Electricity Industry (Hansard, 29 June 1988)

§ 5. Mr. Buchan
To ask the Secretary of State for Scotland if he will make a further statement on the future of the electricity industry in Scotland.

§ Mr. Lang
The Government remain firmly committed to their policy of privatising the electricity supply industry in Scotland within the lifetime of this Parliament. The development of our proposals in detail is proceeding well, and draft legislation will be brought before Parliament in due course.

§ Mr. Buchan
As the Government's own White Paper stresses that a monopoly will continue and that the boards have been efficient, is there any case for proceeding with privatisation other than political dogma and the pursuit of profit by the Government's friends? Above all, is it not incredibly dangerous and reckless, still in the decade of Chernobyl, to put our nuclear power industry in the hands of private profit-makers? It is one of the most dangerous and foolish things that this dangerous and foolish Government have ever done.

§ Mr. Lang
There is considerable advantage to he gained from the development of two free-standing companies in Scotland able to offer competitive sourcing of electricity to Scottish consumers. The important point about nuclear power is the way in which it is regulated, and we are not contemplating any change in the Nuclear Installations Inspectorate, which regulates these matters.

§ Mr. Oppenheim
Will my hon. Friend remind Opposition Members that Scotland has electricity consumers as well as electricity producers, and that those consumers employ people and have interests as well?

§ Mr. Lang
My hon. Friend is right. If we pursued the electricity policy advanced by the Opposition during the last general election campaign, and abandoned nuclear power, electricity prices in Scotland would have to rise by 30 per cent.

§ Mr. Millan
It is now more than three months since the White Paper was published, and we have still not had answers to the basic questions that it raised. Can the Minister at least give us an assurance that, whatever else happens, the industry will not be allowed to fall into foreign hands? Nobody believes that it will stay under Scottish control, but can he at least give us that minimal assurance?

§ Mr. Lang
I understand the right hon. Gentleman's anxiety about this matter. It is an important issue and we are considering it carefully. There will be nothing wrong with a measure of foreign investment in the industry when it is in private hands, but I accept the right hon. Gentleman's anxiety about control or ownership being in foreign hands. That is something that we shall consider closely, and we shall announce our decision at the appropriate time.

§ Mr. Bill Walker
Does my hon. Friend agree that privatisation of the electricity supply industry will give us an opportunity to export electricity to England on a substantial scale? Does he also agree that it gives the Scots an opportunity to invest in the new electricity companies? More important, is my hon. Friend aware that the chairman and senior executives of the British Airports 351 Authority said on the Terrace last night that privatisation is the best thing that has ever happened to them because of the effect it has had on their management, particularly because it electrifies the management as nothing else does?

§ Mr. Lang
My hon. Friend is right. I met representatives of the BAA last night and they confirmed to me the great success that has resulted from privatisation. My hon. Friend mentioned the export of electricity to England. That is an area in which the Scottish electricity industry and, therefore, the Scottish consumer, can benefit considerably, provided that electricity can be generated competitively.

§ Mr. Dewar
How can the Minister describe the privatised companies as free standing if they are to be linked in a joint operating company for nuclear power? Will he give an assurance that, whatever else happens, there will be separate Scottish legislation when the matter comes to the House? That is surely in the interests of good parliamentary scrutiny and democratic control over what the Government are doing. Perhaps I may echo the point made by my right hon. Friend the Member for Glasgow, Govan (Mr. Millan). We have asked whether there will be effective plans to limit foreign ownership and more, important, to retain control in Scotland. Continued dodging and ducking on that issue suggests that the Government are prepared to watch an essential public utility being sold to anyone, anywhere, at any price.

§ Mr. Lang
We are not ducking or dodging anything. There is an appropriate time to answer these matters. Legislation has not yet been prepared or presented to the House. When it has been, that will be the appropriate time to answer these questions. There is nothing anomalous about two independent free-standing companies sharing ownership of a subsidiary. I hear what the hon. Gentleman says about the Opposition's desire for separate legislation. That will be decided at the appropriate time. The hon. Gentleman is as aware as I am that there are many matters that affect the industry both north and south of the border.

§ 6. Mr. McKelvey
To ask the Secretary of State for Scotland if he has yet reached any conclusions as to what strategy he intends to adopt in order to ensure that control of privatised Scottish electricity boards remains in Scotland; and if he will make a statement.

§ Mr. Lang
The Government will seek to encourage as many Scots as possible to invest in the Scottish electricity industry. We are considering whether a special share or other form of protection is appropriate and our conclusions will be announced in due course.

§ Mr. McKelvey
When the Secretary of State's surrogate perpetrates the plunder of one of Scotland's assets, will he bear in mind the increasing poverty in Scotland? When he clinches the sale of the century, will he at least underpin the position of those in poverty by seeking to guarantee their right to fuel and their right not to be cut off? We do not want to see the same thing happen as occurred after privatisation of the gas industry, where the number of cut-offs leapt by a huge percentage in England and to a certain extent in Scotland. We want cut-offs to be disallowed.

§ Mr. Lang
I do not know how the hon. Gentleman can speak about increasing poverty in Scotland when personal 352 disposable incomes in 1986 were 16 per cent. higher than they were 10 years ago. There is no reason why we should depart from the present policy on cut-offs.

§ Mr. Steel
If control does not remain in Scotland, how will the Minister explain to the House and his constituents that the common tariff principle, which protects consumers in rural areas in the north of Scotland, will not be applied to rural areas in the south of Scotland?

§ Mr. Lang
I take it from the right hon. Gentleman's question that he welcomes the prospect of control and ownership of the companies returning to Scotland, because, at present, the industries are owned by the Treasury.

§ Mr. Steel
Answer the question.

§ Mr. Lang
On the question of common tariffs, the only requirement is for the north board to provide a common tariff, and it will be able to do so as largely a result of the availability of hydro power. There is no requirement at present for the south board to provide a common tariff and we see no need for that.

§ Mr. Forth
Will my hon. Friend resist the pathetic chip-on-the-shoulder paranoia of Opposition Members? Will he contrast the apparent wish of Opposition Members to restrict ownership of a utility to those within a particular geographic area with their welcome for the jobs generated by external investment in Scotland over many years? Can my hon. Friend tell me how many jobs in Scotland depend on investment by what Opposition Members call foreigners? What confidence does he have that restricting ownership to Scots would do any good for the Scottish economy?

§ Mr. Lang
Since Locate in Scotland was established in 1981 about 50,000 jobs have been created or safeguarded in Scotland as a result of inward investment. We share my hon. Friend's view that the electricity industry in Scotland is a great potential asset. We believe that by privatising it we will enable Scotland to enjoy the maximum benefit from it.