HC Deb 15 May 1989 vol 153 cc5-7
5. Mr. Thurnham

To ask the Secretary of State for Energy if he will make a statement about his proposals for employees in the electricity industry being offered a stake in their own companies.

Mr. Parkinson

There will be attractive terms to ensure that employees can acquire shares in the successor companies. Decisions on the details of the offers that will be made to employees will be taken nearer the time of the sales.

Mr. Thurnham

When allocating shares, will my right hon. Friend give every encouragement to employees to take up their full individual entitlement, to spread the benefits of share ownership as widely as possible?

Mr. Parkinson

We think that it is very important for individual employees of the industry to have their own shareholding. We therefore intend to put together a package of discounts and encouragements which we hope will encourage more than 90 per cent. of employees to take up their shares, as has happened with previous privatisations.

Mr. Foulkes

However welcome the proposal may be in principle, will this not remain merely a cosmetic exercise unless the Secretary of State is willing to ensure that the majority of shares go to people who have staked their lives in the electricity industry, rather than to big business, which happens to have the capital to put into shares but which has no real long-term interest in the industry?

Mr. Parkinson

I do not believe that the hon. Gentleman is seriously suggesting that the rest of the nation should make a present of something up to £10 billion to the 131,000 people who work in the industry. It is a national asset. The employees receive a proper wage and salary, but we want them to have the chance to have a stake in the industry and we intend to ensure that they do.

Mr. Mans

I welcome my right hon. Friend's reply on this matter. Has he given any thought to setting up employee share ownership plans trusts—ESOPS trusts—as part of the offer for sale of the companies as a way of ensuring that employee share ownership is ongoing?

Mr. Parkinson

That is a possibility that has been put to us. I have not taken a final decision nor have the companies, but we are slightly dubious about collective ownership in this case. We believe that, initially, the employees should become individual shareholders in their own right.

Mr. Pike

Rather than just giving the employees a stake in the industry if it must be privatised, why does the right hon. Gentleman not take the opportunity, while the Bill goes through the House, to enable them to have a say in the industry by making provisions for employee participation at board level on the various boards? The right hon. Gentleman could do that and he could ensure that the employees are allowed to elect their own representatives on to those boards.

Mr. Parkinson

We do not believe that trade union representation is necessarily the same as representation by the labour force. We do not believe in the institutionalised representation of the work force on the board. We want individual members of the work force to have shareholdings, to go to the AGM and to use their votes to vote on to the board directors of their choice.