HC Deb 01 July 1993 vol 227 cc1098-9
3. Mr. McGrady

To ask the Secretary of State for Northern Ireland what assessment he has made of the privatisation process of Northern Ireland Electricity.

The Minister of State, Northern Ireland Office (Mr. Robert Atkins)

The privatisation of Northern Ireland Electricity has been a great success, especially in relation to the Government's objective of seeking to broaden and deepen share ownership. Two thirds of the shares on offer were allocated to the general public; that represents the highest percentage allocated to the public in any electricity privatisation.

Mr. McGrady

I thank the Minister for his reply, in which he has lauded the people who want to make a few quick pounds on the transaction. Does he share the concerns of the ordinary householder in Northern Ireland, of those in commerce and of those in industry about the terms of the sell-off? The high-cost, long-term contracts, the £50 million required for gas conversion at Ballylumford, the £100 million required for desulphurisation at Kilroot and many other aspects that were not previously revealed will lead to a very high acceleration of electricity costs in Northern Ireland. Is not the Minister now honour bound to withdraw the remarks and undertakings given by his predecessor, the hon. Member for Wiltshire, North (Mr. Needham), who said that electricity prices in Northern Ireland would not rise beyond inflation before 1997? They have already done so.

Mr. Atkins

I am sure that my predecessor, who is now Minister for Trade, will be more than happy to defend his position as and when he chooses to do so. I am sure that he can speak for himself. I reiterate that the privatisation was a major success for the Government and, above all, for the people of Northern Ireland. Many people bought shares. Over 50 per cent. of the shares allocated to the general public were allocated to Northern Ireland people and about 1,800 NIE employees also bought shares. It is worth making the point that registered customers applying for 300 shares or fewer, which represents 44 per cent. of the total, got their full allocation. All in all, this is an excellent story for Northern Ireland. It will help to ensure that in future, the benefits of competition, of the gas interconnector and the electricity interconnector and of other ways to generate power will contribute to a more efficient way in which to provide electricity to all who wish to use it.

Mr. Ian Bruce

Has my hon. Friend noted that although in English, Scottish and Welsh privatisations, the industries concerned have had quite large restructuring costs, the productivity increase and money saved by the reduction in the number of staff and the improved efficiency in using fuel are now coming through and are leading to large decreases in the cost of electricity to consumers? Has my hon. Friend made any judgment about when electricity prices will start to fall in the same way in Northern Ireland?

Mr. Atkins

My hon. Friend makes a jolly good point; I wish that I had thought of it myself. We shall look at that point. Although we have problems in Northern Ireland because of the peripherality of the Province, I hope that, in time, the benefits of privatisation will lead to the objective to which my hon. Friend referred.

Mr. John D. Taylor

In view of the Minister's praise for the flotation of shares in Northern Ireland Electricity, which was overwhelmingly oversubscribed and which attracted the support of hundreds of thousands of Northern Ireland investors, will he reconsider the flotation of shares in the proposed privatisation of the Northern Ireland Airports Authority for private individuals?

Mr. Atkins

I am grateful to the right hon. Gentleman for making that point. Of course, I share his desire to offer possible shares in the airport to as wide a range of people as possible. The problem is that it is a relatively small flotation. The advice that we have from the specialists is that a flotation would not be the most cost-effective way to carry out the process. None the less, the fact that the right hon. Gentleman has raised the matter will cause me to ask questions as severely as I can. If there is a way in which to carry out such a flotation, I should like to do so.