§ The Secretary of State for Energy (Mr. John Wakeham)
This privatisation has been an outstanding success with the issue over 10 times subscribed. There were 12.75 million applications. Despite this, 97 per cent. of customers who applied and over two thirds of all who applied will receive some shares. About one quarter will receive all they applied for.
The continued overwhelming public interest in participating in privatisation shows the public support for the regional electricity companies and for privatisation.
§ Mr. Moate
May I be the first to congratulate my right hon. Friend and everyone else involved on successfully concluding today what must be the largest privatisation in the history of the western world? Does not the fact that some 5 million to 6 million people are believed to have applied for shares show that only a few in the socialist bastions on the Opposition Benches do not understand the instincts of the people of Britain for a capital-owning democracy?
§ Mr. Wakeham
I am grateful to my hon. Friend. He is right that the flotation has had massive public support. As I said, 12.75 million applications were made, and his estimate that between 5 million and 6 million customers were involved is not far from the mark. Over four and a half times as many people applied as did, for example, for shares in the water industry.
§ Mr. Benn
Is the Secretary of State aware that while he has been spending billions or millions of pounds of public money on floating off the electricity industry, 60,000 people were cut off in the Chesterfield district over the weekend due to the storms, 1,000 faults occurred and 20,000 emergency calls were made? Is he aware that many people will not be reconnected until the weekend and that their water supplies are affected, too? Is he aware that if he were a local councillor he would be surcharged for wilful neglect?
§ Mr. Wakeham
I appreciate the number of people whose electricity supply was cut off over the weekend. I was included in that number. I visited the National Grid control yesterday afternoon and I have spoken to the chairmen of the companies most affected. Altogether, 1 million customers lost supply at the peak. By early this morning that figure had been reduced to about 380,000. Most supplies should be back on today or tomorrow, but for some it may take longer. The companies have worked hard to restore supplies. The regional electricity companies that are not severely affected are providing assistance to others. Specialist contractors have been brought in and the Army is providing help. I am sure that the whole House wishes to join me in expressing appreciation of the hard work in difficult conditions which the engineers, linesmen and other staff are undertaking.
§ Mr. Hannam
Will my right hon. Friend accept our congratulations on the success of his undoubted personal efforts in attracting millions of shareholders into the electricity industry? Does he agree that that represents real public ownership, not the parody which the Labour party favours?
§ Mr. Wakeham
I am most grateful to my hon. Friend. The sale of the 12 companies will realise £8 billion. That is a considerable achievement which disproves the allegation that the privatisation was too difficult to be completed. It represents excellent value for taxpayers.
§ Mr. Dobson
Will the Secretary of State confirm that, according to the audited accounts of the 12 regional companies and the National Grid Company, the net assets of the industry being sold at the moment are worth £16 billion? Will he confirm that he intends to sell those assets for less than £8 billion in total? What was his primary duty? Was it to look after the interests of the taxpayer and the electricity consumers whose bills helped to build up those assets over the years, or was it to bung £100 million to City advisers and underwriters who took no risks whatever?
§ Mr. Wakeham
The hon. Gentleman has his way of looking at these things. My task was to find a proper price which was fair to the taxpayer and fair to those who were purchasing shares in the company. The price has been properly based on the value of anticipated future earnings and dividends. That is how the industry should be valued.
§ Mr. Wakeham
If the hon. Gentleman will keep quiet, I shall do my best to answer the supplementary question of the hon. Member for Holborn and St. Pancras (Mr. Dobson). The hon. Member for Cardiff, West (Mr. Morgan) may have a chance to ask a supplementary question, but at the moment I am trying to reply to his hon. Friend.
I have outlined the way in which the industry should be valued. The hon. Member for Holborn and St. Pancras referred to the current cost account of assets, or replacement costs, and that is not what the taxpayer paid for the assets. To go along the line that he recommends 643 and to realise proceeds equivalent to current cost account would mean a substantial increase in electricity prices. I am sure that that is not what the hon. Gentleman wants.
§ Mr. Speaker
Order. May I just tell the House that although I understand the importance of what happened over the weekend several other questions on the Order Paper are more relevant to the bad weather that has been experienced in many parts of the country. Question 6 is, perhaps, an example.