Electricity Generation (Hansard, 19 May 1993)

§ 1. Mr. Cummings
To ask the President of the Board of Trade when he last met the Director General of Electricity Supply to discuss the regulation of electricity generation.

§ The Minister for Energy (Mr. Tim Eggar)
My right hon. Friend the President of the Board of Trade and I meet the Director General of Electricity Supply from time to time and discuss a wide range of electricity issues.

§ Mr. Cummings
As electricity prices have risen by 9 per cent. in the past month, while British Coal prices have fallen by 19 per cent., does the Minister agree that the generators are failing abysmally to pass those benefits on to the consumer? Does he also agree that the cost of coal-fired electricity is considerably lower than gas-fired generation? If he does agree, why does he continue to shut pits, while promoting the building of new gas power stations?

§ Mr. Eggar
I refer the hon. Gentleman to the coal review White Paper, which I am sure he has read, which examines all those arguments in detail, as they were examined by the Select Committee on Trade and Industry. The hon. Gentleman should have set the record straight and pointed out that electricity prices to the domestic consumer have fallen in nominal terms and have certainly fallen in real terms in almost every area.

§ Mr. Simon Hughes
Given that the forecast of the National Grid is that there will be 57 per cent. over-capacity by 1997–98, do the Government make it clear to the electricity supply industry that its priority should be conservation rather than production, and if not, why not?

§ Mr. Eggar
The hon. Gentleman should study the National Grid statement in rather more detail. It sets out a number of scenarios making different assumptions on a seven-year horizon. The Government are, of course, concerned to promote energy conservation. That is why the budget of my right hon. and learned Friend the Secretary of State for the Environment in this area has almost doubled.

§ Mr. Robin Cook
Does the Minister recall that, in March, the House was told that the Government had saved 12 pits by coming up with a subsidy to enable the generators to burn more coal? Is he aware that, in the two 224 months since then, far from burning more coal. the generators have been burning even less than they had planned? Will he meet the generators and ask them when they intend to place a contract for a single extra bag of coal? If he does not get that contract, does he appreciate that those 12 pits will go the way of the rest? If that happens, his subsidy will look like a sham which solved a political crisis for the Conservative party but has not solved the jobs crisis in the coal industry.

§ Mr. Eggar
That is absolutely typical of the hon. Gentleman: when he identifies a problem, he wants the Government to get in and sort it out. He believes in state direction. He has no belief whatever in the private sector and wants to spend taxpayers' money regardless of the value to the economy as a whole. The Government have made it absolutely clear that we will make a subsidy available, but that it is a matter for negotiation between British Coal and the private sector generators to see whether additional coal sales can be identified.