HC Deb 08 February 1995 vol 254 cc332-4
9. Mr. Jim Marshall

To ask the President of the Board of Trade what advice his Department has given the Office of Electricity Regulation on mergers and acquisitions of regional electricity companies.

Mr. Jonathan Evans


Mr. Marshall

I thank the Minister for that curt and short reply. Does he agree that the recent bid for Northern Electric highlights the weakness of the Government's position in terms of seeking to foster regional electricity companies that are responsive to local need and intent on fostering a regional identity? If he accepts that, how does he intend to ensure continued ministerial and parliamentary control over electricity policy? Will he refer the matter to the Monopolies and Mergers Commission as a number of his hon. Friends are urging him to do?

Mr. Evans

My right hon. Friend the President of the Board of Trade will give careful consideration to all aspects of the specific case raised by the hon. Gentleman before announcing his decision in due course. I make it clear to the hon. Gentleman that when the Director General of Fair Trading gives his advice to the President of the Board of Trade, he takes account of all relevant factors including any views that may be forthcoming from the Director General of Electricity Supply.

Mr. Brooke

Before we become immersed in a series of possibly irrelevant issues, does my hon. Friend agree that if the bidder for Northern Electric was within the European Union the only consideration to which the bid would be subject would be competition? If a British bidder is involved, would it not be sensible for the same conditions to apply here?

Mr. Evans

My right hon. Friend will understand that the decision will be taken in accordance with the statute and with the practice followed by the President of the Board of Trade in relation to all such matters. My right hon. Friend will understand that it would be inappropriate for me to comment further at this stage.

Mr. Beggs

What assessment has been made of the likely impact of the acquisitions and mergers of regional electricity companies on the ultimate price that industrial users of electricity have to pay? Does the Minister agree that highly priced electricity is most likely to damage our existing industries and that it threatens our ability to attract inward investment?

Mr. Evans

The hon. Gentleman will be aware that one factor to be taken into account by the President of the Board of Trade in the case in question will be the views of the Director General of Electricity Supply. The hon. Gentleman should recognise that the regulator is given specific powers in this area.

Sir Patrick Cormack

I do not wish to draw my hon. Friend further, but does he accept that many Conservative Members hope that this particular bid will be referred to the commission?

Mr. Evans

I note the views expressed in those measured tones by my hon. Friend. I assure him that all views expressed in relation to this matter will be given appropriate and detailed consideration.

Dr. John Cunningham

Is the Minister clear that the powers of the regulator will be sufficient to safeguard consumers' interests if a succesful bid takes place, whether for Northern Electric or for any other regional electricity company? Is he satisfied that sufficiently effective and transparent accounting procedures will be put in place to ensure that any new owner of a regional electricity company will not be able to drain finance out of it for other purposes? Is his Department now satisfied that there is no question of insider dealing being involved in the Trafalgar House bid for Northern Electric?

Mr. Evans

I do not wish to pre-empt the decision to be made by the President of the Board of Trade on this. The right hon. Gentleman will be aware of the powers given to the regulator. Those powers were given by the Government to protect the interests of consumers and the right hon. Gentleman would be well advised to recall that.

Mr. John Marshall

Does my hon. Friend agree that if regional electricity companies were immune from takeover they would have less incentive to become more efficient? Will he confirm that Trafalgar House has said that if it acquires Northern Electric consumers will receive a 30 quid bonus? Should we not consider the consumers rather than the esoteric views put forward by the right hon. Member for Copeland (Dr. Cunningham)?

Mr. Evans

I am well aware of the views expressed by my hon. Friend, which are among a range of views expressed to the President of the Board of Trade on this. My hon. Friend will understand, however, why I shall not comment further on whether those views will ultimately prevail.