Electricity Industry (Hansard, 25 May 1988)

§ 5. Mr. Wallace
To ask the Secretary of State for Scotland when he last discussed the proposals for privatisation of the electricity industry with the chairmen of the Scottish electricity boards.

§ Mr. Rifkind
I last met the chairman of the South of Scotland Electricity Board on 1 March and the chairman 313 of the North of Scotland Hydro-Electric Board on 3 March to discuss privatisation of the electricity industry in Scotland.

§ Mr. Wallace
The Secretary of State has often said that once privatisation has taken place he would wish a substantial number of shares to be retained within Scotland. Has he given any thought to proposals to ensure that that happens, given that the hon. Member for Worcestershire, South (Mr. Spicer), the Parliamentary Under-Secretary of State for Energy, has said: We shall be placing on the American market a proportion of the stock we shall be selling in the existing companies."? Does that apply to the flotation of the Scottish companies as well as to those south of the border?

§ Mr. Rifkind
In previous privatisations those who are both employees and consumers of a nationalised industry have often been given preference in the acquisition of shares. In respect of the South of Scotland Electricity Board and the North of Scotland Hydro-Electric Board, almost every consumer, with the sole exception of those living in Berwick-upon-Tweed, lives in Scotland. Therefore, if the Scottish public are interested in acquiring a substantial stake in the ownership of the two companies, they will have a preferential opportunity to do so.

§ Mr. Eadie
When the right hon. and learned Gentleman met the chairmen of the electricity boards in Scotland, was he able to assure them that a separate Scottish Bill would be published and that the proposed privatisation would not be hived off on to the Bill that is being submitted for the privatisation of electricity in England and Wales?

§ Mr. Rifkind
So far neither of the chairmen has expressed any preference for a particular form of legislation. Whether electricity privatisation should be part of a United Kingdom Bill or dealt with by separate English and Scottish Bills is a matter still to be resolved.

§ Mr. John Marshall
Does my right hon. and learned Friend agree that, apart from leading to wider share ownership, privatisation of the Scottish electricity industry will lead to lower prices to the consumer and greater job opportunities in manufacturing industry?

§ Mr. Rifkind
My hon. Friend is correct. There is no reason why the privatisation of both companies should not have the same benefits for the public as all previous privatisations, despite predictions to the contrary by the Labour party.

§ Mr. Maxton
Will the Secretary of State now answer the question put to him by the hon. Member for Orkney and Shetland (Mr. Wallace)? What guarantees will he put in the legislation to ensure that, in the months and years following the privatisation of the two electricity boards, control will remain in Scotland?

§ Mr. Rifkind
I cannot guarantee that the Scottish public will use the opportunities that the Government provide. The Scottish public will have a unique opportunity to acquire shares and therefore to acquire the ownership of the companies. Whether they wish to take advantage of those opportunities will be for them to decide. The hon. Gentleman must appreciate that that would be a responsible position to adopt.

§ Mr. Salmond
The Secretary of State has said that he cannot guarantee continued Scottish ownership of the 314 Scottish electricity industry. Can he give the House any guarantee that the North of Scotland Hydro-Electric Board will have a social clause that is meaningful to the north of Scotland with regard to reconnections, repairs of lines and other aspects of its activities?

§ Mr. Rifkind
The original reasons for the social clause were not those raised by the hon. Gentleman. Those reasons were to ensure that the remote rural areas and island communities had access to the benefits of the board's activities—that has already been achieved—and to achieve common tariffs throughout the area. In the White Paper we have already made it clear that we intend to ensure that there will be common tariffs throughout the board's area.