HC Deb 09 December 1991 vol 200 cc591-2
2. Mr. Norris

To ask the Secretary of State for Energy if he will now take the National Grid Company back into state ownership.

The Parliamentary Under-Secretary of State for Energy (Mr. David Heathcoat-Amory)

No. The National Grid Company has played a central role in the development of the new competitive electricity market.

Mr. Norris

I thank my hon. Friend for that entirely commendable answer. Was his calculation based on any assessment of what he thinks the cost of that renationalisation might be? Perhaps more important, given that it is Labour party policy, what impact would that have on the price of electricity for consumers?

Mr. Heathcoat-Amory

Yes, I entirely agree with my hon. Friend. To take the grid company back into public ownership would cost about £2 billion. I do not know how the money would be found, except from higher taxes or higher electricity prices, or both. Such a move would reimpose the dead hand of state control and political interference. That is Labour party policy, so taxpayers and electricity customers had better beware.

Mr. Hague

Is my hon. Friend aware that although it would be wasteful, unnecessary and expensive to renationalise the National Grid Company, the company has incurred great unpopularity due to its proposals to build pylons through the finest parts of our rural landscape in Cleveland? May I welcome his decision to hold a public inquiry about these proposals and urge him to ensure that the inquiry is held in such a way, in such a place and at such a time that the concerns of many thousands of people about the proposals can be fully communicated?

Mr. Heathcoat-Amory

I know of the proposal to which my hon. Friend refers and I know that he has vigorously represented the concerns of his constituents. I wish to ensure that environmental considerations are properly taken into account. I can tell my hon. Friend that there will be a public inquiry into the proposal and that my right hon. Friend the Secretary of State will announce that formally in due course.

Mr. Dobson

Before the Minister starts to make criticisms of the cost to the taxpayer of buying back the grid company, may I remind him what happened when his right hon. Friend sold it? He so underpriced the shares that the taxpayer lost £1,200 million on the first afternoon of dealing. Since then, the directors have done little other than line their own pockets, award themselves enormous pay increases and indulge in dodgy share options, all of which has been done at the expense of the domestic customer, whose bill has gone up by 40 per cent. since privatisation was announced.

Mr. Heathcoat-Amory

The hon. Gentleman is entirely wrong. The taxpayer and the electricity customer have benefited in every way from privatisation and restructuring of the electricity supply market. I remind the hon. Gentleman that, for the first time, domestic electricity customers are protected by a price cap which ensures that, for the next three years, electricity prices will not rise by more than retail price inflation.