HC Deb 25 July 1988 vol 138 cc3-4
2. Mr. Rost

To ask the Secretary of State for Energy when he expects to appoint the Regulator to oversee the electricity industry in the private sector.

The Parliamentary Under-Secretary of State for Energy (Mr. Michael Spicer)

We plan to appoint the Regulator and have his office established by the time the industry has been reorganised for privatisation.

Mr. Rost

Is my hon. Friend aware of the widely held view, especially among prospective independent electricity producers who can provide the competition that the Government want, that the Regulator should be appointed as soon as possible in the transition period so that the contractual arrangements can be monitored in the run-up to privatisation?

Mr. Spicer

We clearly cannot appoint a Regulator until the necessary legislation has passed through Parliament. Until the Regulator is appointed and the regulatory regime is in place, the Government will oversee, or, to use my hon. Friend's word, "monitor", the electricity supply industry's preparation for privatisation. In particular, we shall oversee the negotiations of the initial contracts between distribution boards and the CEGB's successors. We shall not permit practices designed to stifle competition or to prevent distributors from making contracts with new sources of supply.

Mr. Prescott

Will the Minister confirm that the profit rates allowed by the Regulator for privatised electricity will be double those allowed for the public sector, which will confirm the fears of industry and consumer groups that Britain's electricity prices will move from being among the cheapest to becoming among the most expensive in the world? Will he also confirm that the salary of Lord Marshall, chairman of the new privatised company, will treble to £200,000 for managing a company that is 30 per cent. smaller? Will the Regulator be able to consider that exploitation of the consumer?

Mr. Spicer

I cannot confirm either of those questions, the second of which is a figment of the hon. Gentleman's imagination. As to profit regulation, the hon. Gentleman clearly has not seen the procedents for regulatory regimes or what we have written about them, because they will operate, not on profit regulation, but on price regulation

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