serious charge, coming as it does from the person who, presumably, will be the chairman-designate of the new private company. He says that his company will be unsellable unless he gets a great deal of information and a guarantee from the Government under clause 88.
  Mr. Miller says that the Government must respond now and accept those liabilities on behalf of the taxpayer. If the Minister accepts that, there are serious repercussions for the taxpayer and the scheme's viability and acceptability. If he does not, we should in all honesty have —after all the glitz and the glamour and the wonders worked by the image-makers in the television advertising campaign to sell the company—a Government health warning saying, "Despite all this, the chairman of the
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  company believes that his company is unsellable in the absence of guarantees that we are not prepared to give." If we doubt whether the honesty to give that guarantee and to face up to the problems will be forthcoming, we are entitled to say that there is a fundamental flaw in the scheme.
  I ask the Secretary of State for Scotland to respond on this point. That is the bluntest possible warning from Mr. Miller and it is essential that the Goverment respond to it. [HON. MEMBERS: "Come on."]
  Mr. Keith Mans rose—
  Mr. Dewar: I am sure that the hon. Gentleman has an honoured place in the Conservative kindergarten on Scottish affairs but I am interested in the attitude of the Secretary of State. Does he accept the point made by the SSEB's chairman that the SSEB cannot be responsibly, sold unless we spell out the taxpayers' liability under clause 88? Does the Minister accept that or does he repudiate it, and, if so, on what grounds? [HON. MEMBERS: "Answer."]
  The Secretary of State will not be surprised to know that we shall return to this matter at some length during later stages of the Bill. With such an important statement by such a central figure in the public domain, the Secretary of State is letting himself and the House down by refusing to address himself to those remarks.
  Mr. Rifkind: As the hon. Gentleman is aware, the Bill already provides for certain guarantees and for certain provision to be made by the Secretary of State in appropriate circumstances. No doubt we shall have plenty of opportunities to consider the precise terms of the clause in question.
  Mr. Dewar: Unless we get further information before we come to the selling point, we are entitled to go around quoting Mr. Donald Miller as saying that the company cannot be prudently bought by a prudent investor I hope that that aspect will be properly represented in the Government's doubtless balanced advertising of the issue.
  With the Secretary of State, I have watched with fascination the growth of the energy debate, especially the debate on nuclear power. I am used to Ministers lecturing us. The Minister of State, Scottish Office did so yesterday. We are used to board chairmen courteously instructing us about the "competitive cutting edge" and the absolute advantage for the consumer, the board and the commonweal of Scotland of the nuclear baseload. The message is that every commercial piece of logic would drive any sensible board down the nuclear road. But then I read what is in the Bill—the references to fossil fuel levies and the 20 per cent. statutory obligation on generating companies. Now we have Mr. Donald Miller pointing to the dangers and uncertainties with which industry must live when 60 per cent. of the units sold, as in Scotland, come from the nuclear baseload.
  More interesting is Mr. Miller's view that, whether the industry can or cannot live with it, shareholders cannot be expected to do so and the taxpayer will have to take the strain. It is essential that the Secretary of State spell out exactly how much will be available and what it will cost, and that he come clean. He knows, as I do, that the public are nervous—they raise this matter repeatedly with hon. Members on both sides of the House—about the handover to the private sector of such a sensitive aspect as nuclear power. The scramble to reassure people with references to

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  the nuclear installations inspectorate and the control which will be tightly imposed does nothing to eliminate the persistent and clamouring doubt that safety standards will possibly be squeezed in the long run and that we are moving a particularly inappropriate industry out of the public sector and putting it into the hands of the private sector.
  The Government cannot walk away from the strategic decisions that must be taken and that dominate this important industry. My hon. Friend the Member for Dumfermline, West (Mr. Douglas) said that vital talks will take place over the next few days on the coal burn in Scotland and the contracts between the SSEB and British Coal. I use the word "vital"—a much misused term—advisedly because the future of the industry and the jobs of thousands of people could be at stake.
  The Minister talks about opportunities and challenges in a sort of dismissive way, a pep talk for the young. There has been major investment in our coal industry and designated pits have been sunk, such as those in the area of Longannet, to serve the power stations. Security of supply is still a weighty consideration in this nation's energy planning—or it ought to be. The Peterhead station will take 50 per cent. of its energy in the form of sour gas from the Miller field. British Petroleum is talking about importing coal from Australia and other companies are talking about importing it from Lord knows where else.
  In 1987, the South of Scotland electricity board responded to the Monopolies and Mergers Commission audit report by making it clear that it did not think that it was in the long-term interests of its consumers, or in the public interest, to start importing all its coal rather than taking it from the Scottish fields. The board was right then and it will be right now to rethink what we understand to be its present position.
  Mr. Mans: Is the hon. Gentleman saying that the Scottish industry or Scottish consumers should suffer a coal tax so that Scottish coal can be bought, even though it turns out to be even more expensive than imported coal?
  Mr. Dewar: No, I am not saying that. I hope that the hon. Gentleman will apply the prejudice that he has just displayed to the fuel tax that is contained in the Bill.
  There is a strong national interest in maintaining security of supply. That is what weighed with the SSEB in 1987, and it should not dismiss that consideration now. Of course, the Minister may say that it is different now because the industry is to be privatised and that there is no need to bother about the national interest to the same extent. If that is the argument, it reinforces the case against the Bill a hundred times. We have been trying for months to coax, persuade, or even force the Minister to go beyond the pious hopes that he has expressed that some agreement can be reached. We have not succeeded, but we shall continue to try because this matter is of real and vital national importance. We at least recognise that there is a public interest in the debate. The Government should recognise what we know to be there.
  I note that the SNP amendment has been selected for a Division, and I shall advise my right hon. and hon. Friends to vote for that amendment. No doubt the Committee will be selected very shortly. Whatever the Minister's view about a separate Bill and the process of parliamentary
  806
  scrutiny, he will surely join me in saying that it is important that the distinctive Scottish aspects of the argument to which he properly addressed his attention in his 30 to 40-minute speech are properly examined and echoed in the Committee. This is an important point, although it may sound like a narrow, procedural one.
  I hope that he will agree that that cannot be done if the Committee is cast on such a scale that it will contain, at most, two or three Scottish Members apart from a Front Bencher. We shall press, and shall expect to have his support, for an unusually large Committee on which there can be proper representation, not only by my hon. Friends but by hon. Members in all parts of the House. I am glad to see that the hon. Member for Tayside, North (Mr. Walker) is offering his services, as ever, in this cause. What a trooper!
  We look at the Bill with growing gloom. I accept that it is attractive to the Treasury and I suspect that it has a great deal to do with the greater glory of the Secretary of State for Energy. Perhaps, if the price is outrageously discounted, there may even be something for a few shareholders looking for a quick profit. However, there is nothing in it for the consumer and nothing for the nation. When we look, for example, at the history of the gas industry since privatisation in terms of consumer experience, we see some of the warning examples that lead me to that conclusion.
  I acknowledge that we know a little more about the Government's plans, although we still do not know enough. We have seen some horse trading on assets between the north and south boards. We have seen 600 MW of coal capacity being swapped for the Cruachan pumped storage system and we have seen 50 per cent. of Peterhead up for transfer and bought. All the patching and all the switching does not produce a plausible vehicle that can be offered honestly for sale to the people of Scotland or to people in any other part of the United Kingdom. There are too many ambiguities, confusions and internal flaws for the Bill to carry any real conviction.
  The Government are not succeeding in convincing Scotland that its hostility to a measure that offers it nothing should be abated. Tories that I talk to in Scotland see it as driving the privatisation obsession past the edge of reason. The Government are taking a great public utility and turning it into a fragmented private monopoly, but still into a monopoly. It is asset stripping on a grand scale. It is not some sort of mean folly, but massive irresponsibility by the Government. They should think again.
  In one of his early press statements the Secretary of State for Energy described the Bill as evolutionary. I think that that means that it has not been thought through properly and he knows that he will have to come back to the House with many amendments to try to get it creaking in some sort of unsatisfactory way. We want none of it, and we shall vote accordingly.
  5.45 pm
  Mr. Allan Stewart: I reside in the constituency of Glasgow, Govan and welcome the news given to the House by the hon. Member for Hamilton (Mr. Robertson). I am a fairly typical constituent and I have no doubt that all the other constituents of the hon. Member for Glasgow, Govan (Mr. Sillars) will be as appalled as I

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  am at the disgraceful and scornful way in which he clearly regards his duties in the House on behalf of his constituents. [Interruption.]
  The Labour party has presented a wholly bogus argument about the need for separate Scottish legislation. However, my right hon. and learned Friend the Secretary of State for Scotland clearly showed the case against that. It would be absurd to have two Bills, each with more than 100 clauses, when about 98 of those clauses would have been identical in both pieces of legislation. Some of the five or six separate Scottish clauses are simply technical.
  The hon. Member for Glasgow, Garscadden (Mr. Dewar) made a great deal of his allegation that there would be an absence of control by consumers in the new privatised undertakings. Of course, that is a good argument for him to become a shareholder, because with other shareholders he could exercise his power, if he thought it necessary, to remove the board of directors of the privatised company. He could do that if he and other shareholders were dissatisfied with the board's performance.
  In the short time available to me, I should like to make two points. First, we are clearly transferring financial control from the centre to Scotland. The Opposition have not appreciated that. Of course the Scottish Office is the present sponsoring Department for the two boards, but in any nationalised industry, financial control ultimately rests with the Treasury in London. We are now moving towards control being exercised by the boards located in Scotland. A board will be able to make its own investment decisions unaffected by the necessary constraints that the Treasury under any Government must impose for its own reasons. That is true, even under a Labour Government.
  Mr. Norman Hogg: The hon. Gentleman is making a strong commercial argument. How does he account for the fact that Winston Churchill, when he was Prime Minister, invited one of my illustrious predecessors, Tom Johnston, to set up the North of Scotland Hydro-Electric Board?
  Mr. Stewart: I am confused about what the hon. Gentleman is getting at. It is an advantage to have separate boards in Scotland and for the Scottish Office to have an operational overview, but the fundamental point remains that financial control of the electricity industry, as is the case with any other nationalised industry, ultimately derives from the Treasury, and the removal of such control will be a major benefit for those who are trying to run the industry.
  My second point is that, since 1979, private shareholding in Scotland has doubled. That is a major achievement and an advance in giving people a stake in industries and businesses, but shareholding in Scotland is at a lower level than elsewhere in the United Kingdom. Surely this is a major opportunity for Scots—for all practical purposes, every Scot is an individual customer of one or other board—to take a real stake in a major Scottish industry.
  The hon. Member for Edinburgh, Central (Mr. Darling) has said that there is not enough money in Scotland to take a major stake in industry. He should walk around Charlotte square in his constituency and count the assets of financial institutions such as pension funds and life funds; he will then agree that a massive amount of
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  money is controlled there. I hope that a proportion of it will also go into the new shareholding of the Scottish boards.
  I hope that my right hon. and learned Friend will make the share offer favourable. I hope also that he will realise that this is an opportunity to make ownership by the people a reality, not the myth that it is under nationalisation. We hear a great deal from Opposition Members about ownership by the people. They equate ownership by the state with ownership by individual people. It is a myth. The individual has no control over a nationalised industry. Shareholding gives people a real stake.
  The hon. Member for Garscadden spoke about the timing of the sale of the new companies. I hope that the Scottish companies will be privatised, if not immediately, which would be ideal, then as quickly as possible. Let us try to take the lead in Scotland. My right hon. and learned Friend has confirmed that there are debt matters and so on to be sorted out. Let that be done quickly, and let Scotland take the lead. This is an opportunity for a major expansion of private enterprise in Scotland and for Scots to have a real stake in a most important industry.
  Several Hon. Members rose—
  Mr. Deputy Speaker: It might be sensible if I remind the House that Mr. Speaker has announced that, from 6 o'clock to 8 o'clock, the ten-minute limit on speeches will apply.
  5.52 pm
  Mr. Stanley Orme: Despite what the Secretary of State says about competition within the proposed privatised industry, we are to turn a public monopoly into a private monopoly. The consumer will have no choice—there is no argument about it; the point was explored on the Floor of the House yesterday and this afternoon—just as he has no choice in the British gas industry.
  One aspect of this privatisation makes it different from any other privatisation that has taken place under this Government. The Secretary of State criticised the people who work within the industry. He implied that the industry is not producing as it should and that, under privatisation, it could be dramatically improved. He ignored the fact that it is one of the safest and most efficient electricity supply industries within the developed world. If it had not been for recent price increases, the industry would be providing electricity cheaper than anywhere else in western Europe—certainly cheaper than in the United States or Japan.
  Yesterday, the Secretary of State for Energy and I had an exchange on nuclear power. The central issue is the nuclear dilemma that the Government face. It is not a matter of whether one is in favour of or against nuclear power. Whatever the policy, we are to have some nuclear power into the next century. Under the Government's proposals, how is nuclear power to be dealt with and priced? There is no argument. When challenged, the Secretary of State for Scotland refused to respond to the case of my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) on the cost and control of nuclear power.
  With this Bill, the Secretary of State will put a fence around nuclear power. It will clearly state that it is

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  different and will be dealt with and priced differently. Four PWRs are promised by the end of the century. There is also Sizewell B. We shall be faced with the decommissioning of AGRs and Magnox stations, which will cost several billion pounds. We must consider the tiny Calder Hall experiment, which is being decommissioned at the moment, and the problems that it is creating. What will happen when larger AGRs must be decommissioned in the foreseeable future? What about the cost of that?
  My hon. Friend the Member for Garscadden referred to Mr. Donald Miller and his trenchant remarks about the saleability of the industry if the cost of nuclear power is not removed from the privatisation. If we were to approach Lord Marshall, we would get a similar argument.
  Nobody is more enthusiastic about nuclear power than Lord Marshall.
  Mr. Beith: The right hon. Gentleman can say that again.
  Mr. Orme: The hon. Gentleman says that I can say that again.
  Lord Marshall's enthusiasm will be tempered when he is answerable to private shareholders, who will ask, "Who will pay for the new power stations and for the present decommissioning?" The Sizewell B inquiry lasted for about four years. The inspector eventually said that, on balance, he thought that nuclear power would be cheaper than coal. What would he say today? The Bill strips away the protection that nuclear power has had in this country over recent years and exposes the fact that, compared with the cost of fossil fuels—coal and oil—nobody argues that nuclear power is cheap. That is the reality we face, but what does the privatised industry, which will be answerable to its shareholders, say about that? It says that it exists to make profits.
  That industry will want to use the cheapest coal available. My hon. Friends will be aware that imported cheap coal will be one of the priorities for the privatised industry. Will the British public allow the nuclear part of the industry to be taken out of the Bill, put on one side and completely protected from natural market forces? If that happens, the cost will be borne by the British taxpayer, but not by the shareholders of the privatised companies. They will be excluded. We must face that.
  Last week there was an excellent article in the Spectator by Jonathan Davis who spelt out clearly what will happen. He said:
  "Gone, with the stroke of a Parly draftsman's pen",
  is the previous support for nuclear power. The article continues:
  "Although it does not spell out the message in so many words, Mr. Parkinson's Bill effectively marks the end of that particular hoary game. The prices of oil and coal, nuclear's fossil fuel competitors, have fallen to their lowest level in real terms for many years, and are likely to languish there for some time. In these conditions, even the PWR, the American-designed pressurised water reactor on which so many of the British industry's hopes now rest, cannot expect to compete with coal. No private sector utility would dream of building one in the present climate."
  Given that the Government have supported nuclear power, have pushed it down our throats and have used every means possible to encourage its development, we now face an extraordinary situation.
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  I am sure that my hon. Friends will agree that, in an economy which uses a mixed-fuel input —coal, oil, nuclear power, and alternative sources—for our electricity supply, the way in which to deal with that industry, upon which everyone depends for light, food, fuel and work, can only be through public control. That is in the best interests of the consumer.
  To take nuclear power out of public control is extremely dangerous. The British people want it kept under firm control. I understand that there is a nuclear power station on the edge of the area that was recently hit by an earthquake in the Soviet Union. Fortunately for everyone concerned, it was not damaged; I am sure that we are all extremely thankful for that.
  Mr. Malcolm Bruce: It has been shut down.
  Mr. Orme: Yes, that is correct.
  The British public need to recognise that this Government, or any Government, will give them proper protection. The industry must be answerable to Ministers and, through them, to Parliament. In that way we can discuss it.
  Given that the Bill proposes a separate unit responsible for nuclear power and that it is to be dealt with in a special way, will the Minister give an undertaking that public accountability, through the parliamentary process, will remain? If it does not, our people will realise that they cannot support the Bill.
  The Bill contains a nuclear dilemma, which is unique in comparison to any other development. When the Bill is in Committee, we must explore in detail not just the costs, but the overall management policy for the industry.
  It is absolutely criminal that a well-run economic industry, which has produced what the nation needs, should now be broken up purely in the cause of profit. It has nothing to do with competition or improvements in the industry. When we have had an opportunity to debate this matter further, and when the argument is taken out to the public I believe that they will begin to see through the Bill and will discover that it is not in their interests.
  6.5 pm
  Mr. David Harris: I am sure that the right hon. Member for Salford, East (Mr. Orme) will forgive me if I do not follow his arguments now that the ten-minute speech rule is in play. Unlike the right hon. Gentleman, I support the Bill. My remarks about a particular aspect of it should not be taken as meaning that I intend to oppose the Bill. I am in favour of its general principles.
  I wish to concentrate on a matter of acute importance to one area of my constituency and I believe that it is important to all constituents in rural areas. I believe that parity of charges between comparable consumers throughout a company's area should be written into the Bill.
  My particular interest in this matter stems from the injustice that is suffered by my constituents who live on the Isles of Scilly. For 31 years the Isles of Scilly have had to pay the highest tariff for electricity in the United Kingdom. That stems from the simple fact that, until next year, they must rely on the oil-fired power station on St. Mary's. In April next year all that will change when the submarine cables, which have been laid to the Isles of Scilly, begin to operate. Then, the Isles of Scilly will be connected to the national grid.

  811
  Those cables are the result of a long campaign in which I have played a part, but which has been spearheaded by the islanders. I should like to pay tribute to three islanders, Colin Daly, John Poat and Tony Dingley. They are the officers of the Isles of Scilly electricity tariff parity action group.
  They have won the battle to connect the Isles of Scilly to the mainland grid and they have won the argument for parity between the tariff paid by the islands and the tariff charged by the South Western electricity board. They now fear, however, that that parity might be snatched from them as a result of privatisation. I trust and believe that the Minister of State will assure me that that is not so. I believe that one of the provisions of the European regional development fund grant, which was given for laying the cables, is that parity should not be taken away once it is given. I do not believe that the islanders have anything to fear on that score.
  Let me draw attention, however, to clause 3(2) which relates to the provisions for Scotland. It gives, as in so many cases, special and privileged treatment to Scotland. That clause makes it clear that the Secretary of State can make an order under which tariffs shall not distinguish, directly or indirectly, between different parts of the area covered by that order. The Isles of Scilly would certainly like such a provision written into the Bill—
  Mr. Salmond: Will the hon. Gentleman give way?
  Mr. Harris: I cannot give way; I have only 10 minutes.
  My constituents would certainly like such a provision.
  I have been involved in detailed correspondence with my right hon. Friend the Secretary of State for Energy and my hon. Friend the Minister of State on these points while the Bill has been in preparation. I asked my right hon. Friend on 4 July whether he would give an assurance
  "that the new privatised electricity companies will have parity of charges within their areas, so that, for example, there will be no disadvantage to consumers on the Isles of Scilly in my constituency or, indeed, consumers who live in rural as opposed to urban areas within that company's supply system".
  I am pleased to say that my right hon. Friend replied:
  "We are extremely conscious of the anxiety that is felt in areas such as the Scilly Isles and the south-west. We recognise that it is a serious problem. We are sure that, when we make our proposals, my hon. Friend will be happy with them."—[Official Report, 4 July 1988; Vol. 136, c. 713.]
  I hope that my hon. Friend the Minister will make my happiness complete and give me the assurances that I seek on this important matter.
  At present, my constituents on the Isle of Scilly pay 27 per cent. more for their electricity than the rest of the consumers served by the South Western electricity board. Those with businesses and block tariffs pay 50 per cent. more than those on the mainland. That injustice will be corrected when the cable comes into play, and I hope that this parity will not be snatched away.
  This is a point of much wider application than merely to my constituents on the Isles of Scilly. I heartily agree with the Select Committee on Energy; which states:
  "We do not think rural customers should be charged more per kilowatt hour consumed than people living in towns".
  It is a sad reflection on the Opposition that they have not seized on that point—[Interruption.] At least, they have not done so in this debate. But it is an important point, about which I want a reassurance from the Minister.
  I hope that this fear will not be realised. I appreciate that the legislation on this wider point will be exactly the
  812
  same as the legislation that is now in place. I want something written into the Bill to ensure that there is no discrimination against those who live in rural areas as opposed to those who live in towns, and I confidently expect an assurance from my hon. Friend that the needs of my constituents in the Isles of Scilly will be met.
  6.13 pm
  Dr. David Owen: Electricity generation, unlike water, is not a natural monopoly, and there is no reason why there should not be genuine competition and private generating companies. Indeed, there would be advantages in that.
  The problem with this legislation is that part of the generation of electricity in this country is nuclear. How we should deal with the nuclear power industry raises quite separate questions. At this stage, the Government's intentions, if not the Bill, do not match the genuine public anxieties aroused in this respect.
  Two generating companies for England and Wales are not enough. I strongly challenge the idea of including nuclear power in the National Power company, with about 70 per cent. of present CEGB assets. The Scottish precedent should be followed in England and Wales, and there should be a separate nuclear generation company. That would provide much greater transparency. and the true nuclear costs would be easily identified.
  The nuclear generating companies should not be taken to the market and privatised at this stage unless one of two solutions is adopted. The first is Government involvement, probably through the UK Atomic Energy Authority, in the nuclear generation companies. Initially, that would involve a majority interest in the companies—one in Scotland and one in England and Wales. If the Government reject that, the other option is to keep the nuclear generation companies as franchise companies that construct and run nuclear plants, but the ownership of the nuclear plant and all the rest of the material for storage that is not with BNFL would be owned by the Atomic Energy Authority.
  The Government will have great difficulty in floating the nuclear generating company in Scotland. What Mr. Miller has said about that is true. National Power, the big company in England and Wales, will also be difficult to float. The market will be far more sceptical about the true economic costs of nuclear generation.
  On environmental grounds, one of the advantages of this legislation and the impetus from it is that we are now beginning to discover the true cost of nuclear generation. I suspect that not a single hon. Member believes that we shall in our lifetime again hear nuclear generation justified on economic or commercial grounds. Yet when one thinks of the continual lies that have been told by the CEGB about the costs of electricity generation, I cannot understand how anyone can defend the status quo. I know of no public body that has distorted the truth over decades more than the CEGB. I experienced that in my own constituency when the board wanted to put an oil-fired power station at Millbrook on the Tamar estuary. The board's "facts" were shown to be incorrect, again and again.
  I have no real confidence, either, in the continuation of the existing system of electricity supply. It was vital that the Secretary of State won the battle with Lord Marshall for the separation of the grid from the generation of

  813
  power, but the Secretary of State was wrong to create a company for transmission which was wholly in private hands. There is a public interest in transmission and I would have preferred the company to be publicly held. However, I must admit that a powerful argument against that can be adduced. Successive Governments have interfered in the pricing of electricity and overridden the market. The last Labour Government, of which I was a member—I take my share of collective responsibility for this—caused a massive increase in electricity charges, but that Government were not the only sinners; Conservative Governments have also used prices as a means of raising revenue from the country.
  There is something to be said for the grid being taken out of Government control, but the problem of leaving it to the 12 supply companies is that there may be collusion between them over their pricing mechanisms. That is why even a 10 per cent. public stake in the transmission company would be an adequate safeguard against collusion. The Government should examine that carefully and consider either a Treasury or an Atomic Energy Authority involvement. Either way, the public interest should be reflected by an involvement in the transmission company. That would go a long way to alleviate anxieties about the dangers of the solution that the Government have adopted. There would be no objection in principle to such a move, and I recommend it to the Secretary of State.
  The other advantage of taking the Government out of electricity generation in its widest sense is that they can then start to do what successive Governments have failed to do—apply stringent environmental standards to it. Those standards must be applied, first, to the nuclear generation element and, secondly, to the coal-fired and oil-fired generation element. This country has been a massive polluter in terms of sulphur emissions and many people do not yet believe that the environmental standards in nuclear generation are sufficiently tough. If the Government are outside the system, adding those costs to the industry, on the basis of "the polluter pays", that will add to the overall cost of generation, but we will then have a clear view of the exact costs of generation.
  The real criticism of the Government is that they have gone against their own basic principles. They have not been prepared to trust the market or commercial judgment and they have rigged the market in favour of nuclear power. If nuclear power is as uneconomic as I suspect most people now believe it to be, the only case for providing nuclear power is strategic. We might not wish to be totally dependent on fossil fuels, but we have not yet built up sufficient alternative sources, through wind power, wave power or, as I should far prefer, barriers. There is far more economic sense in heavy initial capital investment in such projects as the Severn barrier and I hope that they will come through on economic grounds.
  However, if we decide, for strategic purposes, that we do not want to be totally dependent on fossil fuels, we should not believe that the only option is nuclear power. The Government also have the option of backing barrage power. We need to hear about that. Let us have a little less talk about a preserved nuclear element. Some of us would like a preserved barrage element. We must bear that in mind.
  814
  There is then the question of how we deal with a strategic element. If the Government decide that they need diversity—I do not deny any Government that power since it is a prudent power to hold—it should be justified in this House on every occasion. The Minister should come to the House for separate authority for a nuclear power station to be built, if the Government believe that there is a strategic need, and justify that decision against commercial costings and market forces. Such an installation should not be put entirely within the private sector. It would be better to put it under the overall authority of the Atomic Energy Authority, with its construction and running franchised to commercial companies.
  Time is short, and I do not wish to detain the House. We are not opposed in principle to the Bill. We see its merits, but we do not believe that it is yet right, particularly in respect of the nuclear and grid aspects. There should be a greater element of public interest in the decision-making, albeit perhaps in a commercial undertaking. We hear a great deal from the Government about public-private partnerships for the inner city. Why cannot there be public-private partnership for this most important strategic element, the generation of electricity? We have nothing against the structure of the Bill because it allows for three or more generating companies in England and Wales and would thus allow for nuclear generation. There would be no need to privatise nuclear generation and we would have an evolutionary approach to this complex subject that might command a surprising consensus throughout the country.
  We shall judge the Bill in that spirit. I hope that it will not be yet more legislation in which the Government resist any fundamental amendment. The Select Committee has already seriously criticised the provisions and the House has the right to influence the legislation, for the good. I hope that the Secretary of State will not close his mind to some significant amendments along the lines that I have suggested.
  6.23 pm
  Mr. Malcolm Moss: It is a rare privilege to follow the right hon. Member for Plymouth, Devonport (Dr. Owen) and I agree with a great deal of what he said. The House should accept his comments, which have been made in a forthright way.
  The right hon. Gentleman is right to say that the electricity supply industry has suffered, as have many nationalised industries, from a combination of Government interference, poor accountability and a lack of market discipline. That has led to inefficient investment decisions being taken, for which the customer has had to pay. This Bill is driven by the needs of customers; we must thank the Secretary of State for underlining that fact when drafting the Bill.
  There are three essential benefits to the customer. First, there will be competition in generation. As that generation accounts for some 80 per cent. of the price of electricity, any competition introduced at this level must exert a downward pressure on prices.
  Secondly, for the first time in this industry, proper regulation will ensure that the benefits from competition will be passed down to customers.
  Thirdly, the consumer will be given a new legal status with legal rights and safeguards that will ensure a better service.

  815
  While I was researching for this debate, I came across an article written by the hon. Member for Gordon (Mr. Bruce). He was here a moment ago, but has now disappeared. I was pleased to see him return today after having disappeared in high dudgeon last night. The problem was that he did not have time to say everything that he wanted to say. Perhaps I might help him. He wrote in the Liberal News in October of last year:
  "It is impossible to defend the status quo in the electricity industry. The CEGB has become a centralised monopoly which is closed, secretive and accountable to no-one. The economics of generation and conservation are neither being properly examined nor subjected to market forces."
  The title of the article was
  "Why I shall be buying electricity shares."
  I could not put it better myself. I agree with everything that the hon. Gentleman has written. I hope that he will come back to make a further contribution tonight.
  We have heard from Labour Members more peddling of the myths and misrepresentations that surround the industry. They would have us believe that the electricity supply industry, under its present organisation, has done the best possible job over the past 30 years. They tell us that there is no alternative to a monopoly and to a vertically integrated generation and distribution system and they claim that it gives the best deal to customers. There is nothing to suggest that an industry under national ownership, such as we have had for many years, will keep a downward pressure on prices.
  In the years between February 1974 and May 1979, the average annual increase in electricity prices was 22 per cent., a total of 180 per cent. in that period. To tell us that the present nationalised system will give us the best deal is totally unfounded.
  Opposition Members tell us that the management of the present system cannot he better. Why, then, does it take 18 years to construct an AGR station? How can we justify a pricing structure of the bulk supply tariff which has led to increased prices to customers? The Energy Act 1983 was designed to open up competition in the industry. It has been a total failure because the percentage of independent generation has gone down since then. The CEGB has protected its monopoly by redefining those "unavoidable costs". In other words, it has upped the fixed price content, which has increased from 1 per cent. in 1983 to about 30 per cent. today. That means that no independent generator can get into the market.
  Then, of course, there is the mystique about nuclear power. I find it strange that, at the Sizewell inquiry, the CEGB told us that nuclear power was cheaper than coal. Now, at the Hinkley C inquiry, it appears that that is not correct and that there has been a 180 deg turnaround in that period. I wonder whether that is simply to muddy the water and sway public opinion about privatisation or whether it is a destabilising ploy for the contract negotiations that it is presently undertaking with the area boards.
  As the right hon. Member for Devonport said, for the first time nuclear costs will be exposed to scrutiny. They will be clearly identifiable, as they never have been before. It is not true, however, that nuclear power is intrinsically expensive. We must look to better management to reduce costs within the industry. Schedule 12 will bring into the clear light of day the costs of waste, reprocessing and disposal. Any grants will require parliamentary scrutiny
  816
  and approval. That is hardly the way to keep information from the public. It is hardly the way to fudge the nuclear issue.
  There has always been a nuclear cost component to the CEGB's electricity prices. The cost or levy would continue in future irrespective of whether the industry was privatised, and the so-called nuclear tax is not a new tax. Had the industry continued under the present organisation, the levy would be part of the cost component.
  The essential questions are, first, who is paying for the back-end cost of nuclear generation? Secondly, who is paying for future unforeseen costs? Thirdly, who covers the cost risk for new nuclear station construction? The consumer has already paid for the back-end costs. I understand that about £3 billion is already in the kitty for the decommissioning of the Magnox stations and to help with the decommissioning of the AGRs. The Government state categorically in the Bill that they will set aside between £1 billion and £2·5 billion to meet unforeseen costs. For the first time, construction risks for new stations will have three-pronged support, from the taxpayer, the consumer through the nuclear levy, and the shareholders.
  Nuclear generation is essential from a strategic point of view. Without it, the lights would have gone out during the coal strike and the oil price hike. It is essential for other reasons as well. With Third-world development, there is a tendency to generate electricity from fossil fuels. That technology is easier for Third-world countries to adapt. If we in the developed countries put pressure on fossil fuels, we either price Third-world countries out of generating electricity altogether or drive them to nuclear generation, which we might not want.
  There are environmental considerations which, for the first time, begin to make nuclear generation much more attractive than CO2-emitting fossil fuel power stations. Further, the world energy market is shifting towards electricity. Between 1970 and 1984, energy usage overall increased by only 1 per cent. whereas electricity usage increased by 36 per cent. Surely this means that nuclear-generated electricity will move more into its own, and diversity of generation gives balance and security of price and supply.
  Nuclear generation is important, but it is not the overriding consideration in the Bill. We heard from the hon. Member for Sedgefield (Mr. Blair) that prices would automatically increase with privatisation, and Opposition Members made light of the fact that new generating capacity is coming forward. We are told that about 20 major companies are making serious approaches to area boards, but I shall give just two specific examples. In the Eastern Electricity region, which covers my constituency, there are five significant new plant proposals, three of which are close to determination. These are combined cycle gas turbine plants of 500 MW capacity, which will be helpful in the further development of North sea gas resources and new fields. In the east midlands area, British Coal is already negotiating with the area board to build fluid gas desulphurisation plants at the pit heads. These plants will produce electricity at a lower price than some of the medium-sized coal stations. The price of coal is already beginning to come down.
  The key to the Bill is competition. We must introduce a third force into generation, and the Government must ensure that, in the critical period of negotiation of

  817
  contracts, the CEGB, with its duopoly inheritance, does not tie up the market and prevent new generators from entering it.
  6.35 pm
  Mr. Dick Douglas: I do not propose to take up the remarks of the hon. Member for Cambridgeshire, North-East (Mr. Moss).
  It seems that the argument in favour of having two Bills, and not the one that is before us, has been advanced during the debate. We seem to have been talking about two Bills. Arguments that have been adduced on behalf of England and Wales have had little bearing on Scotland. This afternoon, the Secretary of State talked about the Scottish coal industry and its relationship to the privatisation of electricity, but before referring to his remarks I shall draw the attention of the House to what was said by Mr. Donald Miller, the chairman of the South of Scotland electricity board, in answer to questions put to him by members of the Select Committee on Energy.
  On 23 March, my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) raised the issue of the relationship of the SSEB to British Coal, and Mr. Miller's reply to question 555 was illuminating:
  "First of all, we cannot be in the business of conniving with British Coal to charge the Scottish electricity customer on the basis of dear coal and subsidising other users; that is not what our board is paid for."
  I am sure that his words were carefully chosen. He has said that he is not to "connive" with British Coal. My hon. Friend pressed him further, and he said:
  "On the first point, whether I have discussed with the Secretary of State for Scotland the implications of the Scottish coalfield being wiped out: the answer is 'no', because it does not arise, there is no need for it to arise."
  Eight or nine months on, we have news for the Secretary of State and Mr. Miller. We are witnessing the possibility of deep-mined coal being wiped out in Scotland because of a slavish, doctrinaire approach to market forces. I have known Mr. Miller for a long time—I do not like talking about personalities in this way—and previously he was an eminently sensible gentleman. It seems, however, that he is being pushed by privatisation into adopting the following posture and statement— this is the effect of what he said—"I am not conniving with British Coal."
  Let us not say that Mr. Miller should connive, but let us suggest to the Secretary of State that he should show an interest in the future of a vital Scottish industry. Let him do what his hon. Friend the Under-Secretary of State for Energy did recently and visit the site of a vital investment of about £60 million in the constituency of my hon. Friend the Member for Clackmannan (Mr. O'Neill), just outside the borders of my constituency. The Under-Secretary visited the Longannet complex, and yesterday, in answer to my question, said:
  "Under privatisation, and with our plans to expand the interconnector between Scotland and the rest of the United Kingdom, the coal can produce electricity which can be sold freely into the British system."—[Official Report, 12 December 1988; Vol. 143, c. 639.]
  As my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) asked, what are the plans for the interconnector? Is it the Department of Energy, the South of Scotland electricity board or some other body that will facilitate its expansion and strengthening? My constituents
  818
  and those of other hon. Members are entitled to know what will happen to the future of a vital industry in Scotland, and they are entitled to know tonight.
  If the issue is to be left to market forces, and if Mr. Miller is to be allowed to import 2 million to 3 million tonnes of coal, he may be able to proceed without necessarily influencing and jacking up world prices, although I have doubts about that. Lord Marshall of the CEGB could not import 65 million tonnes of coal without having an effect on world prices. It would seem that my hon. Friend the Member for Garscadden is correct: the interests of the nation lie in security of supply, not the short-run equilibrium of supply and demand.
  Mr. Miller, who does not now desire to connive with British Coal, had previously to sit down and reach long-term contractural agreements with British Coal to safeguard the supply. If that is not a vital responsibility for people with the national interest of all Scotland and the United Kingdom at heart, I do not know what is.
  I have heard a lot of rubbish about what happened in the miners' strike and how we broke the miners' strike because we had nuclear power. Unfortunately, the breaking of the miners had a lot to do with the public sector. A major reason for the miners being broken in the strike—they were not humiliated, because they preserved their dignity—was the imposition and unification of what was tantamount to a national police force. When it suits them, the Government can misuse the public sector. We are interested in using the public sector for the long-term benefit of the people of this country.
  The Secretary of State defended his new desire to introduce to us his views about perfect competition. We know that there is no such thing as perfect competition in the real world —page 1 of Cairncross taught us that. I notice graduates from St. Andrew's university on the Conservative Benches; I am always willing to educate St. Andrew's graduates.
  Under the Scottish proposals, two companies will own the nuclear sector. That will create a company with 80 per cent. of the assets and 60 per cent. of the generating capacity. How on earth can that be called competition of any magnitude? That is prostituting competition and duopoly. The Secretary of State cannot defend that on the basis of the consumer. However, we are told that the Scottish board will have the magnificent possibility of selling surplus capacity over the wires. There will be no new capacity in Scotland before the year 2000, but the Scottish board can export it, provided that it goes to the market at a price that will bear the costs.
  If the price of the Scottish assets is high, it will be difficult to sell the electricity over the wires. Conversely, that will relate to the low price of the English assets. There is a conundrum. The only way to solve it is to cook the books in pricing terms. We can suggest that here, but that does not mean to say that investors in Charlotte square would be daft enough to be taken in by such action.
  We have heard about the criteria for public or private ownership. I am no slavish adherent to the public sector. The public sector should deliver facilities efficiently. I do not believe in feather-bedding any public sector employee. However, there is duplicity on the Conservative Benches.
  People in the public sector are sick and tired of being praised when there is an emergency in the North sea, on the railways, or in the Soviet Union. At the Dispatch Box last week, the Prime Minister was pleased to say that the public sector would be the first to respond because London

  819
  firemen were to fly out. She was cutting those firemen's facilities, but she had the cheek and audacity to praise them. We have a responsibility to the public sector to ensure that the employees are adequately rewarded.
  Yesterday, the Minister of State, Scottish Office said that the Labour Government brought the organisations into the public sector with one Bill. Unfortunately, he omitted the North of Scotland Hydro-Electric Board. The test of private versus public is an extreme test when one is in difficulty. In the dark days of the war, Churchill went to Tom Johnston to argue for the creation of a public sector board for the Highlands. I am not going to quote Tom Johnston. Instead, I will quote Lord Airlie. On 9 June 1943, he said:
  "I believe that what will happen is that in certain areas which are at present supplied by private companies, would-be consumers will be unable to get electricity on account of the fact that they will he unable to afford, after this war, to pay the charges which the private companies have to impose…There is only one way it can be done,"—
  he was talking about the Hydro Board—
  "and that is for the State to do it."—[Official Report, House of Lords, 9 June 1943; Vol. 127, c. 973, 974.]
  That is what a traditional Tory anxious to preserve the rights of Scotland and the Scottish Highlands said. Today, we see the Tories reneging on Scottish responsibility.
  6.45 pm
  Mr. Michael Colvin: Please forgive me, Mr. Deputy Speaker, for jumping in and out of the Chamber so frequently this evening. However, democracy does not prevail only here; it prevails upstairs in the Committee Rooms where many elections have been taking place. For a moment I confess that I wondered whether I had stepped in on what is essentially a Scottish party, with reels and all. As a three quarter Scot who probably draws electricity from the hydro-electric scheme in Scotland when he switches on an electric switch in his house, I think that I am justified in taking part in the debate.
  Mr. John Maxton: How does the hon. Gentleman work that out?
  Mr. Colvin: That is how it works.
  I welcome the Bill because many of my constituents work in the power generation industry. They will also welcome this proposal to denationalise one of Britain's biggest businesses, thus honouring the 1987 Conservative party general election manifesto commitment to privatise more state industries, and to increase share ownership for employees and the public at large. Almost one in five of the adult population now own shares directly and more than 1·5 million people own shares in the companies for which they work.
  My right hon. Friend the Secretary of State for Energy has shown considerable ingenuity in devising the corporate structure for the electricity industry following privatisation. He and the merchant banks that will advise him will have to show great ingenuity in devising schemes to ensure that shares in the 15 electricity companies with £27 billion-worth of assets are spread as widely as possible. There is probably scope there for creating another 1 million shareholders.
  Southern Electricity, my local area distribution board, shares my welcome for the Bill. The board favours becoming a publicly owned company believing, in the words of its chairman, Mr. Duncan Ross, that it can
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  "look forward to a more diverse and competitive electricity generation market, in which it can shop around to obtain the best buys for its 2·4 million customers."
  That is the answer to those who say that following privatisation there will be no competition. The distributors will be able to shop around for electricity and that competition would be lost if the Labour party regained office and renationalised the industry as Opposition Members told us that they would yesterday. So much for the Opposition's commitment to repeal clause IV—the nationalisation clause in their constitution. That must be double-talk.
  I represent a very energy-related constituency. It has the largest oil refinery in Europe—the Esso plant at Fawley—which provides fuel for a major power station which stands on an adjacent site. Fawley used to fuel the Marchwood power station further up the Solent. That power station was made redundant a few years ago but the site also houses the Marchwood research laboratory.
  The Bill is doubly welcome to my constituents because the public inquiry into the proposed Fawley B power station has had to be shelved, probably indefinitely. That is proof, if it is needed, that competition has an effect on the industry. When the distributing company-to-be, Southern Electricity, was asked to guarantee that it would buy the energy produced from Fawley B, it refused. Fawley B power station would have cost £1·3 billion and would have produced 1,800 MW a year. Somebody would have had to buy it, and that provides the key to the Bill.
  The Bill shifts the responsibility for ensuring that the juice is there when we turn on the switch in our house from the generating company—the CEGB—to the distributors, and they can shop around. Southern Electricity is considering other sources and because of the trends today and because of research, will find that many smaller power stations are probably better than the mega-power stations that have been built hitherto. Yesterday, we heard hon. Members talk about alternatives such as combined heat and power as more effective ways of making full use of our fossil fuels.
  The Bill is certainly welcome in Romsey and Waterside. It is also welcome to Hampshire ratepayers because it will save them about £1 million, which is the cost of fighting the public inquiry into the proposed power station and jetty.
  I am sure that my hon. Friend the Minister will forgive me for not going through the ritual back-slapping exercise that usually prevails in these debates. I intend to be quite critical on three aspects, which are raised not only in the Bill itself, but by the proposal to develop Fawley B. The first is the question of the environment. The second, is the question of coal imports and the third that of research.
  Earlier this year, the White Paper on privatising the electricity industry made no reference to the privatised electricity companies having to have any concern for the environment—nor does the Bill. I have read the Bill from cover to cover and it has little to say on a subject that has been of increasing public and political concern in recent years. It simply repeats, in schedule 9, the limited objectives of the Electricity Act 1957 on the protection of flora and fauna. It relates only to the natural beauty of the countryside and the physical condition of any buildings of special, architectural or historic interest. That is riot enough. The Bill does not incorporate other much wider matters of environmental concern that have grown up over the years, such as emissions from power stations,

  821
  atmospheric pollution, the management of radioactive waste and, of course, other audible and visual pollution of the environment.
  I accept that those matters are covered, in part, by the Control of Pollution Act 1974 and, of course, by the recent European Community agreement which implements the large plant directive to reduce emissions from power stations. However, I still believe that the Bill should specifically contain broader environmental provisions and I am sure that in Committee, additional clauses on the environment will be suggested.
  My second point concerns coal. The Fawley B proposal would necessitate the building of a jetty for bringing in coal. That coal would not necessarily come from abroad, but might come round the coast. That would require substantial investment, so once the facility was built, there would be strong economic incentives to maximise its use. That applies to coal jetties generally. It is clear from what Lord Marshall and British Coal have said that the importation of foreign coal is an important option in keeping our coal industry competitive. Opposition Members who represent constituencies with coal interests commented on that in considerable depth yesterday.
  I want to point out that it would be wholly wrong to proceed with the Fawley jetty—or any other facility for importing coal—without being certain that the inland infrastructure is there for the movement of that coal to other power stations inland, and that it is adequate. In the case of Waterside, where we fought a public inquiry on the proposal for moving oil from Wych Farm in Dorset to Fawley for processing, was refused simply because the railway line was inadequate. The movement of coal, lime, gypsum and all other power station products, is equally impractical because it would require many more trains than the oil proposal. That is a lesson that we must take on board.
  My third point concerns research. Section 7 of the Electricity Act 1957—which is due to be repealed in its entirety by the Bill—sets out the mandatory and permissive frameworks that have led to the existing high level of research work in the electricity supply industry. The Berkeley, Marchwood and Leatherhead research laboratories spent £224 million in the last financial year, which has helped our electricity industry to lead the world in so many areas.
  What do the Government propose as an adequate replacement for section 7 of the 1957 Act? No framework is provided under the Bill. It has been for the CEGB to decide, following discussions with the Department of Energy, that, subject to the enactment of the Bill, Berkeley nuclear laboratories and the Central Electricity research laboratory—except for the part of the CERL site engaged in transmission-related work—will be owned by the new National Power company—big G. Marchwood engineering laboratories, in my constituency, will be owned by the new Power Generation company—little G. That part of the CERL site at Leatherhead that is already engaged in transmission work will be owned by the new National Grid company.
  I question whether the allocation of these research facilities is the right one, especially in relation to Marchwood where 400 to 450 people work, mainly in nuclear power research—on which they spend 60 per cent.
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  to 80 per cent. of their time—and which will be allocated to little G, when it should be to big G. This reorganisation must be considered again because Marchwood faces closure and the loss of 450 jobs. Those research facilities there at present, which are non-nuclear, will probably be moved to Ratcliffe-on-Soar power station, and that could sound the death knell for Marchwood.
  Mr. Deputy Speaker (Sir Paul Dean): Order. I am sorry to interrupt, but I must be fair to other hon. Members and the hon. Gentleman has had a little more than the time allocated.
  6.57 pm
  Mr. Peter Hardy: I shall try not to speak for the whole time that is allocated, although I should have very much liked to comment on the speech made by the hon. Member for Romsey and Waterside (Mr. Colvin). I am very pleased that, unlike most of his colleagues, he has realised that the electricity industry has been responsible for significant achievements, and it was good to see some of his hon. Friends wince when he expressed that view. It is not a view that would have been expressed by the hon. Member for Birmingham, Northfield (Mr. King) who, in an aside, summed up the approach of Conservative Members when he talked about getting £20 billion in the kitty to fight the next election. That is what the Bill is about.
  The Secretary of State, who is rather more polished and urbane, would not say that, but he deliberately, or negligently, misled the House yesterday when he said that the Bill would be achieving something enormously important in breaking new ground and giving the suppliers the duty to supply electricity. He suggested that that goes further than any responsibility placed on the public sector. He told us about that part, but he did not tell the House—and perhaps the Minister of State can explain—that the absolute promise that the Secretary of State gave to the House yesterday about the duty to supply seems to be remarkably hedged about in clauses 15 and 16.
  If any supplier does not wish to fulfil the terms of clause 3, to which the Secretary of State was referring, clauses 15 and 16 seem to give it every possible opportunity to evade that mythical responsibility. The Secretary of State may not have read the Bill. I hope that he has an enjoyable Christmas, although he may not like the idea of what is to come. He will still be Secretary of State in January and February during the Committee Stage, and he and his Ministers will have to do much more homework than appeared to have been done yesterday.
  That was not the only point on which the Secretary of State was somewhat misleading. He implied that he was negotiating with the trade unions and that they were quite happy to talk to him about the distribution of shares. As far as I know, the trade unions have had no contact with him at all. They are probably quite interested in the allocation of shares, but they see it as peripheral compared to the future of an industry that is so important to their members and the country.
  It is fashionable for Conservative Members to criticise the industry. We should remember that many of them represent rural constituencies and they should understand that two enormously important developments assisted rural Britain in the 1940s and subsequently. One was the Agriculture Act 1947 which brought rural areas a share in urban prosperity—a Labour Government achievement—

  823
  and the other was the nationalisation of the electricity industry, which brought light and power to areas of Britain that would not otherwise have been able to afford them. If the decision were left to the private sector now, I doubt whether it would find some of the areas represented by Conservative Members particularly attractive as markets.
  In addition to the future of the rural areas, I am concerned about conservation. The Bill is woefully inadequate in its provision for conservation and the environment. The Government have merely lifted the appropriate part of an Act of 1957, but the fact that throughout their period in office they have ignored its requirements does not give us much hope that the provision will prove satisfactory. The fact that the Nature Conservancy Council has not been consulted and that there is no structure for consultation with public agencies seems to me a woeful omission. The conservation lobby fears that the priority afforded to environment issues will be grossly inadequate.
  One begins to wonder about Conservative Members' intelligence in that regard. The other day I did a study of what would happen in Britain if we did not take environmental problems seriously enough, and if the sea level rose. I found grounds for satisfaction. The Government are utterly unconcerned about the environment. They are utterly unworried and remarkably negligent when it comes to support for fluidised bed combustion and so on. They are ignoring anything beyond the next balance sheet and the next election, and history will hold them responsible for the rise in the sea level.
  Unfortunately, 90 per cent. of our low-lying areas are represented by Conservative Members. When the sea level rises as a result of Conservative negligence, it will be interesting to see what those attached to private affluence and to the eradication of the public sector will do. Perhaps they will come squealing for public sector support, and when they do, some of us may point out that the Conservative Government whom they support are responsible. That Government may well be quite prepared to obliterate the research capacity to which the hon. Member for Romsey and Waterside referred. I hope that Conservative Members will be consistent enough to say to their constituents, "Build your own sea walls, walk about in your own wellington boots and pay your own electricity bills."
  There is another question that the Minister must answer. The Secretary of State forced quite unnecessarily high electricity price increases last year, on the ground that the CEGB needed to invest £1 billion. But the CEGB was about to do that; it was already budgeted for. I ask the Minister to tell the House, therefore, whether the CEGB will be investing an additional £1,000 million in the current financial year—the money that the Secretary of State compelled it to raise. If the CEGB is not to spend that sum, the House and the country will require an explanation.
  I should declare an interest; I am involved with NACODS, the National Association of Colliery Overmen, Deputies and Shotfirers, and with the National and Local Government Officers Association. Some months ago, I asked a question in the House about potential redundancies. Only in two ways can a profit be made: first by reducing labour costs and second by reducing input costs. I feared that many jobs would go, as Mr. Alex Henney suggested. The Secretary of State gave me an absolute assurance, not only that there would be no
  824
  redundancies but that additional jobs would follow privatisation. Can the Minister confirm that pledge? If the Government have retreated from it, he should let us know now. It will be no consolation for the workers in the industry to be given a few crumbs of shares if they then find that the pressure of ruthless privatisation makes them join the ranks of the unemployed.
  The Secretary of State referred yesterday to imported coal. He clearly has no understanding of the international coal trade, which could not have sustained a sudden switch from domestic to imported coal. He referred to low-sulphur coal. How can the Government talk about low-sulphur coal or high-sulphur coal when we have shown in recent months that they do not even know which country the coal is coming from? That is a serious point. The miners in the constituency of my hon. Friend the Member for Barnsley, East (Mr. Patchett) have their coal washed at the Manvers site in my constituency. In the last three months we have produced coal at 81p a gigajoule on average and last week they were producing it at 68p a gigajoule.
  In destroying that achievement, the Government would not merely bring embarrassment and long-term danger to the electricity industry and to the consumer; they would destroy an important part of the potential for British -industrial growth. The damage that they have already inflicted upon high energy users such as United Engineering Steel in my constituency by an unnecessary increase in prices this year shows that a balance of payments deficit of enormous and hitherto unimaginable dimension is of no consequence to them. Those of us who take a longer view would suggest that the achievements that the hon. Member for Romsey and Waterside has just begun to recognise are about to be sacrificed by a bunch of people whose motivation, like that of the hon. Member for Northfield, is pure greed.
  7.8 pm
  Mr. Michael Irvine: The hon. Member for Sedgefield (Mr. Blair) is a barrister. His speech yesterday was fluent; it had a certain polish and it went on rather too long. In other words, it was very much the speech of a barrister. Barristers have clients, and I found myself asking just who the hon. Gentleman's clients were. I decided that they were just about every vested interest and every force against progress that is to be found in the industry. The hon. Gentleman's clients are the National Union of Mineworkers, the anti-nuclear lobby, the state corporatists. They are all those who are against the operation of market forces and competition and who recoil with a shudder from the idea of giving the consumer some clout.
  The CEGB has much of which it can be proud, and I acknowledge it. I acknowledge that it has achieved and maintained high technical standards, but it is by no means the creature of perfection that many of its apologists would have us believe. Its record on investment shows that it has over-invested far too often. A look at the way in which its power stations have been constructed and supervised reveals an appalling record.
  Look at the time that it took the CEGB to construct Dungeness B. Originally it planned to build the power station in five years; it took 20. When it put its hands on Hartlepool, the power station there was expected to take six years. It took 18 years. It was not just the AGR power stations that took such a time. The Isle of Grain power

  825
  station was planned to take seven years, but it took 13. Ince B was planned to take five years, but it took 10. In some respects, the CEGB has not served the nation well, although in others I acknowledge that it has.
  Yesterday, the hon. Member for Clydesdale (Mr. Hood) spent a great deal of time talking about fat cats. He spat out the words with considerable ferocity and frequency. Looking at him, I was moved to reflect that he had a not inconsiderable waistline himself. Apart from the hon. Member for Clydesdale and the fat cats to whom he referred, there are others. Could it not be that the CEGB is a bit of a fat cat? Could it not be in need of slimming down? Could it not be that it occasionally needs to meet the sharp end of competition? If you will forgive the pun, Mr. Deputy Speaker, that would do it a power of good.
  This Bill will open the way for many small-scale generating schemes. We shall see many more power and heat schemes. I am convinced that a great number of small gas-generated power stations will open as a direct result of the Bill. Section 5 of the Energy Act 1983 paved the way for such small gas-generated power stations and the like to generate directly into the national grid.
  Unfortunately, that section was not the success that was hoped for. The trouble was that the CEGB was in control of the national grid and it had no desire to see small gas and other generating stations move in on its territory. Things will now be different. Following the Bill, the national grid will be under the control of the distribution companies, which will have an interest in encouraging different sources of supply, in diversifying and in seeing competition brought into the generating industry. That will be a considerable force for good.
  Labour Members from time to time during the debate have mocked the special status that the Government are according nuclear power in the Bill. Power generated through nuclear fission is, and should be, treated as a special case. The cost of constructing nuclear power stations is heavy, but the great advantage is that, once those costs have been incurred, the running costs are comparatively cheap. Quite apart from that, there is the issue of security of supply.
  In his opening speech, my right hon. Friend the Secretary of State said that on several occasions during the past 20 years there had been threats to security of supply. There have been threats to oil and coal supplies to power stations. There has not been the same threat to power supplies from nuclear stations. It is noteworthy that not one Opposition Member has addressed himself to that argument. That shows its force and weight and why it is so important that the Government should have it in mind.
  Mr. Deputy Speaker: Order. I must ask the hon. Gentleman to come to his last sentence.
  Mr. Irvine: The Government's approach to nuclear power is refreshingly pragmatic. They are going forward not with dogma but with pragmatism. In giving nuclear power a special status, they are not showing favouritism but rather indulging in plain good common sense.
  7.14 pm
  Mr. Alex Salmond: I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
  826
  "That this House declines to give a Second Reading to a Bill which is ill considered spatchcock legislation; notes that electricity supply, as a basic service, properly belongs in the public sector; that the Bill fails to introduce effective competition into the privatised structure in England and Wales and particularly in Scotland, leaving consumers to face higher bills to finance the doubling of company rates of return; further notes the lack of public provision for the strengthening of the electricity interconnector between Scotland and England and the failure to guarantee that the Scottish companies will not be forced to compete to sell electricity to a monopoly buyer at a loss of some tens of millions of pounds, the effective removal of the social clause from the Hydro-Board operations and the failure to appoint a separate Scottish regulator to oversee the distinctive characteristics of the Scottish electricity system, the Government's failure to respond adequately to the Select Committee on Energy's detailed and robust criticisms, and the continued intent to shelter the nuclear industry from competition at the expense of the coal industry; and considers that Scottish consumers risk being denied the full benefits of the development of hydro power and North Sea Gas, the two cheapest and most environmentally sensitive major sources of electricity generation."
  There has been some interest in the use of the word "spatchcock" to describe the Government's proposed legislation. That word was used by the Select Committee on Energy. As all hon. Members will know, it means a chicken that is ill-prepared—slaughtered before its time. The word is derived from the Indian army. I can think of no better word than one used by the Indian Raj to describe what the Scottish Raj is doing to Scotland in the Bill.
  I was prepared for the fact that the Secretary of State for Energy would know little about the Scottish side of the legislation when he opened the debate. He knew so little that he refused point blank to answer questions on the Scottish issue. But I was not prepared for the Secretary of State for Scotland to display a similar level of ignorance. If I interpreted him correctly, the Secretary of State for Scotland said that only about 3 per cent. of the issues involved in the Scottish privatisation were different and separate from those involved in the privatisation in England and Wales. There can be no better testimony to the Secretary of State's total ignorance of the measure that he is co-sponsoring through the House.
  The Scottish and English privatisations are like chalk and cheese. The issues involved in the vertical integration of the Scottish electricity industry and its privatisation are separate and distinct from the issues involved in the different structure south of the border. Such remarks show why, according to the MORI poll published last Friday, 61 per cent. are now dissatisfied with the Secretary of State's performance. That is only 1 per cent. more than the dissatisfaction accorded to the Leader of the Opposition. The Secretary of State is now chasing hard on the heels of the Prime Minister to be the most unpopular political figure in Scotland.
  Why are the Scottish public so dissatisfied with the Secretary of State's performance? The major reason is that he persists in imposing policies which have no popular support in Scotland. The Bill is an excellent illustration of that. I defy any Tory Member to tell me where, in Scottish local election results, general election results or opinion polls, there is any sign of convincing support for electricity privatisation in Scotland.
  When that point is pursued with the Secretary of State, he says that the companies support privatisation. I can think of nothing more pathetic than being reduced to claiming the support of people whom he appoints or whose future he controls. That displays the Tory party's

  827
  attitude to Scotland. On so many issues, the Tory party has appointed place people in a failed attempt to reinforce its support in Scotland.
  The Secretary of State is unpopular because of the contempt with which he allows Scottish business to be treated. The distinctive nature of the Scottish electricity industry was recognised by the Select Committee on Energy. In the absence of a Select Committee on Scottish Affairs, the Energy Select Committee went into the Bill's Scottish aspect, although it recognised that it could not do the thorough job or do the matter the justice that a Scottish Affairs Select Committee would have done. Now we find that there is to be no Scottish Bill, no Scottish debate and no Scottish Standing Committee, all because the Government lack the troops to man their Scottish Benches. We see another perfect illustration of that this evening.
  Mr. Bill Walker: Will the hon. Member give way?
  Mr. Salmond: No. I am restricted to 10 minutes, so I am not prepared to take information from the hon. Gentleman who has just arrived.
  The Government are trying to disguise their lack of a Scottish mandate and to call the English battalions to their rescue by keeping the two Bills together.
  The Minister of State, who has just arrived, will remember that one reason why, according to the MORI poll, 61 per cent. were dissatisfied with the Secretary of State was due to the Government's lack of backbone in defending Scottish interests. It was incredible to hear the argument for a separate Scottish regulator described as "foolish" by the Secretary of State earlier. The Select Committee on Energy, which has a majority of English Back Benchers, concluded that the distinctive nature of the Scottish electricity system justified a separate Scottish regulator. There can he no better illustration of the lack of backbone of the Secretary of State for Scotland. He is unwilling to demand for Scotland even that which was recommended by a majority of English Tory Back Benchers.
  There are many reasons for opposing the Bill, and many are detailed in the amendment. Because of the shortage of time, I shall concentrate on two of them. First, inevitably, electricity privatisation in Scotland will result in higher prices. There is an argument on the English and Welsh legislation. On one side it is argued that higher rates of return and increased costs through separating the generators from the grid will result in higher prices. On the other side it is argued that pressure and competition in generation will bring prices down. That is an argument, although it is one in which the hon. Member for Sedgefield (Mr. Blair) has the initiative over the Secretary of State for Energy.
  In Scotland there is no argument. There is no competition in the Scottish measure and no downward pressure on prices. Rather than relying on the opinion of the Secretary of State for Scotland, we should turn to people who know about the industry. The chairmen of the two companies in Scotland that are to be privatised gave evidence to the Select Committee. Mr. Joughin, the chairman of the Hydro-Electric Board, was not an unimpressive witness but when pressed as to whether competition would be promoted by the Scottish measures, he was unable to give an answer.
  828
  The succession of questions ran as follows: he was asked what a consumer was to do when he was dissatisfied with the privatised Hydro Board's cost of electricity. He said:
  "He can come to the Annual General Meeting and chase us."
  I then asked him:
  "Say he is not a shareholder, but just a customer?"
  Mr. Joughin replied:
  "I would hope he would soon become a shareholder, the same as you would in any other company in which you wanted to take a challenging interest."
  He was then asked:
  "You are surely not saying that the customers who are not shareholders will not be uppermost in your mind when you move into the private sector?"
  Mr. Joughin replied:
  "Customers will, as they are now, be uppermost in our minds, yes."
  He was then asked:
  "However, they will not be able to do anything about it if your performance is not very good'?"
  Mr. Joughin's last word on the subject was:
  "With due respect, Sir, this is not our debate. We are the Management, we have a Government which has said that it wishes to privatise, and it is our responsibility to be sure that we make the best decisions possible to enable that privatisation to be as effective as we can for our consumers."
  In the final analysis, when asked to explain where the competition was in the Scottish measures, the best that the chairman of the Hydro Board could say was, "We are doing what we are telt." In that, he was similar to the chairman of the South of Scotland Electricity Board who completely destroyed the argument that there was competition in supplying to industrial consumers in Scotland when he told the Select Committee:
  "the nuclear company will own, as I have indicated, 80 per cent. of the generation assets, in Scotland and produce 60 per cent. of the electricity, and so a very high degree of co-operation is required between the partners. At the same time, we arc enjoined by the White Paper to compete. That is an unusual situation. To our knowledge, it has no precedent anywhere in the world."
  From both the Hydro Board chairman and the South of Scotland electricity board chairman there is an admission that there is no real competition in the Scottish measures. That is why the Select Committee on Energy concluded that the claims of competition by emulation were "largely meaningless".
  In the absence of competition and downward pressure on prices, it is inevitable that an increase in rates of return— a doubling is estimated by the Hydro Board—will lead to higher prices for Scottish consumers in the private sector.
  There is one area of competition in the Scottish measures, and that is that the two boards will be involved in the cut-throat competition of selling electricity to England and Wales. As yet, we have no absolute guarantee that the English and Welsh distribution companies will not combine to form a monopoly buyer to force down the price at an estimated cost to Scotland of tens of millions of pounds. I am asking for that guarantee now. The one achievement, in competition terms, of the Secretary of State for Scotland is to see that competition between the two Scottish boards forces down costs for consumers in England and Wales. What a triumph for the Secretary of State for Scotland!
  I shall deal with the fallacy of Conservative Members' claims of control in Scotland. The Secretary of State for Scotland refused to say how much of the Scottish private

  829
  sector had disappeared into external ownership during his tenure of office. The estimate from Scottish Business Insider is about two thirds. He also refused to tell us why he did not argue for a Scottish Telecom, Scottish Gas or Scottish Steel.
  When the right hon. and learned Gentleman argues that the two major companies will enliven and bring rebirth to the Scottish private sector, we should remember that it was only a year before the elimination of Britoil as Scotland's major private sector company that the Secretary of State for Scotland, at the opening of its new offices in Glasgow, was saying what an asset it was to Scotland. The claim of the Scottish Conservatives that there is something distinctly Scottish in the measures they are suggesting is as bogusly Scottish as the hon. Member for Tayside, North (Mr. Walker) dressed in his latest kilt.V
  I want to turn—
  Mr. Deputy Speaker: Order. I must ask the hon. Gentleman to come to his last sentence.
  Mr. Salmond: The measure before us betrays the interest of the Scottish people. The enormous generation assets and potential of Scotland in terms of coal, hydro power, and cheap gas are being wasted. We are further than ever from an energy policy for Scotland that would allow those assets to be used for the benefit of Scottish industry and Scottish consumers.
  7.26 pm
  Mr. Keith Mans: I should like to make a few comments about the transfer of the electricity industry into the private sector and the need to rely upon a variety of generation systems.
  I was struck by the inconsistency of the arguments by the hon. Member for Sedgefield (Mr. Blair) yesterday and his colleague, the hon. Member for Glasgow, Garscadden (Mr. Dewar) today. Yesterday, we discussed the so-called nuclear levy and we were told that prices would rise if the electricity industry was privatised. Today we were told that Scottish coal is a special case and that the Scottish electricity industry should not be allowed to import coal, despite the fact that it might be cheaper. At the same time, it was suggested that prices would still rise in Scotland. That is the sort of inconsistency that has coloured many of the Opposition's arguments over the past two days.
  I want to concentrate on the reasons why the industry should be moved into the private sector. Yesterday we heard a great deal about the conditions pertaining many decades ago when much of the industry was in the private sector. It was suggested that the problems of the 1920s and 1930s were good reasons for not moving the industry into the private sector. I am afraid that that argument, like so many others put forward by Opposition Members, looks to the past, not to the future.
  I am the first to admit that the creation of the national grid in the 1930s was a good idea. However, I am the last to admit that the nationalisation process that took place after the last war was a good idea. Our generation industry would have been just as efficient, if not more so, with a national grid had we not had that nationalisation measure.
  In the public sector, the solutions to the problems of the electricity industry, like in so many other industries, are of a general nature. Quite often the Treasury decides the
  830
  amount of money that an industry should borrow to fund its investment. In the electricity industry in particular, we can see the effects of that over many decades. Prosperity or the need for the Treasury to spend or save more money has often dictated the investment plans of the industry rather than the needs of the consumer and the needs of the industry itself.
  In the public sector, too little regard is paid to alternative methods of generating electricity. Again, we tend to be blinkered. The fashion may be, perhaps according to the Government of the day or to the philosophy of the chairman running the Central Electricity Generating Board at the time, to go for a nuclear, coal or oil option. Little regard is paid to smaller systems of generating electricity that are becoming more popular abroad, and which I suggest will become more popular in this country once the industry is privatised.
  It is necessary for the electricity industry's long-term interests, and for those of its consumers, for there to be a number of different systems of generating electricity. More specifically, it is important to retain the nuclear option. One can see what happens when there is no variety of generating systems in a country such as France, where, because of high oil prices, they went overboard in terms of nuclear-powered electricity. The French have saddled themselves with a £20 billion debt as a result.
  I was interested in the remarks made yesterday by the hon. Member for Sedgefield (Mr. Blair), although I did not quite understand his logic. I gather that his suggestion was that, whereas electricity costs in France are higher, that country can still sell electricity to the CEGB at a lower price than that at which it can be produced in this country, so the French Government are subsidising our domestic electricity industry.
  One element of consistency in the debate on the electricity industry is the inconsistency in estimates of the cheapest source of electricity over a long period. Twenty years ago, oil was in vogue and undoubtedly provided the cheapest source. As a result of oil price increases, coal became the cheapest 10 years ago, but two years ago, when oil prices fell, there was doubt as to whether it would not be feasible to generate electricity from oil again. Today, perhaps coal has the slight advantage.
  Throughout all of that, there was the nuclear option as well. Even today it is, in terms of running costs, a cheap way of generating electricity. The drawback is the cost of building nuclear stations. Factors such as interest rates play a large part in decisions on the best way to proceed.
  Another important factor is the decisions made by Governments—specifically Labour Governments—over many years, about the nuclear industry. Yesterday, my hon. Friend the Member for Havant (Sir I. Lloyd) rightly observed that, in the past, Britain's nuclear industry has largely been technology-led, which has often taken us up blind alleys in terms of the cost of Magnox stations and, more specifically, the delays suffered as a result of advanced gas-cooled reactors. Today, I believe that, as a result of our decision to change to pressurised water reactors, there is less likelihood of any kind of nuclear levy being applied in future, based on the experience of other countries running PWR stations rather than on our own experience in respect of Magnox and AGR stations.
  The relationship between electricity generation and the environment is becoming more important. There is a good case to be made for retaining the nuclear option because, with nuclear power, many of the environmental problems

  831
  associated with it were taken into account when its cost was calculated. [HON. MEMBERS: "Oh!"] There remains the cost of shutdowns, clearing the sites, and waste storage. I can understand Opposition Members encouraging me to make that point. What we do not yet know are the full environmental implications of having a generating system that is largely or totally based on coal or other fossil fuels.
  A coal-fired power station, for example, generating 1,800 MW, in the category into which Drax B falls, produces 11 billion tonnes of carbon dioxide and 16,000 tonnes of sulphur dioxide annually. That can be overcome by fitting fluid gas desulphurisation devices, but that will add to the costs—which is not taken into account when the equation is done. It does not end there. If one has fluid gas desulphurisation, one must also get rid of the gypsum, which amounts to 500,000 tonnes a year, and of 1 million tonnes of ash annually. None of those factors was taken into account in arriving at the cost of coal-fired, as compared with nuclear, power stations. When such costs are taken into account in future, the so-called nuclear levy may not arise.
  For too long, many people in this country have believed that the best way of running large public utilities such as electricity was by retaining them in the public sector. In an age in which the interests of the consumers and of the environment are of increasing importance, such a view is no longer appropriate. We need to free the industry from the Treasury's purse strings, and to give both industrial users and regional boards freedom of choice. We must allow the industry to rely on a variety of sources of supply for the generation of electricity throughout the country.
  For all those reasons, and because I believe that environmental and consumer interests will be better protected if the electricity industry is in private hands and the regulator in public hands, I welcome the Bill and shall vote for it tonight.
  7.36 pm
  Mr. Terry Patchett: I do not propose taking up a great deal of time, as I am anxious to hear the contributions of Conservative Members. This is the second day of debate on the Bill but, as yet, I have heard not one convincing argument from Government Members, including the Secretary of State, for privatising the electricity supply industry. We keep getting a parade of parroting about competition and its benefits to the customer, which, I feel sure, Conservative Members know in their hearts not to be true.
  Private power companies may be forced into making deals with large industrial users, such as car manufacturers, who may threaten to build their own generating plants as part of their bargaining power in negotiating electricity prices. No such tactic is available to the domestic consumer. Where industrial users take advantage of the new situation, the power companies' shareholders will expect them to find their profits from elsewhere—and they can come from no other source than domestic users.
  Much has been said about competition, but there is only likely to be any between the big City corporations, over which of them is prepared to pay more into the Chancellor of the Exchequer's kitty to reap the benefits of the captive market. They are the "fat cats" to whom my hon. Friend the Member for Clydesdale (Mr. Hood) referred yesterday. They can do so safely, in the knowledge that a great deal of the money that they pay to the
  832
  Chancellor will be returned to them personally by way of promised tax cuts. So those people will win twice on the deal.
  It is ironic that, while the Government appear to advocate competition, they consider it unfair that the nuclear power industry should compete equally with other energy sources, and they insist on its being guaranteed 20 per cent. of the energy market. Not only that, but the Government are prepared to prop up the nuclear industry, given the unknown costs of decommissioning nuclear power stations in the future. The Government leave the nationalised coal industry to fend for itself in its battle against cheap, subsidised foreign coal that is flooding the world now, but which may not be available at a future date, by which time the Government's policies may have annihilated our domestic coal industry.
  The Government are not only deserting our coal industry but openly and actively contributing to its downfall, even to the cynical use of private Bills. The North Killingholme Cargo Terminal Bill and others like it were introduced as private Bills, then openly and avidly supported by the Government payroll vote. The last time that the Killingholme Bill came before the House, there was an open if unofficial Whip on it: the Government had put a two-line Whip on the business that followed it, when they knew that there would be no vote on the matter. The two-line Whip was dropped immediately after the vote had been taken on the private Bill.
  I deem that cynical politics, and would expect it to leave a nasty taste in the mouths of Members of Parliament who believe in the parliamentary procedures of the House. The only reason for supporting that Bill was to allow easy access for cheap imported coal and to decimate our own coal industry, which would have considerable difficulty in competing with cheap imports born of subsidies and cheap labour—even, in some instances, child labour.
  It has been estimated that unrestricted foreign coal imports by privately owned power stations could lead to the loss of 160,000 jobs, of which 65 per cent. would be in the coal industry. That would decimate constituencies such as mine, which are already reeling under high unemployment because of the Government's earlier pit closure programme. The number of collieries is expected to halve. By 1992, British Coal will be reduced to 48 collieries employing 45,000 people and producing between 73 million and 80 million tonnes of coal a year. That forecast is based on coal imports of 40 million tonnes.
  The level of import penetration in the electricity industry will ultimately depend on the relative value of sterling. Nevertheless, there are reasons for expecting a massive increase. For example, the coal division of British Petroleum is understood to have held informal talks in Britain about the possibility of buying Australian coal for power generation. Despite the extra transportation costs, BP believes that it could undercut British Coal by quite a margin. While private electricity industry may gain from such deals in the short term, our country will lose. Not only will our balance of payments be affected, but huge numbers of people will be out of work and have to be paid dole rather than contribute from their taxes, as they would much prefer to do.
  The Bill has been described by an outside expert on the electricity industry as a
  "mixture of political prejudice and technical ignorance."
  The industry itself cannot easily forecast supply and demand, which can fluctuate daily. In an emergency, when

  833
  demand may shoot up surprisingly in a few days, we are told that the various groups would have to co-operate rather than provisions being included in the Bill to control such an emergency.
  We are asking companies to compete to benefit the consumer; in a crisis, however, they are expected to co-operate with one another. That seems to me a contradiction in terms. The electricity industry is much too serious a matter for this flippant Bill, born out of pure political dogma and with no concern or benefit for the consumer. It is merely yet another example of the Government's selling off the family silver to prop up their economic policy—which, like the Bill, is a complete failure.
  7.43 pm
  Mr. Ian Bruce: Many hon. Members have said that they have never believed CEGB statistics before, but suddenly believe them when they suggest that nuclear power is more expensive than coal. Perhaps we should examine that a little more closely. I seem to be the only hon. Member left in the House who believes that nuclear power is the most economic form of fuel, let alone that it is the most environmentally safe.
  We must consider like for like. This country has opted for 20 per cent. nuclear power and 80 per cent. other forms of power. Across the Channel, France, a country of similar size, has invested heavily in nuclear power. I must take my hon. Friend the Member for Wyre (Mr. Mans) to task for referring to a £20 billion debt; I wish that we had made as large an investment in our nuclear industry. With its 80 per cent. nuclear power, France can boast the cheapest electricity in Europe—far cheaper than ours.
  I am also extraordinarily surprised to hear Scottish Members claim that the SSEB will be so terribly disadvantaged. Perhaps they should have gone and listened to its chairman when he was in London a few weeks ago, speaking of the enormous success of its AGRs and Magnox stations. They have demonstrated how even a small nuclear programme can be extremely effective and profitable.
  It is strange that the CEGB should tell us that it is having its costing re-examined, particularly on reprocessing. Reprocessing was always very safe when done at Sellafield. We are all flown up to look at the wonderful THORP reprocessing plant and to be told how many extra billions of pounds will be spent on it, but all that is being back-end-loaded on the Magnox stations and the reprocessing. Of course that suddenly looks bad according to the economics of a "tailing off" industry. The CEGB has made a hash of running its AGRs: two of its stations are a disaster. Yet a few months ago, if asked what its AGR stations were doing, the CEGB would have produced the story that they would come right next year or the year after.
  Now the chairman of big G, finding that he is the only member of the English generating industry who must have nuclear power on his side, is trying to talk down the value of his assets, like any sensible man wanting to demonstrate in the future what wonderful profits he is making. Yet in the Hinkley inquiry, the CEGB is putting forward the case today that Hinkley C would have even cheaper electricity
  834
  than the most modern coal-fired stations. We must look carefully at the statistics that are thrown at us, and ask why the CEGB is suddenly producing such a mish-mash.
  Many hon. Members are keen to tell us about the alternatives—wind power, barrage power, oil and gas turbines. I say, "Great: this is what privatisation will allow us to prove." It will not be for the CEGB to say, "Wind power is not an efficient way to generate electricity." Opposition Members, or Mr. Porritt from Friends of the Earth, can go out and invest their own money—or other shareholders' money—to create alternative power sources. They know that they will be able to sell their electricity on to the grid and to any number of people who want to use it. If it is economic, we shall see such development very quickly.
  The United States has had the same problem of consumers worrying about nuclear power stations on their doorstep, with the scaling down of electricity generation by that method. Much of that has been brought about by the combined heat and power method. It has proved economic for the present, while being produced in small packages. Industrial companies that wish to use the heat that they are creating on site and can also generate electricity. Unlike the CEGB, which says that, as it is the only customer who can buy it, it will pay next to nothing, they can sell it at a competitive price on to the grid.
  We must, however, talk about the environment. It is easy to form a view of a nuclear industry that we have constantly loaded with costs to ensure that it is ultra-ultra-safe. Unfortunately, the coal industry has been creating an enormous amount of pollution, and the chickens are now coming home to roost. The amount of CO2, NOX and sulphur being put into the atmosphere has been a constant environmental problem. I was most grateful to the hon. Member for Wentworth (Mr. Hardy), who stated that the Conservative Government would still be in power in the year 2020, and therefore should be worrying about the possible greenhouse effect and any floods in hon. Members' constituencies when considering the Bill. As I live only 50 ft above sea level, I am most concerned about that.
  We must look extremely carefully at research, particularly research into nuclear electricity as well as other forms of electricity. Money has been spent on the possibilities of fusion rather than fission reactors. Opposition Members, who seem to be so against nuclear power, are keen to preserve the jobs of fast breeder reactor workers in Scotland. We must also consider the smaller nuclear reactors. I heard a very good presentation about the economics of small nuclear power stations, the speed at which they can be produced and the fact that economically they can be much more effective than very large stations. We will be considering an enormous number of questions in Committee. I certainly welcome the light and fresh air coming into the industry. Clearly, without the privatisation of this enormous monopoly, we should not have had such a sensible and sane debate.
  7.51 pm
  Mr. A. J. Beith: If the hon. Member for Dorset, South (Mr. Bruce) believes passionately in the economic case of nuclear power, why does he not let it take its chance in the free market, which

  835
  the Government are not prepared to do? The Bill is designed to ensure that the disciplines of the free market never apply to nuclear power.
  I shall return to that later, but I wish to register a small matter, which is important in my constituency and which is still not clarified—the question whether the south of Scotland company will be allowed to be a retail electricity company in England. If it is not, that will represent a change in the arrangements under which a large part of my constituency is supplied by the South of Scotland electricity board. It would be useful to know whether we are to continue to be provided with electricity by the SSEB, and if so, whether or not it can expand beyond the areas it currently supplies in England.
  I shall concentrate on three reasons why my right hon. and hon. Friends are right to oppose the Bill. First, it gives no priority to energy conservation. Why is there no obligation on the face of the Bill to make energy conservation, and the efficient use of energy, a priority? Why is it not recognised as part of the non-fossil fuel quota? Why are the energy efficiency improvements which could be achieved in other ways not recognised as part of the non-fossil fule quota? If the object of the non-fossil fuel quota is to make the country less dependent on fossil fuels, any measure which makes it less dependent should count towards that quota. Increases in energy efficiency must come into that category, and that should be put right.
  The notion of the non-fossil fuel quota is misleading, as it is couched only in terms of nuclear power, particularly in the financial provisions which back it up. There is no mention of dual firing, or any other means by which dependency on any one fuel could be reduced. No priority is given to energy conservation.
  Secondly, nuclear power has a protected status. The consumer is taxed so that he shall have nuclear power. The taxpayer is taxed so that nuclear power shall be provided. Companies are placed under an obligation to buy it. It is the most blatant piece of market distortion since the direction of industry in the second world war. It is such a blatant distortion of the free market that it would qualify the Secretary of State to be Energy Secretary in Albania —the country so often used by Conservative Members to describe the attitude of the Labour party. The Secretary of State deserves that categorisation for his incredible departure from the principles that he is supposed to espouse.
  The Secretary of State intervened in the speech of my hon. Friend the Member for Gordon (Mr. Bruce) to suggest that one of the advantages of the Bill was that in future there would be a more open debate on nuclear power. Tonight, there has been some focus on the figures for nuclear power and some justified criticism of the CEGB for its grotesque nuclear power figures in the past. We have heard some rather surprising praise of the SSEB from the Labour Front Bench for its record on nuclear power, of which I am extremely critical. It has grossly over-invested in nuclear power recently. How can there be a more open debate on nuclear power if it is no longer possible at a public inquiry on nuclear power stations, such as the one planned at Druridge bay in my constituency, to argue that there is no proven need for the power that that station will generate?
  The answer to that challenge will be that Parliament has decided that, whether or not it is needed, we are obliged to have it. That rigs future public inquiries into nuclear power stations. Unless the Minister can demonstrate that
  836
  there will be a different approach, the argument will be adduced that it is not a question of need, Parliament has decided and the law says that we have to have it whether or not it is needed. It will cease to be possible to argue at a public inquiry that the environmental damage caused by building a nuclear power station is not justified by any overwhelming need for the power that it would generate.
  In the context of the Druridge bay power station which the CEGB wishes to build in my constituency, how can the Department of Energy issue fact sheet 11 at the time of the publication of the Bill, which lists a Druridge bay power station as one of those to be allocated to the National Power Company? There is no Druridge bay power station; nobody has applied for planning permission for that power station, no planning permission has been granted and no licence has been issued for it. It is simply a malevolent gleam in the eye of the chairman of the CEGB. Even he recognises that it is well down the track of his own plans, given the overriding need for more power in the south rather than in the north of England.
  Will the Minister explain how that power station is listed as an assett to be transferred to National Power when it does not exist? His ministerial colleagues may refuse planning permission for it. Is the Minister prejudicing a later decision on the planning permission for that station by listing it in a fact sheet as if it were a foregone conclusion? My constituents have the feeling that it is all cut and dried and that Ministers have given some behind-the-scenes promise that the CEGB and National Power will be able to build at Druridge bay and that the planning arrangements will be a foregone conclusion. That must not be so. We shall fight it, and we are entitled to know why it was listed in that way.
  One consequence of the protected status of nuclear power is that those who object to the building of particular nuclear power stations will have their arguments ruled out by the Bill.
  My third reason for being so strongly opposed to the Bill is that it lacks any acceptance of vital social obligations. The Bill allows the vicious penalty of standing charges on pensioners to continue. The SSEB goes one further: it imposes six standing charges a year on its customer. They are quarterly for most of England, but six a year in Scotland. They are very much resented, and the Bill does nothing to remove them.
  The Bill does nothing to help those who are not on mains electricity. Many of my constituents and many people in other rural areas do not have mains electricity. The Government are not continuing the present Hydro Board obligation to help people in rural areas, and they are certainly doing nothing like that to help consumers in other parts of the country. It is simply not good enough for the industry to pass out of public ownership with no provision for the remaining people who do not have the benefit of mains electricity.
  I and my right hon. and hon. Friends are no enthusiasts for the present structure of the electricity industry. Ministers have quite rightly quoted my hon. Friend the Member for Gordon, who suggested that it would be possible to consider ways of privatising the generation of electricity so as to ensure there was some real competition. But that requires continued public maintenance of the national grid, which is conspicuously lacking in the Bill. It would require much more real competition than the Government are introducing. The Government are putting the electricity industry in turmoil without any hope of

  837
  increasing competition, without any hope of promoting conservation, without any hope of maintaining the social obligations of the industry and with the express purpose of subsidising, feather-bedding and protecting nuclear power.
  I agree with the comments by the right hon. Member for Plymouth, Devonport (Dr. Owen) about the electricity industry. The point of difference between us is that I do not share his apparent belief that the Government have any intentions of putting the Bill right and turning it into the kind of legislation that could reasonably attract wider support. The Bill will throw the electricity industry into turmoil without achieving the objectives which I have set out, and it deserves to be opposed.
  8 pm
  Mr. Tim Janman: I have great pleasure in supporting the latest element of the Government's denationalisation programme. It will be the most successful element of that programme because there will be more competition than with telecommunications and gas.
  I refute the Opposition's absurd allegations that Conservative Members are ideological and dogmatic. In 1947, when electricity was centralised and nationalised under the then Labour Government, the industry was not technically inefficient. There had been no labour disputes between 1926 and 1947. Over a 20-year period, output increased by a factor of 10. The industry had modern, not dilapidated plant and there was within it no high unemployment. There was no case for the electricity industry being taken from private companies and local authorities other than that of spiteful Socialist dogma. That was why the industry was put into the nationalised sector in 1947.
  Mr. Frank Haynes: What is the hon. Gentleman talking about? He was not born then.
  Mr. Janman: I can see that the hon. Gentleman was born a long time before me.
  It is worth examining the merits of nationalisation which the Opposition would put forward. There is the so-called merit that we all own the electricity industry because it is nationalised. What utter nonsense. If we asked the majority of people in this country whether they own electricity, they would look at us in blank amazement. The state owns it, and it is run by politicians and bureaucrats with their own interests at heart, not those of consumers. Citizens may not own the electricity industry, but we are all consumers, whether at home or because people work for companies which use electricity for industrial purposes. Because of the competition element in the legislation, the entire population, as consumers, will benefit from the downward price pressure that will be brought about in the medium and long term once denationalisation has taken place.
  Another myth of nationalisation is that it leads to improved industrial relations. Between 1945 and 1987, 1·928 million man days were lost in the three nationalised industries—gas, electricity and water. That is hardly proof that nationalisation brings about a calmer atmosphere and fewer days lost through strikes. The devil of nationalisation has two heads, of course—that of the monopoly of
  838
  capital which it brings about and that of the monopoly of labour with its power over consumers, the economy and the nation.
  We are told that nationalisation is a guarantee of lower energy prices. Since 1963, there have been seven price increases in a given 12-month period of about double or more than double the inflation rate. The worst two examples occurred under Labour Administrations—in 1974, there was a one-off price increase of 33 per cent., against inflation of 17·9 per cent., and a year later, an increase of 47·1 per cent., against inflation of 24·6 per cent. I am not scoring points off the Opposition but wish to show that nationalisation is no guarantee of low prices. In 1963, under a Conservative Administration, when inflation was running at 1·6 per cent., the price of electricity increased by 8·7 per cent.—more than five times the inflation rate. The issue is not the political hue of the Government of the day but whether the consumer is best served by choice and competition or by a monopoly which the Opposition would wish to impose.
  There are two coal-fired power stations in my constituency. Over the past few months, I have taken it upon myself to talk to management and officials of the Transport and General Workers Union. I assure my hon. Friend the Minister that the managements of those power stations are enthusiastic and optimistic about the future of the stations. I should, however, like him to respond to some of the worries that members of the TGWU have expressed to me. They would like information on the likely level of foreign investment in the electricity industry, post-denationalisation.
  Given the changes that will occur in the industry, it would be useful to get a commitment that the changes will be handled sensitively. The TGWU officials in my constituency talk about the many existing industry traditions. That is a euphemism for too much demarcation and therefore too much overmanning. If the industry is to become more efficient, as it will after denationalisation, there may have to be some reductions in the work force. I do not, of course, know the circumstances of any one plant. Are there likely to be reductions? If so, I should like a commitment that it will be sensitively handled by generous voluntary redundancies.
  Time is short and, because other colleagues wish to speak, I shall summarise my arguments. It is clear that the legislation will mean major changes in the electricity industry. It will mean a change in the way that investment decisions are made. Instead of being producer-led, they will be consumer-led. Investment will be led by the way in which the new distribution companies choose to buy their source of energy. The investment decisions of the new generating companies—there will definitely be more than two such companies—will be affected by market conditions and not by political priorities in Whitehall. There will be much more competition and consumer choice, which will lead to a downward pressure on prices. There will be a long-term future for the energy industry and, in particular the electricity industry. There will be increased flexibility for all concerned on the generating and the consumer sides, with the industry being accountable directly to the industrial consumer and to the domestic consumer via the 12 distribution companies.
  This is an excellent Bill, which is long overdue. We should have introduced this measure in the 1950s. I am pleased to support it.
  8.9 pm
  Mr. Allen McKay: I wish that we had more time to develop the arguments advanced by the hon. Member for Thurrock (Mr. Janman) because we could show the House how wrong he is. I shall deal with two of the matters that he raised, the first of which is consumer choice. There is no such thing in the Bill, and the consumer cannot do a thing about it. He has to take the electricity that is supplied to him. The domestic consumer does not have a row of switches enabling him to take his supply from a Scottish board, a Yorkshire board or a board in the south. He must take the electricity from wherever it is distributed. He has no choice in the matter and it is time that we got away from that argument.
  I should like to nail the lie about price increases in 1963, 1964 and 1965. I worked for British Coal from the 1950s up to the 1960s, and we said at that time that the Labour Government were wrong in their policies towards the coal industry. We told them that the Arabs would not always live in tents. That proved to be right, because in the 1960s the price of oil was increased not two or three times, but four times. That was the reason for higher prices to industry. The Government were warned then, and we are warning the Government now, to be careful how they treat the electricity industry. In the Army there used to be a saying, "If it moves, salute it, and if it doesn't, whitewash it." That is the Government's idea of privatisation. Everything goes and they are whitewashing the costs of nuclear generation.
  The generation and supply of electricity are not marketable commodities. This is a key strategic industry, but what is wrong with it? It is clearly efficient and provides an excellent service and the customer trusts it. I am not convinced by the argument about competition. Perhaps later the Minister will explain where the competition will come from and how it will arise. Perhaps he will also give us an estimate of how much prices will fall. We have been told that prices will continue to fall, but the Minister should say when that will happen.
  Electricity is a marvellous commodity. One cannot hear it, touch it, taste it or smell it and it cannot be stored. It must he used at the point of production. The Government are selling something that we cannot hear, smell or touch. This is competition in the industry, because the merit system used by the distribution boards ensures that electricity is supplied at the cheapest possible price. Anybody who goes to the distribution boards to see how they work will see that, if a small pump breaks down and causes an increase in the generation price, it is stopped and the next cheapest one is used. That goes on throughout 24 hours.
  The Magnox nuclear power station is nearing the end of its life, and will probably finish in about 10 years. We have five AGRs and three of them are not working properly. Millions of pounds have been poured into those three AGRs to try to get them working before privatisation. The generating boards will tell any hon. Member who wants to ask that Magnox electricity is far dearer than that produced by a coal-fired power station, that AGR electricity is marginally dearer than coal-fired electricity and that the PWR electricity is the only one that is cheaper. However, we have only one of those. It is said that we need four more and that they will cost £6 billion.
  840
  Who will pay £6 billion without an assurance that at the end of the investment there will be a sale? That is what it comes down to. Clause 4 of the Bill makes it an offence to
  "(a) generate electricity for the purpose of giving a supply to any premises or enabling a supply to be so given;
  (b) transmit electricity for that purpose; or
  (c) supply electricity to any premises"
  unless the Secretary of State gives a licence.
  People who talk about small power stations being allowed to operate are fooling themselves. The Secretary of State will not allow small power stations. He wants to ensure that they do not compete with nuclear power stations so that they can be kept. That is what the clause is all about. If that is what the Government intend to do, they should say so. Of course we shall continue to oppose them, but there is far more of a quarrel when they try to cover things up. Who will bring in small generating plants and feed the electricity into the grid? If such small generating stations are allowed, what will happen to the large boys and to the £6 billion that is to be invested? They will not allow small generating stations to depress their profit margins. The domestic customer, not the industrial customer, will suffer.
  Prices will not decrease—they will increase. My hon. Friend the Member for Sedgefield (Mr. Blair) was right when he spoke about a 25 per cent. increase in prices. The figures have been worked out and I am sure that my hon. Friend is correct. There will be no competition and no consumer choice and there is no need for the Bill.
  8.14 pm
  Mr. Andrew Hargreaves: I am grateful for the opportunity to speak in the debate because I have had experience of dealing with foreign power-generating companies and their experience is relevant to some of the proposals in the Bill.
  In contrast to what has been said by some Opposition Members, I shall begin by saying that the Bill is long overdue. That is because there are no longer any valid reasons for the provision of power being in the state's hands alone, other than because of a threat to continuity of supply, strategic national interests on security. In peace time and with an increasingly sophisticated generating and distribution system, none of the reasons that I have mentioned is valid.
  If one looks to America or nearer home to Finland or Socialist Sweden, one sees excellent examples of private, non state-owned generation and distribution companies providing a superbly reliable service to the customer. I remind Opposition Members that in both those Scandinavian countries even nuclear power generation is in private or non state hands and has a magnificent safety record. They should look at the relationship and shareholding structures of OKG and Forsmarks Kraftgrupp of Sweden and at Teollisuuden Voima Oy and Imatran Voima Oy of Finland. So much for the argument about whether the industry should be state-owned or private.
  In welcoming the move to the private sector, I am relieved to see that efforts have been made to ensure that the progress which has been made by the CEGB on the sophistication of the national grid will not be lost in the division and transfer into private hands. I welcome the considerable emphasis on regulation and supervision when normally I would be suspicious of those things. I am

  841
  relieved that the merit order dispatch system will be preserved, but I know that many hon. Members will want to question the Minister about contracts between generators. They will want to be sure that take or pay contracts, or contracts direct to customers or between supply companies and other generators, will not harm this system or make difficult the concept of a pool of generators. That is important and I am sure that hon. Members will elaborate on it in Committee.
  I have already had discussions with one major consumer near my constituency who has been approached with a direct supply contract from EDF of France. The impact of this type of competition, while beneficial to customers in cost terms, should not be allowed to destroy a sophisticated system that benefits all customers, especially domestic customers, and which has taken a long time to evolve. It may place the new supply companies in a less than competitive position, and that might result in higher rather than lower costs to the domestic user.
  I support my hon. Friend's contention that competition should be the best guarantee of customers' interests. I am pleased to see that the Bill lays a framework for the industry in which decisions about the industry's future and the supply of electricity should be driven by the needs of all customers and, above all, will give the industry's managers more scope to use their initiative in the interests of their customers. This is, of course, reinforced by the measures in the Bill for giving customers new rights rather than just safeguards. That is important and I hope that it will be expanded in Committee.
  This is an exciting opportunity for those working in the industry and I am pleased that my right hon. Friend will ensure, when it comes to the flotation, that those who work in the industry as well as customers will be offered a direct stake in their industry. I hope that my right hon. Friend will make these proposals clear in Committee. Although the Bill leaves open some technical and operating questions which I spoke about earlier and which will need to be clarified in Committee, it is radical yet structured and deserves the support of the House.
  8.19 pm
  Mr. Harry Barnes: When he opened today's debate, the Secretary of State for Scotland said that there is no such thing as perfect competition in the electricity supply industry. That is a simple truism. He should also have added that there is no such thing as what might be termed imperfect competition in the electricity supply industry, for the notion of imperfect competition is itself an economic theoretical concept. Very little competition is possible within the electricity supply industry. Neither perfect nor imperfect competition possible because masses of competing producers and competing consumers are required. The electricity supply industry's production is termed a natural monopoly. That term has been used by the Minister and it has been used in connection with the water privatisation Bill—that public utilities are natural monopolies. That means that they cannot help but be monopolies.
  The idea of natural monopolies was introduced near the end of the 19th century by essentially Conservative theorists to explain certain changes that were occurring in society, so they said that utilities such as the railways were
  842
  natural monopolies and therefore had to be regulated. That old-fashioned notion is now re-emerging in connection with how the electricity and water industry privatisations are to take place. It is not just that competition is impossible among electricity producers: it is difficult to have anything that amounts to competition among consumers. We cannot easily opt—except at great capital or consumer cost—for oil, gas, coal or electric heating, thereby turning away from the method that we previously used in the home or industry. Theoretically we can do so, and, sometimes, people will.
  However, it is much less easy for consumers to opt for other utilities. We cannot have nuclear-powered microwaves—except in the sense that nuclear power can be fed into the electricity industry and used in microwaves. Nowadays, we do not opt for gas street lighting as distinct from electric lighting. We do not opt for oil-driven television sets as distinct from electrically powered ones. We do not opt for coal-fired computers. It is nonsense to claim that there is competition in those utilities.
  As utilities are privatised, what is to happen to those who will control and own them? Are we to have special legislation to prevent interlocking directorships when the barons of the energy industry grow up to control what is being done? The little people might initially get their hands on a few shares that give them no control over the industry, apart from being able to ensure that it operates according to what are considered to be market principles, which means that the work force and others will suffer considerably.
  In such circumstances, monopolies, duopolies, cartels, or whatever, display considerable similarities. They restrict output to raise prices, control their labour forces by their power, and manipulate demand by advertising. The Government are privatising and doctrinaire. They solidly believe in controlling people by advertising. That is exactly the technique that they use to persuade the electorate to co-operate and to sell off public assets and hand them over to small groups in society.
  The only answer to natural monopolies in public utilities is public ownership, but, by itself, public ownership is not sufficient. We also require public regulation to control how the public industry is run. That means that restraint should be exercised upon any monopoly. The only possible restraints that can be operated upon the monopolies that we are talking about —natural monopolies—are those of a democratic nature. That means producer democracy in which workers operate self-management techniques, and it means consumer democracy in which consumers operate, influence and control.
  One aspect of consumer democracy should be parliamentary democracy. It should be possible, through the operation of parliamentary democracy, civil liberties and rights, and parliamentary and council elections in this country, to influence what takes place. We have an elected dictatorship, rather than a democratic system. The Government are destroying the possibility of producer democracy and consumer democracy, which are the answers to any problems that have emerged.
  The use of private monopoly, duopoly, cartels or whatever we like to call them in the electricity supply industry will lead to massive coal imports from South Africa and Colombia, and the destruction of the remnants of most of the remaining coal industry in this country, especially in north Derbyshire. The north Derbyshire

  843
  coalfield will be under considerable threat. To try to defend its interest, the Coal Board will react by closures and the development of super-pits and opencast mining techniques. The heart of the constituency of Derbyshire, North-East can be ripped out by opencast mining techniques.
  I have a map from the Opencast Executive, which shows that in the rural and Conservative areas of my constituency, which are considerable, there is massive opencast potential. In the working-class areas, where there was a great number of pits, even existing pits will be closed and coal will be mined by opencast methods. That is the approach that the Government will take.
  There will also be an attack upon supply industries that have many export markets. They will be destroyed by the import of coal into this country. Shops and services and the local business rateable values will collapse. There are also social implications. In Derbyshire, for instance, 9,700 jobs are estimated by the Coalfield Communities Campaign to be put at risk because the measures that are associated with this development will produce problems. There is also the development of nuclear power and the nuclear nonsense, and the considerable environmental and social dangers that will be created by it. The Government are introducing a dangerous system of private monopoly power to be used against the interests of people.
  8.27 pm
  Mr. Michael Jack: I am most grateful for your calling me to speak in this debate, Madam Deputy Speaker. I shall try to limit my remarks.
  The Bill is an exciting concept. It opens the electricity industry to a new dynamic. It sets the management of the electricity industry free from Government control for the first time in its life. I can remember, during my days at university, studying economics and, time after time, realising that investment plans for the electricity supply industry had been sacrificed by various post-war Governments on the altar of economic efficiency. That is why we have some of the problems with our electricity supply industry today. The Bill removes obstacles to investment in that vital industry.
  In the document "The Generating Game", published by the Central Electricity Generating Board, there are three statements. They are, that electricity is the power behind modern civilised life; that convenient electricity binds together the fabric of 20th century society; and that with this comes the responsibility to ensure reliable electricity supplies. The Bill responds to those three statements.
  I shall address the main part of my remarks to the point about reliable supplies. From the conversations that I have had with the chairman of the North-Western electricity board, NORWEB, I sense that he and his staff are excited about how the Bill will open up new forms and new sources of electricity generation in the north-west. New sources of energy will be available from the industrial sector. the proponents of combined heat and light production. New sources of nuclear electricity will also be possible. All those opportunities will be available, as well as giving that management the ability to run its company in the interests of its consumers.
  The hon. Member for Banff and Buchan (Mr. Salmond) is unclear about the powers of consumers who are
  844
  shareholders. Many of those people will beat a path to the annual general meetings of electricity supply companies that fail to deliver.
  Some 3,500 of my constituents are, however, concerned about the provisions of the Bill. They work for British Nuclear Fuels plc and make the fuel rods for all our existing nuclear power stations. They want to make the fuel pellets for the PWRs. They strongly believe that what they contribute to the electricity supply of this country is concentrated, reliable energy.
  In my hand I have the equivalent of 1½ tonnes of coal. It is a small pellet from an advanced gas-cooled reactor. It provides a vivid picture of the nature of nuclear electricity. [Interruption.] The hon. Member for Cardiff, West (Mr. Morgan), who has just pretended to faint, demonstrates one of the problems we face—the total irrationality about, and lack of understanding of, the intrinsic safety of nuclear electricity.
  Those 3,500 workers strongly believe that they made the contribution that kept the lights burning when the miners deserted those who needed electricity supplies. They want to be given the chance to make their contribution to our supply of electricity through a newer, slimmed-down, more efficient BNFL.
  When the Bill is considered in Committee, I hope that Ministers will remember the obligations we have to those workers in the nuclear industry in my constituency, at Sellafield and at the other power stations. They must ensure that those parts of the Bill that refer to continuity in the supply of electricity reflect the contribution that nuclear power makes.
  On 20 April 1988, the Under-Secretary of State for Energy, my hon. Friend the Member for Worcestershire, South (Mr. Spicer), spoke at the annual luncheon of the British Nuclear Forum. He said:
  "Nuclear power makes a valuable, indeed vital, contribution to diversity in electricity generation and so to the security of supply. It would be folly to rely on a closely related narrow group of fuels for electricity generation. Fossil fuels historically have shown that they are all, in one way or another, highly volatile in both price and availability."
  Mr. Morgan rose—
  Mr. Jack: I will decline the offer of further information as I still have some to give and little time in which to do so.
  In 1972 there were rota disconnections to the electricity supply. None of us needs reminding of the events during the miners' strike. To put our dependence on nuclear sources of energy into perspective, it should be noted that only 5 per cent. of the total energy usage in this country —not electricity usage—comes from nuclear sources. I believe that that is almost too low a percentage in a world where our hydrocarbon fuel supplies are always at risk.
  I am attempting to advocate the part that nuclear electricity can play in the future of our energy supplies. I am concerned about the Bill because, although, quite rightly, in its later clauses, it reflects the problems of decommissioning our existing Magnox and other nuclear power stations, as drafted, it does not give the same strength of commitment to addressing some of the technical problems particularly associated with the AGRs.
  In Committee, it would be good if Ministers could give some consideration to the cost legacy that will be passed on to the large power generating company that tries to bring the Magnox stations and the older AGRs up to

  845
  power. If we intend to cater for problems at the back end of the industry, it is logical to cater for the problems at the front end of the industry.
  In early December on "This Week", a programme on ITV, it was pointed out that Hinkley Point power station generated electricity at 2·64 per kilowatt hour; Drax power station generates electricity at 2·46p. That is a narrow difference, but it does not take into account the environmental consequences of fossil fuel burning to which my hon. Friend the Member for Wyre (Mr. Mans) ably referred.
  On 11 December an article in the Sunday Telegraph magazine contained the sentence:
  "The lessons for Earth are frightening. Unless we switch radically from the burning of fossil fuels to nuclear power, temperatures on Earth could double by the 22nd century."
  We will not be around then, but we have an important responsibility to lay the foundations for an energy policy that is environmentally safe. Nuclear electricity is a safe form of power generation.
  My constituents who work for British Nuclear Fuels plc want a chance to play their part. Their company has shown a willingness to modify its procedures and to become efficient. It can also tackle the problems of reprocessing, which is vital to maintaining the security of supply of our uranium assets. It can tackle the problem of decommissioning power stations in an efficient way. It is on record as saying that it welcomes electricity privatisation as it will sharpen up its act. British Nuclear Fuels even has the potential to become a nuclear generator in its own right. That is an exciting prospect, and the Bill affords that chance.
  It has been estimated that the cost of removing the oil platforms from the North sea when the oil runs out—nuclear energy can delay that inevitable occurrence—is £6 billion, which is twice the estimated cost of decommissioning our Magnox power stations.
  In making a commitment to the role that nuclear power can play in producing electricity for our country, I plead with Ministers to ensure, for the sake of the public, that there is no compromise on safety within the nuclear industry. That would be a folly for which the public would not easily forgive us.
  I wholeheartedly support the Bill and the role that nuclear power can play in its objectives.
  8.37 pm
  Mr. George J. Buckley: I am grateful for this opportunity to contribute to this debate.
  We have had two days' debate on the problems contained in the Bill. It appears that Conservative Members talk about everything but the electricity industry and the consequences for the economy. I have listened intently to find out what is behind the privatisation proposals. The hon. Member for Fylde (Mr. Jack) spoke of the environmental consequences of using nuclear power, and that is the only point the Prime Minister has made about privatising electricity. She has said that it will provide environmental benefits for the world. No mention has been made of the economic benefits to the nation of privatising the generating boards.
  The Secretary of State has stated four principles to support the Bill. He says that the supply of electricity should be driven by the needs of the customer. That
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  implies that the customer would have a direct input on the supply of electricity. There is no suggestion in the Bill, however, that the customer would have any such influence. Therefore, that reason does not represent a major pillar of principle to justify the privatisation.
  The Secretary of State has also said that competition is the best guarantee of customers' interest. Once again, the Government seem to take the view that anything publicly owned is more efficient and better able to meet the best interests of the customer if it is privatised. Nothing in the Bill says that that will be so. I suspect that the Minister had a great deal of difficulty grappling with the complexity of the national grid. His best effort was to come forward with two generating companies, one to generate 30 per cent. and the other 70 per cent.
  Such percentages have been proposed more to deal with the nuclear side of generation than for anything else. If the percentages were more equally divided between the two companies, the problems of dealing with the liabilities of the nuclear industry that are beginning to develop would face the companies. National Power has been made as big as it is—70 per cent.—as an inducement to people in the private sector to take on the difficult generating capacity of the nuclear industry.
  The Bill outlines a regulatory framework to promote competition, oversee prices and protect customers under the national monopolies that remain. The Government, who are exponents of the theory of the private market, accept in the legislation that it will create monopolies. So regulations will be imposed to protect customers from those monopolies. One of the main points made by Conservative Members is that the public monopoly of the CEGB does not serve the nation efficiently. The Bill provides for monopolies of supply companies in the geographical areas for which they are responsible. There will be no competition in those areas, and no option for customers to choose between different sources of supply. That is a complete contradiction of the Government's philosophy, which is to break up the monopoly of the CEGB.
  Another technical dilemma that the Minister must have faced when considering this legislation was that of how to deal with the national grid, a unique technical apparatus that could not be broken down into smaller companies. So the Minister has come up with a mechanism of two, rather than several, companies.
  One of the most appalling aspects of the legislation is the demanding commitment that 20 per cent. of the electricity supply be drawn from nuclear power. That is almost to impose on the privatised supply industry a commitment to take 20 per cent. of its power generation from nuclear energy, even though it is now proving to be one of the most expensive sources of energy produced by the CEGB. The signs are that the private monopolies—that is what they will be—will be only too pleased to invest in nuclear energy; but the experience of development of nuclear energy leaves much to be desired. The Magnox stations, the first nuclear power stations, were built with an overrun of two and a half years. The AGR at Dungeness B had an overrun of 10 years. Private industry would be reluctant to invest capital in nuclear projects with such large overruns.
  The Government's position accords more with their philosophy of privatisation than with improving the nation's electricity supply. The Government's fourth principle is that security of supply must be maintained, but

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  such security depends more on diversity of supply—by coal, oil, gas and nuclear power—than on the privatisation of the CEGB. The Bill owes more to dogma than to any desire to improve the efficiency of the supply system, and I feel sure that the Committee will amend many of the proposals in the Bill to make it comply with the industry's needs. Some of its clauses are ill thought out.
  Another thing that disturbs me about the legislation is that the privatised supply industry will not be committed to complying with the EEC regulations on environmental standards. Numerous hon. Members have expressed their concern about the environmental effects of coal and oil —the problems of acid rain, and so on. The regulations on refurbishing and replacing existing plant require no investment in ensuring that that is done in accordance with EEC standards. So, while the nation—and even Conservative Members—express concern about the consequences of coal burning for the environment, the legislation does not commit the private companies to doing anything about them.
  The CEGB has been a major innovator and has conducted much research into the development of electricity. Its technology has been at the forefront of power generation. The suggested private companies that will take over from the CEGB will be more reluctant to invest in research and development for the nation's future generating capacity.
  The new private monopolies will be more likely to make domestic consumers pay high prices than to make major industrial consumers do so. I can foresee pressure being applied by the larger consumers to privately owned monopolies to reduce the costs to British industry.
  The burden imposed by the Government with this Bill may be mainly offset by the importation of so-called cheap coal, which will put our indigenous mining industry in jeopardy. Any private enterprise worth its name is more concerned about its investors than its customers. It is a myth put about by Tory Members that the legislation is mainly designed for the consumer, who will have no influence on the privatised industry, and who will be given no safeguards in the legislation.
  The major regulatory factor imposed by the Government was enacted recently by the Minister of State, who imposed 9 per cent. and 6 per cent. increases on CEGB supplies. That regulatory factor will be used by the Government under the Bill to impose higher prices on the industry.
  8.48 pm
  Mr. Quentin Davies: The most striking aspect of the Bill is the boldness and originality of the concept that it embodies. Until now, only two models for the organisation of electricity generation and distribution, or variations or combinations of them, have been practised in the Western world. The first is the model of the public or private sector vertically integrated utility company with an effective regional monopoly. That is the model which obtains in Germany and the United States and household names in those countries, such as RWE and Con-Edison, are excellent illustrations of it. The other model is the nationwide, vertically integrated, publicly owned monopoly, of which EDF in France and the CEGB in England and Wales are among the most distinguished examples.
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  My right hon. Friend the Secretary of State has launched today a completely new departure which represents a third option that has never been tried before. Its novelty and originality appeared to the hon. Member for Sedgefield (Mr. Blair) as a condemnation in themselves. That may be an interesting sidelight on the intellectual state of the modern Labour party, but it is a short-sighted view to take. I am convinced that, in a number of respects, the new model represents a real advance on previous thinking in this important area of industry.
  I shall highlight three of the aspects in which the Bill represents such an advance. First, for the first time, we shall have real competition in power generation in this country. That means that for the first time the British public will have the assurance that resources in this area are being used efficiently, and they will be the first public in the world to have that assurance. The CEGB, unique among monopolies in world history, may have been able to avoid generating any monopoly costs of its own. It may be that it does not suffer from overmanning, from feather-bedding of any kind or from cosy relationships with particular suppliers: we shall see. There are two possibilities: either we shall have the evidence that, until now, electricity has indeed been generated as cheaply as possible, or we shall succeed in saving those monopoly costs.
  The second important benefit that the Bill will bring is the assurance that all existing generating capacity in this country will be used efficiently, including that standby or surplus primary capacity that exists at present in British manufacturing industry. Under the present regime, there is no way that that existing capacity can be used efficiently, since, effectively, the electricity produced by it can be offered for sale only to the CEGB, which is itself the major competitor of these potential suppliers. That anomaly will be removed by the separation of the national grid from the generating industry.
  The third great advance represented by the Bill, which has not been mentioned in the debate so far but is worthy of the attention of the House, is that, for the first time, we shall achieve real diversification among suppliers of electricity in this country. I do not just mean diversification between alternative sources of energy. Theoretically, we can achieve that even with a single monopoly producer. That has already been achieved under the CEGB regime, although arguably to a very inadequate degree. Diversification between suppliers does not just mean diversification between alternative sources of energy. It does not just mean the benefit of achieving the cost reductions through competition that I have already mentioned. It means that we shall also be diversifying those investment risks that are so crucial in the electricity generation business.
  At present, only one body of men takes the key investment decisions about where and how new generating capacity will be constructed. In future, a whole range of companies will take those decisions. Precisely because the uncertainty of the assumptions that need to be made when investment decisions are taken in this sector is so high, particularly the uncertainty of the assumptions that must be made about the future costs of energy, and because the lead times in respect of construction and commissioning in this sector of industry are so long, those risks are inordinately high and anything that we can do to reduce those risks is well worth while.

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  I have no doubt that, left to itself under the present regime, the CEGB, if decided as it apparently has, that we shall need approximately 12,000 MW of additional power between now and the end of the century, it would proceed in its normal way to construct four or five conventional thermal or nuclear power stations. Perhaps we should invest more in alternative renewable sources of energy, or in gas turbine-generated energy which, as the House knows, has the highest thermal efficiency of all, about 56 per cent. Thermal efficiency, unlike energy prices, does not vary, except very slowly with improvements in technology.
  However, it would be wrong for any individual or single body of men to reserve to himself or to themselves the decisions that will need to be taken in this area. It is important to diversify the source of those decisions. Diversification of risk in this area, as with diversification of risk in any area, means reduction of risk. Over time, reduction of risk means reduction of cost. Here again, we are scoring a real advance in the Bill.
  Finally, I wish to say a few words about the distribution companies. It is utterly absurd for Opposition Members to hint, as they have done in the debate, that we should somehow attempt to break the natural monopoly in distribution. Surely they do not seriously mean to say that we should duplicate or triplicate the enormous fixed assets involved in a domestic distribution network.
  In the Bill, we have gone over to a concept that has not been mentioned by Opposition Members, but which they would do well to contemplate. It is the concept of yardstick competition, the ability of both the market and regulators to assess the economic performance of a distribution company by reference to the performance of other comparable companies in the same sector of activity. It is an entirely new concept to be introduced into the electricity industry. It is full of promise and makes me confident that I can commend to the House as much the proposals on distribution as those on the generation of electricity.
  I am convinced that, in years to come, the British public and the British media will give accolades of gratitude to my right hon. Friend the Secretary of State both for the boldness with which he has conceived the structure of the electricity industry as enshrined in the Bill and for his courage in putting over, and, I believe, already successfully persuading a great part of the establishment in the generating and distribution sectors of the industry to accept, the merits of his new concept. I believe also that in the coming months we shall see his success in persuading the House of the merits of that concept also.
  9 pm
  Dr. Lewis Moonie: When wind power becomes a commercial proposition, I shall be first in the queue to buy shares in Tory Back Benchers. We have just heard one of the most flatulent contributions from a Conservative Member during a debate in which the contributions from those on the Conservative Benches have rarely risen above the banal. They seem to think that we are talking about self-evident truths. They suggest that privatisation must mean competition and a better deal for consumers. No one has yet provided us with the slightest piece of information that might support that contention.
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  What are the United Kingdom's electricity needs? We need a cheap source of power, a secure supply, environmental safety and regard to the satisfaction of increased demands in future. After privatisation, however, the industry will have one aim only, and that will be to maximise profitability on behalf of shareholders. It will seek to maximise the return on the capital that is deployed. It will pursue that aim through minimal price competition, through the development of a cartel, as we see in so many industries that are dominated by a few producers. It will seek the cheapest source of supply. In doing so, it will have minimal regard to strategic issues such as future investment in plant. It will show minimal concern for the consumer and minimal regard for indigenous sources of supply. Unemployment and misery will be caused as a result.
  The need for profitability will lead the industry to sell as much electricity as possible. There will be no incentive for it to save energy and it will use all that is produced. It will minimise the drive for the creation of new plant, as it will wish to maximise the return of capital. This may lead in future to under-development, gaps in provision and shortages for consumers. Consumers will face increasing prices, increasing insecurity and probably a reduction in safety.
  The main problem is that the power requirement in future will increase, and all methods of generating it have environmentally deleterious effects. We have heard nuclear power described so glowingly by Conservative Members, but perhaps that is an inappropriate term. There is the problem of low-level emission radiation, which is generally accepted by my profession to be a bad thing. There is the more unlikely but finite possibility of catastrophic accidents at nuclear plants. In a crowded country such as ours, such accidents would sterilise a large section of our land.
  There is the problem of storage of spent fuel and its processing. There is the problem of decommissioning power stations when they have reached the end of their useful life. There is the problem also—it has not been mentioned by Conservative Members—of difficulties in the supply of fuel. We do not produce our own fuel for nuclear power stations, and there is no guarantee of stability in price or in supply. The fuel comes from South Africa, Namibia, Zaire and Bolivia, for example. These are countries which have poor safety records for their workers, and the likelihood of stable future political conditions cannot be guaranteed.
  At present, nuclear power is not a good option. We have that admission from the lips of the director of the South of Scotland electricity board, Mr. Miller. There is no doubt, however, that there are future possibilities for the supply of nuclear generated electricity. We have the fast breeder technology and the developments at Dounreay. There is also the possibility of nuclear fusion. I shall return briefly to these possibilities and developments at the end of my speech.
  The other main source of supply is coal, of which we have vast indigenous supplies. At present, it is relatively cheap, and it is likely to remain so. Coal-fired power stations are cheaper to build than nuclear stations and are generally safer and more economical. Smaller coal-fired power stations are suitable for combined heat and power projects, especially when the fluidised bed method of burning the stuff is used, which offers a more efficient utilisation of fuel.

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  Of course there are problems with coal. Burning coal emits sulphur and nitrous oxides which can be removed by burning low-sulphur coal which ex-miners in my constituency, if they were given the chance, would be delighted to produce, because my constituency sits on about 12 ft of such coal. Alternatively, and more expensively, the emissions may be treated by scrubbing the noxious gases on a sluice.
  Carbon dioxide is also a problem. Conservative Members have made much of that problem, but we must recognise that burning coal does not produce much carbon dioxide compared with the burning of fuel generally and the loss of the biomass in the tropical rain forest. It is interesting that an American company which is about to build a power station has agreed, as part of the deal, to replace a proportion of the biomass in the tropical area, thereby reducing the contribution of the emissions to the overall load of carbon dioxide in the atmosphere. We must surely consider that, but it has not been considered so far in this country. It is possible to diminish the effects of carbon dioxide release if we are prepared to take action.
  Sadly, other alternatives like wave, wind, tidal power, geothermal or solar sources are not yet commercially viable. Bearing in mind cost and feasibility, such alternative power supplies can only be considered in future. What are the needs for a national strategy? We must consider the long-term need for cheap, secure and expanding supplies of energy. At present, coal is undoubtedly the cheapest option.
  Nuclear power is currently too expensive and too risky, even if we consider the pressurised water reactor programme. which I believe should be abandoned. Perhaps, in future, nuclear energy will have a part to play. We should continue to invest very heavily in research into ways to make that a reality, particular in fast breeder technology and nuclear fusion. Sadly, the Government are reducing their investment in those areas. We must also study the safety aspects more carefully, particularly with regard to the decommissioning programme on the Magnox stations. Nuclear power may well have a role to play in future, but it has very little role to play at present other than in providing expensive electricity for a hapless consumer.
  The main alternative must be to maximise the efficiency of utilisation of supplies. There will be no incentive for a privatised electricity industry to do that. Its incentive would be to sell as much as possible. As responsible politicians, our incentive should be to minimise consumption through better insulation and utilisation and through the use of energy-efficient appliances and storage systems like those used by the North of Scotland Hydro-Electric Board. We must consider the development of alternative sources and carry out feasibility studies on wind, wave and tidal power. If we do that, we can be certain of a secure supply of energy in future. The Government's proposals do not offer us that option.
  9.7 pm
  Mr. Frank Haynes: I have listened to this debate over the past two days, but I have not yet heard anyone raise the question of safety and nuclear power. I have heard many contributions, particularly from Conservative Members.
  I am perhaps nearly the oldest member in the Chamber at the moment—and I am not speaking about you, Mr.
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  Deputy Speaker. I am not trying to drag you into this argument. I remember the days as a lad when we had candles and oil lamps. I was born in 1926 so I remember all that. We also had gas, but we did not have electricity. It was around but only if one could afford it. It was there, but what happened? The electricity suppliers were not bothered about expansion; they were concerned only about pouring money into their pockets through profits.
  The Secretary of State for Energy wants to take us back to the Victorian era, and we ain't going. I will tell him that straight. The Secretary of State had better watch out when the Bill goes upstairs to Committee because I will be a member of that Committee. I will be whipping that Bill for the Opposition and I want to see the Secretary of State in his place every time we sit. I am sure that we shall have a good argument in Committee.
  Competition has been mentioned time and time again, but it has not yet been proved to me where the competition will be. There will be one industry that provides electricity, as there is today. I welcomed the election of a Labour Government in 1945, and they were a marvellous Government. They saved the electricity industry and they expanded it nationwide, so that everyone who wanted electricity could have it.
  The hon. Member for Stamford and Spalding (Mr. Davies) spoke about electricity. All he knew about it when he was a baby and had nappies on was that he put his hand on the wall and switched on the light. That was not the case when I was a kid. All he had to do was to switch on an electric heater, but we had to hug ourselves to keep warm. I remember the days of trams. When the track was being relaid, we would get the wooden blocks to burn for warmth. These lads do not know anything about that because they were not born then. The Secretary of State can take the grin off his face or I shall knock it off in Committee—by God, I shall.
  I have had few moments to myself over the past two days because I have been busy on the Front Bench whipping the Bill. The House will hear the reports of the success that we shall have in the argument in Committee. We shall not win the vote, but we shall win the argument, and the Secretary of State and his team will see that what they have produced in the Bill is not what the British public wants.
  9.12 pm
  Mr. Kevin Barron: It is good to follow such a stirring speech by my hon. Friend the Member for Ashfield (Mr. Haynes). His stirring contribution was short, but his contribution in Committee may be longer. It may be longer than the Secretary of State's contribution —but we shall have to wait and see.
  First, I want to thank my hon. Friend the Member for Midlothian (Mr. Eadie) who, for 16 years, has given great service to the Labour party as my predecessor on the Front Bench energy team. With his customary elegance, he showed once again in his contribution yesterday his skill in highlighting the contradictions in Government policies. My hon. Friend said that the Government's blatant preference for the use of nuclear power cannot be argued on price. The Bill has certainly given up the ghost of arguing that. I, like him, resent the attempts to build up the case for nuclear power by attacking the coal industry—which he highlighted yesterday.

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  The real effect of the Bill will be felt in every shop, office, factory and home in Great Britain. That was pointed out by the right hon. Member for Selby (Mr. Alison) who is not in his place now—who said that the coal and electricity industries are inextricably linked. The issue is inseparable from the future of many industries such as the railways, power engineering and major industrial energy users such as the steel, glass and chemicals industries.
  I have a briefing, which the Chemical Industries Association Ltd. sent to me. It comments on the effects of the Bill on the prices that those industries, as big consumers of energy in this country, will have to pay.
  Under the heading "Prices and Price Control", the CIA explains that it does not accept the reasons given for increasing electricity prices by more than 8 per cent. this year, by a further 6 per cent. next April and possibly the same again in 1990. It goes on to say that it believes that any price control formula should take 1987 as its base year —excluding the privatisation sales booster increases that the Government imposed earlier this year.
  The proposals have already affected electricity costs; there is no doubt about that. The price increases that the Government forced on the industry last April, together with next April's price hike amount to an increase of more than 15 per cent. Those added costs are all directly related to the substance of the Bill.
  On 3 November 1987, the Secretary of State for Energy tried to dismiss the price increases by saying that they were to do with raising revenues in the industry. He said:
  "In considering the targets for these years, the Government have had to take into account the fact that, although in the recent past the electricity supply industry has had surplus capacity, that position is now changing. On current forecasts, the Central Electricity Generating Board envisages that at least 13 GW of new capacity will be needed to meet demand by the end of the century."—[Official Report, 3 November 1987; Vol. 121, c. 801.]
  The Government moved into funding privatisation of the electricity supply industry in November 1987.
  For many years the medium-term development plan that was used by the CEGB was the one thing that set prices for the electricity supply industry that took into account all the costs of new build, and so on. The report dealing with the period from 1986 to 1993 said:
  "On the assumptions upon which these forecasts are based, retail tariff increases over the plan period will be below the rate of general inflation."
  I put it to the Secretary of State that that is certainly not what happened in April this year or what is planned for April next year.
  Perhaps the Secretary of State can be forgiven. He has great difficulty in understanding the price implications. The House will recall that yesterday, when my hon. Friend the Member for Sedgefield (Mr. Blair) said that private sector electricity in comparable industrial countries was expensive, the Secretary of State said:
  "Prices in Japan are almost twice ours, and prices in West Germany are about 50 per cent. higher."—[Official Report, 12 December 1988; Vol. 143, c. 689.]
  That shows what a muddle the Government are in. It is obvious to most informed commentators that under private ownership the price of electricity will rise, although we shall have to wait and see whether prices will be as high as in Germany and Japan.
  Dr. Michael Clark: The hon. Gentleman has been talking about prices. Will he take into account the fact that, in the five years to October this year, electricity prices have risen by 2·8 per cent. per annum whereas during the five years of the last Labour Government they rose by 22 per cent. every year?
  Mr. Barron: That may have had something to do with the cost of base fuels to the electricity supply industry, but I shall consider that question later in my speech.
  I was referring to the position of the Secretary of State as regards the price of electricity and suggesting that it would rise under private ownership. This will happen mainly as a result of the Government's obsession with nuclear power—an obsession which, to be fair, was not entertained by the current Conservative Government alone, but an obsession that has failed the nation in its promise of fuel so cheap that it would eventually not be worth printing electricity bills requesting payment for it.
  The reality of that obsession has been the failure to meet construction targets on costs, times and production levels. At their peak, Magnox stations have only ever produced 3·8 GW, compared with an expectation of 5 GW. The AGRs, which by 1975 were planned to provide some 8 GW, have a current output capacity of 2·7 GW. After many years we have learnt the truth about the economic cost of Britain's nuclear power programme.
  Mr. Tony Marlow: The hon. Gentleman says that the Conservative party has an obsession with nuclear power. He seems to think that, by definition, nuclear power is much more expensive than electricity generated in any other way. Why is it that in France, which has much more nuclear power than we have, electricity is much more cheaply produced than here?
  Mr. Barron: Let me direct the hon. Gentleman's attention to the Library note on the cost of electricity generation in Britain compared with that in France. He will see from that independent assessment that the cost of electricity generated by privatised nuclear power in France is far higher than that generated in the public sector in Britain.
  Mr. Quentin Davies rose—
  Mr. Barron: May I continue?
  In October 1987, in a television interview, Lord Marshall described the British nuclear power industry. For perhaps the first time since the nuclear industry had been set up in Britain, people who knew about it were beginning to tell the truth.
  In "Brass Tacks" on BBC—I hope it is not too difficult for Conservative Members to accept that we still have a British Broadcasting Corporation—the interviewer referred to a letter that had been sent by the CEGB to the "Stop Sizewell B" campaign in December 1986 which said that Magnox stations had been saving consumers about £250 million a year. In answer to a question, Lord Marshall said:
  "You are correct to say on the Magnox stations as a whole, whether or not Magnox has been an economic bargain or not in the narrow sense does depend on their performance in the future and the price of coal in the future, so in that sense it's jam tomorrow."
  The interviewer then said:
  "And that's also true of the AGRs?"
  Lord Marshall replied:

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  "That is bound to be the case because we've only got some of them working just in the last few years."
  If even the most ardent supporter of nuclear power accepts its failure, why will not the Government?
  The Bill contains a nuclear levy and tax. Will the Secretary of State for "Nuclear" Energy tell us exactly what the nuclear levy in clause 31 is for? Is it to finance the expensive Magnox and AGR costs now and the PWR costs in future? Does it also include the cost of building the new family of PWRs? What is clause 31 for?
  The Secretary of State for Energy (Mr. Cecil Parkinson): Clause 31 is straightforward. At the moment, a cost for nuclear energy is built into an electricity bill. It is being paid now. It has been paid for the past 30 years. We are isolating it and demonstrating exactly what it is. If there is a difference between that and fossil fuel prices, we shall spread it over all fossil fuels. It is not a new tax or anything invented; it identifies the expense.
  Let me make one other point. The hon. Gentleman has probably forgotten that the AGR programme was imposed on Britain by a Labour Government.
  Mr. Barron: I acknowledged that earlier. I am sure that the Secretary of State for "Nuclear" Energy did not miss it.
  What the right hon. Gentleman has said is that this is to pay for a nuclear programme. It is to pay for the PWR programme that the CEGB has said in evidence is more expensive than British coal. It is the penalty that consumers will have to pay for the Government's obsession with nuclear power.
  As the debate got nearer, the sound of the bugle of retreat was heard louder and louder. We are now led to believe that the nuclear levy is to pay for the nuclear programme. In The Observer on Sunday, the Department of Energy said:
  "the levy would not, as expected, go to subsidise the multi-billion pound construction of a new family of nuclear reactors. A department spokesman said National Power, the new generating company responsible for nuclear energy, will be expected to raise the finance on the market like everybody else."
  If that is so, why the levy?
  We are led to believe that the reason for that decision is, according to the Secretary of State in his speech yesterday to maintain a strong nuclear industry. Yet the British nuclear industry has never been strong, either in security of supply or economics. It is not the diversity of supply that concentrates the minds of industrial and domestic consumers, but security of supply, and it is that which the Bill puts at risk.
  The current forecast of demand by the year 2000 is 56·9 GW. Between now and then, over 5,000 MW of coal capacity is to be closed together with over 1,000 MW of oil and nearly 3,000 MW of nuclear power.
  It is predicted that necessary capacity for the year 2000 will be between 12 or 15 GW. We are led to believe that nuclear power, if it comes on stream, will provide us with about one third of that need. We have heard from the Association of Independent Electricity Producers that the maximum capacity that could be supplied by private generators would be about 4 GW.
  Another option that could be used to meet future demand—I do not know whether it is being considered —is the refurbishment, rather than retirement, of coal-fired power stations. A decision on that should be
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  taken as soon as possible, since a programme of refurbishment would be carried out over years, not overnight.
  Opposition Members would welcome the addition to our electricity supplies of the long overdue combined heat and power schemes. Their contribution will of necessity be small. Given that the applications for new generators, which are talked about but never named, are likely to be top-up stations rather than for baseload generation, there must be a major question about whether the short-termism of the newly privatised industry is adequate to ensure the efficient replacement of retiring stations.
  Replacing baseload capacity that is being lost involves many "ifs". We cannot risk any shortfall in supply and, therefore, the building of a big coal-fired power station is imperative. That should not be on a green-field site because we have seen the problems at Fawley, but it could be built somewhere like West Burton. That is necessary if the Government are to show that they are concerned about security of supply. It would bridge the gap between the supply and demand forecast and would enable the CEGB to do what it is good at. No matter what its critics have said, it is good at using proven technology to guarantee security of supply in this country, and a new coal-fired power station in the midlands coalfields would be able to do that.
  The Secretary of State has a problem in his reluctance to discuss the strategic role to be played by the British coal mining industry. The Government have chosen to ignore a major fuel supplier in electricity generation. My hon. Friend the Member for Barnsley, Central (Mr. Illsley) said in his contribution to yesterday's debate that British Coal's half-year operating profit was £119 million—the best half-yearly figure that it has reported in 20 years. Unfortunately, the press conference and the debate surrounding that result had an atmosphere more like that of a wake than a celebration, and talk by media pundits of a rundown in British coal mining on top of the 10,000 to 20,000 jobs that have already been lost was totally uncalled for—yet it was not contradicted by British Coal or the Secretary of State for Energy.
  Instead, we must grow used to indifference and the perpetual stance taken by the Tory Government to the domestic coal mining industry. Of course the Secretary of State speaks of investing large sums of taxpayers' money, to ensure that we have a modern and competitive coal industry. However, the right hon. Gentleman gave evidence to the Select Committee, which commented that such observations avoided the real issue.
  The issue is simple. Today, the British coal industry simultaneously faces two major problems: first, the need to establish a new commercial relationship with the electricity supply industry; secondly, the unprecedented low level of international seam coal prices. To ignore them, and to suffer more job losses while having increased dependency on imports, will be of no use to this country.
  At the heart of the matter is the Government's involvement in the historic pledge argument. The Secretary of State for Energy made an historic pledge at this year's Conservative party conference. I have some experience of historic pledges, and I say to the right hon. Gentleman that there are few occasions on which they are worth the paper they are written on. In my experience, few historic pledges have ever come true. We shall have to wait to see whether that of the Secretary of State does.

  857
  The Select Committee on Energy, with its majority Conservative membership, clearly summed up the Government's attitude in its conclusions. The Select Committee said that it was disturbed at the uneven treatment being given by the Government to coal and nuclear power. The problems of nuclear power have been glossed over, while there has traditionally been emotional hostility towards coal mining. Such hostility does not go back just to my time in the industry but for generations; the Tory party's hostility to it is well known.
  It must be difficult for the Secretary of State for Energy to accept that in the last few years the British coal industry has lowered prices by 20 per cent. in real terms, reduced costs by 30 per cent. in real terms, and increased productivity by 75 per cent. in real terms. All that has been done at some economic and social cost to mining communities, with every one of them still having an unhealthy share of the nation's unemployed—very much so. And in his speech yesterday, the right hon. Gentleman said that he did not know the projected likely fossil fuel costs for years to come.
  The Electricity Bill is not born out of consumer needs, it does not argue the case for privatisation of the electricity supply, and its claims to introduce competition are fictitious. Most Conservative Members have had to apologise when, having trawled through the Bill, they failed to find where it introduces competition.
  In his speech on 12 October to the Tory party conference in Brighton, the Secretary of State claimed that this was the first privatisation to be regionally based. He said:
  "In privatising the area boards, we shall be creating 12 powerful companies, each with its headquarters and decision-making in the region that it serves."
  He gave the example, and I am pleased that he did, of the Yorkshire electricity board. He said that the decision that governs the quality and price of electricity supply to my home will be made in Yorkshire by Yorkshire men answerable to the people of Yorkshire, and that domination by London will be a thing of the past.
  The Secretary of State obviously has plans to move his Department up to Yorkshire. He is obviously going to appoint a director-general and/or agent who comes from Yorkshire and has offices in Leeds, London and Edinburgh. That must be his master plan, because he knows as well as I do that any major decisions on electricity will be made by the Secretary of State for Energy and the director-general. They will decide the price of electricity; they will set the nuclear tax and levy; they will set the costs of transmission; they will issue the licences for generators and supply boards; they will be responsible for security and sufficiency of supply.
  As has been pointed out by many hon. Members and highlighted by the hon. Member for Havant (Sir I. Lloyd), Chairman of the Select Committee on Energy, the Secretary of State will be involved in detailed obligations in no few than 67 distinct and separate parts of the Bill. The Bill does not offer consumer choice, but says, "Take it or leave it." It has not satisfied the concerns of industries whose energy costs are a major part of their expenditure. It has not satisfied the needs of consumers, nor has it quelled the doubts of the 55 per cent. of the British public
  858
  who want the electricity industry to stay in the public sector. We shall speak for them tonight, and vote against the Bill.
  9.36 pm
  The Parliamentary Under-Secretary of State for Energy (Mr. Michael Spicer): Let me begin by asking the hon. Member for Rother Valley (Mr. Barron) a question. In answer to an intervention by my hon. Friend the Member for Rochford (Dr. Clark), who asked why electricity prices had gone up by 180 per cent. under the last Labour Government, I believe that he said, "Fuel costs." Does that explain why postal charges went up by 147 per cent., rail charges by 171 per cent., bus fares by 150 per cent. and water charges by 150 per cent? He need not answer now; a letter will do.
  The gist, as I have understood it, of what the hon. Member for Rother Valley was saying when he was not talking about coal—the gist, indeed, of much of what Opposition Members have said over the past two days —is that the British electricity supply industry operates in a state close to perfection. In the imagination of Opposition Members, electricity consumers, distributors and the one producer apparently pull together in almost perfect harmony. Investment decisions planned and executed by that one producer flow through with such precision as to ensure that costs are at a minimum, power stations work with total efficiency, electricity is priced as low as it can be and service can only be described as pastoral.
  That imagery has only one flaw: it is not true, and many of my right hon. and hon. Friends have spoken eloquently to that effect over the past two days. Yesterday, particularly good speeches were made by my right hon. Friends for Selby (Mr. Alison) and for Guildford (Mr. Howell) and by my hon. Friend, the Member for Birmingham, Northfield (Mr. King). Today we heard from my hon. Friends the Members for Cambridgeshire, North-East (Mr. Moss), for Eastwood (Mr. Stewart), for Ipswich (Mr. Irvine), for Wyre (Mr. Mans), for Dorset, South (Mr. Bruce), for Thurrock (Mr. Janman), for Stamford and Spalding (Mr. Davies), for Romsey and Waterside (Mr. Colvin), for Fylde (Mr. Jack) and for Birmingham, Hall Green (Mr. Hargreaves). The first part of what my hon. Friend the Member for St. Ives (Mr. Harris) had to say was also eloquent and excellent. All those speeches were in favour of radical change in the industry.
  Yardsticks in a monopolistic state-controlled industry are, of course, hard to find. But if efficiency is to be measured, for instance, by the rate of return on capital, it must be realised that this is so low in the electricity supply industry that it falls short even of the rate of return rules for new investment in the public sector laid down by the last Labour Government.
  When the Government have insisted that rates of return are raised to a realistic level to prepare the industry for the massive new investment in plant and machinery that will be required over the next 10 years, the industry's main response has been not to cut costs but to raise prices. Nor should we be surprised that that should be so, because 80 per cent. of the costs of producing electricity in England and Wales are at present associated with a single producer which is allowed to pass its costs, whatever they are and however they are set, straight through to the customer. We

  859
  have no real way of judging whether those costs are defensible. It is intrinsic to the system that there are few benchmarks by which we can judge efficiency within the
  Contrary to what has been said by the Opposition, the British electricity supply industry has been operating for several years with expensive excess capacity, with power stations which have not been built to time and cost, and several of which in England and Wales still do not produce electricity efficiently. The Opposition do not appreciate it, but we know that all that is paid for by the customer. The repeated bleat has gone up throughout the debate from the Opposition Benches asking us why we wish to restructure the industry and why we wish to privatise it. It is because, by a process of introducing competition where it most directly affects costs, of regulating the monopoly sectors in support of the consumer, of encouraging employees to own their own shares and of launching great new regional centres of power, we mean radically to improve the system. That is the answer to the question: "Why privatise?".
  In a moment I shall answer some of the other questions raised on both sides of the House about how much competition and how much regulation. Let me deal first with some of the specific points which have been touched on in the debate. [Interruption.]
  The hon. Member for Glasgow, Garscadden (Mr. Dewar) asked about special shares. Arrangements will be put in place to safeguard the independence of the area boards, National Power, Power Gen, the national grid and the two Scottish companies. The articles of the companies will restrict individuals and companies from building up a shareholding of more than 15 per cent. That will be reinforced by a special share to be held by the Government.
  Questions have been asked, in particular by my hon. Friend the Member for Romsey and Waterside, about the effect of the Bill on the conservation of electricity and the environment. A number of hon. Members have raised that issue. The answer is that the Bill is likely to have a highly beneficial effect on conservation and the environment. That is partly because the Director General of Electricity Supply will have a specific statutory duty to promote energy efficiency, partly because access to the system will encourage on to it generators with smaller, less polluting, highly modernised stations—CHP has been mentioned several times in the debate, and of course that will be one source of energy that will be encouraged—and partly because a special arrangement for non-fossil fuel sources will benefit renewable energy such as the Mersey barrage which has been mentioned by the right hon. Member for Plymouth, Devonport (Dr. Owen), the other barrages, and wind power which has been mentioned on several occasions. I am informed that clause 30 is the first time that wind power has been mentioned specifically in any statute.
  The effect of privatisation on prices was also raised. The Opposition quite falsely have suggested that the privatisation process will raise prices. Our judgment is the reverse. The presence of competition is bound to create greater efficiency in that part of the industry which currently comprises three quarters of its costs—in other words, generation.
  Mr. Salmond: The Minister keeps referring to the British electricity supply industry, but how on earth can
  860
  the argument he has just made be applied to the Scottish electricity industry, where there is no competition whatsoever in generation?
  Mr. Spicer: Nine tenths of the industry is English and Welsh electricity. It is worth making that point in the context of all the barracking by Scottish Members. It is rubbish to say that there will be no competition in Scotland and, if the hon. Gentleman will allow me, I shall tell him precisely why.
  It is true that the massive investment programme which lies ahead will have to be paid for. In the present circumstances, the bills for that can be shared only between the consumer and the taxpayer. Someone has to pay for this massive investment. In future, the shareholder will join in the risk and, of course, will expect to receive dividends in return for doing so. We shall certainly not permit the supply companies to pass through into prices all the cost increases that they incur. They will therefore have the incentive to contract as efficiently as possible for future generating capacity.
  Several hon. Members have argued that we should not have made special provisions for nuclear power. [Interruption.]
  Mr. Speaker: Order. Hon. Members should not carry on private conversations in the middle of an important speech.
  Mr. Spicer: Some Opposition Members have simply been confused, but I am sure that others have been perverse. The provision that the Government have made for the making of grants, loans and guarantees relates in particular to future costs which the industry could not have been able to forsee, arising, for example, out of changes in Government policy or changes in the policy of the responsible regulator. This would be true, for instance, if a policy were introduced rapidly to speed up the process of decommissioning. The industry will certainly be expected to continue to make full and proper provision for all foreseen decommissioning, reprocessing and waste management costs. It does so at present for England and Wales at a cost of between £2 billion and £3 billion.
  We have said that, while the consumer will pay, as he does now, for the benefits of diversity which nuclear-generated electricity provides, in future—the Opposition have consistently failed to understand this point—he will pay on a transparent basis and not, as now, on the basis of accounts which confuse nuclear and other fuel sources in such a way as to make them unidentifiable.
  We expect—unlike the right hon. Member for Devonport—that the introduction of modern and highly efficient PWRs will lead in time to the need for special treatment for the nuclear industry falling away. It is certainly our desire that all forms of power generation should ultimately compete on the same footing. The argument that coal is being unfairly treated compared with nuclear—the theme of the speech of the hon. Member for Rother Valley—is absurd when one considers the £9 billion of taxpayers' money that has been spent in the past nine years and add to that the enormous amounts—currently running at £550 million a year—which consumers of electricity have been paying, over the odds, for British coal.
  Mr. Barron: The basis of that figure has been widely disputed, even by the CEGB. How much money will be spent on the nuclear levy which the Bill introduces?
  Mr. Spicer: The CEGB's estimate is much higher—the hon. Gentleman is right to say that the figure is disputed. We take a rather modest figure.
  Since the war—this matter is not disputed—the equivalent of £19 billion in today's money has been paid by the taxpayer to the coal industry. To say that the coal industry is being unfairly treated in these circumstances is bizarre.
  The question has been raised as to why Scotland is being treated differently from England and Wales in the Bill. The answer in part is that the vast majority of the Bill covers Scotland, England and Wales identically. The differences apply where the nature and structure of the two industries are different. In England and Wales, nuclear accounts for only 16 per cent. of the electricity produced—
  Mr. Douglas: Come on.
  Mr. Spicer: The hon. Gentleman may know this, but many people have asked this question.
  Mr. Douglas: The Minister, who is a pleasant gentleman, should try to understand that the root of the objection is not that Scotland is being treated differently, but that because it is different it should have a separate Bill.
  Mr. Spicer: My right hon. and learned Friend the Secretary of State for Scotland spent a great deal of time explaining that, but perhaps the hon. Member for Dunfermline, West (Mr. Douglas) was not in the Chamber at the time. [Interruption.] I understand that he was. There are some differences. Proportionally, Scotland has four times as much nuclear power as England and Wales, has a vastly greater amount of hydro-electricity and is a different market place. It is clear that we had to cater for some differences north of the border.
  The hon. Member for Ashfield (Mr. Haynes), who is sitting on the Opposition Front Bench, raised the question of safety. I can tell him categorically that the industry will be safe in private hands. All hon. Members accept that safety standards, especially in the nuclear industry, are excellent. They will remain precisely the same after privatisation and nuclear safety will continue to be policed after privatisation by the nuclear installations inspectorate. Some hon. Members have argued that in future the industry is to be too heavily regulated.
  Mr. Orme: The Minister says that nuclear safety will remain in future as it is at present. Will the commission be answerable to Parliament in the way that it is presently answerable?
  Mr. Spicer: Yes, of course it will. I am glad that the right hon. Gentleman reminded me about that specific question.
  As I say, some hon. Members have argued that we are to regulate the industry too heavily and other hon. Members have argued just as vehemently that we have put the industry on too loose a rein. The House may therefore feel that we have got it about right. The principle that has guided us has been that those parts of the industry where it is most difficult to inject competition, for instance the grid company and the supply companies, should be the
  862
  most rightly regulated. It is fairly natural for us to do that, but even here the role of regulation will be to bring as much competition into the industry as possible.
  For instance, we expect that the Director General of Electricity Supply will particularly have in mind, in his approach for example to the grid company, the need to allow maximum access to new entrants commensurate with the well-being and safety of the system. On the other hand we think that there is little need for economic regulation at the generating end of the industry.
  Contrary to what the Opposition have said, we think that we will achieve growing and genuine competition by splitting the CEGB into two companies, by allowing distribution companies up to a maximum of 15 per cent. own generation and by encouraging new companies to come in.
  I now turn to the word that the Opposition dare not speak—renationalisation. In answer to questions yesterday from my hon. Friends the Members for Lewisham, West (Mr. Maples) and for Rochford, the hon. Member for Sedgefield (Mr. Blair) said of the electricity industry:
  "When we come to power it will be reinstated as a public service for the people of this country, and will not be run for private profit."
  Later, when pressed by my hon. Friend the Member for Rochford, he said:
  "We will reinstate it as a proper public service under public control."—[Official Report, 12 December 1988; Vol. 143, c. 689-696.]
  I must ask him what that means. If it is Socialist yuppy-speak for renationalisation, then one day I suspect that he will be bound to have to tell the electorate the terms on which he will buy out the shareholders, particularly those shareholders who are also employees of the industry. If he does not mean renationalisation and is just putting up token opposition, I must tell him that we understand—it is what he is there to do—but I fear that it will not exactly improve his credibility.
  I refer next to what has perhaps been the essential thrust of the Opposition's Front Bench attack on the Bill in the past few days. Opposition Members have argued that, under the terms of the Bill, there will be insufficient competition. At least, that is what I understood the hon. Member for Sedgefield to imply. In bringing competition into the forefront of the debate, Opposition Members have taken the debate on to our territory, and for that we must be grateful.
  I am not sure what the Labour party knows about competition. Yesterday, the hon. Member for Sedgefield said:
  "The truth is that there is no competitive pressure in this structure at the point of consumption, which is the only competitive pressure that matters."—[Official Report, 12 December 1988; Vol. 143, c. 692.]
  When, as in the case of electricity, three quarters of costs are at the point of production, that is manifest nonsense, and the hon. Gentleman knows it. He does not believe it himself—he is grinning. Of course he cannot believe that competition in three quarters of the industry has no effect on the consumer—[Interruption.]
  The hon. Member for Sedgefield says that the consumer does not pay. The consumer ultimately pays the costs. He is saying that, because we cannot have 100 per cent. perfect competition, we should have no competition. That is precisely what he and other Opposition Members have said throughout the debate. The hon. Member for Rother Valley is nodding his head.
  Mr. Barron: The Opposition simply say that, in 1983, the Government brought in an Energy Act that was to introduce the same competition, and it singularly failed, and we are arguing about that here tonight.
  Mr. Spicer: Conservative Members would go some way with the hon. Gentleman. It is interesting that we are having this discussion about whether we have given enough competition. That is a perfectly reasonable debating ground, and we are delighted to have it. The 1983 Act, for various reasons—notably that the CEGB was left as a monopoly—did not work. That is why we are bringing in this replacement. I am glad that the hon. Gentleman mentioned the 1983 Act. Of course we were not pleased with it. It was a step in the right direction, but it was not far enough. It left a monopoly in place, and that monopoly, in effect, was able to control the rules.
  We say that where we cannot have perfect competition, we should regulate to protect the interests of the consumer. The truth is that, philosophically, a member of the Labour party—whether or not he is a member of the new yuppy Labour party—would not know a consumer if he saw one. The Labour party owes its very existence to producer interests. One never hears about common ownership of the means of consumption. Socialism was founded on the unholy alliance between producers and trade unions. The market place simply does not feature in Opposition Members' thinking. The truth is that the interests of the consumer are the essence of the Bill which, for the first time, imposes an obligation on the industry to supply all consumers, unless it is technically impractical to do so.
  The consumer will not only benefit directly if some three quarters of his costs are subject to the force of competition, but he will have the chance, if that is what he wishes, to buy his electricity from an alternative supply company. The hon. Member for Rother Valley was wrong about that.
  It has been said that the Bill is radical. That is precisely right. It is extremely radical. To change the whole emphasis of an immense utility away from one that is dominated by a single producer towards one that reflects the interests of the customer is an enormously ambitious undertaking. We are under no illusions about that. For the time being it may not appeal to the myopic imagination of the Opposition, bent on driving this country back into the past, but I am sure that it will receive the support of the mass of the country.
  Question put, That the amendment be made:
  The House divided: Ayes 239, Noes 316.

  Division No. 12]

  [10 pm

  AYES

  Abbott, Ms Diane

  Bennett, A. F. (D'nt'n & R'dish)

  Adams, Allen (Paisley N)

  Bermingham, Gerald

  Allen, Graham

  Bidwell, Sydney

  Alton, David

  Blair, Tony

  Anderson, Donald

  Blunkett, David

  Archer, Rt Hon Peter

  Boyes, Roland

  Armstrong, Hilary

  Bradley, Keith

  Ashdown, Paddy

  Bray, Dr Jeremy

  Ashley, Rt Hon Jack

  Brown, Gordon (D'mline E)

  Ashton, Joe

  Brown, Nicholas (Newcastle E)

  Banks, Tony (Newham NW)

  Brown, Ron (Edinburgh Leith)

  Barnes, Harry (Derbyshire NE)

  Bruce, Malcolm (Gordon)

  Barron, Kevin

  Buchan, Norman

  Beckett, Margaret

  Buckley, George J.

  Beggs, Roy

  Caborn, Richard

  Beith, A. J.

  Callaghan, Jim

  Bell, Stuart

  Campbell, Menzies (Fife NE)

  864

  Campbell, Ron (Blyth Valley)

  Hughes, Robert (Aberdeen N)

  Campbell-Savours, D. N.

  Hughes, Roy (Newport E)

  Canavan, Dennis

  Hughes, Sean (Knowsley S)

  Carlile, Alex (Mont'g)

  Hughes, Simon (Southwark)

  Clark, Dr David (S Shields)

  Illsley, Eric

  Clarke, Tom (Monklands W)

  Ingram, Adam

  Clay, Bob

  Johnston, Sir Russell

  Clelland, David

  Jones, Barry (Alyn & Deeside)

  Clwyd, Mrs Ann

  Jones, Martyn (Clwyd S W)

  Cohen, Harry

  Kaufman, Rt Hon Gerald

  Coleman, Donald

  Kennedy, Charles

  Cook, Frank (Stockton N)

  Kilfedder, James

  Cook, Robin (Livingston)

  Kinnock, Rt Hon Neil

  Corbett, Robin

  Kirkwood, Archy

  Corbyn, Jeremy

  Lambie, David

  Cousins, Jim

  Lamond, James

  Cox, Tom

  Leadbitter, Ted

  Crowther, Stan

  Leighton, Ron

  Cryer, Bob

  Lestor, Joan (Eccles)

  Cummings, John

  Lewis, Terry

  Cunliffe, Lawrence

  Litherland, Robert

  Cunningham, Dr John

  Livingstone, Ken

  Dalyell, Tam

  Livsey, Richard

  Darling, Alistair

  Lloyd, Tony (Stretford)

  Davies, Rt Hon Denzil (Llanelli)

  Lofthouse, Geoffrey

  Davies, Ron (Caerphilly)

  Loyden, Eddie

  Davis, Terry (B'ham Hodge H'l)

  McAllion, John

  Dewar, Donald

  McAvoy, Thomas

  Dixon, Don

  Macdonald, Calum A.

  Dobson, Frank

  McFall, John

  Doran, Frank

  McKay, Allen (Barnsley West)

  Douglas, Dick

  McKelvey, William

  Duffy, A. E. P.

  McLeish, Henry

  Dunnachie, Jimmy

  Maclennan, Robert

  Dunwoody, Hon Mrs Gwyneth

  McNamare, Kevin

  Eadie, Alexander

  McTaggart, Bob

  Eastham, Ken

  McWilliam, John

  Evans, John (St Helens N)

  Madden, Max

  Ewing, Harry (Falkirk E)

  Mahon, Mrs Alice

  Fatchett, Derek

  Marek, Dr John

  Fearn, Ronald

  Marshall, David (Shettleston)

  Field, Frank (Birkenhead)

  Marshall, Jim (Leicester S)

  Fields, Terry (L'pool B G'n)

  Martin, Michael J. (Springburn)

  Flannery, Martin

  Martlew, Eric

  Flynn, Paul

  Maxton, John

  Foot, Rt Hon Michael

  Meacher, Michael

  Forsythe, Clifford (Antrim S)

  Meale, Alan

  Foster, Derek

  Michael, Alun

  Foulkes, George

  Michie, Bill (Sheffield Heeley)

  Fraser, John

  Michie, Mrs Ray (Arg'l & Bute)

  Fyfe, Maria

  Mitchell, Austin (G't Grimsby)

  Galbraith, Sam

  Molyneaux, Rt Hon James

  Galloway, George

  Moonie, Dr Lewis

  Garrett, John (Norwich South)

  Morgan, Rhodri

  Garrett, Ted (Wallsend)

  Morley, Elliott

  George, Bruce

  Morris, Rt Hon A. (W'shawe)

  Gilbert, Rt Hon Dr John

  Morris, Rt Hon J. (Aberavon)

  Godman, Dr Norman A.

  Mowlam, Marjorie

  Golding, Mrs Llin

  Mullin, Chris

  Gordon, Mildred

  Murphy, Paul

  Gould, Bryan

  Nellist, Dave

  Graham, Thomas

  Oakes, Rt Hon Gordon

  Grant, Bernie (Tottenham)

  O'Brien, William

  Griffiths, Win (Bridgend)

  O'Neill, Martin

  Grocott, Bruce

  Orme, Rt Hon Stanley

  Hardy, Peter

  Patchett, Terry

  Hattersley, Rt Hon Roy

  Pendry, Tom

  Haynes, Frank

  Pike, Peter L.

  Healey, Rt Hon Denis

  Powell, Ray (Ogmore)

  Heffer, Eric S.

  Prescott, John

  Henderson, Doug

  Primarolo, Dawn

  Hinchliffe, David

  Quin, Ms Joyce

  Hogg, N. (C'nauld & Kilsyth)

  Radice, Giles

  Holland, Stuart

  Randall, Stuart

  Home Robertson, John

  Redmond, Martin

  Hood, Jimmy

  Rees, Rt Hon Merlyn

  Howarth, George (Knowsley N)

  Reid, Dr John

  Howell, Rt Hon D. (S'heath)

  Richardson, Jo

  Hoyle, Doug

  Roberts, Allan (Bootle)

  Hughes, John (Coventry NE)

  Robertson, George

  865

  Robinson, Geoffrey

  Taylor, Matthew (Truro)

  Rogers, Allan

  Thomas, Dr Dafydd Elis

  Rooker, Jeff

  Thompson, Jack (Wansbeck)

  Ross, Ernie (Dundee W)

  Turner, Dennis

  Rowlands, Ted

  Walker, A. Cecil (Belfast N)

  Ruddock, Joan

  Wall, Pat

  Salmond, Alex

  Wallace, James

  Sedgemore, Brian

  Walley, Joan

  Sheerman, Barry

  Wardell, Gareth (Gower)

  Sheldon, Rt Hon Robert

  Wareing, Robert N.

  Short, Clare

  Welsh, Michael (Doncaster N)

  Sillars, Jim

  Wigley, Dafydd

  Skinner, Dennis

  Williams, Rt Hon Alan

  Smith, Andrew (Oxford E)

  Williams, Alan W. (Carm'then)

  Smith, C. (Isl'ton & F'bury)

  Wilson, Brian

  Smyth, Rev Martin (Belfast S)

  Winnick, David

  Snape, Peter

  Wise, Mrs Audrey

  Soley, Clive

  Worthington, Tony

  Spearing, Nigel

  Wray, Jimmy

  Steel, Rt Hon David

  Young, David (Bolton SE)

  Steinberg, Gerry

  Stott, Roger

  Tellers for the Ayes:

  Strang, Gavin

  Mrs. Margaret Ewing and

  Straw, Jack

  Mr. Ieuan Wyn Jones.

  Taylor, Mrs Ann (Dewsbury)

  NOES

  Adley, Robert

  Carlisle, Kenneth (Lincoln)

  Aitken, Jonathan

  Carrington, Matthew

  Alexander, Richard

  Carttiss, Michael

  Alison, Rt Hon Michael

  Cartwright, John

  Allason, Rupert

  Cash, William

  Amery, Rt Hon Julian

  Chalker, Rt Hon Mrs Lynda

  Amess, David

  Channon, Rt Hon Paul

  Amos, Alan

  Chapman, Sydney

  Arbuthnot, James

  Chope, Christopher

  Arnold, Jacques (Gravesham)

  Churchill, Mr

  Arnold, Tom (Hazel Grove)

  Clark, Hon Alan (Plym'th S'n)

  Ashby, David

  Clark, Dr Michael (Rochford)

  Aspinwall, Jack

  Clark, Sir W. (Croydon S)

  Atkins, Robert

  Clarke, Rt Hon K. (Rushcliffe)

  Atkinson, David

  Colvin, Michael

  Baker, Rt Hon K. (Mole Valley)

  Conway, Derek

  Baker, Nicholas (Dorset N)

  Coombs, Anthony (Wyre F'rest)

  Baldry, Tony

  Coombs, Simon (Swindon)

  Banks, Robert (Harrogate)

  Cope, Rt Hon John

  Barnes, Mrs Rosie (Greenwich)

  Cormack, Patrick

  Batiste, Spencer

  Couchman, James

  Beaumont-Dark, Anthony

  Cran, James

  Bellingham, Henry

  Critchley, Julian

  Bendall, Vivian

  Currie, Mrs Edwina

  Bennett, Nicholas (Pembroke)

  Davies, Q. (Stamf'd & Spald'g)

  Benyon, W.

  Davies, David (Boothferry)

  Bevan, David Gilroy

  Day, Stephen

  Biffen, Rt Hon John

  Devlin, Tim

  Body, Sir Richard

  Dickens, Geoffrey

  Bonsor, Sir Nicholas

  Dicks, Terry

  Boscawen, Hon Robert

  Dorrell, Stephen

  Bottomley, Mrs Virginia

  Douglas-Hamilton, Lord James

  Bowden, A (Brighton K'pto'n)

  Dover, Den

  Bowden, Gerald (Dulwich)

  Dunn, Bob

  Bowis, John

  Durant, Tony

  Boyson, Rt Hon Dr Sir Rhodes

  Dykes, Hugh

  Braine, Rt Hon Sir Bernard

  Eggar, Tim

  Brandon-Bravo, Martin

  Emery, Sir Peter

  Brazier, Julian

  Evans, David (Welwyn Hatf'd)

  Bright, Graham

  Evennett, David

  Brittan, Rt Hon Leon

  Favell, Tony

  Brooke, Rt Hon Peter

  Fenner, Dame Peggy

  Brown, Michael (Brigg & Cl't's)

  Field, Barry (Isle of Wight)

  Browne, John (Winchester)

  Finsberg, Sir Geoffrey

  Bruce, Ian (Dorset South)

  Fishburn, John Dudley

  Buck, Sir Antony

  Fookes, Miss Janet

  Budgen, Nicholas

  Forman, Nigel

  Burns, Simon

  Forsyth, Michael (Stirling)

  Burt, Alistair

  Forth, Eric

  Butcher, John

  Fowler, Rt Hon Norman

  Butler, Chris

  Fox, Sir Marcus

  Butterfill, John

  Franks, Cecil

  Carlisle, John, (Luton N)

  Freeman, Roger

  866

  French, Douglas

  Lilley, Peter

  Fry, Peter

  Lloyd, Sir Ian (Havant)

  Gale, Roger

  Lloyd, Peter (Fareham)

  Gardiner, George

  Lord, Michael

  Garel-Jones, Tristan

  Luce, Rt Hon Richard

  Gill, Christopher

  Lyell, Sir Nicholas

  Glyn, Dr Alan

  McCrindle, Robert

  Goodhart, Sir Philip

  Macfarlane, Sir Neil

  Goodlad, Alastair

  MacKay, Andrew (E Berkshire)

  Goodson-Wickes, Dr Charles

  Maclean, David

  Gorman, Mrs Teresa

  McLoughlin, Patrick

  Gorst, John

  McNair-Wilson, Sir Michael

  Gow, Ian

  McNair-Wilson, P. (New Forest)

  Gower, Sir Raymond

  Madel, David

  Grant, Sir Anthony (CambsSW)

  Major, Rt Hon John

  Greenway, Harry (Ealing N)

  Malins, Humfrey

  Greenway, John (Ryedale)

  Mans, Keith

  Gregory, Conal

  Maples, John

  Griffiths, Sir Eldon (Bury St E')

  Marland, Paul

  Griffiths, Peter (Portsmouth N)

  Marlow, Tony

  Grist, Ian

  Marshall, John (Hendon S)

  Grylls, Michael

  Marshall, Michael (Arundel

  Gummer, Rt Hon John Selwyn

  Martin, David (Portsmouth S)

  Hamilton, Hon Archie (Epsom)

  Mates, Michael

  Hamilton, Neil (Tatton)

  Maude, Hon Francis

  Hampson, Dr Keith

  Mawhinney, Dr Brian

  Hanley, Jeremy

  Maxwell-Hyslop, Robin

  Hannam, John

  Mayhew, Rt Hon Sir Patrick

  Hargreaves, A. (B'ham H'll Gr')

  Mellor, David

  Hargreaves, Ken (Hyndburn)

  Meyer, Sir Anthony

  Harris, David

  Mills, Iain

  Hawkins, Christopher

  Miscampbell, Norman

  Hayes, Jerry

  Mitchell, Andrew (Gedling)

  Hayhoe, Rt Hon Sir Barney

  Mitchell, Sir David

  Hayward, Robert

  Moate, Roger

  Heddle, John

  Montgomery, Sir Fergus

  Heseltine, Rt Hon Michael

  Morris, M (N'hampton S)

  Hicks, Mrs Maureen (Wolv' NE)

  Morrison, Sir Charles

  Hicks, Robert (Cornwall SE)

  Morrison, Rt Hon P (Chester)

  Higgins, Rt Hon Terence L.

  Moss, Malcolm

  Hill, James

  Moynihan, Hon Colin

  Hind, Kenneth

  Mudd, David

  Hogg, Hon Douglas (Gr'th'm)

  Neale, Gerrard

  Holt, Richard

  Nelson, Anthony

  Hordern, Sir Peter

  Neubert, Michael

  Howarth, Alan (Strat'd-on-A)

  Nicholls, Patrick

  Howarth, G. (Cannock & B'wd)

  Nicholson, David (Taunton)

  Howe, Rt Hon Sir Geoffrey

  Nicholson, Emma (Devon West)

  Howell, Rt Hon David (G'dford)

  Onslow, Rt Hon Cranley

  Howell, Ralph (North Norfolk)

  Oppenheim, Phillip

  Hughes, Robert G. (Harrow W)

  Owen, Rt Hon Dr David

  Hunt, David (Wirral W)

  Page, Richard

  Hunter, Andrew

  Paice, James

  Hurd, Rt Hon Douglas

  Parkinson, Rt Hon Cecil

  Irvine, Michael

  Patnick, Irvine

  Irving, Charles

  Patten, John (Oxford W)

  Jack, Michael

  Pattie, Rt Hon Sir Geoffrey

  Jackson, Robert

  Pawsey, James

  Janman, Tim

  Peacock, Mrs Elizabeth

  Jessel, Toby

  Porter, Barry (Wirral S)

  Johnson Smith, Sir Geoffrey

  Porter, David (Waveney)

  Jones, Gwilym (Cardiff N)

  Portillo, Michael

  Jones, Robert B (Herts W)

  Powell, William (Corby)

  Jopling, Rt Hon Michael

  Price, Sir David

  Key, Robert

  Raffan, Keith

  Kirkhope, Timothy

  Redwood, John

  Knapman, Roger

  Renton, Tim

  Knight, Greg (Derby North)

  Rhodes James, Robert

  Knight, Dame Jill (Edgbaston)

  Rifkind, Rt Hon Malcolm

  Knowles, Michael

  Roberts, Wyn (Conwy)

  Knox, David

  Rowe, Andrew

  Lamont, Rt Hon Norman

  Sackville, Hon Tom

  Lang, Ian

  Sainsbury, Hon Tim

  Latham, Michael

  Scott, Nicholas

  Lawrence, Ivan

  Shaw, David (Dover)

  Lawson, Rt Hon Nigel

  Shaw, Sir Giles (Pudsey)

  Leigh, Edward (Gainsbor'gh)

  Shaw, Sir Michael (Scarb')

  Lennox-Boyd, Hon Mark

  Shepherd, Colin (Hereford)

  Lester, Jim (Broxtowe)

  Shersby, Michael

  Lightbown, David

  Sims, Roger

  867

  Skeet, Sir Trevor

  Walden, George

  Smith, Tim (Beaconsfield)

  Walker, Bill (T'side North)

  Soames, Hon Nicholas

  Walker, Rt Hon P. (W'cester)

  Spicer, Michael (S Worcs)

  Waller, Gary

  Stevens, Lewis

  Walters, Sir Dennis

  Stewart, Allan (Eastwood)

  Ward, John

  Stradling Thomas, Sir John

  Wardle, Charles (Bexhill)

  Summerson, Hugo

  Warren, Kenneth

  Taylor, John M (Solihull)

  Watts, John

  Taylor, Teddy (S'end E)

  Wells, Bowen

  Thatcher, Rt Hon Margaret

  Wheeler, John

  Thompson, D. (Calder Valley)

  Whitney, Ray

  Thompson, Patrick (Norwich N)

  Widdecombe, Ann

  Thorne, Neil

  Wiggin, Jerry

  Thornton, Malcolm

  Wilkinson, John

  Thurnham, Peter

  Winterton, Mrs Ann

  Townend, John (Bridlington)

  Winterton, Nicholas

  Townsend, Cyril D. (B'heath)

  Wolfson, Mark

  Tracey, Richard

  Wood, Timothy

  Tredinnick, David

  Woodcock, Mike

  Trotter, Neville

  Yeo, Tim

  Twinn, Dr Ian

  Young, Sir George (Acton)

  Vaughan, Sir Gerard

  Younger, Rt Hon George

  Viggers, Peter

  Waddington, Rt Hon David

  Tellers for the Noes:

  Wakeham, Rt Hon John

  Mr. Michael Fallon and

  Waldegrave, Hon William

  Mr. David Heathcoat-Amory

  Question accordingly negatived.
  Main Question put forthwith, pursuant to Standing Order No. 60 (Amendment on Second or Third Reading):—
  The House divided: Ayes 304, Noes 238.

  Division No. 13]

  [10.16 pm

  AYES

  Adley, Robert

  Browne, John (Winchester)

  Aitken, Jonathan

  Bruce, Ian (Dorset South)

  Alexander, Richard

  Buck, Sir Antony

  Alison, Rt Hon Michael

  Budgen, Nicholas

  Allason, Rupert

  Burns, Simon

  Amery, Rt Hon Julian

  Burt, Alistair

  Amess, David

  Butcher, John

  Amos, Alan

  Butler, Chris

  Arbuthnot, James

  Butterfill, John

  Arnold, Jacques (Gravesham)

  Carlisle, John, (Luton N)

  Arnold, Tom (Hazel Grove)

  Carlisle, Kenneth (Lincoln)

  Ashby, David

  Carrington, Matthew

  Aspinwall, Jack

  Carttiss, Michael

  Atkins, Robert

  Cartwright, John

  Atkinson, David

  Cash, William

  Baker, Rt Hon K. (Mole Valley)

  Chalker, Rt Hon Mrs Lynda

  Baker, Nicholas (Dorset N)

  Channon, Rt Hon Paul

  Baldry, Tony

  Chapman, Sydney

  Banks, Robert (Harrogate)

  Chope, Christopher

  Barnes, Mrs Rosie (Greenwich)

  Churchill, Mr

  Batiste, Spencer

  Clark, Hon Alan (Plym'th S'n)

  Beaumont-Dark, Anthony

  Clark, Dr Michael (Rochford)

  Bellingham, Henry

  Clark, Sir W. (Croydon S)

  Bendall, Vivian

  Clarke, Rt Hon K. (Rushcliffe)

  Bennett, Nicholas (Pembroke)

  Colvin, Michael

  Benyon, W.

  Conway, Derek

  Bevan, David Gilroy

  Coombs, Anthony (Wyre F'rest)

  Biffen, Rt Hon John

  Coombs, Simon (Swindon)

  Body, Sir Richard

  Cope, Rt Hon John

  Bonsor, Sir Nicholas

  Cormack, Patrick

  Boscawen, Hon Robert

  Couchman, James

  Bottomley, Peter

  Cran, James

  Bottomley, Mrs Virginia

  Critchley, Julian

  Bowden, A (Brighton K'pto'n)

  Currie, Mrs Edwina

  Bowden, Gerald (Dulwich)

  Davies, Q. (Stamf'd & Spald'g)

  Bowis, John

  Davis, David (Boothferry)

  Boyson, Rt Hon Dr Sir Rhodes

  Day, Stephen

  Braine, Rt Hon Sir Bernard

  Devlin, Tim

  Brandon-Bravo, Martin

  Dickens, Geoffrey

  Brazier, Julian

  Dicks, Terry

  Bright, Graham

  Dorrell, Stephen

  Brittan, Rt Hon Leon

  Douglas-Hamilton, Lord James

  Brooke, Rt Hon Peter

  Dover, Den

  Brown, Michael (Brigg & Cl't's)

  Dunn, Bob

  868

  Durant, Tony

  Jones, Gwilym (Cardiff N)

  Dykes, Hugh

  Jones, Robert B (Herts W)

  Eggar, Tim

  Jopling, Rt Hon Michael

  Emery, Sir Peter

  Key, Robert

  Evans, David (Welwyn Hatf'd)

  Kirkhope, Timothy

  Evennett, David

  Knapman, Roger

  Favell, Tony

  Knight, Greg (Derby North)

  Fenner, Dame Peggy

  Knight, Dame Jill (Edgbaston)

  Field, Barry (Isle of Wight)

  Knowles, Michael

  Finsberg, Sir Geoffrey

  Knox, David

  Fishburn, John Dudley

  Lamont, Rt Hon Norman

  Fookes, Miss Janet

  Lang, Ian

  Forman, Nigel

  Latham, Michael

  Forsyth, Michael (Stirling)

  Lawrence, Ivan

  Forth, Eric

  Lawson, Rt Hon Nigel

  Fowler, Rt Hon Norman

  Leigh, Edward (Gainsbor'gh)

  Fox, Sir Marcus

  Lennox-Boyd, Hon Mark

  Franks, Cecil

  Lester, Jim (Broxtowe)

  Freeman, Roger

  Lightbown, David

  French, Douglas

  Lilley, Peter

  Fry, Peter

  Lloyd, Sir Ian (Havant)

  Gale, Roger

  Lloyd, Peter (Fareham)

  Gardiner, George

  Lord, Michael

  Garel-Jones, Tristan

  Luce, Rt Hon Richard

  Gill, Christopher

  Lyell, Sir Nicholas

  Glyn, Dr Alan

  McCrindle, Robert

  Goodhart, Sir Philip

  Macfarlane, Sir Neil

  Goodlad, Alastair

  MacKay, Andrew (E Berkshire)

  Goodson-Wickes, Dr Charles

  Maclean, David

  Gorman, Mrs Teresa

  McLoughlin, Patrick

  Gorst, John

  McNair-Wilson, Sir Michael

  Gow, Ian

  McNair-Wilson, P. (New Forest)

  Gower, Sir Raymond

  Madel, David

  Grant, Sir Anthony (CambsSW)

  Major, Rt Hon John

  Greenway, Harry (Ealing N)

  Malins, Humfrey

  Greenway, John (Ryedale)

  Mans, Keith

  Gregory, Conal

  Maples, John

  Griffiths, Sir Eldon (Bury St E')

  Marland, Paul

  Griffiths, Peter (Portsmouth N)

  Marlow, Tony

  Grist, Ian

  Marshall, John (Hendon S)

  Grylls, Michael

  Marshall, Michael (Arundel)

  Gummer, Rt Hon John Selwyn

  Martin, David (Portsmouth S)

  Hamilton, Hon Archie (Epsom)

  Maude, Hon Francis

  Hamilton, Neil (Tatton)

  Mawhinney, Dr Brian

  Hampson, Dr Keith

  Maxwell-Hyslop, Robin

  Hanley, Jeremy

  Mayhew, Rt Hon Sir Patrick

  Hannam, John

  Mellor, David

  Hargreaves, A. (B'ham H'll Gr')

  Meyer, Sir Anthony

  Hargreaves, Ken (Hyndburn)

  Mills, Iain

  Harris, David

  Miscampbell, Norman

  Hawkins, Christopher

  Mitchell, Andrew (Gedling)

  Hayes, Jerry

  Mitchell, Sir David

  Hayhoe, Rt Hon Sir Barney

  Moate, Roger

  Hayward, Robert

  Montgomery, Sir Fergus

  Heddle, John

  Morris, M (N'hamptpon S)

  Heseltine, Rt Hon Michael

  Morrison, Sir Charles

  Hicks, Mrs Maureen (Wolv' NE)

  Morrison, Rt Hon P (Chester)

  Hicks, Robert (Cornwall SE)

  Moss, Malcolm

  Higgins, Rt Hon Terence L.

  Moynihan, Hon Colin

  Hill, James

  Mudd, David

  Hind, Kenneth

  Neale, Gerrard

  Hogg, Hon Douglas (Gr'th'm)

  Nelson, Anthony

  Holt, Richard

  Neubert, Michael

  Hordern, Sir Peter

  Nicholls, Patrick

  Howarth, Alan (Strat'd-on-A)

  Nicholson, David (Taunton)

  Howarth, G. (Cannock & B'wd)

  Nicholson, Emma (Devon West)

  Howe, Rt Hon Sir Geoffrey

  Onslow, Rt Hon Cranley

  Howell, Rt Hon David (G'dford)

  Oppenheim, Phillip

  Howell, Ralph (North Norfolk)

  Owen, Rt Hon Dr David

  Hughes, Robert G. (Harrow W)

  Page, Richard

  Hunt, David (Wirral W)

  Paice, James

  Hunter, Andrew

  Parkinson, Rt Hon Cecil

  Hurd, Rt Hon Douglas

  Patnick, Irvine

  Irvine, Michael

  Patten, John (Oxford W)

  Irving, Charles

  Pattie, Rt Hon Sir Geoffrey

  Jack, Michael

  Pawsey, James

  Jackson, Robert

  Peacock, Mrs Elizabeth

  Janman, Tim

  Porter, Barry (Wirral S)

  Jessel, Toby

  Porter, David (Waveney)

  Johnson Smith, Sir Geoffrey

  Portillo, Michael

  869

  Powell, William (Corby)

  Townsend, Cyril D. (B'health)

  Price, Sir David

  Tracey, Richard

  Raffan, Keith

  Tredinnick, Daivd

  Redwood, John

  Trotter, Neville

  Renton, Tim

  Twinn, Dr Ian

  Rhodes James, Robert

  Vaughan, Sir Gerard

  Rifkind, Rt Hon Malcolm

  Viggers, Peter

  Roberts, Wyn (Conwy)

  Waddington, Rt Hon David

  Rowe, Andrew

  Wakeham, Rt Hon John

  Sackville, Hon Tom

  Waldegrave, Hon William

  Sainsbury, Hon Tim

  Walden, George

  Scott, Nicholas

  Walker, Bill (T'side North)

  Shaw, David (Dover)

  Waller, Gary

  Shaw, Sir Giles (Pudsey)

  Walters, Sir Dennis

  Shepherd, Colin (Hereford)

  Ward, John

  Shersby, Michael

  Wardle, Charles (Bexhill)

  Sims, Roger

  Warren, Kenneth

  Skeet, Sir Trevor

  Watts, John

  Smith, Tim (Beaconsfield)

  Wells, Bowen

  Soames, Hon Nicholas

  Wheeler, John

  Spicer, Michael (S Worcs)

  Whitney, Ray

  Stevens, Lewis

  Widdecombe, Ann

  Stewart, Allan (Eastwood)

  Wiggin, Jerry

  Stradling Thomas, Sir John

  Wilkinson, John

  Summerson, Hugo

  Winterton, Mrs Ann

  Taylor, John M (Solihull)

  Winterton, Nicholas

  Taylor, Teddy (S'end E)

  Wolfson, Mark

  Thatcher, Rt Hon Margaret

  Wood, Timothy

  Thompson, D. (Calder Valley)

  Woodcock, Mike

  Thompson, Patrick (Norwich N)

  Yeo, Tim

  Thorne, Neil

  Young, Sir George (Acton)

  Thornton, Malcolm

  Younger, Rt Hon George

  Thurnham, Peter

  Townend, John (Bridlington)

  Tellers for the Ayes:

  Mr. David Heathcoat-Amory and

  Mr. Michael Fallon

  NOES

  Abbott, Ms Diane

  Clwyd, Mrs Ann

  Adams, Allen (Paisley N)

  Cohen, Harry

  Allen, Graham

  Coleman, Donald

  Alton, David

  Cook, Frank (Stockton N)

  Anderson, Donald

  Cook, Robin (Livingston)

  Archer, Rt Hon Peter

  Corbett, Robin

  Armstrong, Hilary

  Corbyn, Jeremy

  Ashdown, Paddy

  Cousins, Jim

  Ashley, Rt Hon Jack

  Cox, Tom

  Ashton, Joe

  Crowther, Stan

  Banks, Tony (Newham NW)

  Cryer, Bob

  Barnes, Harry (Derbyshire NE)

  Cummings, John

  Barron, Kevin

  Cunningham, Dr John

  Beckett, Margaret

  Dalyell, Tam

  Beggs, Roy

  Darling, Alistair

  Beith, A. J.

  Davies, Rt Hon Denzil (Llanelli)

  Bell, Stuart

  Davies, Ron (Caerphilly)

  Bennett, A. F. (D'nt'n & R'dish)

  Davis, Terry (B'ham Hodge H'l)

  Bermingham, Gerald

  Dewar, Donald

  Bidwell, Sydney

  Dixon, Don

  Blair, Tony

  Dobson, Frank

  Blunkett, David

  Doran, Frank

  Boyes, Roland

  Douglas, Dick

  Bradley, Keith

  Duffy, A.E.P.

  Bray, Dr Jeremy

  Dunnachie, Jimmy

  Brown, Gordon (D'mline E)

  Dunwoody, Hon Mrs Gwyneth

  Brown, Nicholas (Newcastle E)

  Eadie, Alexander

  Brown, Ron (Edinburgh Leith)

  Eastham, Ken

  Bruce, Malcolm (Gordon)

  Evans, John (St Helens N)

  Buchan, Norman

  Ewing, Harry (Falkirk E)

  Buckley, George J.

  Ewing, Mrs Margaret (Moray)

  Caborn, Richard

  Fatchett, Derek

  Callaghan, Jim

  Fearn, Ronald

  Campbell, Menzies (Fife NE)

  Field, Frank (Birkenhead)

  Campbell, Ron (Blyth Valley)

  Fields, Terry (L'pool B G'n)

  Campbell-Savours, D. N.

  Flannery, Martin

  Canavan, Dennis

  Flynn, Paul

  Carlile, Alex (Mont'g)

  Foot, Rt Hon Michael

  Clark, Dr David (S Shields)

  Forsythe, Clifford (Antrim S)

  Clarke, Tom (Monklands W)

  Foster, Derek

  Clay, Bob

  Foulkes, George

  Clelland, David

  Fraser, John

  870

  Fyfe, Maria

  Mitchell, Austin (G't Grimsby)

  Galbraith, Sam

  Molyneaux, Rt Hon James

  Galloway, George

  Moonie, Dr Lewis

  Garrett, John (Norwich South)

  Morgan, Rhodri

  Garrett, Ted (Wallsend)

  Morley, Elliott

  George, Bruce

  Morris, Rt Hon A. (W'shawe)

  Gilbert, Rt Hon Dr John

  Morris, Rt Hon J (Aberavon)

  Godman, Dr Norman A.

  Mowlam, Marjorie

  Golding, Mrs Llin

  Mullin, Chris

  Gordon, Mildred

  Murphy, Paul

  Gould, Bryan

  Nellist, Dave

  Graham, Thomas

  Oakes, Rt Hon Gordon

  Grant, Bernie (Tottenham)

  O'Brien, William

  Griffiths, Win (Bridgend)

  O'Neill, Martin

  Grocott, Bruce

  Orme, Rt Hon Stanley

  Hardy, Peter

  Patchett, Terry

  Hattersley, Rt Hon Roy

  Pendry, Tom

  Haynes, Frank

  Pike, Peter L.

  Healey, Rt Hon Denis

  Powell, Ray (Ogmore)

  Heffer, Eric S.

  Prescott, John

  Henderson, Doug

  Primarolo, Dawn

  Hinchliffe, David

  Quin, Ms Joyce

  Hogg, N. (C'nauld & Kilsyth)

  Radice, Giles

  Holland, Stuart

  Randall, Stuart

  Home Robertson, John

  Redmond, Martin

  Hood, Jimmy

  Rees, Rt Hon Merlyn

  Howarth, George (Knowsley N)

  Reid, Dr John

  Howell, Rt Hon D. (S'heath)

  Richardson, Jo

  Hoyle, Doug

  Roberts, Allan (Bootle)

  Hughes, John (Coventry NE)

  Robertson, George

  Hughes, Robert (Aberdeen N)

  Robinson, Geoffrey

  Hughes, Roy (Newport E)

  Rogers, Allan

  Hughes, Sean (Knowsley S)

  Rooker, Jeff

  Hughes, Simon (Southwark)

  Ross, Ernie (Dundee W)

  Illsley, Eric

  Rowlands, Ted

  Ingram, Adam

  Ruddock, Joan

  Johnston, Sir Russell

  Salmond, Alex

  Jones, Barry (Alyn & Deeside)

  Sedgemore, Brian

  Jones, Ieuan (Ynys Môn)

  Sheerman, Barry

  Jones, Martyn (Clwyd S W)

  Sheldon, Rt Hon Robert

  Kaufman, Rt Hon Gerald

  Shore, Rt Hon Peter

  Kennedy, Charles

  Short, Clare

  Kilfedder, James

  Sillars, Jim

  Kinnock, Rt Hon Neil

  Skinner, Dennis

  Kirkwood, Archy

  Smith, Andrew (Oxford E)

  Lambie, David

  Smith, C. (Isl'ton & F'bury)

  Lamond, James

  Smyth, Rev Martin (Belfast S)

  Leadbitter, Ted

  Snape, Peter

  Leighton, Ron

  Soley, Clive

  Lestor, Joan (Eccles)

  Spearing, Nigel

  Lewis, Terry

  Steel, Rt Hon David

  Litherland, Robert

  Steinberg, Gerry

  Livingstone, Ken

  Stott, Roger

  Livsey, Richard

  Strand, Gavin

  Lloyd, Tony (Stretford)

  Straw, Jack

  Lofthouse, Geoffrey

  Taylor, Mrs Ann (Dewsbury)

  Loyden, Eddie

  Taylor, Matthew (Truro)

  McAllion, John

  Thomas, Dr Dafydd Elis

  McAvoy, Thomas

  Thompson, Jack (Wansbeck)

  Macdonald, Calum A.

  Turner, Dennis

  McFall, John

  Walker, A. Cecil (Belfast N)

  McKelvey, William

  Wall, Pat

  McLeish, Henry

  Wallace, James

  Maclennan, Robert

  Walley, Joan

  McNamara, Kevin

  Wardell, Gareth (Gower)

  McTaggart, Bob

  Welsh, Michael (Doncaster N)

  McWilliam, John

  Wigley, Dafydd

  Madden, Max

  Williams, Rt Hon Alan

  Mahon, Mrs Alice

  Williams, Alan W. (Carm'then)

  Marek, Dr John

  Wilson, Brian

  Marshall, David (Shettleston)

  Winnick, David

  Marshall, Jim (Leicester S)

  Wise, Mrs Audrey

  Martin, Michael J. (Springburn)

  Worthington, Tony

  Martlew, Eric

  Wray, Jimmy

  Maxton, John

  Young, David (Bolton SE)

  Meacher, Michael

  Meale, Alan

  Tellers for the Noes:

  Michael, Alun

  Mr. Allen McKay and

  Michie, Bill (Sheffield Heeley)

  Mr. Robert Wareing

  Michie, Mrs Ray (Arg'l & Bute)

  Question accordingly agreed to.
  Bill read a Second time.
  Motion made—[Mr. Lofthouse]—and Question put, That the Bill be committed to a Special Standing Committee.
  The House divided: Ayes 234, Noes 299.

  Division No. 14]

  [10.31 pm

  AYES

  Abbott, Ms Diane

  Evans, John (St Helens N)

  Adams, Allen (Paisley N)

  Ewing, Harry (Falkirk E)

  Allen, Graham

  Ewing, Mrs Margaret (Moray)

  Alton, David

  Fatchett, Derek

  Anderson, Donald

  Fearn, Ronald

  Archer, Rt Hon Peter

  Fields, Terry (L'pool B G'n)

  Armstrong, Hilary

  Flannery, Martin

  Ashdown, Paddy

  Flynn, Paul

  Ashton, Joe

  Foot, Rt Hon Michael

  Banks, Tony (Newham NW)

  Forsythe, Clifford (Antrim S)

  Barnes, Harry (Derbyshire NE)

  Foster, Derek

  Barron, Kevin

  Foulkes, George

  Beckett, Margaret

  Fraser, John

  Beggs, Roy

  Fyfe, Maria

  Beith, A. J.

  Galbraith, Sam

  Bell, Stuart

  Galloway, George

  Bennett, A. F. (D'nt'n & R'dish)

  Garrett, John (Norwich South)

  Bermingham, Gerald

  Garrett, Ted (Wallsend)

  Bidwell, Sydney

  George, Bruce

  Blair, Tony

  Gilbert, Rt Hon Dr John

  Blunkett, David

  Godman, Dr Norman A.

  Boyes, Roland

  Golding, Mrs Llin

  Bradley, Keith

  Gordon, Mildred

  Bray, Dr Jeremy

  Gould, Bryan

  Brown, Gordon (D'mline E)

  Grant, Bernie (Tottenham)

  Brown, Nicholas (Newcastle E)

  Griffiths, Win (Bridgend)

  Brown, Ron (Edinburgh Leith)

  Grocott, Bruce

  Bruce, Malcolm (Gordon)

  Hardy, Peter

  Buchan, Norman

  Hattersley, Rt Hon Roy

  Buckley, George J.

  Haynes, Frank

  Caborn, Richard

  Healey, Rt Hon Denis

  Callaghan, Jim

  Heffer, Eric S.

  Campbell, Menzies (Fife NE)

  Henderson, Doug

  Campbell, Ron (Blyth Valley)

  Hinchliffe, David

  Campbell-Savours, D. N.

  Hogg, N. (C'nauld & Kilsyth)

  Canavan, Dennis

  Holland, Stuart

  Carlile, Alex (Mont'g)

  Home Robertson, John

  Clark, Dr David (S Shields)

  Hood, Jimmy

  Clarke, Tom (Monklands W)

  Howarth, George (Knowsley N)

  Clay, Bob

  Howell, Rt Hon D. (S'heath)

  Clelland, David

  Hoyle, Doug

  Clwyd, Mrs Ann

  Hughes, John (Coventry NE)

  Cohen, Harry

  Hughes, Robert (Aberdeen N)

  Coleman, Donald

  Hughes, Roy (Newport E)

  Cook, Frank (Stockton N)

  Hughes, Sean (Knowsley S)

  Cook, Robin (Livingston)

  Hughes, Simon (Southwark)

  Corbett, Robin

  Illsley, Eric

  Corbyn, Jeremy

  Ingram, Adam

  Cousins, Jim

  Johnston, Sir Russell

  Cox, Tom

  Jones, Barry (Alyn & Deeside)

  Crowther, Stan

  Jones, Ieuan (ynys Môn)

  Cryer, Bob

  Jones, Martyn (Clwyd S W)

  Cummings, John

  Kaufman, Rt Hon Gerald

  Cunningham, Dr John

  Kennedy, Charles

  Dalyell, Tam

  Kilfedder, James

  Darling, Alistair

  Kinnock, Rt Hon Neil

  Davies, Rt Hon Denzil (Llanelli)

  Kirkwood, Archy

  Davies, Ron (Caerphilly)

  Lambie, David

  Davis, Terry (B'ham Hodge H'l)

  Lamond, James

  Dewar, Donald

  Leadbitter, Ted

  Dixon, Don

  Leighton, Ron

  Dobson, Frank

  Lestor, Joan (Eccles)

  Doran, Frank

  Lewis, Terry

  Douglas, Dick

  Litherland, Robert

  Duffy, A. E. P.

  Livingstone, Ken

  Dunnachie, Jimmy

  Livsey, Richard

  Dunwoody, Hon Mrs Gwyneth

  Lloyd, Tony (Stretford)

  Eadie, Alexander

  Lofthouse, Geoffrey

  Eastham, Ken

  Loyden, Eddie

  872

  McAllion, John

  Robertson, George

  McAvoy, Thomas

  Robinson, Geoffrey

  Macdonald, Calum A.

  Rogers, Allan

  McFall, John

  Rooker, Jeff

  McKelvey, William

  Ross, Ernie (Dundee W)

  McLeish, Henry

  Rowlands, Ted

  McNamara, Kevin

  Ruddock, Joan

  McTaggart, Bob

  Salmond, Alex

  McWilliam, John

  Sedgemore, Brian

  Madden, Max

  Sheerman, Barry

  Mahon, Mrs Alice

  Sheldon, Rt Hon Robert

  Marek, Dr John

  Shore, Rt Hon Peter

  Marshall, David (Shettleston)

  Short, Clare

  Marshall, Jim (Leicester S)

  Sillars, Jim

  Martin, Michael J. (Springburn)

  Skinner, Dennis

  Martlew, Eric

  Smith, Andrew (Oxford E)

  Maxton, John

  Smith, C. (Isl'ton & F'bury)

  Meacher, Michael

  Smyth, Rev Martin (Belfast S)

  Meale, Alan

  Snape, Peter

  Michael, Alun

  Soley, Clive

  Michie, Bill (Sheffield Heeley)

  Spearing, Nigel

  Michie, Mrs Ray (Arg'l & Bute)

  Steel, Rt Hon David

  Mitchell, Austin (G't Grimsby)

  Steinberg, Gerry

  Moonie, Dr Lewis

  Stott, Roger

  Morgan, Rhodri

  Strang, Gavin

  Morley, Elliott

  Straw, Jack

  Morris, Rt Hon A. (W'shawe)

  Taylor, Mrs Ann (Dewsbury)

  Morris, Rt Hon J. (Aberavon)

  Taylor, Matthew (Truro)

  Mowlam, Marjorie

  Thomas, Dr Dafydd Elis

  Mullin, Chris

  Thompson, Jack (Wansbeck)

  Murphy, Paul

  Turner, Dennis

  Nellist, Dave

  Walker, A. Cecil (Belfast N)

  Oakes, Rt Hon Gordon

  Wall, Pat

  O'Brien, William

  Wallace, James

  O'Neill, Martin

  Walley, Joan

  Orme, Rt Hon Stanley

  Wardell, Gareth (Gower)

  Patchett, Terry

  Welsh, Michael (Doncaster N)

  Pendry, Tom

  Wigley, Dafydd

  Pike, Peter L.

  Williams, Rt Hon Alan

  Powell, Ray (Ogmore)

  Williams, Alan W. (Carm'then)

  Prescott, John

  Wilson, Brian

  Primarolo, Dawn

  Winnick, David

  Quin, Ms Joyce

  Wise, Mrs Audrey

  Radice, Giles

  Worthington, Tony

  Randall, Stuart

  Wray, Jimmy

  Redmond, Martin

  Yong, David (Bolton SE)

  Rees, Rt Hon Merlyn

  Reid, Dr John

  Tellers for the Ayes:

  Richardson, Jo

  Mr Allen McKay and

  Roberts, Allan (Bootle)

  Mr. Robert N. Wareing.

  NOES

  Adley, Robert

  Bonsor, Sir Nicholas

  Aitken, Jonathan

  Boscawen, Hon Robert

  Alexander, Richard

  Bottomley, Mrs Virginia

  Alison, Rt Hon Michael

  Bowden, A. (Brighton K'pto'n)

  Allason, Rupert

  Bowden, Gerald (Dulwich)

  Amery, Rt Hon Julian

  Bowis, John

  Amess, David

  Boyson, Rt Hon Dr Sir Rhodes

  Amos, Alan

  Braine, Rt Hon Sir Bernard

  Arbuthnot, James

  Brandon-Bravo, Martin

  Arnold, Jacques (Gravesham)

  Brazier, Julian

  Arnold, Tom (Hazel Grove)

  Bright, Graham

  Ashby, David

  Brittan, Rt Hon Leon

  Aspinwall, Jack

  Brooke, Rt Hon Peter

  Atkins, Robert

  Brown, Michael (Brigg & Cl't's)

  Atkinson, David

  Browne, John (Winchester)

  Baker, Rt Hon K. (Mole Valley)

  Bruce, Ian (Dorset South)

  Baker, Nicholas (Dorset N)

  Buck, Sir Antony

  Baldry, Tony

  Budgen, Nicholas

  Banks, Robert (Harrogate)

  Burns, Simon

  Barnes, Mrs Rosie (Greenwich)

  Burt, Alistair

  Batiste, Spencer

  Butcher, John

  Beaumont-Dark, Anthony

  Butler, Chris

  Bellingham, Henry

  Butterrfill, John

  Bendall, Vivian

  Carlisle, John (Luton N)

  Bennett, Nicholas (Pembroke)

  Carlisle, Kenneth (Lincoln)

  Bevan, David Gilroy

  Carrington, Matthew

  Biffen, Rt Hon John

  Carttiss, Michael

  Body, Sir Richard

  Cash, William

  873

  Chapman, Sydney

  Heseltine, Rt Hon Michael

  Chope, Christopher

  Hicks, Mrs Maureen (Wolv' NE)

  Churchill, Mr

  Hicks, Robert (Cornwall SE)

  Clark, Hon Alan (Plym'th S'n)

  Higgins, Rt Hon Terence L.

  Clark, Dr Michael (Rochford)

  Hill, James

  Clark, Sir W. (Croydon S)

  Hind, Kenneth

  Clarke, Rt Hon K. (Rushcliffe)

  Hogg, Hon Douglas (Gr'th'm)

  Colvin, Michael

  Holt, Richard

  Conway, Derek

  Hordern, Sir Peter

  Coombs, Anthony (Wyre F'rest)

  Howarth, Alan (Strat'd-on-A)

  Coombs, Simon (Swindon)

  Howarth, G. (Cannock & B'wd)

  Cope, Rt Hon John

  Howe, Rt Hon Sir Geoffrey

  Cormack, Patrick

  Howell, Ralph (North Norfolk)

  Couchman, James

  Hughes, Robert G. (Harrow W)

  Cran, James

  Hunt, David (Wirral W)

  Currie, Mrs Edwina

  Hunter, Andrew

  Davies, Q. (Stamf'd & Spald'g)

  Hurd, Rt Hon Douglas

  Davis, David (Boothferry)

  Irine, Michael

  Day, Stephen

  Jack, Michael

  Devlin, Tim

  Jackson, Robert

  Dickens, Geoffrey

  Janman, Tim

  Dicks, Terry

  Jessel, Toby

  Dorrell, Stephen

  Johnson, Smith, Sir Geoffrey

  Douglas-Hamilton, Lord James

  Jones, Gwilym (Cardiff N)

  Dover, Den

  Jones, Robert B (Herts W)

  Dunn, Bob

  Jopling, Rt Hon Michael

  Durant, Tony

  Key, Robert

  Dykes, Hugh

  Kirkhope, Timothy

  Eggar, Tim

  Knapman, Roger

  Emery, Sir Peter

  Knight, Greg (Derby North)

  Evans, David (Welwyn Hatf'd)

  Knight, Dame Jill (Edgbaston)

  Evennett, David

  Knowles, Michael

  Favell, Tony

  Knox, David

  Fenner, Dame Peggy

  Lamont, Rt Hon Norman

  Field, Barry (Isle of Wight)

  Lang, Ian

  Finsberg, Sir Geoffrey

  Latham, Michael

  Fishburn, John Dudley

  Lawrence, Ivan

  Forman, Nigel

  Lawson, Rt Hon Nigel

  Forsyth, Michael (Stirling)

  Leigh, Edward (Gainsbor'gh)

  Forth, Eric

  Lennox-Boyd, Hon Mark

  Fowler, Rt Hon Norman

  Lester, Jim (Broxtowe)

  Fox, Sir Marcus

  Lightbown, David

  Franks, Cecil

  Lilley, Peter

  Freeman, Roger

  Lloyd, Peter (Fareham)

  French, Douglas

  Lord, Michael

  Fry, Peter

  Luce, Rt Hon Richard

  Gale, Roger

  Lyell, Sir Nicholas

  Gardiner, George

  McCrindle, Robert

  Garel-Jones, Tristan

  Macfarlane, Sir Neil

  Gill, Christopher

  MacKay, Andrew (E Berkshire)

  Glyn, Dr Alan

  Maclean, David

  Goodhart, Sir Philip

  McLoughlin, Patrick

  Goodlad, Alastair

  McNair-Wilson, sir Michael

  Goodson-Wickes, Dr Charles

  McNair-Wilson, P. (New Forest)

  Gorman, Mrs Teresa

  Madel, David

  Gorst, John

  Major, Rt Hon John

  Gow, Ian

  Malins, Humfrey

  Gower, Sir Raymond

  Mans, Keith

  Grant, Sir Anthony (CambsSW)

  Maples, John

  Greenway, Harry (Ealing N)

  Marland, Paul

  Greenway, John (Ryedale)

  Marlow, Tony

  Gregory, Conal

  Marshall, John (Hendon S)

  Griffiths, Sir Eldon (Bury St E')

  Marshall, Michael (Arundel)

  Griffiths, Peter (Portsmouth N)

  Martin, David (Portsmouth S)

  Grist, Ian

  Maude, Hon Francis

  Grylls, Michael

  Mawhinney, Dr Brian

  Gummer, Rt Hon John Selwyn

  Maxwell-Hyslop, Robin

  Hamilton, Hon Archie (Epsom)

  Mayhew, Rt Hon Sir Patrick

  Hamilton, Neil (Tatton)

  Mellor, David

  Hampson, Dr Keith

  Meyer, Sir Anthony

  Hanley, Jeremy

  Mills, Iain

  Hannam, John

  Miscampbell, Norman

  Hargreaves, A. (B'ham H'll Gr')

  Mitchell, Andrew (Gedling)

  Hargreaves, Ken (Hyndburn)

  Mitchell, Sir David

  Harris, David

  Moate, Roger

  Hawkins, Christopher

  Montgomery, Sir Fergus

  Hayes, Jerry

  Morris, M (N'hampton S)

  Hayhoe, Rt Hon Sir Barney

  Morrison, Sir Charles

  Hayward, Robert

  Morrison, Rt Hon P (Chester)

  Heddle, John

  Moss, Malcolm

  874

  Moynihan, Hon Colin

  Taylor, Teddy (S'end E)

  Mudd, David

  Thatcher, Rt Hon Margaret

  Neale, Gerrard

  Thompson, D. (Calder Valley)

  Nelson, Anthony

  Thompson, Patrick (Norwich N)

  Neubert, Michael

  Thorne, Neil

  Nicholls, Patrick

  Thornton, Malcolm

  Nicholson, David (Taunton)

  Thurnham, Peter

  Nicholson, Emma (Devon West)

  Townend, John (Bridlington)

  Onslow, Rt Hon Cranley

  Tracey, Richard

  Oppenheim, Phillip

  Tredinnick, David

  Page, Richard

  Trotter, Neville

  Paice, James

  Twinn, Dr Ian

  Parkinson, Rt Hon Cecil

  Vaughan, Sir Gerard

  Patnick, Irvine

  Viggers, Peter

  Patten, John (Oxford W)

  Waddington, Rt Hon David

  Pattie, Rt Hon Sir Geoffrey

  Wakeham, Rt Hon John

  Pawsey, James

  Waldegrave, Hon William

  Peacock, Mrs Elizabeth

  Waldenm, George

  Porter, Barry (Wirral S)

  Walker, Bill (T'side North)

  Porter, David (Waveney)

  Waller, Gary

  Portillo, Michael

  Walters, Sir Dennis

  Powell, William (Corby)

  Ward, John

  Price, Sir David

  Wardle, Charles (Bexhill)

  Raffan, Keith

  Warren, Kenneth

  Redwood, John

  Watts, John

  Renton, Tim

  Wells, Bowen

  Rhodes James, Robert

  Wheeler, John

  Rifkind, Rt Hon Malcolm

  Whitney, Ray

  Roberts, Wyn (Conwy)

  Widdecombe, Ann

  Rowe, Andrew

  Wiggin, Jerry

  Sackville, Hon Tom

  Wilkinson, John

  Sainsbury, Hon Tim

  Winterton, Mrs Ann

  Scott, Nicholas

  Winterton, Nicholas

  Shaw, Sir Giles (Pudsey)

  Wolfson, Mark

  Shepherd, Colin (Hereford)

  Wood, Timothy

  Sims, Roger

  Woodcock, Mike

  Skeet, Sir Trevor

  Yeo, Tim

  Smith, Tim (Beaconsfield)

  Young, Sir George (Acton)

  Spicer, Michael (S Worcs)

  Younger, Rt Hon George

  Stevens, Lewis

  Stewart, Allan (Eastwood)

  Tellers for the Noes:

  Stradling Thomas, Sir John

  Mr. Michael Fallon and

  Summerson, Hugo

  Mr. David Heathcoat-Amory.

  Taylor, John M (Solihull)

  Question accordingly negatived.
  Bill committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).
  It being after Ten o'clock, MR. SPEAKER proceeded to put forthwith the Questions which he was directed by paragraph (1) of Standing Order No. 53 (Questions on voting of estimates &c.) to put at that hour.

  SUPPLEMENTARY ESTIMATES 1988–89
  Resolved,
  That a supplementary sum, not exceeding £1,042,249,000, be granted to her Majesty out of the Consolidated Fund to defray charges for Civil Services which will come in course of payment during the year ending on 31st March 1989, as set out in House of Commons Paper No. 690 of Session 1987–88.

  ESTIMATES 1989–90 (VOTE ON ACCOUNT)
  Resolved,
  That a sum, not exceeding £50,987,976,000, be granted to Her Majesty out of the Consolidated Fund, on account, for or towards defraying the charges for defence and Civil Services for the year ending on 31st March 1990, as set out in House of Commons Papers Nos. 691, 692 and 661 of Session 1987–88.
  Bill ordered to be brought in upon the foregoing Resolutions by the Chairman of Ways and Means, the Chancellor of the Exchequer, Mr. John Major, Mr. Norman Lamont, Mr. Peter Brooke and Mr. Peter Lilley.

  CONSOLIDATED FUND BILL
  Mr. Norman Lamont accordingly presented a Bill to apply certain sums out of the Consolidated Fund to the

  875
  service of the years ending on 31 March 1989 and 1990; And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 12.]

  BUSINESS OF THE HOUSE
  Ordered,
  That, at this day's sitting, the Ways and Means Motion may he proceeded with, though opposed, until any hour.—[Mr. Maclean.]

  Electricity Bill [Money]
  Queen's recommendation having been signified—
  Motion made, and Question proposed,
  That, for the purpose of any Act resulting from the Electricity Bill ("the Act"), it is expedient to authorise—
  (1) the payment out of money provided by Parliament of the following, namely—
  (a) the remuneration of, and any travelling or other allowances payable under the Act to, the Director General of Electricity Supply and any staff of the Director, any other sums payable under the Act to or in respect of a person who holds or has held office as the Director and any expenses duly incurred by the Director or by any of his staff in consequence of the provisions of the Act;
  (b) the remuneration of the chairman of a consumers' committee, any travelling or other allowances payable under the Act to such a chairman or to other members of such a committee, any other sums so payable to or in respect of a person who holds or has held office as such a chairman, any sums so payable to members of a sub-committee of such a committee and any expenses incurred by such a committee;
  (c) sums payable under the Act to persons who, immediately before the Electricity Consumers' Council and the Consultative Councils established under section 7 or 7A of the Electricity Act 1947 cease to exist by virtue of the Act, are the chairman or other officers of those Councils;
  (d) expenses incurred by the Treasury or the Secretary of State in acquiring securities of a successor company or rights to subscribe for any such securities;
  (e) sums required by the Secretary of State for paying remuneration and travelling or other allowances to persons on whom duties with respect to the preparation and auditing of statements of accounts are imposed by order under the Act;
  (f) sums payable under the Act to or in respect of persons who immediately before the transfer date are the chairman or other members or are employees of the existing bodies;
  (g) sums required by the Secretary of State for paying grants to the existing bodies;
  (h) the remuneration of, and any other allowances payable under the Act to, meter examiners and any other sums payable under the Act to or in respect of such examiners;
  (i) expenses reasonably incurred by the Fisheries Committee appointed under section 5(2) of the Electricity (Scotland) Act 1979 and continued in existence by the Act;
  (j) sums required by the Secretary of State for making grants or loans towards nuclear expenditure, or for fulfilling guarantees given by the Secretary of State in respect of sums borrowed from a person other than the Secretary of State for the purpose of meeting such expenditure, so long as the aggregate of any grants so made and of any amounts outstanding by way of principal in respect of loans so made and of sums paid in fulfilment of guarantees so given shall not exceed £1,000 million or such greater sum, not exceeding £2,500 million, as the Secretary of State may by order specify;
  (k) administrative expenses incurred by the Secretary of State or the Treasury in consequence of the provisions of the Act;
  (l) increases attributable to the Act in the sums payable out of money so provided under any other Act;
  (2) the payment out of the National Loans Fund of—
  (a) any sums required by the Secretary of State for making loans to successor companies in England and Wales which are for the time being wholly owned by the Crown, so long as the aggregate of any amounts outstanding by way of principal in respect of such loans shall not exceed £400 million or such greater sum, not exceeding £600 million, as the Secretary of State may by order specify;
  878
  (b) any sums required by the Secretary of State for making loans to successor companies in Scotland which are for the time being wholly owned by the Crown, so long as the aggregate of any amounts outstanding by way of principal in respect of relevant loans and sums issued out of the Consolidated Fund for fulfilling guarantees given by the Treasury in respect of sums borrowed by such companies from persons other than the Secretary of State shall not exceed £3,000 million;
  (c) any sums which, by virtue of the Act, are payable under section 5 of the Miscellaneous Financial Provisions Act 1955 in respect of unclaimed interest of redemption money on British Electricity Stock or North of Scotland Electricity Stock;
  (3) the reduction of the assets of the National Loans Fund by amounts corresponding to such liabilities of a successor company in Scotland in respect of relevant loans as the Secretary of State may by order extinguish;
  (4) the payment out of the Consolidated Fund of any sums required by the Treasury for fulfilling guarantees given by them in respect of sums borrowed from persons other than the Secretary of State by successor companies in Scotland which are for the time being wholly owned by the Crown;
  (5) the transfer to the Treasury of all rights and liabilities of the Electricity Council in respect of British Electricity Stock and all rights and liabilities of the North of Scotland Hydro-Electric Board in respect of North of Scotland Electricity Stock.
  In this Resolution—
  "existing body", "successor company" and "transfer date" have the same meanings as in Part II of the Act;
  "nuclear expenditure" means expenditure incurred by any person in connection with the storage or reprocessing of nuclear fuel, the treatment, storage or disposal of nuclear waste or the decommissioning of any nuclear installation:
  "relevant loan", in relation to a successor company in Scotland, means—

  (a) any loan made, or deemed to have been made, by the Secretary of State or from the National Loans Fund the liability to repay which vests in that company by virtue of the Act;

  (b) any loan made to that company by the Secretary of State; and

  (c) any sums payable under debentures issued as a consequence of the making of an order under the Act extinguishing any liabilities of that company.—[Mr. Maclean.]

  10.45 pm
  Mr. Malcolm Bruce: This money resolution is something to which the House should give serious attention, because it is being asked to vote through a sum in excess of £6 billion, and it will not be appropriate to let such a major item pass without raising a number of questions.
  A high proportion of the sum required of the taxpayer will be used to obviate nuclear power costs. It is difficult to establish precisely how much, but a figure of £2·5 billion is specifically identified in relation to nuclear power, with another £3 billion for the Scottish electricity debt conversion—most of which is due to Scotland's substantial nuclear capacity and its associated debt. It means that the taxpayer is being asked substantially to underwrite both debts incurred and yet to be incurred, to that level.
  One or two other matters should be covered by the Bill, and one is bound to ask whether the money resolution is adequate, given that large sums of money are specifically earmarked.
  Concern has been expressed about the Bill's implications for low income groups and the threat of disconnections. Schedule 6 deals with disconnections but

  879
  does not make it clear that protection will be provided in cases of hardship. It states that an electricity company may disconnect a customer whose bill has not been paid within 15 days of receipt of a demand for payment. That provision is unqualified, and the House will want to ensure that the protection against disconnection in cases of hardship that exists in the present regime will be continued in the Bill, and that provision for that will be made by the taxpayer—which seems not inappropriate-or that a clear indication is given that such protection will be given by the electricity companies.
  Another matter of considerable concern in many quarters is the lack of any obligation under the proposed legislation to provide a supply. That means that, if the social clause observed by the Hydro Board in areas such as the north of Scotland is removed, new developments in the Highlands may be placed at risk. Although the board may say that 99·9 per cent. of existing customers are connected, many will not have been. Under existing legislation, there is an obligation to supply them, too. There could be new developments in remote locations which, under the new legislation, may be denied the rights of access that currently exist.
  One is entitled to ask what provision will be made either to require the companies taking over from the existing boards to provide such a guarantee, and, if necessary, for public funding to underwrite it. If public funding can be provided on such a lavish scale to underwrite the Government's political objectives, and their strategic objectives in terms of nuclear power, one would like to think that the interests of low income groups and of developments in remote areas will be similarly protected. It is worth reminding the House that people on low incomes spend on average between 15 to 25 per cent. of their incomes on heating and lighting, compared with the national average of 6 to 7 per cent.
  A number of complaints have been expressed to me by industries that are high users of energy. I freely admit that the paper industry is very important to my constituency, and it has suffered badly from the privatisation of British Gas: in its own words, the industry in the last four years has been ripped of shamefully by a monopoly that has now been properly called to account, as we said it would have to be. Having suffered that, the industry now fears that it will face a similar problem with the privatisation of electricity.
  Many companies are committed at present to investing in combined heat and power systems, but fear that the changed circumstances could prevent that from being viable. After all, as the Minister has told us, the Scottish electricity industry has 100 per cent. over-capacity, and appears to be prepared to undercut any other competitive supplier to any level to try to ensure that the maximum connection is maintained—although that is not in the wider national interest in terms of energy efficiency, competitiveness or indeed conservation. Such factors should either be explained in the Bill or provided for in the money resolution.
  Given that the Bill is likely to become law, and privatisation is likely to go ahead, I make a plea on behalf of companies in my constituency—which I know have applied to be put on the shortlist before—that they be given the opportunity to supply the paper for the prospectuses. That might help to mollify them after the way they have suffered through increased energy costs in both the past and the proposed legislation.
  880
  The Bill fails on two counts, and the money resolution does not provide for any adequate coverage. First, contrary to what the Minister has said, the Bill substantially reduces the industry's commitment. to promote energy conservation. Clause 3(3)(b) lays down a requirement for the director general and the Secretary of State
  "to promote efficiency and economy on the part of such persons and the efficient use of electricity supplied by them".
  That is far from a strong commitment to promote energy conservation. Energy conservation and the interests of the environment will not be served by the market; they are the Government's responsibility. We need from the Government a clear indication of how they will ensure that the privatised industry will genuinely attend to such matters, and the money resolution should have made provision for any associated costs.
  The regulator proposed in the Bill is funded and staffed entirely inadequately, given the job that he is expected to do in an industry that has been completely reorganised and is extremely complex. The money resolution should have provided more money for the director general, who should have additional powers which would certainly require extra funds. He should have the power to set tariffs, or at least the company should have to apply to him for their approval. He should also have the power to approve major capital investment. He should have the power to direct companies in a way that is beneficial to the environment, and also to direct them to take action to promote energy efficiency and conservation. In pursuit of those aims, he should have the power to set up public hearings at which interested bodies could question the protagonists. All that requires considerably more money and staff than the Bill provides for.
  But the most offensive thing about the money resolution is that the House is being asked to vote through at least £6 billion of taxpayers' money to finance a flotation for which the Government have totally failed to make a case. The real motivation is to secure, at the expense of £6 billion of taxpayers' money, the £20 billion proceeds that the Government expect to get to bribe their way through the next election. The House should not allow that blatant misuse of taxpayers' money to pass unchallenged. The money resolution is the biggest that I have known to come before the House. I find it quite extraordinary that the Government can expect it to pass without debate and without proper attention being drawn to those important matters.
  10.54 pm
  Mr. Alex Salmond: Before allowing the money resolution to pass, given the vast sums involved, we should pursue the Government's financial intentions as to the future of the Bill. I particularly want to know whether they will have the brass neck to ask electricity consumers to purchase shares in the new privatised organisations.
  The array of assets owned by the electricity companies have been financed out of the bills paid by electricity consumers. Although the industry has substantial capital debt, nothing in the money resolution states that that debt definitely will be offset. Therefore, if that is the Government's intention it seems unreasonable to charge people to buy the assets to which they have already contributed as electricity consumers.

  881
  The Government do not have to charge people for the distribution of shares. They have a precedent in that the TSB effectively was stolen from its depositors. The industry was privatised and the money was put back into the industry instead of going to the Treasury. Have the Government considered that course? More reasonably, have they considered giving a free distribution of shares to electricity consumers? If the aim and intention of the Bill was to encourage share ownership, the Government might actively be considering a free distribution of shares to electricity consumers who have financed the assets which they will be asked to buy.
  If the Government show no sign of taking any such action, I shall be led to the unworthy conclusion that the money resolution will provide two slush finds—a slush fund for the nuclear industry, which has been mentioned in the debate, and a slush fund for the Government to use the money taken from electricity consumers for the assets for which they have already paid through their electricity bills, for the Government's own political purposes in their attempts to win future elections.
  10.56 pm
  The Parliamentary Under-Secretary of State for Energy (Mr. Michael Spicer): The hon. Member for Gordon (Mr. Bruce) finally got yesterday's speech off his chest. Although he kept mentioning the money resolution and asked some questions, most of the questions he raised are not covered by the money resolution. In his final peroration he mentioned the staffing for the director general. We believe that £10 million is certainly adequate to cover his various statutory obligations, in particular the two that the hon. Gentleman mentioned.
  I am not sure that the hon. Gentleman understood the Bill sufficiently when he raised the question of energy efficiency. The Bill places a statutory obligation on the director general to further the interests of energy efficiency. He specifically mentioned CHP. Again, the Bill gives the director general specific powers to ensure that there is full and fair access of all forms of electricity to the system. We believe that we have adequately staffed for those items.
  The obligation to supply is quite clear. Whereas at the moment there is no absolute obligation to supply outside the 50 yd from the mains limit, under the Bill every single consumer in Scotland, or anywhere else in Britain will have the right to be connected, unless there is a very specific technical reason why he cannot be connected.
  Mr. A. J. Beith: On that very point, is the charge to consumers provided for in the Bill likely to be as it is now under the nationalised boards, when consumers are asked to pay as much as £10,000 to be connected to the mains supply?
  Mr. Spicer: That is a very good question. The costs must be reasonable. The director general will act in an arbitration role. If a company could charge arbitrary high costs and thus discriminate against certain consumers, that would be wrong. There are ways in which such matters can be arbitrated.
  The final point made by the hon. Member for Gordon in his finishing-up of yesterday's speech was about disconnection. The Bill makes it clear that, where a right to disconnect exists, the supplier must give 15 working
  882
  days for payment and two days' notice before disconnection. Once the cause of the disconnection has been removed, the supplier will have to reconnect within two working days. Therefore, there will be a tightening up.
  The hon. Member for Banff and Buchan (Mr. Salmond) raised an almost incomprehensible question. I think he asked whether we were going to exclude electricity consumers as buyers of shares. I have said that the obligation will be upon companies to sell electricity to all domestic customers, so the answer must be no.
  Mr. Salmond: Perhaps I can explain my point to the Minister. The question is not whether shares will be sold to consumers but whether they will be charged for shares in assets for which they have already paid through their electricity bills. I argue that the Government are asking people to pay twice for the same thing. I gave the example of the Trustee Savings bank, which was privatised, when another course was taken.
  Mr. Spicer: As everyone will be a consumer, it would be crazy to give special discounts to everyone. That would be an extraordinary proposition. I thought that I had understood the hon. Gentleman correctly, and I find that I did. I hope that I have answered hon. Members' specific questions.
  Question put:
  The House divided: Ayes 191, Noes 19.

  Division No. 15]

  [11.2 pm

  AYES

  Aitken, Jonathan

  Cope, Rt Hon John

  Alexander, Richard

  Cran, James

  Alison, Rt Hon Michael

  Currie, Mrs Edwina

  Amess, David

  Davies, Q. (Stamf'd & Spald'g)

  Amos, Alan

  Davis, David (Boothferry)

  Arbuthnot, James

  Douglas-Hamilton, Lord James

  Arnold, Jacques (Gravesham)

  Dover, Den

  Ashby, David

  Dunn, Bob

  Aspinwall, Jack

  Durant, Tony

  Baker, Rt Hon K. (Mole Valley)

  Favell, Tony

  Baker, Nicholas (Dorset N)

  Fenner, Dame Peggy

  Baldry, Tony

  Finsberg, Sir Geoffrey

  Barnes, Mrs Rosie (Greenwich)

  Fishburn, John Dudley

  Batiste, Spencer

  Forman, Nigel

  Beaumont-Dark, Anthony

  Forsyth, Michael (Stirling)

  Bellingham, Henry

  Forth, Eric

  Bendall, Vivian

  Fowler, Rt Hon Norman

  Bennett, Nicholas (Pembroke)

  Fox, Sir Marcus

  Bevan, David Gilroy

  Franks, Cecil

  Boscawen, Hon Robert

  Freeman, Roger

  Bowis, John

  French, Douglas

  Brandon-Bravo, Martin

  Gale, Roger

  Brazier, Julian

  Garel-Jones, Tristan

  Bright, Graham

  Gill, Christopher

  Brittan, Rt Hon Leon

  Goodhart, Sir Philip

  Brooke, Rt Hon Peter

  Goodlad, Alastair

  Browne, John (Winchester)

  Goodson-Wickes, Dr Charles

  Buck, Sir Antony

  Gorst, John

  Budgen, Nicholas

  Gow, Ian

  Burns, Simon

  Gower, Sir Raymond

  Burt, Alistair

  Greenway, John (Ryedale)

  Butcher, John

  Gregory, Conal

  Butterfill, John

  Griffiths, Sir Eldon (Bury St E')

  Carlisle, John, (Luton N)

  Griffiths, Peter (Portsmouth N)

  Carlisle, Kenneth (Lincoln)

  Grist, Ian

  Carrington, Matthew

  Hamilton, Hon Archie (Epsom)

  Carttiss, Michael

  Hampson, Dr Keith

  Cash, William

  Hanley, Jeremy

  Chapman, Sydney

  Hargreaves, A. (B'ham H'll Gr')

  Chope, Christopher

  Harris, David

  Clarke, Rt Hon K. (Rushcliffe)

  Hawkins, Christopher

  Conway, Derek

  Heathcoat-Amory, David

  Coombs, Anthony (Wyre F'rest)

  Heddle, John

  Coombs, Simon (Swindon)

  Hicks, Mrs Maureen (Wolv' NE)

  883

  Holt, Richard

  Nicholls, Patrick

  Howarth, Alan (Strat'd-on-A)

  Nicholson, David (Taunton)

  Howarth, G. (Cannock & B'wd)

  Oppenheim, Phillip

  Howell, Ralph (North Norfolk)

  Paice, James

  Hughes, Robert G. (Harrow W)

  Parkinson, Rt Hon Cecil

  Hunt, David (Wirral W)

  Patten, John (Oxford W)

  Hunter, Andrew

  Pattie, Rt Hon Sir Geoffrey

  Hurd, Rt Hon Douglas

  Peacock, Mrs Elizabeth

  Irvine, Michael

  Porter, David (Waveney)

  Jack, Michael

  Portillo, Michael

  Jones, Robert B (Herts W)

  Powell, William (Corby)

  Kirkhope, Timothy

  Price, Sir David

  Knapman, Roger

  Raffan, Keith

  Knight, Greg (Derby North)

  Redwood, John

  Knowles, Michael

  Renton, Tim

  Knox, David

  Rhodes James, Robert

  Lamont, Rt Hon Norman

  Rifkind, Rt Hon Malcolm

  Lang, Ian

  Roberts, Wyn (Conwy)

  Latham, Michael

  Rowe, Andrew

  Lawrence, Ivan

  Sackville, Hon Tom

  Lester, Jim (Broxtowe)

  Shepherd, Colin (Hereford)

  Lightbown, David

  Smith, Tim (Beaconsfield)

  Lilley, Peter

  Spicer, Michael (S Worcs)

  Lloyd, Peter (Fareham)

  Stewart, Allan (Eastwood)

  Lord, Michael

  Stradling Thomas, Sir John

  Lyell, Sir Nicholas

  Taylor, John M (Solihull)

  Maclean, David

  Taylor, Teddy (S'end E)

  McLoughlin, Patrick

  Thompson, Patrick (Norwich N)

  McNair-Wilson, Sir Michael

  Thorne, Neil

  McNair-Wilson, P. (New Forest)

  Thurnham, Peter

  Malins, Humfrey

  Trotter, Neville

  Mans, Keith

  Twinn, Dr Ian

  Marland, Paul

  Vaughan, Sir Gerard

  Marlow, Tony

  Viggers, Peter

  Marshall, John (Hendon S)

  Waddington, Rt Hon David

  Marshall, Michael (Arundel)

  Wakeham, Rt Hon John

  Martin, David (Portsmouth S)

  Waller, Gary

  Maude, Hon Francis

  Wardle, Charles (Bexhill)

  Mawhinney, Dr Brian

  Warren, Kenneth

  Maxwell-Hyslop, Robin

  Watts, John

  Mayhew, Rt Hon Sir Patrick

  Wells, Bowen

  Meyer, Sir Anthony

  Wheeler, John

  Mills, Iain

  Widdecombe, Ann

  Miscampbell, Norman

  Wiggin, Jerry

  Mitchell, Andrew (Gedling)

  Wilkinson, John

  Mitchell, Sir David

  Winterton, Mrs Ann

  Montgomery, Sir Fergus

  Winterton, Nicholas

  Morris, M (N'hampton S)

  Wood, Timothy

  Morrison, Sir Charles

  Yeo, Tim

  Morrison, Rt Hon P (Chester)

  Moss, Malcolm

  Tellers for the Ayes:

  Moynihan, Hon Colin

  Mr. Stephen Dorrell and

  Neale, Gerrard

  Mr. Michael Fallon.

  Neubert, Michael

  884

  NOES

  Alton, David

  Salmond, Alex

  Ashdown, Paddy

  Skinner, Dennis

  Beith, A. J.

  Steel, Rt Hon David

  Campbell, Menzies (Fife NE)

  Taylor, Matthew (Truro)

  Carlile, Alex (Mont'g)

  Thomas, Dr Dafydd Elis

  Cryer, Bob

  Wallace, James

  Ewing, Mrs Margaret (Moray)

  Wigley, Dafydd

  Fearn, Ronald

  Hughes, Simon (Southwark)

  Tellers for the Noes: Mr. Andy

  Jones, Ieuan (Ynys Môn)

  Kirkwood, and

  Kennedy, Charles

  Mr. Malcolm Bruce

  Livsey, Richard

  Question accordingly agreed to.

  ELECTRICITY BILL [WAYS AND MEANS]
  Resolved,
  That, for the purpose of any Act resulting from the Electricity Bill, it is expedient to authorise—
  (1) the inclusion in licences granted under that Act of conditions requiring the rendering of payments to the Secretary of State or the Director General of Electricity Supply;
  (2) the imposition of charges to corporation tax by provisions relating to the taxation of successor companies within the meaning of Part II of that Act;
  (3) the payment of sums into the Consolidated Fund or the National Loans Fund.—[Mr. John M. Taylor.]

  STATUTORY INSTRUMENTS, &c.
  Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c.)
  STATUTORY INSTRUMENTS, &c.

    INDUSTRIAL ORGANISATION AND DEVELOPMENT
    That the draft Iron Casting (Scientific Research Levy) (Abolition) Order 1988, which was laid before this House on 24th October 1988, in the last Session of Parliament, be approved.—[Mr. John M. Taylor.]
    Question agreed to.

    TERMS AND CONDITIONS OF EMPLOYMENT
    That the draft Employment Subsidies Act 1978 (Renewal) (Great Britain) Order 1988, which was laid before this House on 9th November 1988, in the last Session of Parliament, be approved.—[Mr. John M. Taylor.]
    Question agreed to.

  SOCIAL SERVICES
  Ordered,
  That Mrs. Gillian Shephard and Mr. Tim Yeo be discharged from the Social Services Committee and Mrs. Marion Roe and Ann Widdecombe be added to the Committee.—[Sir Marcus Fox, on behalf of the Committee of Selection.]

  No-fault Compensation
  Motion made and Question proposed, That this House do now adjourn.—[Mr. John M. Taylor.]
  11.13 pm
  Mr. Elliot Morley: I am grateful for the opportunity to raise several issues in tonight's Adjournment debate, in particular an issue relating to one of my constituents, Mrs. Maclntyre.
  For over 20 years, Mrs. Maclntyre has been suffering from what was diagnosed as a psychiatric problem. In that period, she twice attempted suicide. It was a difficult and traumatic time for her, her husband and her family. In 1983, Mrs. Maclntyre saw another doctor, who diagnosed her as suffering from a form of thyroid disorder. He prescribed another form of drug, During the same year, however, Mrs. Maclntyre decided to stop taking all the medication that she had been prescribed, and she recovered almost immediately. Since 1983, she has not suffered from the depression that had afflicted her during the previous 20 years.
  Mr. and Mrs. Maclntyre have tried to pursue this matter through the courts as a case for compensation because of wrongful diagnosis. The court case took more than five years, and at the end of it, Mrs. Maclntyre had not progressed much further. The independent medical opinion and legal advice that she received concluded that she would be unable to prove her case in the courts. Therefore, she would be unable to receive compensation even though it was recognised by her independent advisers that it was quite likely that, "for an indeterminate period", as one specialist put it, she had been prescribed a drug for which there was no need. It was also suggested that there was a possible case on the grounds that her doctors did not know exactly what she was being treated for, or when the illnesses from which it was claimed she was suffering were resolved. One doctor said that those illnesses had resolved themselves.
  Mr. and Mrs. Maclntyre and their barrister believe that it is a remarkable coincidence that all the symptoms from which she was suffering ended when she stopped taking the drugs prescribed. At one time, Mrs. Maclntyre went from becoming obese to becoming extremely thin because of rapid weight gain and loss brought on by her drugs.
  Under our present law, the only way in which Mrs. Maclntyre can receive compensation is to prove that there was negligence on the part of the doctors who treated her, in particular Dr. Harding-Price, who diagnosed the thyroid problem and who specified the prescription of certain drugs. It is most unlikely that such negligence could be proved in court, so a stalemate has been reached because Mrs. Maclntyre can no longer receive legal aid after five years and therefore the case cannot proceed.
  That lady has suffered an injustice, but there is no further way in which she can pursue her case or claim. Some countries, such as Sweden and New Zealand, have a fund that would resolve that problem, known as a no-fault compensation fund. The idea is that people who can prove that they are victims of wrongful diagnosis, wrongful medical treatment or treatment that accidentally went wrong, can apply to the fund and receive compensation on a fixed scale depending upon the amount of inconvenience suffered or damage caused.
  886
  There are many advantages attached to such a scheme. For example, it cuts the lengthy time that people must spend attempting to receive compensation. Mrs. Maclntyre is not alone in having to go through lengthy, drawn-out legal battles. Those battles are extremely expensive because of lawyers' fees. The fund also removes the confrontational nature of such claims, in which where the victim must prove the criminal negligence of the doctor who may have treated him. We need a system under which people can receive compensation quickly and efficiently.
  That scheme could also apply to the case of another constituent of mine, a district nurse. That lady was injured when she restrained a patient who was having a fit. That patient cannot, of course, be held responsible for the injuries she suffered. She will receive the minimum compensation, and sick and invalidity benefits as laid down by the state, but she will not receive the compensation to which she believes she is entitled, a belief I wholeheartedly endorse.
  If we had a system of no-fault compensation, this lady could also apply to the fund, and because she would only have to demonstrate the injuries that she had received, she could get compensation without going through lengthy court proceedings and without proving who was directly responsible.
  The Swedish system is confined to cases of medical negligence. The New Zealand system goes further and includes compensation for the victims of road traffic accidents, for example. I ask the Minister to consider such issues carefully. Many victims of road accidents—and sometimes of hit-and-run accidents for which it has not been possible to find the culprits—have found that it has taken years to settle their claims for compensation. Their cases have been dragged through the courts at great expense and with great delay, and in the end the only ones to suffer have been the victims themselves.
  It would be to the advantage not only of individuals but of the insurance companies to co-operate with the Government in finding the money for such a scheme. I do not pretend that it would be cheap, but there are advantages in cutting down the legal fees that result from going through solicitors.
  I understand that part of the problem in cases of medical compensation, such as that of Mrs. Maclntyre, is that there are only about 50 or 60 firms of solicitors in the country with the detailed experience to pursue such claims through the courts. That has caused some people to have great difficulty in pursuing their cases through the courts —they have argued that they got far less compensation than they were entitled to because of their solicitors' inexperience.
  One such case is that of a gentleman who suffered brain damage in a hospital because the respirator was blocked. He was advised to accept a £2,000 settlement, but his family pursued the matter through the courts and received an award of £490,000 after many years of expense and much suffering.
  I put these points to the Minister in a positive way because I am trying to be helpful. Mrs. Maclntyre's problem is that there is no solution to her case under our law. There is no way in which she can take her case further, even though there is considerable evidence that she and her family suffered a great deal for 20 years. With a no-fault compensation fund, she could receive some compensation for her suffering without going through lengthy legal proceedings, and many thousands like her could get

  887
  compensation without pointing the finger at individual doctors and holding them responsible for what may have been genuine accidents.
  As I said, perhaps the fund could be extended to cover many other groups. It would work more efficiently; it would deal with deserving cases more quickly; and in the long run it would be a much more civilised way of dealing with tragic cases.
  11.23 pm
  The Solicitor-General (Sir Nicholas Lyell): First, I congratulate the hon. Member for Glanford and Scunthorpe (Mr. Morley) on raising once again, in the form of the cases of the constituents that he mentioned, part of the subject which was so carefully addressed more than 10 years ago in the Pearson report.
  On behalf of his constituent, Mrs. Maclntyre, the hon. Gentleman told a tale of frustration based on a perceived and no doubt much-felt injury or suffering for which no fault can be established against any individual, and for which a no-fault scheme of compensation is seen by some people, and urged by the hon. Gentleman, as a possible answer.
  It is believed by the hon. Gentleman and others that a scheme such as applies in Sweden or New Zealand might serve his constituents and other people in this country better than our present system, but it is not entirely clear that it would do so, as I shall explain in some detail. It may help to explain the current state of the law in this field and to look back at the Pearson report and what it recommended, and to look forward—this will be helpful to the hon. Gentleman's constituents and the nation at large —to some of the recommendations of the civil justice review which reported last year and is likely to be implemented in the comparatively near future.
  I should tell the House first that the Pearson commission drew attention to a number of popular misconceptions about the concept of no-fault schemes. It commented that it had found a widespread ignorance of the fact that in this country we already have a considerable element of no-fault provision and that there has been no-fault provision on quite a considerable scale since the Workmen's Compensation Act 1897.
  A person who has been injured may look immediately to the medical benefits provided by the National Health Service, whether medical care is needed in the short term only or for an extended period. If the injury is sufficiently serious to prevent an immediate return to normal life, a large range of benfits and services may be available to him or her, including social security allowances and benefits such as mobility and attendance allowances, industrial disablement benefit for people injured at work, severe disablement allowance for disabled people who are unable to work, as well as invalidity benefit for sick people unable to work and local authority social service provision of a number of kinds.
  However, I wish to turn specifically, as did the hon. Gentleman, to the question of medical accident and injuries that have been sustained, or are perceived to have been sustained, in the course of an illness or the medical treatment that accompanied that illness. The Pearson commission carefully considered the case for alternative methods of compensating those who suffer medical accidents. Two of its recommendations were to the effect that, with one exception, the basis of liability in tort for
  888
  medical injuries should continue to be negligence and that a no-fault scheme for medical accidents should not be introduced. The report also said that the progress of the two different no-fault schemes in operation in Sweden and New Zealand, to which the hon. Gentleman referred, should also be studied and assessed.
  These issues have been kept under review, as have the overseas schemes. It is notable that, at the time of the Pearson report, the view of the medical profession, as expressed by the British Medical Association, was firmly opposed to a no-fault scheme, on the grounds that such a scheme might undermine the independence of the profession, particularly by obliging doctors and surgeons to defer to their employers, the health authorities.
  However, there has been some shift in the view of the profession since then and it may therefore first be helpful to summarise the arguments considered by the Pearson commission when it decided not to recommend the introduction of a no-fault system for medical accidents.
  The commission looked first at the cost of a no-fault system. The costs involved are inherently difficult to assess precisely, but, if the scale of the compensation envisaged were to be anything like that applicable when negligence is established under our present scheme, the costs would undoubtedly be higher.
  The commission considered that the second main difficulty in the way of the scheme was how to establish causation—this is highly relevant to the case of Mrs. Maclntyre which has been raised by the hon. Gentleman—because it is by no means always possible to identify the cause of an injury. There will frequently be difficulty in distinguishing medical accident from either the natural progress of a disease or from a possible side effect of treatment. A no-fault scheme might seem to effect an improvement by achieving equal treatment of all parties suffering injury as a result of accident, but, in a significant number of cases, it would be seen to operate no less unfairly than a fault-based scheme in making a new distinction between accident cases and natural progression cases.
  One of the features of the Swedish experience seemed to call for a precise definition of what is meant by medical accident. Lawyers among us will remember the great degree of attention which was given under the Workmen's Compensation Acts to the meaning of
  "in the course of employment."
  It is that sort of question, when related to medical accidents, which necessarily has to be asked unless we are to introduce a scheme which compensates everyone for any degree of suffering howsoever caused, and no one has proposed that.
  The Pearson commission noted in its review of foreign practice that the Swedish experience at that time was that one claim failed for every two that succeeded. High cost has always been an important factor in the operation of the New Zealand no-fault accident compensation scheme. The scheme, which came into existence in 1974, provides rehabilitation and income-related benefits. These are financed largely by levies on employers, the self-employed and the owners of motor cars, for disabilities resulting from accidents. The scheme is not limited to medical injuries and covers all accidents. However, the New Zealand Law Commission has recently referred to
  "unexpected and considerable increases in costs in real terms."

  889
  The New Zealand scheme applies only to disabilities that are the result of accidents, and the very definition of that term appears to have caused frequent litigation on its application in certain cases. Disabilities caused by accident in New Zealand in the course of medical, surgical and dental procedures are expressly included within the definition of personal injury by accident, but compensation is generally refused when the disability results from the known risks of the medical procedure in question. To many patients, however, such disabilities must seem to be no less the product of an accident.
  The Swedish scheme is a voluntary one that is operated by a consortium of health companies under an agreement with the health care authorities and health professions, which pay the premiums. The scheme does not compensate for injuries that are the normal outcome of a disease. There is no compensation for injuries that are unavoidable complications of treatment selected for proper medical reasons, unless it can be shown that the patient could have been treated effectively in another way. It is notable that the average level of awards under the scheme is just over £2,000.
  I am sorry that I must present a somewhat depressing catalogue of comments on the Swedish and New Zealand schemes. They have been carefully studied, and we shall continue to study them. I am not sure that they offer as much practical satisfaction to those who find themselves in the categories which have been outlined by the hon. Member for Glanford and Scunthorpe as might first have been thought.
  Sir Michael McNair-Wilson: My hon. and learned Friend may remember that, on 17 December 1987, my right hon. and learned Friend the Attorney-General answered a debate which I initiated on the Pearson commission's report. My right hon. and learned Friend suggested that a working party might be set up, consisting of members of the British Medical Association and the Department of Health and Social Security, as it then was, to consider another form of compensation scheme. Has any progress been made with the working party?
  The Solicitor-General: I do not think that I can answer my hon. Friend's question. I am sorry that I am not immediately aware of the answer, though I did re-read my right hon. and learned Friend's answer to the debate which was initiated by my hon. Friend, as my hon. Friend has been a leading proponent of further study of these matters. I undertake to ascertain what the position is and to write to him.
  I hope that what I go on to say provides slightly more hope in respect of dealing with the final matters dealt with by the hon. Member for Glanford and Scunthorpe, which were the difficulties of carrying forward litigation.
  The principal criticism of the tort-based system in this country has been the delay, cost and complexity of civil proceedings. I know something about medical negligence cases, because I used to act in them. There have been many
  890
  real improvements in many respects over the past 10 years, but we believe that we could go further. In early 1985, the civil justice review was set up to improve the machinery of justice in England and Wales by means of reforming jurisdiction procedure in court administration and in particular to reduce delay, cost and complexity. The review body's report was published in the summer and it contained many recommendations offering the possibility of improvements throughout civil justice for the benefit of all litigants. Some of the recommendations relate exclusively to personal injury claims. The report has been put out to consultation and has received urgent consideration in Government Departments, and the Government have given the proposals a high priority.
  Several procedural reforms are recommended in the report as a means of reducing delay. In particular, the review recommends a new system of court control of case progress which would impose time limits on litigants and their solicitors from the stage at which an action becomes defended. Measures would also be taken to cut down delay before proceedings are commenced. For cases going to full trial, the review recommends further steps to speed up the hearing; compulsory pre-trial exchange of witness statements; and greater reliance on written rather than oral evidence, with an opportunity for the judge to read relevant material before the trial.
  Further proposals designed to reduce delays, specifically in personal injury cases generally, include early release of accident reports by police and of medical reports by hospitals. As a means of making progress in protracted cases, it is recommended that the court should have power of its own motion to order a split trial in which the issue of liability is tried separately and in advance of the issue of damages.
  The review recommends that smaller personal injury cases—up to £1,000—should be referred to arbitration by a county court registrar under the simplified small claims procedure. That would cut out legal costs in such cases and ensure that they were speedily disposed of.
  Among the further recommendations of the review body was a recommendation relating to further exploration of no-fault compensation possibilities in a specific context which is different from that referred to by the hon. Member for Glanford and Scunthorpe and by my hon. Friend the Member for Newbury (Sir M. McNair-Wilson), but it may nevertheless be of interest. It proposed that further consideration should be given by my right hon. and noble Friend the Lord Chancellor in consultation with the insurance industry to the feasibility of a no-fault scheme for less serious road accidents funded by private insurance. The review recognised a number of advantages of setting up such a scheme which would reduce pressure on the court system.
  The Lord Chancellor is carefully considering that and other aspects of the civil justice review report and expects to make an announcement soon. Although he cannot give a precise date, he hopes to do so early in the new year.
  Question put and agreed to.
  Adjourned accordingly at twenty-two minutes to Twelve o'clock.