HC Deb 20 July 1994 vol 247 cc301-2
4. Mr. Loyden

To ask the President of the Board of Trade if he will make a statement on the regulation of the electricity supply industry.

Mr. Eggar

Effective regulation, together with the introduction of competition, is bringing considerable benefits to consumers. Domestic customers, for example, have seen a 7 per cent. reduction in prices, in real terms, over the past two financial years.

Mr. Loyden

Does the Minister agree that it is a scandal that about £12 million has been awarded by themselves to the chairmen of the electricity supply industry? Does that show that the regulatory bodies act in the interests of the consumer or in the interests of the electricity companies?

Mr. Eggar

My right hon. Friend the Prime Minister has made the Government's view on salary increases clear. On the subject of the future of electricity prices, the Director General of Electricity Supply is currently conducting a review of the distribution price mechanism. I understand that he is likely to report within the next two or three weeks.

Mr. Malcolm Bruce

Does the Minister accept that it is an expressed view of the Electricity Consumers Council that the benefits of privatisation have been passed on to the shareholders, but not in full to the consumers and that, in its view, electricity prices are at least 5 per cent. too high? What action will the Government take to ensure that the benefits that they claim come from privatisation are passed to consumers in the form of lower prices?

Mr. Eggar

I congratulate the hon. Gentleman on his new appointment. It is slightly unfortunate that he did not listen to my initial response. I made it clear that there had been a 7 per cent. reduction in real terms in prices for domestic consumers over the past two years as a direct result of privatisation.

Mr. Robin Cook

What will the Minister do when he is faced with a proposal from the electricity companies to sell the national grid? Does he remember that when the Government sold all the electricity companies, they made £5 billion? Is not he surprised that the electricity companies now expect to get back £4 billion of that just by selling the national grid? Does not that suggest that the price of privatisation was a bad bargain? Will he demand that the public, who built the national grid, get some of the money, or will the electricity companies make a windfall profit at the expense of a public already thoroughly fed up with paying for bigger boardroom salaries?

Mr. Eggar

The hon. Gentleman is so blinded by socialist dogma that he will not recognise the considerable benefit to domestic consumers as a direct result of privatisation. There has been a 7 per cent. reduction in electricity prices in real terms and there are likely to be further reductions. There have also been significant reductions for all industrial consumers other than the very large ones.

On the hon. Gentleman's initial question about the national grid, unlike him I shall listen to the proposals made by the regional electricity companies, if they make any. I do not make up my mind until I have heard the facts.