Electricity Industry Privatisation (Hansard, 21 December 1988)

§ 8. Mr. Harris
To ask the Secretary of State for Scotland what estimate he has made of the volume of electricity likely to be sold by the Scottish electricity industry to England following privatisation.

§ 18. Mr. Strang
To ask the Secretary of State for Scotland what estimates he has made of the amount of electricity which could be supplied to England from Scotland over the next 10 years; and if he will make a statement.

§ The Minister of State, Scottish Office (Mr. Ian Lang)
The level of electricity exports from Scotland after privatisation will be a matter for commercial negotiation between the companies. Active consideration is being given to upgrading the capacity of the interconnector so that opportunities for trading can be maximised to the limits justified commercially and economically.

§ Mr. Harris
Does my hon. Friend agree that the proposals in the Electricity Bill, coupled with the moves to upgrade the interconnector between Scotland and England, offer exciting prospects for the generating industry in Scotland? Would he find it a refreshing change if the ragbag of an Opposition thought positively about the matter rather than negatively?

§ Mr. Lang
My hon. Friend is absolutely right. These provisions enable the prospect of a competitive and 438 commercially oriented environment to be introduced in the electricity industry, and that is bound to have a downward effect on prices for the consumer.

§ Mr. Strang
Does the Minister of State accept that it is enormously important that Scotland sells electricity to England on a substantial scale in the coming years? Are the Government prepared to pay for the investment in the increased capacity of the interconnector? Above all, will he give an assurance that he and his right hon. and learned Friend will not stand idly by and allow the South of Scotland electricity board to write off hundresds of millions of pounds of investment and thousands of jobs in the Scottish deep mining industry?

§ Mr. Lang
The decision on whether to proceed with the upgrading of the interconnector is a matter for the commercial judgment of the companies involved. The industry has reached agreement in principle to increase the capacity of the interconnector to 1600 MW. The cost, which may be as high as £200 million, is a matter for negotiation.

§ Mr. Home Robertson
What prospects are there for the future of electricity generation at the highly efficient coal-burning power stations at Cockenzie and Longannet if the SSEB persists with its policy of burning loss-lead, imported coal rather than honouring its contract to burn Scottish coal at those power stations? Is it not absurd that two nationalised industries should be taking each other to court in a dispute about a perfectly clear contract that was intended to protect investment and employment not only in the power stations but in the pits? Will the sponsoring Minister for the SSEB—the Secretary of State for Scotland —intervene now to stop the dispute to ensure that the contract is honoured and the jobs protected?

§ Mr. Lang
The upgrading of the interconnector will increase the possibility of coal-generated electricity being exported to England, but the competitiveness of coal is a matter for British Coal to negotiate with the SSEB.

§ Mr. Gregory
Does my hon. Friend agreed that the privatisation of Scottish electricity would bring a welcome move from Whitehall to Scotland and provide opportunities for employees, as well as members of the public, to share in the future of that great industry?

§ Mr. Lang
My hon. Friend is right. The privatisation of the electricity industry in Scotland will create two substantial free-standing private enterprise companies and enhance the enterprise economy in Scotland.

§ Mr. Kennedy
Will the Minister give Scotland a guarantee that following privatisation, the ownership of the successor companies to the North of Scotland Hydro-Electric Board and the SSEB will remain in Scottish hands?

§ Mr. Lang
The hon. Gentleman will be aware that the industries are not in Scottish hands at the moment. However, privatisation will provide for an opportunity for consumers in Scotland and employees of the boards to buy shares in the electricity industries in Scotland. In addition, there is provision for a special share that will enable my right hon. and learned Friend the Secretary of State to control the shareholding of any one individual.