HC Deb 10 April 1989 vol 150 cc673-88

Amendment made: No. 78, in page 144, line 45, column 3, leave out lines 45 and 46 and insert 'Section 44.'.—[Mr. Michael Spicer.]

Order for Third Reading read—Queen's and Prince of Wales's consent signified.

10.6 pm

The Secretary of State for Scotland (Mr. Malcolm Rifkind)

I beg to move, That the Bill be now read the Third time.

It is probably impossible to present new considerations for the deliberations of the House that have not already been exhaustively discussed at Second Reading, in Committee or on Report. However, I would wish briefly, in order not to detain the House, to emphasise that the Government believe that the deliberations on the Bill have clearly and firmly established the basic propositions on which the Bill was originally commended to the House.

First, we believe that the Bill is in the interests of the electricity industry. It is significant that the industry agrees with our observation. Perhaps the most important consideration from the industry's point of view is that in future the investment needs and other crucial decisions affecting the electricity industry will not be subject to Government or to politicians of any party. That will place the electricity industry in the same position as other industries throughout the United Kingdom. It can only be beneficial that those aspects of investment and other matters are determined by the industry. I believe that that explains the enthusiasm of the people who work in the electricity industry for the prospects that privatisation will bring about.

Secondly, I believe that the Bill has clearly been shown to be in the interests of the consumer. That is central to the difference between the two sides of the House. Whereas the Labour party, and those who support its point of view, believe that if one cannot have perfect competition, one should be satisfied with perfect monopoly, the Government believe that it is possible to introduce substantial elements of competition within the electricity industry, that it is in the interests of the consumer to do so and that the Bill will bring that about.

There will, therefore, be competition in generation, there will be choice for bulk purchasers of electricity and there will be opportunities for exporters, especially for the Scottish electricity industry, which I believe have justified the support for the Bill.

The Bill is especially important for Scotland where the nationalisation of the electricity industry some 40 years ago meant—as do all other forms of nationalisation in Scotland—the loss of control in Scotland to the Government of the day, whichever Government that might be. One never ceases to be amused, as well as unsurprised, at the inability of the Opposition to understand that argument.

In future the needs of the Scottish electricity industry will be decided by the management of that industry in Scotland, which I believe is of significance. In addition, by the privatisation of the SSEB and the hydro board, we will create two of the largest Scottish companies, which will give a major boost to the development of the Scottish private sector. We will see also exciting opportunities for consumers, employees and financial institutions in Scotland to acquire a significant stake in the industry.

There are fundamental differences between the Government and the Opposition. The Opposition stand for monopoly. They stand for continuing monopoly that they express themselves content with and anxious to preserve. The Opposition also appear to believe that there is a need not for simply a regulatory structure to protect the public interest, but for politicians and for Governments to have a continuing right to interfere in the fundamental decisions affecting this industry, although they have no comparable right in other industries that are crucial to our national economy.

These are crucial issues of principle and I believe that during the debate my right hon. and hon. Friends, who have been concerned with the detail of the Bill, have manifestly shown the desirability of the Bill and, indeed, the benefits that it will bring to the public throughout the United Kingdom. It is on that basis that I happily commend the Bill to the House.

10.8 pm

Mr. Blair

As we are preparing to vote on the Third Reading of the Electricity Bill it is instructive to remember the words of the Secretary of State for Industry who, six years ago, moved the Telecommunications Bill to privatise British Telecom. The Secretary of State for Industry then is the Secretary of State for Energy now, the peripatetic right hon. Member for Hertsmere (Mr. Parkinson). I gather he is now occupied as a travelling salesman somewhere in the Soviet Union. At that time he set up what he believed would be the guiding principle in the privatisation of British Telecom. He promised: It will give customers the choice between different suppliers of apparatus, different suppliers of services and, increasingly, different networks. It did not do any of those things. He said of British Telecom: I am convinced that to change British Telecom ownership will bring about a major improvement in BT's accountability. It has not. Finally, he said. We offer the millions of BT customers a newly enshrined set of rights"—[Official Report, 18 July 1983; Vol. 46, c. 27–38.] Tell that to the thousands more who, each year, complain about the standards of service that they receive.

The truth is that every promise that has been made tonight for the Electricity Bill was made in 1983 for the British Telecom Bill. The Government were wrong then and they are wrong now. We have established that for the consumer, contrary to what the right hon. Gentleman has said, there will be no choice of area board, no choice at point of service. There will be little competition ever in this industry and no competition for at least 10 years.

We have shown that the basic security of supply is at risk because, as Mr. Baker said and the Secretary of State could not deny, it will not be the duty of National Power or PowerGen to keep the lights on after privatisation, although they are the only people who will be able to fulfill that duty of supply.

We have learnt that the area boards with a high proportion of industrial customers will be vulnerable to takeover and bankruptcy if they lose major customers from the system.

We have revealed that the nuclear industry, quite apart from any other section of the fuel industry, will be ring fenced, given special protection against risk and underwritten by a special tax paid for by the consumer and the taxpayer who will still be liable for the costs of decommissioning even after losing the profit from the industry.

We know that the national grid, the transmission system, itself a monopoly to be owned by the area boards, will be privatised although no rational case has been made for its privatisation at any time during our deliberations.

We have exposed the fact that the costs of flotation will be huge and that they may amount to as much as £25 for every household in this country. All that for a privatisation that the people do not want, the nation does not need and that is now incomprehensible in any terms except as a doctrine driven by prejudice.

Mr. Alfred Morris (Manchester, Wythenshawe)

Is not the Government's whole stance in relation to this Bill reminiscent of Oscar Wilde who said, after the first night of one of his plays, "The play is a great success, but the audience a failure"? Although the Government are convinced by their own propaganda, has not the Bill been overwhelmingly rejected by the electorate and therefore by the consumers?

Mr. Blair

My right hon. Friend is entirely right.

The Government may get their majority tonight in the House, but they have failed miserably to persuade the majority of people in this country that the proposal is good. At the next election they shall pay the penalty for that misjudgment.

10.13 pm
Mr. Rost

I congratulate my right hon. and hon. Friends on the courageous manner in which they have introduced this radical Bill and on the skilful manner in which they have handled this complicated and technical reform.

I welcome the opportunity for competition. Evidence already exists of area boards shopping around and contracting or arranging to contract for cheaper electricity than they now pay the CEGB to supply. The east midlands hoard, for example, is already offered cheaper power than it now buys from the CEGB. I welcome the change of heart on the part of the CEGB, which is already having to rethink its energy strategy and abandon its traditional plans of electricity only large coal-fired stations in favour of lower-cost electricity production. It has had to turn to combined cycle gas turbines and it has realised that, in future, it will have to sell electricity in a competitive market.

I welcome the nuclear clause because for the first time, by ring fencing the real cost of nuclear energy, it will concentrate the minds of the nuclear industry, which will have to become competitive if it wishes to have a future unprotected by a subsidy which I regard as transitional. I welcome the effect that it will have on the coal industry, which will also have to realise that it must improve its competitiveness if it wishes to sell its products. The country will no longer be handicapped by high-cost coal and the high-cost electricity which results from it.

I welcome the opportunities of wider share ownership, particularly employees shareholding, that will result from the legislation. I welcome the opportunities that will come to the new technologies for electricity production, which the CEGB has preferred to ignore and which will produce cheaper power—the clean coal technologies, the combined-cycle gas turbine. Those will exert downward pressure on prices, as distributors have the competitive incentive to source their supplies from lower-cost electricity. I welcome the incentives particularly for the combustion of municipal refuse, which can be used for fuel instead of land fill and causing pollution.

I have only one regret, and one reservation, which is that I hope that my right hon. Friends will look again at the need to increase the powers to oblige privatised production companies to sell off their surplus power stations, of which they are hoarding more than 100 at the moment—most of them near urban areas. These redundant power station sites are ideal for the private producers, who want to provide competition. It is important that those sites should be made available on a competitive basis.

My regret is that the Government have rejected amendments—including my own—that would have strengthened the obligation to produce electricity more efficiently and less wastefully. That is a missed opportunity, which would have encouraged more efficient electricity production, more city combined heat and power district heating, reduced the emissions of greenhouse gas CO, whilst, at the same time, improving energy efficiency and reducing fossil fuel burn.

The United Kingdom has the highest CO2 release of fossil fuel from energy production per head of population in Europe. We burn more coal and, at the same time, we use only one third of what we put into power stations to convert into electricity. We throw away, in the form of hot water, the other two thirds of the fuel—which other countries increasingly use for space heating, so displacing fossil fuel burn. We should also do that.

The Government could have given a lead—I hope that they will reconsider this—in promoting more energy efficiency by reducing the greenhouse gases and, at the same time,. reducing the threat of global warming. I predict that within two or three years, because of international and EEC pressure, and the need to reach agreement to reduce CO2 emissions globally, amendments will be made to the Bill in the form that some of us have suggested. I hope that hon. Members of the other place will look again and attend to this most important matter to strengthen the Bill in a way that will give credit to the Government in the longer term.

I hope that the regulator, when appointed, will prove to be as effective as the regulator of British Gas—the director general of Ofgas. He must be a person of such calibre because his responsibilities will be immense and he will determine whether the Government's proposals for competition succeed or fail.

The Bill offers a long overdue restructuring of the industry. It will offer the opportunities that are desperately needed for competition and innovation. It will provide a better deal for consumers and for industry, which has complained for far too long about too-high energy costs. It will therefore benefit the economy as a whole. That is why I regard this legislation as far more important than any other privatisation measure that we have introduced over the past decade. Indeed, I regard it as the most significant and radical measure of this Parliament.

In the longer term, this reform will benefit the whole economy and its competitiveness far more than any other measure that we have introduced.

10.20 pm
Mr. Eadie

I intend to be brief.

As we have debated the Bill it has emerged that the consumer has been conned by the idea of the privatisation of the electricity supply industry. On any objective analysis of our discussions, it is certain that the consumer will pay more because of the measure. But that is not the end of it: the taxpayer will pay a price too.

It has also emerged in the course of our debates that private capital is not interested in building thermonuclear power stations unless the Government are prepared to give some guarantees. So the Government are presenting private capital with a cheque to try to induce it to build thermonuclear power stations. Only time will tell whether the cheque is blank.

The Secretary of State for Scotland talked of the great freedom that the Bill would bring about—freedom from interference by the Government. He said that private capital and private industry would determine events. The Bill needs another title—it is not only about the privatisation of electricity; the right hon. and learned Gentleman spoke of the abolition of the Department of Energy. That means the abolition of the pursuit of an energy policy. I predicted six months ago that it was planned to abolish that Department. Ministers and civil servants will become redundant as a result of this Bill. It is a pity that the Under-Secretary of State, who has worked so hard on the Bill, may be one of its casualties.

The Conservative party was responsible for setting up the Department of Energy. Someone told me the other day that the Conservatives are so busy changing the policies and structures of previous Governments that they are now turning in on themselves and beginning to change policies and programmes that they instituted.

The abolition of the Department of Energy would be a tragedy for the country. The Government do not even pretend that there should be an energy policy. The signal to abolish the Department of Energy is the signal that energy policy will be left to free market forces.

It has been clear throughout the passage of the Bill that the people reject it. We heard earlier that as many as 70 per cent. of the electorate opposed the Bill. The Government are ignoring the wishes of the people. They are using their majority to drive through their dogma.

The Bill is being speeded to the other place. The Government are not sure how it will work and to some extent it is a stab in the dark. The Government are passing the Bill with a prayer in their heart. Let us hope that lights do not go out as a consequence of the Bill. I hope that the other place will look closely at it because it is not in the interests of the British people.

10.25 pm
Mr. Malcolm Bruce

As the hon. Member for Midlothian (Mr. Eadie) has said, we are now speeding the Bill to the other place. The other House will make amendments that we have failed to have accepted. Even though the Bill is ill-thought out, the Government have accepted virtually no modifications even after 156 hours in Committee and three days of debate in the House. Opposition Members are extremely frustrated that Ministers are not prepared to acknowledge that they have lost many of the arguments and have had to force their will by way of the votes.

I have made it clear from the start that for many years I have not supported the prevailing status quo in the electricity supply industry. The one area in which I have had some possibility of agreement with the Government is in the analysis that restructuring is necessary. It is much more sensible to liberalise before privatising. That is better than creating a duopoly that will not provide effective competition and assuming that an untested carve-up will produce good results for the consumer, although all the evidence suggests that it will not.

The Government have resisted attempts to ensure that the Bill will give high priority to the promotion of energy conservation and reduce the impact of the energy supply industry on the environment. In spite of their protestations outside the House, the Government have resisted every amendment on those subjects. The industry is about to be given to a private sector that has no responsibility to increase energy conservation or to reduce the impact of the industry on the environment. That is a damning indictment of the so-called environmental commitment of the Government. Such a commitment does not exist and to them the pursuit of profit is far more important than concern for the environment and the industry's impact on it.

The way in which the Government have been forced to fix the nuclear component of the Bill has made a mockery of effective competition. The nuclear industry will have to accept that at some time in future it and every other sector of the industry will have to stand up and be counted within a competitive environment. The Government know, because otherwise they would not have structured the Bill in the way that they have, that if that sector of the industry were made to do that it would fall flat on its face. Nobody wishes to invest in that sector. In spite of all the distortions and the fixes that the Government have put into the Bill, all the signs are that the City is still not interested in putting money into the nuclear industry.

The Government have the audacity to lecture people inside and outside the House about free enterprise and the market economy. Yet they are effectively saying to the City of London and the public at large that the nuclear industry will be offered on the basis that the private investor will take the profits and the taxpayer will underwrite the risk. How can the Government continue to claim that they believe in a free market when they are creating an industry more featherbedded than any other sector of the economy? That is the most absurd component in the Bill.

In a rare contribution to the debate on the Bill, the Secretary of State for Scotland said that privatisation will be good for Scotland. Apparently the first good thing that Scotland has got out of it is an increase in electricity prices higher than anywhere else in the United Kingdom. In Committee we told Ministers that the two specific requirements in the Bill that tariffs should be based on average United Kingdom prices and that, effectively, prices should operate on the basis of return on capital will mean that prices in Scotland will increase faster than anywhere else in the United Kingdom. Ministers were not able to deny that. That will be particularly true if the Scottish supply industry is not able to dispose of its substantial surplus activity, which it will have difficulty in doing. In those circumstances, the people of Scotland will experience the opposite effect over the next few years as their electricity bills rise well above the United Kingdom average, with consequent increases in hardship.

The Government have neither succeeded in persuading the House of the virtues of their argument nor, more offensively, even attempted to do so. They have laid back on the size of their parliamentary majority and treated the Opposition with contempt. We can take that because we have become used to it, but, far more important, the Government have treated the British people with contempt. They have shown not the slightest interest in the representations that have been made by a wide variety of interest groups. They have not won any of the arguments, although they will win the vote tonight. They have taken a step that will have to be corrected at a later date by a future Government.

I hope that the prospectus will contain a notification that if there is a change of Government, there will be a change of environment, the regulator will effectively regulate, and real competition will be brought into the industry, rather than the measures that the Government are proposing.

10.30 pm
Mr. Tom Cox (Tooting)

The Third Reading of the Bill will see the end of a policy for the electricity industry, the overriding priority of which was to keep the supply going. We have heard a great many statements about how wonderful a private electricity industry will be. No one ever writes to me saying that. On the contrary, I have received an enormous number of letters from constituents who are extremely concerned, as have hon. Members who have spoken in the debate. I am sure that even Conservative Members have received such letters.

We should always remember that, since the formation of the state-run electricity industry, it has met the needs not only of the great cities but of the rural areas. When there were privately run companies, the needs of many of those rural areas were not met. Electricity was not supplied to many of them not because they did not want it but because the companies were not prepared to pay the costs of bringing the supply to them. Now the criterion of profit will be put first.

Even at this late stage, it is wise to comment on the remarks made by Mr. John Baker, the designated head of National Power. He said: The job isn't about shouldering national responsibilities but about meeting contracts, improving profitability, about seeking opportunities, but only exploiting them if it pays to do so … We need to define ways of running our power stations so that we can exploit our power contracts profitably. Our task will not be to keep the lights on whatever the cost". That should be made known to the public.

I have read the Official Report of the Committee sittings, and have listened to some of the debates in the House. We have heard much about "consumer interests" and "competition". It all sounds wonderful, but there is nothing in the Bill to ensure that there is competition. Prices will not even stabilise, let alone go down. They will increase. The Government imposed increases in 1988 and 1989, and they will be the criteria that the private companies use.

What is most tragic is that, although we are a rich nation, we cannot use our resources without planning over the whole range of electricity policy. But where is any long-term planning provided for in the Bill? Where is real public accountability or consultation enshrined in the Bill? Despite what the Minister has said, nothing of the sort is to be found in it.

I have raised only some of the vital issues that should have been discussed. As those who were members of the Committee that considered the Bill have said, long-term planning, public accountability and consultation were not really discussed in Committee. The great tragedy is that in the long term it will be the British people who will pay for the folly of the privatisation of our great electricity industry. It was highly profitable when it was state run and it met real needs, whether in large cities or small rural areas. The industry met the needs of the British people. They will not be met when the Bill is enacted.

10.35 pm
Mr. Hardy

I hesitated before I decided to speak once again on the Bill. It was the contribution of the Secretary of State for Scotland that persuaded me that I should make some brief comments. The right hon. and learned Gentleman said that the electricity industry wanted privatisation. Those who are at the top of the industry, who may see substantial increases in their salaries, may want it. With the contacts that I have in the power industry, I have not detected any wish to embrace privatisation.

The Government may feel that they can persuade those who work in the industry to accept privatisation when they are offered shares, but more and more of them have come to the conclusion that the offer will leave them with less than 1 per cent. of the equity. Relatively shortly after the shares have been allotted, we shall find that there are larger shareholdings in Tokyo, Bonn, Ottawa, New York and all the other financial centres of the world than among those who work in the industry who do not want privatisation.

As Conservative Members have boasted, this is the largest privatisation that the Government have proposed. Conservative Members to a man have trooped through the Government Lobby in support of it. Not one of them has ever asked how much the country will get for the privatisation. The Minister knows that the net asset value of the industry is well over £14 billion. He may be able to reduce that figure by writing down capital, but when the industry is sold it will be lucky if the price is half of its real value.

It was said earlier today that we have already sold the family silver and that now we are selling the family gold. Unfortunately, when the gold is sold it will be at the going rate for silver, not for gold. The interests of the nation will be gravely disregarded. The value of Britain, in terms of the worth of the electricity industry, will be dramatically reduced. The bargain for the consumer will be a bad one. Indeed, the consumer is already paying far more than he should as a result of the sweetening exercise that has taken place since last year.

The Government will secure the Bill's passage through Parliament, but over the next two years the British people will realise that they have been robbed. They will realise that their assets have been disposed of cheaply. They will understand that to a large extent profits will accrue for only a small minority. The guarantee of supply, which has been the proud boast of the industry in public hands, will not be guaranteed or sustained in the years ahead. The Government will regret the enactment of the Bill, and from that point of view I suppose that we have some cause for rejoicing. The people have begun to understand that what the Government are about is not in the long-term interests of the nation.

10.38 pm
Mr. Ieuan Wyn Jones

I, too, do not wish to detain the House for long, but the Opposition have an obligation to puncture the utter complacency of the Secretary of State for Scotland, who sought to commend the Third Reading. He trotted out the usual slogans that we have heard from the Government on this and other measures. I thought to myself that one slogan was missing because the Government's slogans came in threes. The right hon. and learned Gentleman used two, talking about choice and consumers. What about value for money? He did not mention it once.

We have heard that we are to have thumping big electricity price rises as a sweetener for the industry. Even the slogans that the right hon. and learned Gentleman used are false. We have heard much about competition. What competition? It is impossible to see any way in which the consumer can make an effective choice about the company from which he gets his electricity. The only option is for him to pay the bill, which will be higher than it has been.

The Secretary of State for Scotland and his colleagues would do well to look again at the recent report of the Select Committee on Energy, of which my hon. Friend the Member for Banff and Buchan (Mr. Salmond) was a member. Two telling comments will haunt the Government following privatisation. The Committee said: Electricity is too important an industry for the country to gamble that everything will come out right"; and The Government has singled out only two factors to justify its decision; security of supply and party manifesto commitment to a continuing nuclear programme. It has glossed over the industry's economics, ignored the industry's external costs, and still cannot be sure that the favoured PWR technology is the best available.

Mr. Rost

Will the hon. Gentleman give way?

Mr. Jones

I am not prepared to give way because my contribution must be short.

The public and the consumer have been conned, but the voting public at the next election will not be conned.

10.41 pm
Mr. Jack Thompson

I am not an economist or accountant. My background is in engineering and my discussion on the Bill has been with engineers in the industry. The engineers—not the management—are critical of the privatisation propositions. One engineer commented, "It is like a bicycle. If the pedals and the cranks are taken off the chain and the sprockets on the wheel., the bicycle will not work." That is what is happening with the industry.

The implication is that the CEGB and the area boards have not been efficient. Having spent some time with the good officers of the North Western electricity board, I refute that suggestion. That board was very efficient. My experience was that it was exceptional. I have links with the electricity board in my area which is aware of the consumers' needs and problems.

If a problem is to arise with the industry, it will be a technical one. If there is an argument to restore the industry to state control, it will be a technical one which will be irrefutable. The industry started with a municipal electricity supply and links with private electricity suppliers. There was no choice between the wars other than to have a nationalised industry. That argument will be made again, and we shall have to restore the industry to public ownership not for political but for technical reasons.

10.34 pm
Mr. Alan W. Williams

As I said in Committee and on Report, the Government have been on the defensive throughout the Bill's proceedings. That has been symbolised by the fact that only one Conservative Back Bencher has spoken on Third Reading. Often in Standing Committee the Secretary of State and Ministers were not just on the defensive but on the ropes—indeed, they were punch drunk at the end of several sittings from trying to defend some of the clauses.

I find no merit in the Bill. It will create a private monopoly because there will be no competition. Earlier, we challenged the Minister directly about what competition there would be for the individual householder. I think of people such as my mother, who is a widow and a pensioner. Apparently she can opt out and I suppose that she could devise her own supply, but in reality there will be no competition. The Bill also brings threats of price rises—6 per cent., 9 per cent. and much more to come when the shareholders want their cut.

The Bill provided an opportunity for measures on the environment and conservation, but the Government have pushed all such opportunities to one side. We have seen clearly that their commitment to the environment and green issues is non-existent. The Bill shows clearly the double standards for coal and the nuclear industry. The Government are carrying out a clear vendetta against the coal industry, which dates from the 1970s or even earlier than that. The Government are the descendants of the coal owners. [HON. MEMBERS: "Back to 1926."] That is right. The vendetta goes back to 1926 and before, and it has returned with a vengeance in the 1970s and 1980s and as a result of the miners' strike. I come from a part of the country that used to have many coal mines, but there are none left now. When I was elected, there were three just outside my constituency, but the number is down to one. Throughout our debates, we have seen the terrific pressure that will be put on the coal industry by privatisation and the free range of market forces—coal imports and the like. There will be no ring fencing or defence for the coal industry.

The nuclear industry will be completely ring-fenced under the Bill, with the nuclear quota, the nuclear tax and the pressurised water reactors that nobody wants. There will be problems of waste and decommissioning, yet the Government volunteer to take back those problems and to pay the bills. That is an appalling double standard. The public have noticed that fact through the reports of our debates and we shall carry on explaining that to them. They have noticed that one set of principles is applied to coal, whereas the nuclear industry is to be protected.

Dr. Kim Howells

I want to reinforce my hon. Friend's point. It is curious that the Government have chosen to ring-fence the nuclear industry as a reliable source of energy and electricity, yet they have refused to ring-fence the Nottingham coalfield, which in their books has been a marvellous and reliable source of electricity and energy. It is curious. We own the coal underground in Nottinghamshire, yet we do not own the uranium that we send to our nuclear power stations.

Mr. Williams

The Government's logic is strange. However, the public have seen what is happening and they do not like the Bill or the privatisation of water. Public opinion is overwhelmingly on our side. We have tried to reflect the views of the consumers, the taxpayers and the electorate. Unfortunately, the Government have not accepted any of our clauses or amendments and they will suffer for that at the hour of reckoning.

10.48 pm
Mr. Maxton

I shall be brief, but it is essential to make several points before this obnoxious piece of legislation leaves the Commons, especially in view of the case put by the Secretary of State for Scotland, who is deputising for the Secretary of State for Energy who is yet again swanning round the world.

Nothing in Committee or on Report has convinced me that I was wrong to argue that we should never have had Scottish legislation dealt with in an English and Welsh Bill. It has made it difficult to put the Scottish case and the Scottish people have not had the opportunity to consider it fully. Of course, it has exposed cruelly the Tory party's total failure to persuade the Scottish people of their case and their inability to conform to the normal constitutional conventions on Scottish legislation in this House because of their disastrous defeat in Scotland in 1987.

The Bill, like the Tory party itself, has little support in Scotland. Despite what the Secretary of State said, few employees at any level believe that the Bill will do anything for Scotland. Among the consumer organisations, political parties and churches in Scotland, it is difficult to find anyone who is not opposed to the Bill. Its opponents, I may add, include the Scottish CBI. The people of Scotland want their electricity supply industry to remain in public hands, and the Government have a responsibility, which they never fulfil, to listen to their voices.

My hon. Friends have shown that the Bill will create no real competition in England and Wales. The vertically integrated nature of the new companies in Scotland, with generation, transmission and supply all carried out by one company in clearly delineated geographical areas of Scotland, will deprive Scottish consumers of even a phoney facade of competition. The Bill creates private monopolies which, despite the so-called controls that the licences and regulation are supposed to impose on them, will be able to exploit their position to maximise profit at the expense of Scottish consumers.

Yet again the Secretary of State for Scotland abdicated his responsibility for the electricity supply industry in Scotland. The headquarters of the South of Scotland electricity board are in my constituency, and most of the board members live in or near my constituency. The headquarters of the North of Scotland Hydro-Electric Board are in Edinburgh. If the Secretary of State had read his own press release or had bothered to attend our debates last week, during which I quoted him, he would know that it said that he had issued an instruction to the boards in connection with their financial limits. It was not the Treasury that did that; it was the Secretary of State for Scotland.

At present, control of the electricity supply industry in Scotland rests in Scotland. The Government have riot given us a single guarantee that after privatisation that control will lie anywhere other than outside Scotland—perhaps even outside the United Kingdom.

The price of electricity has already been increased by 8 per cent. to fatten up the industry to make it attractive to the new shareholders, as Mr. Joughin, the chairman of the North of Scotland Hydro-Electric Board said. If that can happen before privatisation, how much worse will it be afterwards? The Bill will mean higher prices, poorer services for consumers, probably the end of the coal industry in Scotland, a deterioration in the environment and hardship for the poorest members of society. The Bill is unwanted and unnecessary. Its sole purpose is to give fast bucks to the Government's friends in the City, and I ask my hon. Friends to join me in voting against its Third Reading.

10.52 pm
Mr. Michael Spicer

Rather to the Opposition's surprise, we have been happy to join them on what they thought was their chosen ground—the issue of prices—because we know that it must exert a downward pressure on prices if we replace the present structure of the industry under which a monopoly generates its own costs and supplies the industry on the basis of those costs, without intervention.

The hon. Member for Sedgefield (Mr. Blair) designated today consumer day. I told the House that, once the Bill has been passed, every day will be consumer day because every aspect of the Bill is devoted to ensuring that the consumer gets a better deal. That is not only true in relation to prices; there will be a panoply of consumer rights and competitive pressure not only on generation, which accounts for 70 per cent. of the industry's costs, but on the public electricity supply industries. New duties will be placed on the regulator to ensure that the consumer is well cared for. In particular—something that the Opposition have not been willing to concede as a great new benefit—consumer committees will in future be part of the regulatory body rather than merely shouting their views from the touch line.

In this short debate the hon. Member for Wentworth (Mr. Hardy) rightly said that this will be the largest privatisation of all time. Added to the 9 million shareholders—three times the number when we took office—will no doubt be considerably more private shareholders, and many will no doubt be the employees or the industry to whom we shall give special terms.

One enormous advantage of privatisation will be that the massive investment programme that is due to take place in the industry will be determined not on the basis of decisions——

Mr. Dick Douglas (Dunfermline, West)


Mr. Spicer

No, I shall not give way. The hon. Gentleman has not been here——

Mr. Douglas


Mr. Spicer

No, I shall not give way. It is too late. I am not giving way to the hon Gentleman or to anybody else at this stage because I have promised to be brief.

Massive investment decisions are ahead. The decisions to invest will be made not on the basis of political infighting in Whitehall or behind beige doors in Whitehall, but on the basis of market conditions, and will be determined by the market place.

Our reforms of the electricity supply industry, which are undoubtedly radical, are aimed at making Britain's electricity supply industry one of the most efficient in the world. We believe that as the European market opens up in 1992 and transnational common carriage becomes a real possibility, Britain will have the opportunity to become the power house of Europe.

What we are proposing to do is what some people have argued is impossible—to turn a massive producer-driven public sector monopoly into a series of customer-oriented private companies, many with shares that are owned by their employees and many of which will be competing with one another for business. In future the customer will call the tune, which is something that, despite all the protestations to the contrary, all the rhetoric and all the press releases, is not and never will be central to the beliefs of the Socialist party, the Opposition.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 251, Noes 193.

Division No. 151] [10.57 pm
Adley, Robert Body, Sir Richard
Aitken, Jonathan Bonsor, Sir Nicholas
Alexander, Richard Boscawen, Hon Robert
Alison, Rt Hon Michael Boswell, Tim
Allason, Rupert Bottomley, Peter
Amess, David Bottomley, Mrs Virginia
Amos, Alan Bowden, Gerald (Dulwich)
Arbuthnot, James Bowis, John
Arnold, Jacques (Gravesham) Brandon-Bravo, Martin
Arnold, Tom (Hazel Grove) Brazier, Julian
Ashby, David Bright, Graham
Aspinwall, Jack Brown, Michael (Brigg & Cl't's)
Atkins, Robert Bruce, Ian (Dorset South)
Atkinson, David Buchanan-Smith, Rt Hon Alick
Baker, Rt Hon K. (Mole Valley) Buck, Sir Antony
Baker, Nicholas (Dorset N) Budgen, Nicholas
Baldry, Tony Burns, Simon
Banks, Robert (Harrogate) Burt, Alistair
Batiste, Spencer Butcher, John
Beaumont-Dark, Anthony Butterfill, John
Bellingham, Henry Carlisle, Kenneth (Lincoln)
Bendall, Vivian Carrington, Matthew
Bennett, Nicholas (Pembroke) Carttiss, Michael
Benyon, W. Chalker, Rt Hon Mrs Lynda
Bevan, David Gilroy Chapman, Sydney
Bitfen, Rt Hon John Chope, Christopher
Blackburn, Dr John G. Clark, Sir W. (Croydon S)
Colvin, Michael Janman, Tim
Conway, Derek Jessel, Toby
Coombs, Anthony (Wyre F'rest) Jones, Robert B (Herts W)
Coombs, Simon (Swindon) Kellett-Bowman, Dame Elaine
Cope, Rt Hon John Key, Robert
Couchman, James King, Roger (B'ham N'thfield)
Cran, James Kirkwood, Archy
Curry, David Knapman, Roger
Davies, Q. (Stamf'd & Spald'g) Knight, Greg (Derby North)
Davis, David (Boothferry) Lamont, Rt Hon Norman
Day, Stephen Lang, Ian
Devlin, Tim Latham, Michael
Dicks, Terry Lawrence, Ivan
Dorrell, Stephen Lee, John (Pendle)
Douglas-Hamilton, Lord James Lennox-Boyd, Hon Mark
Dover, Den Lester, Jim (Broxtowe)
Dunn, Bob Lightbown, David
Durant, Tony Lilley, Peter
Eggar, Tim Lloyd, Sir Ian (Havant)
Emery, Sir Peter Lord, Michael
Evennett, David Lyell, Sir Nicholas
Fairbairn, Sir Nicholas McCrindle, Robert
Fallon, Michael Macfarlane, Sir Neil
Favell, Tony MacGregor, Rt Hon John
Field, Barry (Isle of Wight) MacKay, Andrew (E Berkshire)
Finsberg, Sir Geoffrey McLoughlin, Patrick
Fishburn, John Dudley McNair-Wilson, Sir Michael
Fookes, Dame Janet McNair-Wilson, P. (New Forest)
Forman, Nigel Major, Rt Hon John
Forsyth, Michael (Stirling) Malins, Humfrey
Fox, Sir Marcus Mans, Keith
Franks, Cecil Maples, John
Freeman, Roger Marshall, Michael (Arundel)
Fry, Peter Martin, David (Portsmouth S)
Gale, Roger Mates, Michael
Gardiner, George Maxwell-Hyslop, Robin
Garel-Jones, Tristan Mayhew, Rt Hon Sir Patrick
Gill, Christopher Meyer, Sir Anthony
Glyn, Dr Alan Miller, Sir Hal
Goodlad, Alastair Mills, Iain
Goodson-Wickes, Dr Charles Mitchell, Andrew (Gedling)
Gow, Ian Mitchell, Sir David
Greenway, Harry (Ealing N) Moate, Roger
Greenway, John (Ryedale) Montgomery, Sir Fergus
Gregory, Conal Morris, M (N'hampton S)
Griffiths, Sir Eldon (Bury St E') Morrison, Sir Charles
Griffiths, Peter (Portsmouth N) Morrison, Rt Hon P (Chester)
Grist, Ian Moss, Malcolm
Ground, Patrick Moynihan, Hon Colin
Grylls, Michael Neale, Gerrard
Hague, William Nelson, Anthony
Hamilton, Hon Archie (Epsom) Neubert, Michael
Hamilton, Neil (Tatton) Newton, Rt Hon Tony
Hampson, Dr Keith Nicholls, Patrick
Hanley, Jeremy Nicholson, David (Taunton)
Hargreaves, A. (B'ham H'll Gr') Nicholson, Emma (Devon West)
Hargreaves, Ken (Hyndburn) Norris, Steve
Harris, David Onslow, Rt Hon Cranley
Hayes, Jerry Oppenheim, Phillip
Hayhoe, Rt Hon Sir Barney Page, Richard
Hayward, Robert Paice, James
Heathcoat-Amory, David Patnick, Irvine
Heddle, John Patten, Chris (Bath)
Heseltine, Rt Hon Michael Patten, John (Oxford W)
Higgins, Rt Hon Terence L. Pawsey, James
Hill, James Peacock, Mrs Elizabeth
Hogg, Hon Douglas (Gr'th'm) Porter, Barry (Wirral S)
Hordern, Sir Peter Porter, David (Waveney)
Howard, Michael Portillo, Michael
Howarth, Alan (Strat'd-on-A) Powell, William (Corby)
Howarth, G. (Cannock & B'wd) Price, Sir David
Howell, Rt Hon David (G'dford) Raffan, Keith
Hughes, Robert G. (Harrow W) Raison, Rt Hon Timothy
Hunt, David (Wirral W) Rathbone, Tim
Hunt, John (Ravensbourne) Redwood, John
Hunter, Andrew Renton, Tim
Hurd, Rt Hon Douglas Rhodes James, Robert
Irvine, Michael Riddick, Graham
Jack, Michael Ridley, Rt Hon Nicholas
Jackson, Robert Rifkind, Rt Hon Malcolm
Roberts, Wyn (Conwy) Stern, Michael
Rost, Peter Stevens, Lewis
Rumbold, Mrs Angela Stewart, Andy (Sherwood)
Ryder, Richard Stewart, Rt Hon Ian (Herts A
Shaw, David (Dover) Stradling Thomas, Sir John
Shaw, Sir Giles (Pudsey) Summerson, Hugo
Shaw, Sir Michael (Scarb') Taylor, Ian (Esher)
Shelton, Sir William Taylor, John M (Solihull)
Shephard, Mrs G. (Norfolk SW) Tebbit, Rt Hon Norman
Shepherd, Colin (Hereford) Thurnham, Peter
Shersby, Michael Tredinnick, David
Smith, Sir Dudley (Warwick) Trotter, Neville
Smith, Tim (Beaconsfield) Waddington, Rt Hon David
Speed, Keith Wakeham, Rt Hon John
Spicer, Sir Jim (Dorset W) Widdecombe, Ann
Spicer, Michael (S Worcs) Younger, Rt Hon George
Squire, Robin
Stanbrook, Ivor Tellers for the Ayes:
Stanley, Rt Hon Sir John Mr. David Maclean and Mr. Tom Sackville.
Steen, Anthony
Abbott, Ms Diane Cox, Tom
Allen, Graham Crowther, Stan
Alton, David Cryer, Bob
Archer, Rt Hon Peter Cummings, John
Armstrong, Hilary Cunliffe, Lawrence
Ashdown, Rt Hon Paddy Cunningham, Dr John
Ashley, Rt Hon Jack Dalyell, Tam
Ashton, Joe Davies, Ron (Caerphilly)
Banks, Tony (Newham NW) Davis, Terry (B'ham Hodge H'l)
Barnes, Harry (Derbyshire NE) Dewar, Donald
Barron, Kevin Dixon, Don
Battle, John Dobson, Frank
Beckett, Margaret Doran, Frank
Bell, Stuart Douglas, Dick
Bennett, A. F. (D'nt'n & R'dish) Duffy, A. E. P.
Bermingham, Gerald Dunwoody, Hon Mrs Gwyneth
Bidwell, Sydney Eadie, Alexander
Blair, Tony Eastham, Ken
Boateng, Paul Evans, John (St Helens N)
Bray, Dr Jeremy Ewing, Harry (Falkirk E)
Brown, Ron (Edinburgh Leith) Fatchett, Derek
Bruce, Malcolm (Gordon) Faulds, Andrew
Buchan, Norman Fearn, Ronald
Buckley, George J. Field, Frank (Birkenhead)
Caborn, Richard (L'pool B G'n)
Callaghan, Jim Fisher, Mark
Campbell, Menzies (Fife NE) Flannery, Martin
Campbell, Ron (Blyth Valley) Flynn, Paul
Campbell-Savours, D. N. Foot, Rt Hon Michael
Carlile, Alex (Mont'g) Foster, Derek
Clark, Dr David (S Shields) Foulkes, George
Clarke, Tom (Monklands W) Fraser, John
Clay, Bob Fyfe, Maria
Clelland, David Garrett, Ted (Wallsend)
Cohen, Harry George, Bruce
Coleman, Donald Godman, Dr Norman A.
Cook, Robin (Livingston) Golding, Mrs Llin
Corbett, Robin Gordon, Mildred
Corbyn, Jeremy Gould, Bryan
Cousins, Jim Grant, Bernie (Tottenham)
Griffiths, Nigel (Edinburgh S) Mowlam, Marjorie
Griffiths, Win (Bridgend) Mullin, Chris
Grocott, Bruce Murphy, Paul
Hardy, Peter Nellist, Dave
Harman, Ms Harriet O'Brien, William
Haynes, Frank O'Neill, Martin
Healey, Rt Hon Denis Orme, Rt Hon Stanley
Henderson, Doug Patchett, Terry
Hinchliffe, David Pendry, Tom
Holland, Stuart Pike, Peter L.
Home Robertson, John Powell, Ray (Ogmore)
Howarth, George (Knowsley N) Prescott, John
Howells, Dr. Kim (Pontypridd) Quin, Ms Joyce
Hughes, John (Coventry NE) Radice, Giles
Hughes, Robert (Aberdeen N) Randall, Stuart
Hughes, Roy (Newport E) Redmond, Martin
Hughes, Sean (Knowsley S) Rees, Rt Hon Merlyn
Hughes, Simon (Southwark) Reid, Dr John
Illsley, Eric Richardson, Jo
Janner, Greville Robertson, George
Jones, Barry (Alyn & Deeside) Robinson, Geoffrey
Jones, Ieuan (Ynys Môn) Rogers, Allan
Jones, Martyn (Clwyd S W) Rooker, Jeff
Kaufman, Rt Hon Gerald Ross, Ernie (Dundee W)
Kennedy, Charles Rowlands, Ted
Kitfedder, James Ruddock, Joan
Kirkwood, Archy Salmond, Alex
Lambie, David Sedgemore, Brian
Lamond, James Sheerman, Barry
Leighton, Ron Sheldon, Rt Hon Robert
Lestor, Joan (Eccles) Skinner, Dennis
Lewis, Terry Smith, Andrew (Oxford E)
Lloyd, Tony (Stretford) Smith, C. (Isl'ton & F'bury)
Lofthouse, Geoffrey Smith, Rt Hon J. (Monk'ds E)
Loyden, Eddie Snape, Peter
McAllion, John Soley, Clive
McAvoy, Thomas Steinberg, Gerry
Macdonald, Calum A. Stott, Roger
McFall, John Taylor, Mrs Ann (Dewsbury)
McKelvey, William Taylor, Matthew (Truro)
McLeish, Henry Thompson, Jack (Wansbeck)
McWilliam, John Turner, Dennis
Madden, Max Vaz, Keith
Mahon, Mrs Alice Wall, Pat
Marek, Dr John Wallace, James
Marshall, David (Shettleston) Walley, Joan
Martin, Michael J. (Springburn) Wareing, Robert N.
Martlew, Eric Welsh, Andrew (Angus E)
Maxton, John Welsh, Michael (Doncaster N)
Meacher, Michael Williams, Rt Hon Alan
Meale, Alan Williams, Alan W. (Carm'then)
Michie, Bill (Sheffield Heeley) Winnick, David
Michie, Mrs Ray (Arg'l & Bute) Wise, Mrs Audrey
Mitchell, Austin (G't Grimsby) Worthington, Tony
Moonie, Dr Lewis
Morgan, Rhodri Tellers for the Noes:
Morley, Elliott Mr. Allen Adams and Mr. Allen McKay.
Morris, Rt Hon A. (Wshawe)

Question accordingly agreed to.

Bill read the Third time, and passed.