HC Deb 23 July 1990 vol 177 cc9-10
8. Ms. Mowlam

To ask the Secretary of State for Energy when he next expects to meet the chairman of the area distribution companies to discuss privatisation.

Mr. Wakeham

I meet regional electricity company chairmen regularly to discuss a range of matters and have recently set the debt levels of the 12 regional electricity companies and the National Grid Company. The total debt will be £2,843.5 million. I have arranged for the company-by-company figures to be published in the Official Report.

Ms. Mowlam

As 10 of those 12 companies have already failed to meet Government profit targets—it has not stopped the chairmen from taking substantial pay increases—how does the Secretary of State expect shareholders to make informed decisions if the only information that they will have is the knowledge of that failure to meet profit targets?

Mr. Wakeham

That is not the only information that they will have. A proper prospectus, as required by law, will be published and the information will be available there. That is the right time to assess those companies. The results to which the hon. Lady referred reflect the unusually mild winter and the recent storms, but also—and much more important—they are, to an extent, irrelevant under the new competitive regime that we have created.

Mr. Ian Bruce

Has my right hon. Friend yet had a chance to assess how the bidding system for electricity is working? Does he believe, as I do that it is already having the effect of bringing down the price of electricity to the distribution companies, which will be passed on to the consumer in the fullness of time?

Mr. Wakeham

Obviously, I am interested in looking at the information which comes in, but it is too early yet to form any firm conclusions about how the pool price will settle down. However, I agree with my hon. Friend that the arrangements that came into effect on 1 April mean that a great many of our larger electricity consumers have had the price of their electricity significantly reduced.

Mr. Benn

Is the Secretary of State aware that if members of any Labour local authority had handled the public assets entrusted to it in the way in which the Government have handled the assets built up by public money and the labour of those in the industry, they would have been charged with wilful misconduct, brought before the courts and barred from public office and that they would have been lucky to escape the charge of absolute political corruption?

Mr. Wakeham

Only the right hon. Gentleman could have put his question in that way. The Government dealt with the problem of the publicly owned electricity supply industry by vesting it on 31 March in the plcs, all of which are still owned by the Government. The Government will proceed to the privatisation of the majority of them, though not of Nuclear Electric. We shall see to it that we get a proper price for the sale of shares in those companies.

Mr. Dobson

When the Secretary of State last met the bosses of the distribution companies, did he tell them what steps he was taking to protect the independence of the privatised electricity companies? Does he recall that the House was promised on 13 December 1988 that no individual or company would be allowed to take more than a 15 per cent. stake in any of the electricity companies? Is that promise another victim of his desperation over privatisation? Is the Hanson solution intended only for PowerGen?

Mr. Wakeham

I shall be making a statement about the wider issues at a later date, but the competitive nature of the electricity supply industry that we have created also bears importantly on the position of the regulator. He received complaints some time after 1 April, as a result of which he made some very marginal changes in the way the arrangements work.

Following is the information:

Regional electricity companies: debt
£ million
Eastern Electricity plc 263.0
East Midlands Electricity plc 127.0
London Electricity plc 338.5
MANWEB plc 63.0
Midlands Electricity plc 120.0
Northern Electricity plc 164.0
NORWEB plc 153.0
Southern Electricity plc 295.0
SEEBOARD plc 125.0
South Wales Electricity plc 25.0
South Western Electricity plc 80.0
Yorkshire Electricity Group plc 189.0
The National Grid Company plc 901.0