Regional Electricity Companies

HC Deb 20 February 1995 vol 255 cc80-129

Madam Deputy Speaker (Dame Janet Fookes)

I have to announce to the House that Madam Speaker has selected the amendment in the name of the Prime Minister.

7.14 pm

Dr. John Cunningham (Copeland)

I beg to move, That this House deplores the President of the Board of Trade's decision not to refer the hostile bid by Trafalgar House for Northern Electric to the Monopolies and Mergers Commission, given its unpopularity with the majority of Northern Electric's shareholders present at the special general meeting of 15th February, the absence of any experience on the bidders' part in running a private domestic monopoly energy utility, the concerns of the Director-General of Electricity Supply about his ability to regulate a regional electricity company which becomes subsumed within a larger group, the ongoing inquiries being made by the Securities and Futures Authority into insider dealings involving the bidders' advisers the Swiss Bank Corporation, and the expiry on 31st March 1995 of the golden share held by the Government in the 12 regional electricity companies, which will leave them open to predatory or hostile bids without any established procedures for transfer of ownership or the protection of small shareholders, consumers and employees. It is appropriate and timely that the House should have the opportunity to debate the future ownership, control and regulation of regional electricity companies. The motion reflects the widespread public anger—indeed, contempt—felt by consumers and employees alike for a Government and their energy privatisation policies that have left them wide open to exploitation.

Those views are strongly held across the United Kingdom. They are reinforced week in, week out by further news of massive pay rises, huge no-risk share options and self-enrichment by directors who award themselves grotesque increases which bear no relationship to their own or their companies' performance. It is an abuse of their stewardship that we, the public, the press, consumer watchdogs and successful directors in the private sector condemn, but which the President of the Board of Trade condones, defends and, apparently, even believes in.

People are rightly outraged by the frequent widespread abuse of private monopoly power, which Ministers take no action to prevent. Consumers increasingly despair of a regulator who is powerless to act in their interests, who cannot prevent abuses and who has no remit to consider the employees' situation in regional electricity companies.

Everyone recognises that electricity privatisation created private monopoly power, captive consumers and weak regulation in cash-rich industries, all of which have been a recipe for exploitation. As one City analyst said last week: Regional electricity companies are quite unlike anything else. As monopolies governed by a kind of regulator they are a licence to print money. That is what experience has confirmed. Everyone believes that with the apparent exception of Ministers in the Department of Trade and Industry. As the Under-Secretary claimed again last Wednesday, when referring to regional electricity companies, they are indeed normal companies, operating in the private sector."—[Official Report, 15 February 1995; Vol. 254, c. 1002.] It appears that Ministers are unique in their isolation in holding to that belief. The City does not believe that; the press does not believe it; consumers do not believe it; even the chairman and directors of the regional electricity companies themselves do not believe it. They know that if what the Minister said was true and if market discipline genuinely prevailed, they would not be able to get away with the hugh share options and salary increases through which they have been ripping-off consumers. It is a scandal.

Outstanding share options for directors and chief executives in regional electricity companies add up to more than £103 million. The 14 million share options total £103.4 million, according to figures provided by the House of Commons Library. That is the nature and scale of the rip-off that those people are awarding themselves at the consumers' expense. Far from any protection for consumers, the great and false claim at the time of privatisation that regulation would protect them has failed to have any effect. The price controls imposed last summer were so lax that shares in regional electricity companies rose immediately afterwards. The City was pleased that the new regime allowed the money machines to continue.

Sir Michael Grylls (Surrey, North-West)

It was probably a slip of the tongue, but the right hon. Gentleman said that share options were ripping off the consumer—I think that those were his words. I am sure that he did not mean that because, as he knows—or should know—share options are not paid by the companies; they come from shareholders. Any share option does not cost the company one single penny. If the right hon. Gentleman thinks about it, he will realise that that is true.

Dr. Cunningham

We all know where the shareholders' money is coming from—straight out of company dividends. Shareholders and directors are the main beneficiaries of what has been going on, at the expense of consumers, employees and the taxpayer. Following last year's new decisions, shareholders once again won at the expense of consumers and employees.

It is against that background that the first hostile bid to take over a regional electricity company has occurred; indeed, it is because of that background that it has occurred. It involves Northern Electric and Trafalgar House, but it could be any regional electricity company and any predator. With one or two exceptions, the scenario would be the same.

We should bear in mind the fact that the Government's privatisation White Paper envisaged retaining regional-based electricity companies to respond to local needs and to promote regional identity—that was the Government's policy at the time. That basic concept has apparently been abandoned by the President of the Board of Trade. Apparently, any bid for any regional electricity company is now authorised. It is open season because he has ignored—indeed, he has abandoned—any public interest in the matter.

Strong grounds remain for a reference of these issues to the Monopolies and Mergers Commission on public interest grounds.

Mr. Bernard Jenkin (Colchester, North)

What would be the point of referring a United Kingdom company's bid for a regional electricity company on public interest grounds when no such reference would be made in relation to a bidder from another European country?

Dr. Cunningham

I am not sure that that is necessarily true. A number of public interest grounds exist, including not least the ability of the regulator to continue even with his weak powers in the face of a takeover by a multinational conglomerate, whether it be Trafalgar House or any other organisation.

The Labour party strongly holds the view that the bid should be referred. It is not alone in that view, as the hon. Member for Colchester, North (Mr. Jenkin) knows. That is the view of the National Consumer Council, the public watchdog. Its chairwoman, Lady Wilcox, has made that clear. She wrote to the Office of Fair Trading to raise key consumer concerns. She said: Questions about issues like cross-subsidy and disposal of assets must be fully explored by the MMC to safeguard consumers … We believe this will become a major issue for consumers which needs to be tackled as soon as possible. The letter goes on in that vein. No doubt exists, therefore, about what the council believes.

The industry regulator holds the same view, but it has been swept aside by the President of the Board of Trade. The very person appointed by the Government with a framework of regulation to look after consumers' interests believes that the reference should take place. That is not all. I have a copy of a letter written by three Back-Bench Conservative Members to their colleagues. It is from the hon. Members for Stockton, South (Mr. Devlin), for Tynemouth (Mr. Trotter), and for Ryedale (Mr. Greenway).

Mr. Tim Devlin (Stockton, South)

I am here.

Dr. Cunningham

I am pleased to see that at least one of the hon. Gentlemen is in his place. Apart from reiterating my point that the privatisation White Paper sets out the case for retaining regional based electricity companies"— the hon. Gentleman is right about that—those three Conservative Back Benchers say: A reference by the President for the Board of Trade to the MMC is an appropriate way for the important issues raised by the Trafalgar House bid to be examined. On this occasion, we can safely say that support for the reference exists on both sides of the House. It may come as some surprise to the hon. Member for Colchester, North that his Back-Bench colleagues do not share his view, but I thought that he would like to know that they share the Labour party's view. Perhaps the President of the Board of Trade will tell us how many other Tory Members have written to him expressing the same view.

Mr. Devlin

In the letter that I and my colleagues sent to many of our colleagues, we did not express a view as to whether Trafalgar House should be allowed to take over Northern Electric. We said that a number of issues needed to be explored. When I was on the radio the other night in Newcastle, one of the right hon. Gentleman's colleagues would not answer the question of what Labour would do if it were in power. Would it refer the bid or renationalise the industry? No Labour Members have yet said a word about their attitude to that.

Dr. Cunningham

I understand the hon. Gentleman's embarrassment at being found out, but there is no doubt that we would refer the bid to the MMC. I share his view. This is not a question of Trafalgar House, or of being for or against the management of Northern Electric or Trafalgar House. This is a test case. We know that all the other regional electricity companies will be up for grabs.

In the public interest, the matter should be thoroughly examined, and the MMC is the most appropriate forum in which to carry out that examination.

I hope that the President of the Board of Trade will tell us how many more letters he has had in that vein from his right hon. and hon. Friends. The hon. Member for Stockton, South and his colleagues the hon. Members for Ryedale and for Tynemouth will have their resolve put to the test, because at 10 o'clock tonight, they will be able to vote for a reference of the bid to the MMC. The hon. Member for Stockton, South has told his constituents that he wants a reference. Those three Conservative Members will have the opportunity to vote for that at 10 o'clock tonight. We and his constituents will be watching to see whether the hon. Member for Stockton, South puts his vote where, apparently, his beliefs are.

The President of the Board of Trade has no interest in the public interest. He is, after all, the man who boasted at the Tory party conference of his determination to intervene—he is the great intervener. He has failed another test, passed up another opportunity, and sold out on intervention in this case, as in many other cases before. His decision has produced a huge scramble for cash in the City. As we all know, every electricity company will become a target, not for investment in new plant or equipment, not for investment in new skills, education and training, and, above all, not in attempts to give consumers lower prices or better services; they will become a target in the battle to control private monopoly power to generate cash without competition, as those organisations have been doing since their inception.

To defend itself, Northern Electric is offering shareholders more than £500 million in cash or in marketable securities, including its share of huge windfall profits from the sale of the national grid, another sell-out of the taxpayer's interest by the Government. That offer will be financed, among other things, by huge borrowing, by more job cuts, as the chairman of Northern Electric has candidly admitted, and by reducing investment in the business—so much for long-term approaches to the future of electricity supply. Consumers and employees are the losers. Customers will, of course, pay heavily for the cost of the takeover, whatever the outcome of the struggle for control.

All of us, including taxpayers, will pay for all of this because Trafalgar House's bid will be significantly financed by its overseas tax losses, perhaps totalling some £300 million over time. Trafalgar House, cleverly, saw the possibilities for financial engineering, to acquire Northern Electric and make the taxpayer foot part of the bill. At least it made a gesture to consumers, with the offer of a rebate of £20 per consumer, or perhaps per household. Consumers are rightly asking themselves, "If all that money is available to battle for control, and if rebates can be given, why are we paying so much for our electricity?" Why is the regime so lax that all that money can slosh around in the system to benefit shareholders but not consumers?

Employees are asking, "If the companies are so profitable and desirable, and are such cash generators, why should we pay for all this with our jobs?" The likelihood is that those events will be replicated in other regional electricity companies. In Yorkshire, the midlands, the north-west o and elsewhere, consumers, employees and taxpayers will foot the bill for the President's indifference to their position.

The Government sold Northern Electric for £240 million. Trafalgar's first offer is £1.2 billion. The difference of £770 million is the amount by which the Government shortchanged the taxpayer with their ill-judged privatisation. There are 12 RECs. All were underpriced and the loss to the taxpayer runs to billions of pounds. The fact that Trafalgar values Northern Electric at £1.2 billion says it all. Mr. Kevin Lapwood of Smith New Court said: It represents a capitulation on the part of the politicians"— he meant the right hon. Gentleman and his friends— and the regulator. That view is not surprising, given that RECs now have market capitalisation of more than £16 billion, compared with £5.2 billion four years ago.

It is not as though consumers had a good deal on prices. Figures from the Library show that between December 1990 and January this year, electricity prices rose by 4.3 per cent. in real terms against a background of falling world basic energy prices—oil by 26 per cent., gas by 27 per cent. and coal by 18 per cent. So much for claims that privatisation has done a good job for consumers.

Mr. Hartley Booth (Finchley)

Why does not the hon. Gentleman accept that, since privatisation, electricity prices have fallen by 3 per cent. on average?

Dr. Cunningham

Because they have not. The hon. Gentleman is confused. Last September's study by London Economics on productivity growth in RECs stated: No clear privatisation effect is apparent. Whilst there is a slight improvement in the overall average productivity level in the post-privatisation period, this is so small as to not be considered statistically significant … Furthermore, there is no consistent record of improvement among the 12 firms that would suggest that privatisation can be associated with efficiency gains. In fact, while six of the companies improved productivity, three experienced slower productivity growth in this period, two were unchanged and one company actually became less efficient … We cannot accept the hypothesis that productivity growth in the distribution industry as a whole is higher in the post-privatisation period than in the period before. There is no escaping the conclusion that in privatising RECs, the Government got it hopelessly wrong. Directors and shareholders are winners, while consumers, taxpayers and employees are the losers—as are energy conservation policies, long-term capital investment and, ultimately and disastrously, the future of the coal industry and mining communities.

I put specific questions about the Trafalgar House bid to the President and his Ministers before and received no answers, but I will try again. Are the assurances given to the President by Trafalgar House legally enforceable—yes or no? If regulation is unable to protect consumers now in respect of a stand-alone utility, will it not be completely inadequate to deal with multinational conglomerates? The regulator thinks that the answer is yes. What is the right hon. Gentleman's answer?

Is it appropriate for the bid to proceed when the Securities and Futures Authority, the Securities and Investments Board takeover panel and the right hon. Gentleman's officials are investigating the conduct of the Swiss Bank Corporation in respect of share deals in Northern Electric? Is not it possible that at least some of those inquiries may lead to proceedings under the Criminal Justice and Public Order Act 1993?

Who tipped off Trafalgar House last Monday, 13 February, that the President did not intend to refer the matter to the Monopolies and Mergers Commission? Trafalgar clearly knew last Monday, before any public announcement by the right hon. Gentleman. As he was in London on Monday, he clearly made his decision then, so why not make a statement to the House? That Trafalgar House knew on Monday is confirmed in a letter to my right hon. Friend the Member for Bishop Auckland (Mr. Foster) from the Director General of the Office of Electricity Regulation. Professor Littlechild wrote: Following the announcement of the Secretary of State's decision, members of my staff met Trafalgar House representatives on Tuesday 14 February. So far, so good. He adds: The meeting was arranged in the afternoon of Monday, 13 February. That was the day before the announcement. Professor Littlechild concludes: I hope this information is helpful. It is, because it tells us that notwithstanding the right hon. Gentleman's quasi-judicial role—his excuse for not answering questions in the House—he must have been in direct communication with Trafalgar House, telling it of his decision before having the courtesy to inform the House. He did not have the courage of his convictions or to tell Parliament of his decision. Instead, he announced it in a press statement the next day, after he had left the country. Who tipped off Trafalgar House before any public statement was made?

If the President was so sure that he had got it right, why did he not tell the House of his decision? He had every opportunity. We pressed the Department for a statement, but the right hon. Gentleman ducked it. If he had had his way, the House would not have had an opportunity to debate the issue. If the President and his colleagues had had their way, nothing would have been said in the Chamber. Our private notice question brought the Under-Secretary of State for Corporate Affairs to the Despatch Box last Wednesday, and our selection of this topic today has given the House the opportunity for debate.

Mr. Jim Cousins (Newcastle upon Tyne, Central)

Perhaps my right hon. Friend would like the news in a parliamentary answer that I received shortly before this debate. The President of the Board of Trade received the advice of the Director General of Fair Trading on the matter on 2 February. Twelve days passed before the announcement to the House. A meeting with Trafalgar House was held at the right hon. Gentleman's behest on 13 February. Is my right hon. Friend disturbed by that information?

Dr. Cunningham

My hon. Friend is just confirming what is apparent—that the President of the Board of Trade, or his hon. Friends or officials, had conveyed to Trafalgar House long before the announcement of his decision, what the effect of the decision was when that decision was clearly in its interests.

Mr. Chris Mullin (Sunderland, South)

Would this be the appropriate moment to remind the House that Trafalgar House has given £600,000 to the Conservative party since 1979? Does my'right hon. Friend think that it is possible that there is an inside track for companies that enjoy this close relationship with the Conservative party?

Dr. Cunningham

I suppose that Tory Members would describe that as throwing public money at the problem.

The regulator clearly believes that his powers are insufficient to deal with an electricity company wholly owned by Trafalgar House. Does the President of the Board of Trade support the regulator in his wish to require Trafalgar House to float off 25 per cent. of the company? Will he give us a straight answer to that question when he replies? The regulator is dissatisfied and has made a reference to the Monopolies and Mergers Commission because he cannot get satisfaction from Trafalgar House. Will the right hon. Gentleman overrule a reference by the regulator? Yes or no? The public interest reasons for a reference of the bid to the Monopolies and Mergers Commission are overwhelming. The President of the Board of Trade should think again. In its vote tonight, the House should oblige him to do so.

7.40 pm

The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Michael Heseltine)

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: 'applauds the improvements in performance in the electricity supply industry since privatisation; welcomes the benefits which customers are receiving in terms of lower prices and improved service; supports the continuing development of competition in the electricity market and the maintenance of effective regulation where this is necessary; and notes that the Director General of Electricity Supply will continue to promote competition and protect the interests of consumers.'. In anticipation of this debate, I spent some time looking at the Opposition motion. If I may, I shall take the motion as my text. I hope that the right hon. Member for Copeland (Dr. Cunningham) will forgive me for sticking to the subject as expressed on the Order Paper.

Apparently, the reason for deploring what I have not done is that the bid by Trafalgar House for Northern Electric was unpopular with the majority of Northern Electric's shareholders who turned up at a meeting on 15 February. That is the first reason.

The second reason is that, apparently, Trafalgar House has no experience of running a private domestic monopoly energy utility". The third reason is that the concerns of the Director-General of Electricity Supply about his ability to regulate a regional electricity company which becomes subsumed within a larger group were ignored. The fourth point, to which the right hon. Member for Copeland referred, is the ongoing inquiries being made by the Securities and Futures Authority". The fifth point is the expiry on 31st March 1995 of the golden share held by the Government in the 12 regional electricity companies". Those are the reasons which the Labour party gave notice that it wished to draw to the attention of the House tonight.

I am at something of a loss to understand the thinking behind those reasons. Perhaps we can explore just what Labour Members have in mind. It seems that, if a company has a meeting at which an undefined, unprescribed number of shareholders turn up, and if a majority of those who turn up hold a particular view, no matter how few they are, no matter the views of the others and no matter whether proxies are registered from the majority, the fact that those who turn up hold a view should be the determining factor. That is a curious constitutional innovation in the way in which British public companies should be run.

I find it fascinating that the Labour party believes that the view of a small number of possibly wholly unrepresentative shareholders should be the basis on which the President of the Board of Trade reaches his judgment. What about all the other shareholders who did not turn up? What about the majority who may not have expressed an opinion? Supposing that they were against the view of the small minority who did turn up? Am I supposed to ignore them? Am I not supposed to listen to their views and to a range of other people's opinions on the matter?

The fact is—[Interruption.]

Madam Deputy Speaker (Dame Janet Fookes)

Order. There are too many seated interventions. I expect Front-Bench Members in particular to set a good example.

Dr. John Cunningham

I apologise, Madam Deputy Speaker; you are absolutely right.

It is no good the right hon. Gentleman coming out with this fraudulent nonsense about listening to people's views. He did not want to listen to any views. He did not want to come to the House, and he did not want to make a statement. He did not want to answer a private notice question, and he did not want a debate. The truth is that, with perhaps one or two exceptions, he did not want to listen to views.

Mr. Heseltine

The right hon. Gentleman could have put all that in his motion, in which case I would have addressed it. My point, to which the right hon. Gentleman has no answer, is that nothing is so lacking in intellect or logic as the suggestion that I should take the views of a minority of shareholders as the determining factor in such a matter.

The nearest equivalent I can think of immediately is the mass meeting of the trade union movement at which a minority of vocal militants were able to dominate the scene, which led to strike action. This is the sort of technique that the right hon. Gentleman thinks should be introduced in British public affairs. I am not prepared to have anything to do with such an argument.

Mr. Martin O'Neill (Clackmannan)

Will the right hon. Gentleman give way?

Mr. Heseltine

No, because I want to make a bit of progress.

I move on to the next argument paraded, which is the absence of any experience on the bidders' part of running a private domestic monopoly energy utility. This is said by the party that, for 40 years, has nationalised industry after industry after industry so that it can put trade unionists, civil servants and politicians in charge of the commanding heights of the British economy. This is the party that, for 15 years, has sat on the Opposition Benches.

Labour Members have never run any serious industry in their lives, yet they now claim the right to run the whole of the British economy. I have never heard—[Interruption.]

Madam Deputy Speaker

Order. Hon. Members must contain themselves.

Mr. Heseltine

If Labour believes that a company making a takeover bid must have had specific experience in the particular industry, it should say so. The fact is that lack of experience has never stopped Labour Members pursuing any policies of any sort in any circumstances. I cannot believe that they seriously believe that this argument should weigh with me.

I move on to the concerns of the Director General of Electricity Supply about his ability. Here I thought that the right hon. Gentleman asked some important questions, but I was intrigued that he managed to avoid any reference to the Director General—

Mr. Allan Rogers (Rhondda)

Condescending.

Madam Deputy Speaker

Order. I am sorry to interrupt the Secretary of State, but I have made the point before that a continual running commentary from a sedentary position is not acceptable.

Mr. Heseltine

I come back to the point. How can the right hon. Member for Copeland pray in aid the views of the Director General of Electricity Supply, important though his views are, without reference to the Director General of Fair Trading? There was a difference between the two regulators, which I freely admit, so I had to weigh the advice that I was given from two different regulators. I chose to follow the advice of the Director General of Fair Trading.

I found it absolutely fascinating, having listened to what I thought at the beginning of the right hon. Gentleman's speech were to be paeans of praise for the Director General of Electricity Supply, that he provided a catalogue of criticism on how the industry had been badly regulated, how prices—apparently—had been allowed to go up and how consumers had been ripped off. But all that is the responsibility of the Director General of Electricity Supply, the one person who, according to the motion, I am supposed to listen to, as opposed to the Director General of Fair Trading.

Dr. John Cunningham

Of course, the right hon. Gentleman is talking nonsense. The Director General of Electricity Supply can work only within the regulations laid down by the right hon. Gentleman and his right hon. and hon. Friends. The Director General of Electricity Supply is as much a victim of this hopeless, hapless system as are the consumers who are paying the price.

Mr. Heseltine

Now we have—I have not got the words down, but we will have them all in the morning, as they will be carefully recorded—an apparently hapless system that is so unsatisfactory. So I gather that the Labour party, if it ever had the chance, would want to change it. [HON. MEMBERS: "Yes."] That is very interesting. Would I be right in thinking that that would be the case not only for the electricity industry, but for a range of other industries? [HON. MEMBERS: "Yes."] Yes, it would change industry after industry after industry. Where would the Labour party stop?

Mr. Stuart Bell (Middlesbrough)

At the utilities.

Mr. Heseltine

It would stop at the utilities. So am Ito understand that the National Freight Corporation, British Airways and British Steel, and all those other privatised companies, have been given a clean bill of health? Are they now safe from the predatory instincts of the Labour party? We are talking only of the utilities. That is what one might call a halfway house. All the utilities are under threat from the Labour party.

Dr. Cunningham

No, they are not.

Mr. Heseltine

No, they are not. Let us not talk about a divided party. Let us not have references to splits. Are we for clause IV or are we against clause IV? Are we dealing with clause IV(a) or clause IV(b)? Who is the great arbiter between clause IV(a), (b), (c), (d), (e), (f) or anything else'? Is it the spokesmen for the party above the Gangway, below the Gangway, on their feet, on their bottoms? Who speaks for the Labour party?

Mr. George Mudie (Leeds, East)

rose—

Mr. Michael Clapham (Barnsley, West and Penistone)

rose—

Mr. Heseltine

I shall give way to both hon. Members.

Mr. Mudie

Will the President be serious about a matter that may be funny to him, but is of extreme importance to millions of consumers? The man whom the President has to represent consumers, the regulator, advised the President not to allow Trafalgar House to take over 100 per cent. of Northern Electric, and that 25 per cent. was needed for transparency. The man responsible for protecting consumer interest put that position. Will the President take that advice, which would give the customer some protection, or will he sweep it aside?

Mr. Heseltine

I would seriously like to help the hon. Gentleman. The Director General of Electricity Supply has responsibilities, which he is discharging. I understand that he is in conversation with Trafalgar House. Certain assurances have been given, and those are now being discussed by the regulator. It is right and proper that that should be taking place. What the outcome of those discussions will be, I do not know, because that is something within the purview of the director general. But the right hon. Member for Copeland raised some important questions, on which I want to be as helpful as I can to the House, such as the timing of the announcement.

It is perfectly true that, on Monday last week, I left for India. During that afternoon, I reached a judgment about the matter. It followed from that judgment, because I was interested in the assurances that Trafalgar House was offering, that officials in my Department pursued the matter, which they did.

Of course, it was not possible to announce the outcome, because we did not know at that stage whether such assurances would be forthcoming. It is also perfectly true that it fell to my hon. Friend the Under-Secretary of State for Corporate Affairs to make the statement. I would be the first to say that I felt uncomfortable, because I could see how the circumstances were developing. I shall share exactly with the House the dilemma that I faced.

I knew that I was leaving for India. It was a very important trip, as the House would recognise. There was nothing that I could have done, or that I would have wanted to do, to avoid it, and I am sure that no one in the House would have asked me to do so. But I knew that, if I were to have made the statement, it would have had to wait until I had returned on Thursday. I did not believe that information of such sensitivity would hold between Monday and Thursday.

Therefore, I took the initial decisions, and I instigated the consultations that were to lead to the assurances which were forthcoming, and which are now the subject of discussion. I believe that, in that way, I behaved perfectly properly.

Dr. Cunningham

Will the President tell the House whether those assurances are legally enforceable?

Mr. Heseltine

No, they are not legally enforceable. But that is not the end of the matter, because the powers of the director general remain. He has powers first—as he is now doing—to discuss the matters with Trafalgar House; and, secondly, he has powers to refer Trafalgar House to the Monopolies and Mergers Commission, if, in future, he should in any way feel the need to do so. So it is important to understand the balances that exist.

Dr. Cunningham

If the regulator determines that a reference should be made to the Monopolies and Mergers Commission, would the right hon. Gentleman accept that decision, or would he overrule it?

Mr. Heseltine

As the right hon. Gentleman knows, once that process is under way, I am in a quasi-judicial position. [Interruption.] Hon. Members must understand that someone in my position, a position which this House has put me in, as a quasi-judicial authority, is extremely constrained, and rightly so, in their actions. I cannot prejudge matters. I have to listen to all representations, I have to take all such matters into account, and I have to be guided by the very clear legislative framework within which I operate. The judgments are often complicated, finely balanced and difficult, but I reject utterly and absolutely any suggestion that such matters are not carried out in the proper and full way.

Mr. John Gunnell (Morley and Leeds, South)

Will the President comment on the assurances that have been given? Trafalgar House does not have a reputation for being a company in which there is total transparency. It is felt that cash assets are being transferred from one member of the group to another. Have we assurances that such movements will be transparent, so that Northern Electric's consumers may be sure that they are not paying to prop up some other member of the group?

Mr. Heseltine

The hon. Gentleman raises essential questions, and those exact issues are now being discussed by the director general and Trafalgar House. The director general is bound to do that. It is not for me to say that I support him in doing so. It is his legal duty so to do. I understand, as does the House, that that process is now under way. I also understand the need for that transparency, and the public confidence which would flow from it, to be in place.

Dr. Cunningham

Those are important points, as the right hon. Gentleman says. A question now arises over the apparently independent regulator having a right to make a reference to the Monopolies and Mergers Commission. Is the President of the Board of Trade saying that he would respect that independent right? If the regulator were to act in such a way, would the President intervene again to refuse the reference?

Mr. Heseltine

I have no power to stop the director general referring the matter to the MMC. I have a right to challenge the view of the MMC in the recommendations that it makes, but afterwards. That would be done in public, after public debate, and I would have to account in public to this House or wherever appropriate for any decision that I took. I would hope that, like any Secretary of State from any party, I would exercise that discretion and make those decisions in the way in which the House would expect me so to do.

Mr. Richard Caborn (Sheffield, Central)

Will the President give the House his view on the notice presented by Offer, in terms of changing and varying the licence in relation to section 11(2) of the Electricity Act 1989? If there is an objection in 28 days, there could well be a referral to the MMC.

Will the President give us the Government's view about that variation of the licence which, I think, was printed in The Financial Times on 10 February, particularly in light of Northern Electric's position on pricing when it can effectively give shareholders about £380? That point was referred to a little earlier by my right hon. Friend the Member for Copeland (Mr. Cunningham). That was effectively price control, which could now vary the licence conditions that were printed in The Financial Times on 10 February. Will the right hon. Gentleman gives us his view about that?

Mr. Heseltine

The hon. Gentleman raises a complicated issue. It is not a straightforward issue, and I will not give him an answer off the cuff. However, I will ensure that he gets a proper answer, because these are highly complex and technical legal matters, and the House is entitled to be properly informed. Either my right hon. Friend the Minister for Energy and Industry will reply to the hon. Gentleman in his response to the debate, or I will ensure that the Chairman of the Select Committee receives a letter setting out the matter in detail.

We have now dealt with the substance of one of the legitimate concerns. I hope that the House feels that I have dealt with it at some length, and I do not apologise for that.

I was surprised at the suggestion that, if the takeover is successful—I do not know whether it will be successful or not—that is somehow centralising the decision-making in London. As I understand it, Trafalgar House has made it clear that it will leave the headquarters of Northern Electric where it is presently based. It will therefore remain a provincially based company.

I could not understand how the Labour party could argue in that way when, during the last half-century, Labour nationalised provincial company after provincial company and centralised the control of those companies in London. I do not understand why Labour should find it extraordinary that this Government have returned all those companies to provincial headquarters.

The fact that the water and electricity companies and the gas industry now have major provincially dominated headquarters is a very important part of the Government's process of spreading power throughout the country, as opposed to centralising it in London. It is not in the Labour party's gift to suggest that we are trying to centralise powers by the back door—

Mr. Allan Rogers (Rhondda)

Will the President give way?

Mr. Heseltine

No, I want to say something else—

Mr. Rogers

The right hon. Gentleman is not telling the truth.

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse)

Order. Did I hear the hon. Member for Rhondda say that the Secretary of State was not telling the truth? If so, I hope that on reflection he will want to withdraw that comment.

Mr. Rogers

I said that the President of the Board of Trade was misleading the House. I will withdraw the remark that he is not telling—

Mr. Deputy Speaker

Order. That will not do at all. The hon. Gentleman must rephrase his comment.

Mr. Rogers

I never said that he was deliberately—

Mr. Deputy Speaker

Order. The hon. Gentleman must withdraw that comment.

Mr. Rogers

I withdraw my comment, Mr. Deputy Speaker.

Mr. Heseltine

We all make such mistakes. However, if I had made that mistake, I would have admitted it more quickly than the hon. Gentleman did.

Mr. Rogers

Will the right hon. Gentleman give way?

Mr. Heseltine

The hon. Member for Rhondda (Mr. Rogers) has just corrected himself. He should just sit there.

Mr. Rogers

rose—

Mr. Deputy Speaker

Order. It is clear that the President of the Board of Trade is not giving way.

Mr. Heseltine

Thank you very much, Mr. Deputy Speaker. I am not giving way.

The most distressing feature of the debate, of the speech made by the right hon. Member for Copeland, and of many of the comments made by Labour Members is the relish with which they want to portray a major British company like Trafalgar House in the least favourable light.

Trafalgar House is one of our leading overseas companies. It falls to my Department, and it is my privilege, often to spend a lot of time with the export managers, directors and executives of that company, travelling the world trying to obtain business. I wonder what kind of impact Labour Members feel it makes on the people whose lives are devoted entirely to trying to further British interests when they have to listen to the carping criticism that we have heard from Labour Members.

If by any chance the takeover bid goes through—I have no knowledge as to whether it will go through or not—Trafalgar House will then be able to point to its experience of running an electricity company in the United Kingdom as it bids for major world opportunities to install, run and manage electricity facilities internationally.

In this country, we must understand that fighting in the international marketplace today demands a scale of expertise in an ever-toughening competitive world. If, every time we try to put together a major British company to win in the world, we hear carping criticism from Labour Members who constantly talk about rip-offs, the consumers being robbed, soaring prices and any other slanderous attack they can find, they are simply undermining this country's ability to win in the world marketplace.

Dr. John Cunningham

Will the right hon. Gentleman give way?

Mr. Heseltine

No, the right hon. Gentleman has had a fair go. He knows full well that he and the rest of those on the Opposition Front Bench never miss an opportunity to undermine the excellence of British exporting companies across the world.

Mr. Clapham

Will the right hon. Gentleman give way?

Mr. Heseltine

No, there is another Opposition Member trying to get in on the same act.

We are now winning in the export markets of the world on a scale which would have seemed almost inconceivable two or three years ago. We should be immensely proud of that.

We heard another classic canard from the Labour party. I do not want to blame the right hon. Member for Copeland for originating it. The canard was that prices have been soaring—

Dr. Cunningham

No.

Mr. Heseltine

If the right hon. Member for Copeland did not say that, I apologise straight away. I turn my attention to where the blame should lie, and that is with the Leader of the Opposition. Obviously, there is another split in the Labour party. The Leader of the Opposition says prices are going up, but the right hon. Member for Copeland does not believe they are.

That is a welcome conversion—[Interruption.] The right hon. Member for Copeland should be quiet for a moment and decide which side of the argument he is on. I want to nail the Leader of the Opposition. When the Electricity Bill was before the House, the right hon. Member for Sedgefield (Mr. Blair) said: outside of the Conservative party and the Department of Energy, it is barely an issue that prices will rise because of privatisation."— [Official Report, 12 December 1988; Vol. 143, c. 684.] What has happened? Prices to customers have fallen. They are down by 9 per cent. in real terms to domestic users in the past two years. Industrial consumers have also seen falls in real terms. That record compares with a real increase of 5 per cent. in industrial prices, and a 22 per cent. increase in domestic prices under the last Labour Government.

The right hon. Member for Copeland cannot deny that he said that the quality of service has not improved. However, there has been an 80 per cent. reduction in the number of domestic customers who have been disconnected. Customer complaints to the regulator are falling. The right hon. Member for Copeland then said that investment was not taking off. However, the electricity industry has increased investment by more than 10 per cent. in real terms since privatisation.

Productivity is also rising. It is perfectly true that the regional electricity companies have reduced staff in comparison to pre-privatisation levels. They have introduced more flexible work patterns and pay bargaining. However, is Labour arguing that we must continue to employ people in companies that could achieve the same results with fewer people? Is that what Labour Members are saying? If they are saying that, how would they achieve productivity gains to pay the real increases in wages, upon which real increasing prosperity depends?

Whenever there were job losses in any industry, Opposition Members never said, "Britain is becoming more competitive." They tried to pretend that we could freeze—fossilise—our industrial and manufacturing capability in the chaotic world that we inherited from them 15 years ago. That simply is not an option. It was not an option then—that is why they lost power—and it is not an option now. We are winning so much extra export market because we have turned the tide of British productivity.

In this debate, as in all others, Opposition Members cannot come to terms with the fact that it is only within the private sector that we will make the gains upon which the increasing wealth of this country depends. Opposition Members talk about shareholders doing well. I take credit for that and pride in it, because I know that shareholders are the pensioners, the people with the insurance companies, the people who are the savers, and the workers in industry who bought shares in their companies. One should rejoice in that, not condemn it left, right and centre whenever one has an opportunity.

The Labour party cannot come to terms with the fact that, 100 years ago, some lunatic dreamed up the idea called "socialism". It is bust, it is finished, and that is why Labour Members are on the Opposition Benches, and will stay there.

8.10 pm

Mr. David Clelland (Tyne Bridge)

I do not intend to take up much time because this is a short debate. I come not to praise Northern Electric or to condemn Trafalgar House, but to refer to the concerns of users, employees and some of the shareholders of Northern Electric. At a special general meeting in Newcastle last week, to which reference has been made, the individual shareholders who attended the meeting and voted overwhelmingly against the threatened takeover were heavily outvoted by the proxy votes of big institutions. So much for the so-called benefits of wider share ownership, which privatisation promised. That point is made in the motion, and well the President of the Board of Trade knows it. The fat cats still call the tune and their poodles in the Tory party dance to it. That might be a rather badly mixed metaphor, but it is appropriate.

I have no particular sympathy with Northern Electric. The company is responsible for 700 job losses since privatisation, a further 800 job losses between now and 1997 and, we are told, about 100 job losses per year after that, in search of more efficiencies. I look forward to the day when directors will be rewarded according to how many jobs they create rather than how many they destroy, which does not seem to require great genius.

While all those jobs have gone, putting pressure on remaining employees to produce the same and more, the salaries of members of the board of Northern Electric have risen sixfold. The company chairman now makes more money in his lunch hour than the waitress who serves him makes in a whole week. On top of that, senior directors stand to make more than a quarter of a million pounds each from shares obtained by virtue of their position as directors.

To try to stave off the Trafalgar House bid, the company has offered what has been described as a package of perks, the cost of which is reflected in the forecast job losses after 1997 and the decimation of the investment programme that we were told would be one of the great benefits of privatisation.

What of electricity users? I refuse to call them customers. They do not go out shopping for electricity. We are told that the price of electricity has come down since privatisation. Of course, that means since 1991. Electricity prices were hiked up before privatisation in order to make the sell-off more attractive and to allow for a fall after privatisation so that board members could tell us how clever they were and justify their huge salary increases. Users, along with employees and the investment programme, too, will bear the cost of that struggle for power. Last week, BBC North produced a programme about the matter, entitled "Better the Devil you know". That is the theme which the majority of northern Labour Members, electricity users—which, of course, includes all of us—and employees have adopted during this sorry saga. There are implications for the rest of the industry and, of course, for the taxpayer, estimated to be about £270 million in lost tax revenue if the takeover goes ahead.

The electricity supply industry cannot be treated as if it were a sweet factory. It is not like any other industry. It could not possibly be allowed to collapse and threaten the continuity of supply. In such circumstances, however unlikely, even a Tory Government would be forced to step in. We must remember that a Tory Government nationalised Rolls-Royce to save it from extinction. The industry should never have been removed from the public sector. I for one certainly look forward to the day when it might be returned to it. [HON. MEMBERS: "Ah!"] Yes, indeed. I share that hope with the vast majority of the British public, certainly people in the north-east who now suffer because of privatisation.

Mr. Piers Merchant (Beckenham)

Does the hon. Gentleman share that aspiration with his own Front-Bench colleagues?

Mr. Clelland

The Labour party believes that the major utilities should be in public ownership or control. [Interruption.] That is without question; there is no argument about that. In the meantime—[Interruption.] If the President of the Board of Trade wants to go into the matter a little more deeply, I am sure that the time will come when we can do so.

In the meantime, we must suffer the unedifying sight of the money market squabbling over an industry that is vital to the lives and livelihoods of millions of people who are helpless to influence the outcome, because their Government have relinquished control over the industry and prefer to leave its fate to market forces.

The campaign against the takeover that is now being waged in the north-east is about not Trafalgar House but the retention of control over a vital industry—vital to the regional economy and to everyday life—within the region that it serves.

In his recent answer to me, the President of the Board of Trade confirmed that he regarded the continued regional basis of the electricity supply industry to be an important principle, but there seems to be no sign that he or the regulator have any intention of enforcing that principle. On the contrary, his refusal to refer the matter to the Monopolies and Mergers Commission has led to open season on other regional companies and the creation of even bigger monopolies. In his answer last Wednesday to my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins), the Parliamentary Under-Secretary of State for Corporate Affairs confirmed that the safeguards to which the President of the Board of Trade referred are not protected by statute. Indeed, the President of the Board of Trade confirmed that again tonight.

The major utilities are too important to be left to the financial juggling of the market. They are too important to our regional structure to be subjected to the threat of takeover or sell-off. It is the job of Government to secure such services in the interests of the people and of the country. If the Conservative Government will not do that, a Labour Government will.

8.16 pm

Mr. John Sykes (Scarborough)

I shall make a brief contribution. I am the vice-chairman of the Conservative Back-Bench deregulation committee. I am also the Member of Parliament for Scarborough and Whitby, which are supplied by Northern Electric. I am a business man with a factory which is on the coast and which consumes electricity supplied by Northern Electric. I am also a householder who spends most of his life trying to turn out the lights that his children have left on. I do not, however, speak as a shareholder. I carry no torch for either company involved in the discussions.

In my dealings with Northern Electric, I have found it responsive and helpful. Towards the end of last year, there was a proposal to erect pylons from Lackenby to Whitby, which would have vaulted across some of England's finest coastal scenery and through many villages in my constituency. I should like to record my thanks to Northern Electric for shelving those plans. I hope that they remain firmly on the shelf.

The motion is yet another example of scaremongering and nit-picking. Opposition Members know nothing of the world of business, in which takeovers, both hostile and otherwise, are commonplace. Their experience as employers is limited to the countless research assistants who saturate the Palace of Westminster, yet their motion feigns concern for small shareholders whose company may be subjected to predatory or hostile bids. The only hostile or predatory bid that the shareholders need to fear is that which might come from Opposition Members should they seize the reins of power.

The motion undermines Trafalgar House in a most dishonourable manner that suggests an "absence of any experience". The absence of experience lies entirely on Opposition Benches. In the world of business, it is not unusual for a company to diversify by acquiring unrelated interests. Sometimes enormous opportunities flow because of the dovetailing of such interests with those of other companies within the group.

In the Financial Times, Trafalgar House is listed among the diversified industrials, as is the Hanson Trust. No one ever asked Lord Hanson what he knew about batteries before he bought Ever Ready, about cigarettes before he bought Imperial Tobacco, or about bricks before he purchased the London Brick Company. No one bothered F.H. Tomkins when it took over Firth Cleveland or Rank Hovis, yet all those companies have thrived.

I would not mind if the Labour party thought that Trafalgar House was a stranger to the north-east, but it is not. The firm owns Redpath, John Brown Engineering, the Davy Corporation and the Cleveland Bridge Company, which is based in Darlington. The last named has just won the Hong Kong harbour bridge contract, which is much to its credit, and many jobs will flow from the company's activities.

Many people in my constituency, and thousands of others in the north-east, rely on Trafalgar House for their employment. It is wrong of the Labour party to suggest that some of those people might lose their jobs as a result of the takeover. It made the same prediction when Rowntree was taken over by Nestle, but the factory in York has thrived.

If there is any danger to employment, it is presented by the Labour party, a party whose members attacked the Japanese for so-called "alien practices" when Nissan came to the north-east, a party that wants to impose a European job-shredder on companies in this country in the form of the social chapter, and a party masquerading as the business-friendly party of the 1990s. Yet beneath the veneer lurks the same old monster, intoxicated with the urge to regulate and tax. I urge my hon. Friends to reject the Labour motion with the contempt that it deserves.

8.21 pm

Mr. Nick Harvey (North Devon)

The consequences of the President of the Board of Trade's decision not to refer the Trafalgar House bid are vast not only for this case and the many consumers whose interests it affects, but rather more for the precedent that it will set for the future. I echo the comments of the right hon. Member for Copeland (Dr. Cunningham) in expressing disappointment that the Government did not choose to bring the matter to the Chamber of their own accord.

The stock market is already preparing itself for the prospect of a wave of takeover bids for regional electricity companies. The Trafalgar House bid sets a precedent for the takeover of utilities by companies that do not have the supply of utilities as a core business. Questions legitimately and reasonably must be addressed about the commitment of those firms towards the electricity industry.

There is a central contradiction in the decision not to refer the bid, between the Government's stated objectives when they privatised the electricity companies and the attitudes implicit in the decision to give the bid the green light. The prime example is the golden share. The Government's golden share was intended to protect companies such as Northern, presumably because the Government believed that ownership was a matter of public interest. Certainly, previous Secretaries of State for Trade and Industry have seen the provision of power to several million customers as a matter of public interest. There was enough of an interest to ban bids from state-owned firms from abroad, which have been tipped by some to follow the Trafalgar House example now.

Most people naturally presumed that the public interest was the justification for the golden share in the first place, and that its purpose was to provide a defence against precisely such a bid. Perhaps the Government would like to explain the purpose of the golden share in the light of the fact that it has been used only to delay a takeover, rather than to prevent one.

Another central argument about the privatisation of the industry and a stated objective of the Government was on the importance of regional identity. Under the present set-up, there is scope for substantial input from regional electricity companies into their respective regions, whether it is in the arts, sport or any other issue of community importance. Without saying anything specific on this case, I believe that the likelihood of foreign or multinational companies which bid for the regional companies having the same high commitment to the regions is minimal.

Even if the company headquarters remained in Newcastle, decision making would in reality move to London, to the detriment of the north. There have been notorious examples in other cases, when promises that have been given about corporate headquarters have been nakedly broken after the event.

Another stated objective of privatisation was to deliver the efficiency and strength that would benefit customer, employee and company alike. Yet a precedent is now being set for allowing takeover bids from companies which have manifestly failed to prove that they can improve investment or even long-term customer care.

We have been offered only four promises on the maintenance of standards, and the President of the Board of Trade admitted this evening that they had no legal substance whatever. The assurances need to be judged in the light of certain economic truths. Takeovers create a self-perpetuating climate of insecurity, and that has already added £1 billion to the value of the regional electricity companies on the market.

Dividend payments will rise, as they must if the price of shares is not to drop, leaving companies even more vulnerable. Prices in turn will rise, as the price cap allows, to provide the cash flow needed to maintain high dividends and, for the very same reason, jobs will be cut. Investment will not be exempt from the squeeze required to keep shareholders happy, and that runs to the core of the problems that have beset British industry for such a long time.

As a nation, we distribute far more in dividends than our competitors—double the proportion, for example, of Germany or Japan. The results are higher prices for customers, the threat of redundancy for workers and the loss of essential investment in the industries.

Mr. Barry Porter (Wirral, South)

Does the hon. Gentleman have evidence for his assertion that prices are higher or that customers are in some way disadvantaged because of dividend policy? There is no evidence of that.

Mr. Harvey

It is self-evident that if more is given out to shareholders in the form of dividends, less will be available for investment, salaries and any other cost that a company might incur.

Serious questions need to be asked about Trafalgar House's commitment to fulfilling the Government's stated objectives at the time of privatisation. What was the purpose of the golden share? How committed is Trafalgar House to the region or to investment? How determined is it not to shed jobs for the sake of maintaining dividends? What evidence is there that the takeover is not simply designed to give Trafalgar House tax advantages? Has not the company admitted that financial engineering is part of the rationale of the bid? Will the customer benefit from the new ownership?

Those questions will undoubtedly return when other regional electricity companies are subject to takeover bids. For that reason, the bid should have undergone a more thorough and impartial investigation at this time. The President of the Board of Trade's explanation that he had two different pieces of advice from the two regulators and chose one rather than the other does not stand up to much examination. The Director General of Fair Trading has a general concern on competitive issues, but the Director General of Electricity Supply has a much more specific interest in the industry. The fact that either of them raised serious concerns or interests should have amounted to a case for a reference to the Monopolies and Mergers Commission. The idea that the two were looking at the same issues does not seem to be right at all.

A referral to the MMC would have been appropriate and desirable, considering the precedent that the case will set. On Wednesday last week when the issue was briefly debated, Conservative Members claimed that those pressing for a referral to the MMC did not understand the market. The truth is quite the opposite. We understand the market only too well—well enough to understand the difference between competition and monopoly, well enough to understand the difference between a company that is subject to all the rigours of the market and a company whose customers have nowhere else to go, and well enough to understand the difference between a chief executive and a management team whose salaries reflect a genuine market value and those who are in the privileged position of having a trapped market.

We understand that the regional electricity companies are fundamentally different from the majority of other private companies, and that is why they are regulated. That is why a case such as this should be referred to the MMC. The electricity industry is not internally competitive. It provides a necessity that people cannot do without and, as such, it has social obligations to its region and customers. That was the reason behind the golden share and the reason why there is a regulator.

This situation is typical of the many problems that the Government's economic policy is running into. The Government's "hands-off' approach is undermining Britain's competitive aspirations. It seems that asset-stripping, job-shredding, executive riches and financial engineering are now the ideals of the laissez-faire system. Those who claim—as the Government do—to be the champions of the free market must find that something of an embarrassment.

A sound takeover proposal has nothing to fear from a referral to the MMC for investigation. If Trafalgar House could have proved that the various fears that had been raised were unfounded and that the customers, employees, the region and the company would not be disadvantaged, that would have become apparent. Unfortunately, the opportunity has been missed, so the fears remain. The President of the Board of Trade has declared open season. The customers of Britain stand to lose out.

8.29 pm

Mr. Hartley Booth (Finchley)

We have had this evening from the right hon. Member for Copeland (Dr. Cunningham) a parade of verbiage which has not done his argument any favours. He talked about exploitation, a licence to print money and ripping off the consumer. From hon. Members behind him on the Opposition Benches we had a parade of fat cats, as if we were not well aware that that was the dream of the Labour party. It dreams about the horror of fat cats. In the mythology of the Labour party, fat cats are companies that make profits. That is what Labour Members want to get rid of—any company that makes a profit.

Opposition Members have shown no appreciation of what privatisation produces. They have shown no understanding of how it reduces the interference of bureaucrats and the lack of motivation that prevails in a state-organised utility or company. To quote the words of a former Treasury Minister: When the government owns, an owner's concerns dominate its thinking. If we look at parliamentary records for the 40-year period after World War II—when nationalisation was at its peak—debates on the state-owned industries focused on such things as investment needs, losses, debts, labour relations, and strike records. Little time was spent on Parliament's more diffuse obligation to consumers. The Opposition have shown little, if any, understanding of the market. There has been a reference or two to customers, but the regulator was not referred to as a constraint on an entrepreneur and a business, which is what he is in practice. No, not at all. The regulator was paraded before us as an example of the alleged failure of my right hon. Friend the President of the Board of Trade.

Opposition Members have shown no appreciation of the role of the investor and the City. There was a reference from the Conservative Benches, but none came from the Opposition Benches, to the fact that probably everyone in the Chamber, many millions of people in the north of England and many millions of people who are represented by Opposition Members have a stake in what was going on. They have a stake not because they are direct investors but because they have pensions or policies. They have a small stake in the City institutions that happened to vote in the majority to put the bid through in what is referred to in the motion as the "meeting of 15th February".

Nor is there any understanding on the Opposition Benches of the performance of the electricity companies since privatisation. The right hon. Member for Copeland said that I was wrong when I intervened to say that there had been price reductions since privatisation. I can give him and the House my source. It is a small booklet available in the Library of the House of Commons. It says: In the case of manufacturing industry, the latest DTI figures"— this was published last year— show that average electricity prices have fallen in real terms by nearly 7 per cent. in recent years. Domestic consumers are also starting to benefit from lower prices. Overall, real terms domestic electricity prices have fallen by over 3 per cent. since privatisation, and by 7 per cent. in the last two years. I challenge the Labour party. Perhaps it has better figures. There have been real reductions in prices to both domestic and manufacturing consumers of electricity. Instead of the proper appreciation of the industry that we would have expected from Opposition Members, the politics of envy has been paraded intermittently through the debate. It positively replaces the understanding of management and its role.

I understand that some of the directors of utility companies have received huge pay increases. They may well have demoralised some of their employees by taking rises when others have taken pay cuts. That may be a management mistake, but it has nothing to do with the politics of envy. That, and the failure of the Labour party to make the broader point, shows exactly where Labour Members are coming from.

What of the performance of the Labour party with nationalised electricity? We have heard a great deal of rhetoric, but we have not yet heard precisely what was the Labour party's performance during its last tenure of office. Prices rose by 2 per cent. Was that between 1974 and 1979? No. Was it per year? No. Was it six monthly or even three monthly? No. Every six weeks electricity prices rose 2 per cent. between 1974 and 1979. That is the performance of the Labour party. It cannot get away from it. Comments such as the one that we heard a few moments ago from the hon. Member for Tyne Bridge (Mr. Clelland), in which he suggested that we raised prices artificially moments before privatisation, totally fail to recognise that the Labour party increased prices 2 per cent. every six weeks between 1974 and 1979. It was a hypocritical statement. What about concern among the customers? That was a bust fuse, too.

8.38 pm

Mr. Barry Sheerman (Huddersfield)

I wish to deal with a different issue—the possible changed ownership of the regional electricity companies in the context of its effect on the strength, diversity and success of local and regional economies. You and I share the same region, Mr. Deputy Speaker, so I am sure that you will not mind me referring to our region as an example of the issue that it is most important for the House to consider.

Whatever can be said about privatisation, the efficacy of regulation and the balance of benefits to consumers or shareholders, there is one indisputable fact. Electricity, water and, to some extent, gas companies can and do act, under private or public ownership, as positive forces in the building and rebuilding of a viable industrial base in the regions of Britain.

There is clear evidence of strong support and commitment to the regions on the part of the utilities and certainly my local regional company, Yorkshire Electricity. The company is built on its relationships in Yorkshire. It expanded its involvement in the economic development of the region. The company is active in assisting small, medium and other enterprises on a variety of issues. It involved itself extensively in a range of local initiatives such as the Yorkshire and Humberside Development Association. It supports local universities and works to develop profitable partnerships with training and enterprise councils, chambers of commerce and the institutions that seek to secure a dynamic life for the region. Opposition Members would be poorer if we did not recognise some of those facts.

In that respect, Yorkshire Electricity is not dissimilar to some of the other privatised utilities. All three companies have put themselves at the heart of the economic and industrial regeneration of the region, whatever else we may think of them.

Given the constraints of European directives, Yorkshire Electricity and many other regional electricity companies have consistently tried their utmost to maintain their position as significant purchasers of locally derived goods and services. In other ways, such as in its proactive role in local campaigns involving disabled people, children and the environment, Yorkshire Electricity has become a familiar and reliable member of the local community. Opposition Members understand that.

At a time when the arts are increasingly dependent on private-sector sponsorship, local electricity companies, such as Yorkshire Electricity, have become most important benefactors and have fulfilled valuable social and cultural roles in the regions.

The Minister for Energy and Industry (Mr. Tim Eggar)

I apologise for interrupting the hon. Gentleman in full flow, but I have been listening carefully to what he has said and he seems to be giving us a eulogy to privatisation. Can he confirm that?

Mr. Sheerman

I am trying to point out that, under both public and private-sector ownership, Yorkshire Electricity, NORWEB and Northern Electric have played an important role in supporting the regional economy. Perhaps, after hearing something that he might like, the right hon. Gentleman will hear a few things that he will not like. I am trying to give a reasonably well-balanced group of remarks.

In concert with local authorities, regional electricity companies have developed effective partnerships on a range of questions, including public lighting, crime prevention and energy efficiency. We have observed the growth of an awareness on the part of those companies that their future prosperity and development are inextricably linked to that of their consumers and the community that they serve. On that basis, they represent a major regenerative influence and have the potential to diversify and develop exciting initiatives in the regional economies.

Opposition Members would be foolish to ignore that, but the move that the President of the Board of Trade has set in train will at one stroke destroy all that potential. He is often seen as a man of action, rather than deep thought. In this instance, his thoughtlessness could do incalculable damage to our other goals and objectives in the regions. He espouses many other causes to try to help the development of local industry and small and medium-sized enterprises. He expresses concern about regional diversity and growth and about the ability of small and medium-sized enterprises to flourish. Indeed, his competitiveness White Paper, his interest in regional supply networks, local sourcing and business links all point to a commitment to, and concern for, a successful and diverse regionally rooted economy.

However, all that is hot air if we judge it by the effects of the right hon. Gentleman's failure to refer the bid for Northern Electric to the Monopolies and Mergers Commission. All the effort that is being put into a range of initiatives by chambers of commerce, TECs, local authorities, universities and colleges could be utterly wasted if his decision on the ownership of regional utilities remains unchanged. What is more, regional economies on the brink of real growth and development will fall back into decline, with yet another positive influence hived off to London or beyond.

Too often, we have witnessed the effects of a takeover that results in the ownership of a company transferring to a national or international conglomerate. The Government have not been very forthcoming about those sorts of decisions. To the detriment of local companies and whole regions, decisions are no longer made in the regions, or even in this country. Down-sizing, asset stripping and the mean bottom line are all that counts. Local and regional loyalties are consigned to the waste bin. The Government's policies have initiated and hastened that process time and again.

In our region, an example is the disastrous effect of the Government's initiatives and legislation on the brewing industry. Look at the, perhaps unintended but disastrous, consequences of the change in the franchising system for regional television. We have lost the independent Yorkshire Television, which has combined with Tyne Tees and is soon likely to be taken over by Granada.

Time and again, the Government's policies carelessly destroy the viability of local and regional industries. It is a sad day when a political party—whatever its other ideological follies and sheer wrong-headedness—abandons values that, at one time, it held dear. There was a time when the Conservative party believed profoundly in the diffusion of economic power and saw the strength of our democracy being rooted in strong regional prosperity. Today, they have sacrificed that belief, like so many others, on the altar of market forces with tragic consequences that will leave our regions permanently damaged, demoralised and disheartened.

8.45 pm

Mr. Piers Merchant (Beckenham)

I must start by declaring a minor interest. Like hundreds of thousands of people, including no doubt some Opposition Members, I hold a few shares in regional electricity companies, but not in Northern Electric or in Trafalgar House.

This has been an interesting debate for me as I had some knowledge of the predecessor to Northern Electric, the North Eastern electricity board, when I represented Newcastle upon Tyne, Central in the 1980s, before I gracefully withdrew to enable the present hon. Member for Newcastle upon Tyne, Central (Mr. Cousins), who has unfortunately left the Chamber, to pursue his political career, which I gather that he is still contemplating.

Much play has been made of the involvement of regional electricity companies, such as Northern Electric, in the general good of the regions. Before the companies were privatised—under the old nationalised set-up—the regions and areas in which they operated received little support, yet the hon. Member for Tyne Bridge (Mr. Clelland) seemed to be extolling the virtues of nationalisation and promised that, when he had the opportunity, he would return electricity to state ownership. That would certainly strip away any opportunity for regional support to come from the unit serving the area.

I do not believe that the fact that ownership might change need in any sense alter a company's commitment to a region. When I was in the north-east, it was evident that many of the companies that gave great support to the region—I will not be unfair by picking out one or two—were branches of national concerns. They were not locally based or local companies, but simply had regional offices there. In certain cases, they had decided as a matter of policy to support certain regions. There is no necessary connection between where the corporate headquarters of a company is and ownership resides, and where its loyalty can be found, in terms of support for an area in which it operates. If that were the case, virtually no regional support would emerge from such companies. It would all be channelled to the area in which it had its corporate headquarters—central London or elsewhere. That simply is not the case.

For some time, I worked for Northern Engineering Industries, which was a proud north-eastern company, connected with the electricity industry in that it supplied generating plant. Eventually, Rolls-Royce took over NEI, which ceased to have its corporate headquarters in the north-east. At the time, there were many scares and it was said that when Rolls-Royce took over there would be wholesale redundancies in the north-east. That did not happen. There were some—I was one—but it was hardly wholesale. People also said that there would be wholesale reorganisation and that all the power would seep off to London or Derby, with no control left in the area. That turned out to be totally untrue. Control remained in the area and almost as many decisions were made there as before.

It was said that control would be completely lost, but the company—I refer to NEI but the same applies to Northern Electric—was ultimately controlled by its shareholders, the majority of whom did not reside in the region in any case. Moreover, like any large company, the company depended on the operation of capital, which in turn was largely controlled by the City. So the idea that the power base is automatically transferred when a company is taken over flies in the face of fact.

The Opposition seemed to believe that they could change the position and that, if they had state control of industry, the market could he ignored. That does not happen in reality. They now seem to believe that they can insulate an individual company against the operation of the capital market and that Northern Electric could be retained as a private company and protected against takeover bids. That, too, is wrong.

Trafalgar House has given guarantees, as my right hon. Friend the President of the Board of Trade said.

Mr. Rooney

Name them, then.

Mr. Merchant

It has guaranteed that it will give sufficient financial and management resources to enable Northern Electric to carry out its statutory and licence obligations; it will ensure that the Director General of Electricity Supply is provided with such information from any company in the Trafalgar House group as he requires in relation to the exercise of those functions.

Mr. Mullin

Will the hon. Gentleman give way?

Mr. Merchant

I shall give way to the hon. Gentleman in a minute. First, I shall finish answering the question posed to me by naming two other guarantees: Trafalgar House will co-operate with the DGES in ensuring appropriate financial separation and financial independence for Northern Electric; and it will ensure that Northern Electric agrees to appropriate licence amendments.

Moreover, it is clear that if those assurances are breached, the DGES can refer the matter to the MMC, under the Electricity Act 1989.

Mr. Mullin

Did the hon. Gentleman not hear the President of the Board of Trade say that the guarantees given by Trafalgar House were not binding?

Mr. Merchant

If I remember correctly, my right hon. Friend said that they were not "legally" binding, but a guarantee is not invalid if it is not legally binding. In all our activities, we give guarantees that are not legally binding. The important qualification is that, under the Electricity Act, the DGES can still refer the matter to the MMC if those guarantees are broken.

Opposition Members, particularly those who represent north-east England, should rely less on what a few shareholders may have said at a public meeting that they attended, but should weigh up what would be in the best interests of the region. I do not speak in support of the Trafalgar House bid and I understand why people in north-east England feel strongly about the need to retain regional identity among the companies that operate up there. I hope that, if Trafalgar House goes ahead with its hid, it will give further guarantees about maintaining the headquarters of Northern Electric in the region and other links with the region.

Opposition Members should be careful, however, because takeovers are not necessarily bad and Northern Electric may be strengthened, having been taken over by a large outside company. It may benefit from being part of a bigger organisation with access to more capital and expertise; more markets for its products, as well the ability to draw on existing markets; and more financial strength to back it. Consumers may benefit from the better service that would thereby be provided. Opposition Members spoke of the critical job losses under Northern Electric. As part of a larger organisation, instead of simply being made redundant, people could be transferred to other jobs within that organisation. Consumers may benefit from lower prices and a better service as a result of a takeover, and current shareholders in Northern Electric may gain a better return. So the advantages of a takeover should be weighed in the balance. Neither must we forget the role of the regulator and his considerable power to protect consumers' interests.

We should look at the motives of Opposition Members who spoke strongly against the Trafalgar House bid and want it stopped or referred to the MMC. I understand their regional affections but some of their arguments are muddled and they do not see the positive benefits. I suspect that the smoke screen that has been thrown up is to hide the desire of sections of the Labour party to return Northern Electric to public ownership, perhaps not in the direct way referred to by the hon. Member for Tyne Bridge, but in a more subtle and dangerous way, by extending the power of regulation and control in such a way that the company could not operate in a free market but would be at the whim of political manipulation and control.

We should not allow this debate to pass without marking the success of privatisation of the electricity industry. We must not allow one debate, important though it is, to obscure that fact. We are the only large European country to have reduced our electricity prices. Even including VAT, the price of electricity in this country is the fourth lowest in Europe, so all the talk about the rapid rise of electricity prices is inaccurate. Small companies pay among the lowest prices in Europe; since 1993, disconnections have been reduced by 95 per cent., and the number of complaints has fallen by 30 per cent. New options such as "Fuel Direct" are available for people who have difficulty paying. Customers who do not receive proper service now receive payment for default and there has been a revolution in management skills and attitudes. Whereas, in 1979, the taxpayer had to foot the bill when losses amounted to £50 million a week, now the Exchequer, and therefore the taxpayer, receives net proceeds of £48 million a week.

The case for privatisation has now been made, in terms not just of rhetoric but of hard fact and experience. I fear that this debate is motivated by a desire to spoil the truth with scares about what might happen in hypothetical situations. Using one example, every negative outcome that could possibly be conjured up has been used in an attempt to spoil the truth that should be put clearly before the House: privatisation has been a success for all involved, but particularly for the consumer.

8.58 pm

Ms Ann Coffey (Stockport)

The Under-Secretary of State for Corporate Affairs made it clear to the House on Wednesday, in the debate on Northern Electric, that ownership of the regional electricity companies should be decided by the market, and that the Director General of Fair Trading, in his statutory advice, said that the merger did not raise any competition concerns. That is hardly surprising, as Northern Electric, like the other regional electricity companies, will be a monopoly supplier in the domestic market until 1998.

I am interested in the other public interest aspects of the bid. So far, they have been dealt with via advice to the President of the Board of Trade from the regulator and the Director General of Fair Trading, which has led to some discussion about the extent of the regulator's concern and the response of the President of the Board of Trade to that concern. I am further interested in why the regulator has not used his powers under the Electricity Act 1989, to which the Under-Secretary of State referred in the debate in the House last Wednesday, to refer the bid to the Monopolies and Mergers Commission on public interest grounds.

Section 12(1) of the Act says: The Director may make to the Monopolies and Mergers Commission … a reference which is so framed as to require the Commission to investigate and report on the questions—

1. (a) whether any matters which —
2. (i) relate to the generation, transmission or supply of electricity in pursuance of a licence; and
3. (ii) are specified in the reference, 107 operate, or may be expected to operate, against the public interest; and
4. (b) if so, whether the effects adverse to the public interest which those matters have or may be expected to have could be remedied or prevented by modifications of the conditions of the licence."

Public interest is the key phrase. This goes beyond the definition of the director general's role in the Government's amendment, which says that the Government notes that the Director General of Electricity Supply will continue to promote competition and protect the interests of consumers. Public interest has a common law interpretation, and it may be considered as something to be distinguished from the private interests of individuals so that the expression is akin to the economic doctrine of the greatest good of the greatest number. Public interest is synonymous with public benefit. The question, of course, is whether a particular thing that is in the public interest is a question of the times and is a question of fact, to be decided in the light of all the circumstances and conditions as they exist at the present time.

It is easy to see how the MMC can decide whether a monopoly situation operates against the public interest by increasing prices or whether economies of scale outweigh that advantage. Even then, however, there are considerable problems in practice—I refer the Minister to the brewing industry. Ultimately, of course, the objective facts must be evaluated, and at the end it comes down to individual judgments. The President of the Board of Trade is an elected member of a democratically elected Government, totally committed to the free market, and believing that public interest is served by the free market. That is his belief.

What of the regulator, however, who is supposedly independent and unfettered by such ideology? Why has he not referred the matter in the light of the following issues? First, some £300 million in tax payments to the Treasury would he lost if the bid goes ahead. Is that not a matter of public interest? I can certainly think of things that the Treasury could spend £300 million on—raising nurses' pay beyond the miserable 1 per cent. that they have been given, for instance, and perhaps giving local education authorities the money to fund the teachers' 2.7 per cent. increase in salary which currently looks as though it will be funded by lost jobs.

Secondly, there will be further job losses in addition to those already lost. In that context, it is specific not only to this bid but to other electricity companies. Some 10,939 jobs have been lost since privatisation and it is likely that the number of job losses will increase as the regional electricity companies come under increasing pressure to give ever larger returns to shareholders to keep them happy. Is that not a matter of public interest?

If the regulator feels that those issues are not of public interest and do not merit referral to the MMC, he has a very narrow definition of public interest—as narrow as that of the President of the Board of Trade. Perhaps public interest is ultimately a matter of individual judgment based on individual belief. I do not know what the regulator's personal beliefs are, but in this bid, after the abdication of responsibility by the President of the Board of Trade, the regulator was the last protector of public interest in the widest definition of the greatest good for the greatest number—a definition that I know is not shared by the Government.

It is important that the regulator should refer the bid to the MMC so that we can have a proper examination of the public interest and the public can see the independence of the regulator operate; otherwise he will open himself to a critical examination of his independence on public interest issues and bring into dispute the whole regulation system.

9.4 pm

Mrs. Angela Knight (Erewash)

The hon. Member for Stockport (Ms Coffey) referred to the public interest. The interest taken in the debate by Opposition Members is shown by the number who are present; but I believe that the hon. Lady confused the public interest with interest to the public, given the allegations that she made. Let me point out to her that the public interest is best served by cheap electricity and an efficient company. An inefficient company will result in job losses and high prices; we want jobs and low prices, and both have been provided following the privatisation of this company and many other formerly nationalised concerns.

My right hon. Friend the President of the Board of Trade did a masterly demolition job on the motion. In their speeches so far, Opposition Members simply have not made their case. The motion refers to a meeting at which an unknown number of shareholders expressed concern about, or indeed opposition to, the proposed takeover. I have an answer for those shareholders: they do not need to sell their shares.

Another point—which has been answered time and again—relates to the Director General of Electricity Supply and his ability to regulate the industry. I was astounded when I saw that in the motion; I can only assume that it was tabled by someone who was not present last week when my hon. Friend the Member for Brecon and Radnor (Mr. Evans), the Parliamentary Under-Secretary of State for Corporate Affairs, concentrated on that and many other pertinent points relating to the takeover.

The third aspect of the motion that strikes me is the concern about the removal of the golden share from the regional electricity companies, which would apparently make them vulnerable to "predatory or hostile bids". A well-run, efficient company, looking after its customers and employees, need not fear a hostile takeover as it will know how to fight such takeovers effectively. If a company is insulated from the market place, it is insulated from the needs of its customers and will no longer act in the best interests of those customers. That is why companies must be left to trade openly and fairly.

If a lesson is to be drawn from the debate and the bid, it is that if regional electricity companies want to defend themselves from takeovers they must continue to reduce consumer prices. I also believe, however, that takeovers and amalgamations often produce a combined strength—to which my hon. Friend the Member for Scarborough (Mr. Sykes) referred—allowing companies to compete in an international market place which they would not have been able to do alone.

Mr. Mullin

Does the hon. Lady agree that one of the problems of the takeover culture that exists in British industry, and especially in the City of London, is that it obliges companies to be remorselessly short-term in their thinking? One effect of regular takeovers is that everyone is concerned with making the fastest possible buck in the shortest possible time, which is not necessarily conducive to the long-term interests of either companies or customers.

Mrs. Knight

Remarks such as that can be made only by someone who has lived in a sheltered world, perhaps a lecturing establishment, rather than working for companies. If the hon. Gentleman had worked in industry, he would know what an extraordinary comment that was. If—as his expression suggests—he has now decided that he has worked in industry, I suggest that he go back and find out what it is all about.

Mr. Mullin

Will the hon. Lady give way?

Mrs. Knight

No. I have already given way once, and the hon. Gentleman will no doubt have an opportunity to have his say later if he catches your eye, Mr. Deputy Speaker.

It was extraordinary that, in the somewhat mournful diatribe with which he opened the debate, the right hon. Member for Copeland (Dr. Cunningham) should talk about the sale of the national grid. I have news for him: the national grid has not yet been sold. No doubt the right hon. Gentleman is already putting down yet more markers against privatisation. He criticised the difference between the sale price of the regional electricity companies and their valuation now, implying that the companies had been underpriced in the first instance. That increase in the valuation of the companies shows the improvement in their performance since privatisation. We should be proud of that: it demonstrates precisely what privatisation has done.

The hon. Gentleman then quoted one year's electricity price increase. What a selective use of statistics! I also obtained the statistics from the Library, which was the hon. Gentleman's source, and they show a continuing trend of price reduction. Long may that last. In the debate the anti-privatisation lobby has come back out and reared its ugly head. I am sure that we all recall the debate on British Airways when the hon. Member for Glasgow, Garscadden (Mr. Dewar) said that British Airways would be the pantomime horse of capitalism, if it was anything at all. British Airways is now the world's favourite airline.

When we debated British Telecom privatisation Opposition Members said that the public telephone box would be threatened with extinction. The number of call boxes has doubled, and what is more they work. These things mean something to people. British Gas prices have fallen since privatisation but that was never projected by Opposition Members. I do not know whether any of them read the journal Science in Parliament which is sent to us. The one which arrived last week had articles on nuclear power and nuclear privatisation by Greenpeace, which is in favour of privatisation. That is a turn-up for the book, and the articles are well worth reading.

As the House knows, I spent many years in industry before being elected to Parliament. In the years before privatisation the experience with nationalised companies, the state monopolies, was quite different and poorer from what happens today. Those companies, including the electricity companies, frequently ransomed British industry. They were able to do that because they were in state control and, ultimately, they were responsible to the House of Commons. Hon. Members took a close interest in them and effectively ran them. That is why they were inefficient and why they made a loss of about £50 million a week.

Opposition Members should be honest about these matters. If those companies had not been privatised the money that they now contribute to the Exchequer would not be available to be spent on the health service, education and social security. They contribute a great deal weekly, monthly and annually to the Exchequer. If the Opposition do not want that they should say which hospitals and schools they want closed because that is the choice.

Irrespective of whether it is taken over I want this electricity company to continue to produce electricity as cheaply as possible for its consumers and in an efficient and practical way. That has happened because of the competition that has resulted from privatisation, and more competition is now entering the electricity industry.

One of the matters of substance in the debate is regulation. Hon. Members have said that the regulator has no power, that he is some poor, weak individual sitting in an office and that he cannot do or say anything. That is rubbish. The regulator's key duty is to protect customers and promote competition in the electricity industry. That is what we want and it is what industry and the consumer want. He is responsible for settling disputes, issuing licences and investigating complaints, and for making sure that prices are not excessive. His responsibility for fixing a price formula has resulted in a drop in price to the consumer—my consumers and those of every hon. Member.

Those are some of the benefits that have resulted from the work of the regulator. Why does no Opposition Member seem to be prepared to speak about some of the positive happenings? Why are they always so mournful and negative? Not only have consumers benefited because prices have gone down but complaints have gone down as well. There was always a stream of complaints about electricity and long waits for repairs. People never knew when they would lose power or when it would come back. What is more, one could never get through on the telephone but the charges continued. That was the reality of a state monopoly.

The reality for my family in 1988 was that the electricity supply was cut off on Boxing day and it was not reconnected until two days later. That would not happen now because there is an efficient organisation which 99.8 per cent. of the time reconnects the electricity supply within 24 hours. It answers the phone and it compensates people who have lost their power supply. That is the sort of improvement from which customers have benefited. Opposition Members should give the electricity companies credit for that. It is the sort of service that my constituents want.

I mention briefly someone who has been ignored in this debate—the shareholder. He is always portrayed as some awful, scrubby individual in a black mac who somehow makes a profit at somebody else's expense. Who are the shareholders? They are the pension funds—indeed, there are 15 million people in pension funds, which means 15 million of my and other hon. Members' constituents. I want their pension funds to increase so that they can benefit. Who else is a shareholder? Some 6 million private individuals, both men and women, have put their savings into such companies. I want the electricity company we are debating to benefit them. The shareholder is an ordinary man or woman who has saved some money, put it to one side, and who has now invested himself or is in a pension fund. He has benefited and will benefit from the electricity companies.

It is shameful that the shareholder is either ignored or painted in the way that he was this afternoon. The great achievements of privatisation have been the efficiencies and improvements that have resulted in companies being taken out of the Government's hands. The Opposition have done some if-ing and but-ing about whether the regulation system should be changed for the utilities or whether it should be changed for everybody else. Some Labour Members spoke about renationalisation, but their Front-Bench spokesmen rapidly shook their heads. They do not know what they are in favour of, other than taking as much control as possible. That will do nothing for the companies, the customers or the shareholders.

There are one or two improvements, however, that I would like to see. I would like more competition within the industry and for there to be lower prices, especially for some of the major energy users. The prices that they pay should be brought closer to those paid by some of their competitors on the continent. I hope that the Government will consider that point.

Although I am conscious that the privatised utilities receive more scrutiny than almost any other company, I would like greater clarity and coherence in the remuneration packages of a few who work within them. There are many thousands of hard-working, first-class directors and managers in the industry and I would not want their efforts to be destroyed because of the perceived excesses of a handful. I want to ensure that the undoubted benefits to the consumer of privatisation are not muddied by over-concentration on the pay of a few. What I want is concentration on the successes; something that is not even mentioned in the Opposition motion.

9.18 pm

Mr. Ronnie Campbell (Blyth Valley)

When the President of the Board of Trade gave some guarantees about the electricity industry, my mind went back to his guarantees to the miners about the mining industry and the possible closure of 31 pits. Despite his guarantees, all 31 pits have now closed. His guarantees are not worth the paper that they are written on.

Our debate today is not about shareholders or about whether the industry is being run in the right or the wrong way. The industry has been privatised. I worked in a nationalised industry—the coal industry—all my life before coming to this place. Nationalisation has its faults—I could talk about them all evening— but this matter involves one big fault. It is all about a company—Trafalgar House—which is not into electricity, about the capitalist system, and about private entrepreneurs taking a stake in what was a nationalised industry.

The industry was privatised and, obviously, it put up the costs. Figures show that fact, and my hon. Friends have mentioned that prices have risen. Anyone who thinks that they have not should look at their own bills. We do not have to defend that view. I would not even try to defend it. People out there know that their bills have gone up since privatisation. That is where all the profits have come from—hence Trafalgar House's bid for Northern Electric. It made the bid, not because Northern Electric does not deal with complaints any more, or is run badly, but because it has good cash flow and has made a whopping big profit. Trafalgar House wants the takeover to get itself out of the mire.

Tax was mentioned. I have raised the question of tax on two occasions, once with Prime Minister. I did not hear the President of the Board of Trade mention the tax that will be lost to the Treasury.

Mr. Booth

How does the hon. Gentleman deal with the point made by my hon. Friend the Member for Erewash (Mrs. Knight) that it is not just a few rich entrepreneurs making a profit? Privatisation is helping 15 million pensioners and others to secure their futures.

Mr. Campbell

As I have said, it is not a question of someone making some money for some dear old pensioners, but of a company taking over another company which has good cash flow and vast profits. The profits would be wiped out. It is not a question of anything else. All the hogwash that I heard the other night was crazy. This is about the money that Northern Electric has accrued and about the cash flow that is coming in.

Ms Hilary Armstrong (Durham, North-West)

Is my hon. Friend aware that, because of the takeover, Trafalgar House is likely to save £270 million in advance corporation tax? The taxpayer will lose because the company will be able to set that money off in buying Northern Electric.

Mr. Campbell

That is exactly what I was saying. I asked the Prime Minister about tax last week, but he refused to answer because he was not aware of what was happening. Perhaps the Prime Minister has washed his hands of the matter and disagrees with the takeover because he is on the Treasury's side. I am sure that the Chancellor of the Exchequer will he peeved.

We are not talking about only £270 million. That amount is involved not just with one electricity company, but with all 12 electricity companies. One could speculate beyond that—one thinks of the water companies, with their vast profits and cash flow. Ministers cannot tell me that water bills have not been increasing for many years.

Dr. Robert Spink (Castle Point)

Does the hon. Gentleman realise that, when those companies were nationalised, the taxpayer used to lose £50 million every week? The taxpayer is now gaining £48 million every week. Is that not a significant factor in the equation?

Mr. Campbell

As I said, I am not arguing about nationalisation in the old days. I know who ran the nationalised companies—Colonel Blimps and other people. It was a "give us a job" sort of thing. They ran a company but did not know what the hell they were doing half the time. That was the problem with nationalisation. There is nothing wrong with nationalisation if it done run properly. In the mining industry, we have always said that if we had been given the chance we would have run it properly. That is the problem—[HON. MEMBERS: "Ah."]

Of course I would renationalise, because the industry is a utility and it belongs in the public domain. Any energy company belongs in the public domain. I hope that the mining industry will be brought back into the public domain. I hope that the mining and electricity industries will be returned to public ownership. However, when we return to power the companies will be in such a mess that we shall not have a penny to do anything, because the Government have got the country knackered now.

We heard tonight of insider dealing by the Swiss Bank Corporation, which is now buying shares in Yorkshire Electricity. Perhaps the Minister can say why—and perhaps the corporation is buying shares elsewhere. There is some hanky-panky going on, and it will come out in future. I hope that the press are listening because someone who delves deep enough will find that there is a rabbit away and that someone made a lot of money from the deal.

Mr. Mullin

I apologise for interrupting my hon. Friend, but the hon. Member for Castle Point (Dr. Spink) seemed to be under the impression that electricity companies did not make profits before privatisation. They all made profits. Northern Electric made profits of £50 million in 1985–86, £49 million in 1986–87, £47 million in 1987–88, and so on.

Mr. Campbell

The National Coal Board also made profits in a few years when I was there and broke even in other years. If the Minister for Energy and Industry examines the records, he will discover that for himself. That is not to say that they were all right. I could talk all night about the faults of nationalisation, but if I were a Minister in charge of nationalisation I would at least know where the faults lay, which the Minister does not. I know where nationalisation went wrong in the pits. It was not the fault of the miners or of the men at the pit head, but of people elsewhere.

The regulator is most important, but Professor Littlechild will see his job disappear. More takeovers will occur. Yorkshire Electricity will be next, and Trafalgar House may take over the whole lot, with the Swiss Bank Corporation. The companies may be formed into one huge multinational electricity industry, which would take us back to square one. If the regulator loses his powers, he may as well sign on the dole because the big companies will not take a blind bit of notice of him. They are interested only in making vast profits.

My hon. Friend the Member for Sunderland, South (Mr. Mullin) said that the Tory party has made £600,000 from Trafalgar House since 1987. Over the next few years, I will keep a close eye on how much the Tories get from this deal. I bet that they do very well from it—and from any company taking over other utilities, such as water.

I begin to wonder if a rabbit is not away here and that all this is being done on purpose. A Labour Government will soon be in power. I know what I would like to do, but I am not a member of the Front Bench. A Labour Government will tighten the powers of the regulator, but such takeovers will make a nonsense of him and put him on the dole. When Labour comes to power, we will not even be able to regulate the industry. It will he a case of dog eat dog, vast profits, and billions in shares for directors. It is absolutely crazy.

All this is not about pensions and small shareholders in Newcastle and the north-east. It is about greed by private companies and monopolies in taking over industries that have cash flow and profits.

9.29 pm

Mr. Tim Devlin (Stockton, South)

I want to make a couple of points about the Trafalgar House bid for Northern Electric which have not been mentioned in the debate but which merit examination. Trafalgar House is a very large company which has a number of large companies within it based in my constituency. It is majority owned by British institutions. It owns Cleveland Bridge, Cleveland Structural, Davy Offshore, Davy Engineering and Trafalgar House Offshore. It has maintained its subsidiary headquarters in the north of England.

I hold no brief for Trafalgar House or for Northern Electric. However, Northern Electric has, to its credit, brought down the price of electricity, imposed a pay freeze for the past three years and reduced its prices to large consumers in real terms since privatisation.

In this debate, Labour is caught on the horns of a dilemma. It waxes on about high pay and the supposed deficiencies of privatised electricity companies, but it now wants to save some of them from the rigours of the market economy. On the radio last week the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) told us: It's our money and we want it back. What does that mean? As we have heard from the hon. Members for Tyne Bridge (Mr. Clelland) and for Blyth Valley (Mr. Campbell), it means nationalisation. But that is not official Labour policy.

Labour's policy is, apparently, to restore state control by the back door by giving the regulator greater powers to intervene. In the weeks and months ahead, as we head for the general election, I look forward to exposing the truth about the Labour party's position. Labour has a hidden agenda to renationalise many companies, but it will not tell anyone in case it does not get elected because of it.

9.30 pm

Mr. Martin O'Neill (Clackmannan)

I start by responding to the point made by the hon. Member for Stockton, South (Mr. Devlin) and I refer to a briefing that Trafalgar House made available this evening, on ownership of the regional electricity companies. It makes the point that neither the Government nor the Opposition are opposed to a change of ownership of the regional electricity companies in principle. The point is that we are not here this evening to renationalise those companies. We are concerned about the position, among others, of the regional stakeholders who have invested money in companies across the country.

Many of us were in the House when we first dealt with the privatisation of the electricity companies. We heard at that time that it was to be an extension into the regions of popular capitalism and that it was to be an opportunity for ordinary people to get a share in major utilities in their area. The fact is that the utilities are not like international conglomerates; they are different in character and in function. They are subject to different disciplines, depending on the nature of the market.

It was significant that the President of the Board of Trade seemed to think that any company that had been at some stage in public ownership was a public utility for the purposes of this debate. As far as we arc concerned, a company that has responsibility for providing gas, water or electricity—the fundamentals of a civilised life in our society—has to be the subject of regulation and has to be the subject of special and different forms of control.

The President of the Board of Trade has refused to intervene in a bid for a regional electricity company and we must look at the reasons why. It could be suggested that the right hon. Gentleman is merely bowing to one of the major paymasters of the Tory party. It could be that he is ignoring the deep anxieties about the behaviour of the Swiss Bank Corporation, or it could he simply that he is turning his back on the small shareholders and favouring his friends in the City. Those criticisms are commonplace when dealing with takeovers of any kind.

Some of us in the House remember the same criticisms and the same concerns being voiced at the time of the Guinness bid for Distillers. We were told then that the headquarters of Guinness were to be located in Scotland. We were told then that it would be a major international company operating out of Scotland. Virtually within days of the bid being agreed, all those undertakings were reneged on. The now discredited owners and leaders of Guinness turned on their heels and left Scotland behind them. It is against that background that we judge tonight's speeches on the takeover.

We are dealing with a private energy utility, which has at least three more years of monopoly franchise to run. Indeed, it is quite likely that that franchise will run for longer. The regulator has already stated that he has no idea how long it will be before the metering technology is available to enable competition in the regions in the electricity market. At present, there is not the means whereby domestic consumers' electricity consumption can be metered from more than one source. So it is quite possible that the three years of monopoly under the franchise will be extended for a much longer period.

It is certainly clear that with such a monopoly and the lax price controls that the regulator put in place last year—if anyone doubts the laxity of the controls, he need only remember the reaction of the market to the distribution price review, when the prices of shares rocketed because of the relief that the regulator was going to give the industry an easy time—Northern Electric can look to increasing its debt ratio to a figure in the region of 225 per cent. by March next year, if the bid is successful. It will take another four years after that before its debt ratio comes down to about 100 per cent.

Indeed, the Financial Times is right to say in its editorial today: As stable, cash generative businesses, the Recs ought to carry high proportions of debt". They should be capable of carrying such debt because they have the guarantee of income and the guarantee of a market for some considerable time to come.

It is not surprising that, having become so cash rich, Northern Electric should feel so relaxed about throwing money at its shareholders to defend itself. After the privatisation of the regional electricity companies at an artificially low price, and after they have been allowed to be regulated by the most feeble poacher-cum-gamekeeper, it is not surprising that so much interest is now being taken in them.

Perhaps it is not right to attack the director general personally, but it has to be said that he seems somewhat lax to choose, in the middle of a major industrial crisis of the kind that seems to be currently taking place, to go on his holidays. It certainly suggests that he has not quite got his eye on the ball.

One can understand the frustration of Trafalgar House at the regulator's suggestion that it should separate its activities so that he can regulate them more effectively. The regulator maintains that that separation could be achieved either by a re-flotation of some 25 per cent. of Trafalgar House's electricity business, at a cost of between £100 million and £150 million, or simply by changing the original operating licence. If a re-flotation is unacceptable to Trafalgar House, is a change in licence acceptable to Northern Electric? After all, the power to amend electricity licences arises only after a report on the merger has been laid before Parliament and when both parties are subjected to the regime of the Electricity Act 1989. I believe that Trafalgar House is not subject to the Electricity Act regime at present. Perhaps the Minister will confirm that in his winding-up speech.

As we understand it, if Northern Electric is not prepared to have the licence changed, there is no reason why the licence should be changed. If the licence change was not available, Trafalgar House, even if it were successful in its bid, would not be able to sell electricity under the terms of the Electricity Act. Therefore, there is almost a power of veto in the hands of Northern Electric.

The licence modifications have already been referred to in the debate. Indeed, one of the few useful parts of the President of the Board of Trade's speech was when he came down to earth and addressed the status of the guarantees. He made it perfectly clear that the guarantees to be given by Trafalgar House to the regulator were meaningless because they had no force in law. The right hon. Gentleman said that if the regulator was not satisfied, he, the President of the Board of Trade, would be powerless if the regulator sought to refer the bid to the Monopolies and Mergers Commission.

The President said that, at the end of the day, he has to decide whether to accept the MMC report. However, the report may take a considerable time to produce and it may sufficiently frighten off potential predators for other regional electricity companies and make things that much more untidy and difficult for the people concerned.

I refer to the behaviour of Trafalgar House and its supporters last week at the meeting to which reference has been made. I am glad that the President has returned to the Chamber. He did not seem to appreciate that, when he was in purdah, or in opposition, writing books or having books written for him, telling us how he was going to intervene in industry, when the privatisation went through, the companies were organised on a regional basis precisely to attract the small shareholders into those companies.

When meetings are held to consult those people, it cannot be unreasonable for those voices to be heard, especially when at least one of the participants in the casting of the block vote, because that is what the institutions were doing—the Swiss Bank Corporation—is still under investigation for insider dealing. I am led to believe that an appeal to the takeover panel's ruling could still be made by Northern Electric and Warburg.

It is not just the shareholders and the bankers who are important. We must also consider the work force and the customers. In recent weeks we have heard a great deal about highly motivated men who have been richly rewarded by grateful shareholders. We all know about the massive pay-outs awarded to directors and senior executives who, it can be argued, were simply being recompensed for paying off others.

After all, the so-called savings that have been achieved have not been as a result of massive capital investment, because there has been little of that at this stage. They have not been achieved as a result of an imaginative or original pricing policy, because it was dictated by a regulator who seemed to be more concerned with inflating share prices than with cutting electricity bills.

Those so-called savings have been achieved because of lower transmission costs and falls in the international price of coal and gas, through subsidised nuclear power and, most of all, as a result of the paying off of massive numbers of staff. One of the major attractions of Northern Electric to Trafalgar House is that its staffing cuts have been only about 15 per cent., which is only half Eastern Electricity's figure—it has cut 30 per cent. of its staff—and three quarters of that of Midlands Electricity, which has cut 20 per cent. Of the 12 RECs, five have cut more staff than Northern Electric.

It is little wonder that the workers of Northern Electric are looking anxiously at the intentions of both parties as their jobs will have to be sacrificed, as will future price cuts and investment, to pay for the takeover battle.

Mr. Caborn

Does my hon. Friend agree that not to allow the stock exchange's investigation to be concluded when the Swiss Bank Corporation took 8.5 per cent., at £135 million, in Yorkshire Electricity alone and Yorkshire Electricity had to have a search in companies legislation because the investment was supposed to be market-making, is totally out of sync with anything that has ever happened before on the stock exchange? Is it acceptable to allow the takeover to take place? Are the genuine shareholders being protected?

Mr. O'Neill

The activities of the Swiss Bank Corporation should be investigated further, if only because it seems to be a very easy and convenient arrangement whereby it is consulted by Trafalgar House and, before anything else happened, it acquired a substantial shareholding in the company in respect of which it is supposed to be acting as an adviser in relation to the takeover. It all seems to be too convenient. If the Minister had considered that, he should have thought again about a reference.

The current board of Northern Electric is prepared to sacrifice any number of staff to save the board's skin. However, the responsibility of the House is to all the people of the north-east. It is not their fault that they will be the captive consumers of a monopoly electricity supplier for years to come.

If Trafalgar wins with a higher bid than that promised by Northern, there will be precious little money left for distribution of the national grid flotation funds, which will have to be used instead to reduce the gearing or, alternatively, to offset tax losses elsewhere in the financial black hole that is called the Trafalgar House accounts. That company may be able to run cheap discount food stores, but, judging by the experience of passengers on the QE2, when the December Atlantic sailing was made to look like Christmas on Elm street, it has a lot to learn about consumer relations. Its one test in relation to individual consumers in Britain was a disaster.

These matters will not he decided by debates in the House. We shall not receive proper answers from Ministers—we have discovered that tonight. We need the cool assessment of the Monopolies and Mergers Commission.

When energy was privatised, many Opposition Members feared that a great many risks were being taken. Some of those fears have been proven to be exaggerated—we must admit that. There have been complaints about regional electricity companies. My hon. Friend the Member for Huddersfield (Mr. Sheerman) made the point—if the President of the Board of Trade had been present, he would have heard it—that many of our past concerns have diminished. In terms of the accounts and the complaints side of things, matters have become better. However, other fears relating to price, certain aspects of customer satisfaction, the protection of small shareholders' rights, future employment guarantees and management profiteering have still to be resolved. Most of them will require a change of government.

What is required now is reference to the MMC of this, the first, but not the last, bid for a regional electricity company. Such companies will he monopolies for years to come. The shareholdings represent the major savings of many people of modest means. They have provided well-paid and, until now, safe jobs for many people in areas of high unemployment. RECs have responsibility to keep people warm and safe in their homes at reasonable costs. Utilities controlled by small groups of largely unaccountable people deserve better treatment and protection than a brush-off from an indifferent Government. For all those reasons, we call on hon. Members who believe that there are public issues that can be considered only by the Monopolies and Mergers Commission to join us in the Lobby tonight.

9.46 pm

The Minister for Energy and Industry (Mr. Tim Eggar)

The hon. Member for Clackmannan (Mr. O'Neill) has a reputation for being a moderate—a man of the centre road within the Labour party, always waiting to smell the wind, and always waiting to keep just the right side of it. It was interesting to hear what he said. He detests shareholders. He is not prepared, nor is the Labour party, to allow individual shareholders and institutional shareholders to make up their minds and to make their decisions about whether to accept the hid by Trafalgar House. Not a bit of it.

The hon. Gentleman is not interested in protecting the interests of the many hundreds of thousands of pensioners, both present and future, who will have the right to make decisions based on their investment, which has been made on their behalf. He is not willing to trust the judgment of individual shareholders of Northern Electric and elsewhere. Opposition Members do not understand the free market system or how free enterprise works. [Interruption.] Opposition Members revert instinctively to central planning. [Interruption.]

I am not surprised that we have some interruptions from the hon. Member for Blyth Valley (Mr. Campbell). He is deeply uneasy about what his Front-Bench colleagues say. He thinks that the hon. Member for Clackmannan is too moderate. It would he very interesting to take a straw poll. Based on the contributions of Opposition Front-Bench Members, what would north-eastern Members really think about the future of the electricity industry in their area? I shall tell the House. It was clear that the hon. Member for Blyth Valley (Mr. Campbell) wanted renationalisation, as did the hon. Member for Tyne Bridge (Mr. Clelland) who was honest and came out with it immediately.

Mr. Ronnie Campbell

rose—

Mr. Deputy Speaker

Order. The hon. Gentleman must control himself.

Mr. Eggar

It took a good honest Yorkshireman to stand up for Yorkshire. The hon. Member for Huddersfield (Mr. Sheerman) yelled out the benefits of Yorkshire Electricity, and pointed to the major contributions it has been making throughout the region. The hon. Gentleman defended privatisation, and the hon. Member for Clackmannan (Mr. O'Neill) agreed. The hon. Gentleman said that there might be one or two things right about privatisation. He admitted that privatisation works.

One of the great pleasures I have had since the general election has been my frequent visits to the north-east, because I looked after the north-east for the Department of Trade and Industry until July. I admire and respect the sense of community and belief which goes deep in the north-east. There is a deep-rooted belief, shared by local Members of Parliament, that whatever is local is good, and that the status quo has to be defended at any cost.

If the status quo happens to be a nationalised regional distribution board for electricity, it must be defended. [Interruption.] Nobody fought privatisation harder than the hon. Member for Blyth Valley, or the other north-east Members. But now we have a privatised regional company, and what do they do? They rush to defence what is local. They defend the status quo.

Those hon. Members do not use as a defence the argument deployed by my hon. Friends, that prices have come down and that standards of service have improved—not a bit of it. Their defence is simple. It is a north-east company, and it must be defended whatever its rights or wrongs. Northern Electric is worth defending because it is there, but those hon. Members forget that Trafalgar House is also a major company in the north-east.

My hon. Friend the Member for Stockton, South (Mr. Devlin) pointed out the number of companies which the firm owns in the north-east, and I believe that Trafalgar House employs almost as many—if not more—people in the north-east than Northern Electricity.

Mr. Devlin

More.

Mr. Eggar

I am sorry. I did not pick that up.

Ms Armstrong

Will the Minister confirm that the taxpayer—with whom we are supposed to be concerned—is likely to lose about £270 million if the deal goes through?

Mr. Eggar

Of all the points which I thought the scarlet lady might bring up, nothing could surprise me more than that. The new, modern Labour party is worried about the taxpayer. It might have been worried about the customer. That is the first time that the hon. Lady has mentioned the taxpayer.

What the Leader of the Opposition said about privatisation is really interesting, because he was the Opposition spokesman when electricity was privatised. The right hon. Gentleman said that there would he a dramatic upward pressure on prices when electricity was privatised. He was wrong and, what is more, the hon. Member for Clackmannan admitted that he was wrong. Opposition Members said much about the share options issue, and I thought that the great new leader of the Labour party was bound to have made a lot about the share options issue when he lead the Opposition on electricity. I read through Hansard, but I could find no evidence at all that the right hon. Gentleman had ever referred to share options.

I thought that my eyes might have misled me so I arranged for the new marvel, the parliamentary on-line information service, to be interrogated. We fed in the word "Blair". We added "electricity" and "share options". We gave all the relevant dates. What came back? A big round zero. In all the time that the right hon. Member for Sedgefield (Mr. Blair) led on electricity for the Opposition, he never raised the issue of share options. He has the nerve to mention the golden share in his motion. Much mention has been made of share options.

Certain myths persist. When the right hon. Member for Sedgefield opposed privatisation, he said that there would be no competition between the regional electricity companies. He was wrong. Already more than half the competitive market—the over-100 kW market—is provided by companies other than the local regional electricity company. There is already extensive competition. As even the hon. Member for Clackmannan admitted, there will be full competition for domestic consumers in 1998.

The debate has not been about regulation in the electricity sector. It has been about something much more fundamental. It has been about the real priorities of the Labour party. It has been about the dispute between the hon. Members for Blyth Valley, for Tyne Bridge and for Huddersfield. It has all been about clause IV and what the Opposition will do in the future about regional electricity companies.

You might not be a regular reader of the News of the World, Mr. Deputy Speaker, but I can recommend it to you and to all Opposition Members. There is an interesting contribution to it. The hon. Member for Jarrow (Mr. Dixon) said something which I recommend that all Opposition Members should take account of. He said: The last thing we want … is to start contemplating our navels with this unnecessary debate. I don't think Clause 4 should be changed. That is not—

Mr. Deputy Speaker

Order. I cannot see what clause IV has to do with the debate. Stick to the debate.

Mr. Eggar

But, Mr. Deputy Speaker, the debate is entitled Future ownership, control and regulation of regional electricity companies". If the debate is not about whether the Opposition want to renationalise the regional electricity companies and the policies that they want to introduce, what on earth is it about?

I have a word of advice for the hon. Member for Blyth Valley. When he wants to get off early in the evening one day during the week, he should not look to mosey up close to the right hon. Member for Bishop Auckland (Mr. Foster). He should go along the corridor a little further and talk to the hon. Member for Jarrow. I am sure that he will oblige. I do not think that the hon. Member for Huddersfield will be so lucky. The hon. Member for Jarrow will read his speech in the debate this evening. The hon. Member for Huddersfield will be here throughout the night and probably the next day.

We cannot get away from the fact that, despite the new label, the Labour party is a socialist party. Whenever Labour Members are confronted with a difficult issue and have to make a difficult policy choice, what do they do? They rush for central control. They really believe that the man in Whitehall knows best and that the heyday of the socialist party was the day of maximum nationalisation—

Mr. Ronnie Campbell

rose—

Mr. Deputy Speaker

Order. The hon. Member for Blyth Valley (Mr. Campbell) must stop bawling and control himself. I have already told him that. [Interruption.] Order.

Mr. Eggar

There we see it, Mr. Deputy Speaker. The hon. Member for Blyth Valley—

Question put, That the original words stand part of the Question:—

The House divided: Ayes 246, Noes 280.

Division No. 78]	[10.00 pm
AYES
Abbott, Ms Diane	Coffey, Ann
Adams, Mrs Irene	Connarty, Michael
Ainger, Nick	Cook, Robin (Livingston)
Ainsworth, Robert (Cov'try NE)	Corbett, Robin
Armstrong, Hilary	Corbyn, Jeremy
Ashton, Joe	Cousins, Jim
Austin-Walker, John	Cox, Tom
Banks, Tony (Newham NW)	Cummings, John
Barnes, Harry	Cunliffe, Lawrence
Barron, Kevin	Cunningham, Jim (Covy SE)
Battle, John	Cunningham, Rt Hon Dr John
Beckett, Rt Hon Margaret	Dalyell, Tam
Beith, Rt Hon A J	Darling, Alistair
Bell, Stuart	Davidson, Ian
Benn, Rt Hon Tony	Davies, Bryan (Oldham C'tral)
Bennett, Andrew F	Davies, Ron (Caerphilly)
Benton, Joe	Davis, Terry (B'ham, H'dge H'l)
Bermingham, Gerald	Denham, John
Berry, Roger	Dewar, Donald
Betts, Clive	Dixon, Don
Blunkett, David	Dobson, Frank
Boateng, Paul	Donohoe, Brian H
Boyes, Roland	Dowd, Jim
Bradley, Keith	Dunnachie, Jimmy
Bray, Dr Jeremy	Eagle, Ms Angela
Brown, N (N'c'tle upon Tyne E)	Eastham, Ken
Burden, Richard	Enright, Derek
Byers, Stephen	Etherington, Bill
Caborn, Richard	Evans, John (St Helens N)
Callaghan, Jim	Ewing, Mrs Margaret
Campbell, Mrs Anne (C'bridge)	Fatchett, Derek
Campbell, Ronnie (Blyth V)	Field, Frank (Birkenhead)
Campbell-Savours, D N	Flynn, Paul
Caravan, Dennis	Foster, Rt Hon Derek
Cann, Jamie	Foster, Don (Bath)
Chidgey, David	Foulkes, George
Chisholm, Malcolm	Fraser, John
Church, Judith	Fyfe, Maria
Clapham, Michael	Galloway, George
Clarke, Eric (Midlothian)	Gerrard, Neil
Clarke, Tom (Monklands W)	Gilbert, Rt Hon Dr John
Clelland, David	Godman, Dr Norman A
Clwyd, Mrs Ann	Godsiff, Roger

Golding, Mrs Llin	Michie, Bill (Sheffield Heeley)
Gordon, Mildred	Michie, Mrs Ray (Argyll & Bute)
Graham, Thomas	Milburn, Alan
Grant, Bernie (Tottenham)	Miller, Andrew
Griffiths, Nigel (Edinburgh S)	Mitchell, Austin (Gt Grimsby)
Griffiths, Win (Bridgend)	Moonie, Dr Lewis
Gunnell, John	Morgan, Rhodri
Hain, Peter	Morley, Elliot
Hall, Mike	Morris, Rt Hon Alfred (Wy'nshawe)
Hanson, David	Morris, Estelle (B'ham Yardley)
Harman, Ms Harriet	Morris, Rt Hon John (Aberavon)
Harvey, Nick	Mowlam, Marjorie
Henderson, Doug	Mullin, Chris
Heppell, John	Murphy, Paul
Hill, Keith (Streatham)	Oakes, Rt Hon Gordon
Hinchliffe, David	O'Brien, Mike (N W'kshire)
Hodge, Margaret	O'Brien, William (Normanton)
Hoey, Kate	O'Hara, Edward
Hogg, Norman (Cumbernauld)	Olner, Bill
Home Robertson, John	O'Neill, Martin
Hood, Jimmy	Orme, Rt Hon Stanley
Howarth, George (Knowsley North)	Parry, Robert
Hoyle, Doug	Patchett, Terry
Hughes, Kevin (Doncaster N)	Pearson, Ian
Hughes, Robert (Aberdeen N)	Pendry, Tom
Hughes, Roy (Newport E)	Pickthall, Colin
Hughes, Simon (Southwark)	Pike, Peter L
Hutton, John	Powell, Ray (Ogmore)
Illsley, Eric	Prentice, Bridget (Lew'm E)
Jackson, Glenda (H'stead)	Prentice, Gordon (Pendle)
Jackson, Helen (Shef'ld, H)	Prescott, Rt Hon John
Jamieson, David	Primarolo, Dawn
Janner, Greville	Purchase, Ken
Johnston, Sir Russell	Quin, Ms Joyce
Jones, Barry (Alyn and D'side)	Radice, Giles
Jones, Ieuan Wyn (Ynys Mon)	Randall, Stuart
Jones, Jon Owen (Cardiff C)	Raynsford, Nick
Jones, Lynne (B'ham S O)	Redmond, Martin
Jones, Martyn (Clwyd, SW)	Reid, Dr John
Jowell, Tessa	Rendel, David
Kaufman, Rt Hon Gerald	Robertson, George (Hamilton)
Keen, Alan	Robinson, Geoffrey (Co'try NW)
Kennedy, Jane (Lpool Brdgn)	Rogers, Allan
Khabra, Piara S	Rooker, Jeff
Kilfoyle, Peter	Rooney, Terry
Lewis, Terry	Ross, Ernie (Dundee W)
Liddell, Mrs Helen	Rowlands, Ted
Litherland, Robert	Ruddock, Joan
Livingstone, Ken	Sedgemore, Brian
Lloyd, Tony (Stretford)	Sheerman, Barry
Llwyd, Elfyn	Shore, Rt Hon Peter
Loyden, Eddie	Short, Clare
Lynne, Ms Liz	Simpson, Alan
McAllion, John	Skinner, Dennis
McAvoy, Thomas	Smith, Andrew (Oxford E)
McCartney, Ian	Smith, Llew (Blaenau Gwent)
Macdonald, Calum	Snape, Peter
McFall, John	Soley, Clive
McKelvey, William	Spearing, Nigel
Mackinlay, Andrew	Spellar, John
Maclennan, Robert	Steinberg, Gerry
McMaster, Gordon	Stevenson, George
McNamara, Kevin	Stott, Roger
MacShane, Denis	Strang, Dr. Gavin
McWilliam, John	Straw, Jack
Madden, Max	Sutcliffe, Gerry
Maddock, Diana	Taylor, Mrs Ann (Dewsbury)
Mahon, Alice	Timms, Stephen
Marek, Dr John	Tipping, Paddy
Marshall, David (Shettleston)	Turner, Dennis
Marshall, Jim (Leicester, S)	Vaz, Keith
Martin, Michael J (Springburn)	Walker, Rt Hon Sir Harold
Martlew, Eric	Wallace, James
Meacher, Michael	Wardell, Gareth (Gower)
Meale, Alan	Wareing, Robert N
Michael, Alun	Watson, Mike

Welsh, Andrew	Wray, Jimmy
Wicks, Malcolm	Wright, Dr Tony
Williams, Rt Hon Alan (Sw'n W)
Williams, Alan W (Carmarthen)	Tellers for the Ayes:
Wise, Audrey	Mrs. Barbara Roche and Mr. George Mudie.
Worthington, Tony

NOES
Ainsworth, Peter (East Surrey)	Dover, Den
Aitken, Rt Hon Jonathan	Duncan, Alan
Alexander, Richard	Duncan-Smith, Iain
Alison, Rt Hon Michael (Selby)	Dunn, Bob
Allason, Rupert (Torbay)	Durant, Sir Anthony
Ancram, Michael	Dykes, Hugh
Arbuthnot, James	Eggar, Rt Hon Tim
Arnold, Jacques (Gravesham)	Elletson, Harold
Arnold, Sir Thomas (Hazel Grv)	Emery, Rt Hon Sir Peter
Ashby, David	Evans, David (Welwyn Hatfield)
Atkins, Robert	Evans, Jonathan (Brecon)
Atkinson, David (Bour'mouth E)	Evans, Roger (Monmouth)
Atkinson, Peter (Hexham)	Evennett, David
Baker, Rt Hon Kenneth (Mole V)	Faber, David
Baker, Nicholas (North Dorset)	Fabricant, Michael
Baldry, Tony	Field, Barry (Isle of Wight)
Banks, Matthew (Southport)	Fishburn, Dudley
Bates, Michael	Forman, Nigel
Batiste, Spencer	Forsyth, Rt Hon Michael (Stirling)
Bellingham, Henry	Fowler, Rt Hon Sir Norman
Bendall, Vivian	Fox, Sir Marcus (Shipley)
Beresford, Sir Paul	Freeman, Rt Hon Roger
Biffen, Rt Hon John	French, Douglas
Bonsor, Sir Nicholas	Fry, Sir Peter
Booth, Hartley	Gale, Roger
Boswell, Tim	Gallie, Phil
Bottomley, Peter (Eltham)	Gardiner, Sir George
Bottomley, Rt Hon Virginia	Garnier, Edward
Bowden, Sir Andrew	Gill, Christopher
Bowis, John	Goodlad, Rt Hon Alastair
Boyson, Rt Hon Sir Rhodes	Goodson-Wickes, Dr Charles
Brandreth, Gyles	Gorman, Mrs Teresa
Brazier, Julian	Gorst, Sir John
Bright, Sir Graham	Grant, Sir A (SW Cambs)
Brooke, Rt Hon Peter	Greenway, Harry (Ealing N)
Brown, M (Brigg & Cl'thorpes)	Greenway, John (Ryedale)
Browning, Mrs Angela	Griffiths, Peter (Portsmouth, N)
Bruce, Ian (Dorset)	Grylls, Sir Michael
Budgen, Nicholas	Gummer, Rt Hon John Selwyn
Burns, Simon	Hague, William
Burt, Alistair	Hamilton, Rt Hon Sir Archibald
Butler, Peter	Hamilton, Neil (Tatton)
Butterfill, John	Hampson, Dr Keith
Carlisle, John (Luton North)	Hanley, Rt Hon Jeremy
Carlisle, Sir Kenneth (Lincoln)	Hannam, Sir John
Carrington, Matthew	Harris, David
Carttiss, Michael	Haselhurst, Alan
Cash, William	Hawkins, Nick
Channon, Rt Hon Paul	Hawksley, Warren
Clappison, James	Hayes, Jerry
Clark, Dr Michael (Rochford)	Heald, Oliver
Clarke, Rt Hon Kenneth (Ru'clif)	Heath, Rt Hon Sir Edward
Clifton-Brown, Geoffrey	Heathcoat-Amory, David
Colvin, Michael	Hendry, Charles
Congdon, David	Heseltine, Rt Hon Michael
Coombs, Simon (Swindon)	Higgins, Rt Hon Sir Terence
Cope, Rt Hon Sir John	Hill, James (Southampton Test)
Cormack, Sir Patrick	Hogg, Rt Hon Douglas (G'tham)
Couchman, James	Horam, John
Cran, James	Hordern, Rt Hon Sir Peter
Currie, Mrs Edwina (S D'by'ire)	Howard, Rt Hon Michael
Curry, David (Skipton & Ripon)	Howarth, Alan (Strat'rd-on-A)
Davies, Quentin (Stamford)	Howell, Rt Hon David (G'dford)
Day, Stephen	Howell, Sir Ralph (N Norfolk)
Deva, Nirj Joseph	Hughes, Robert G (Harrow W)
Devlin, Tim	Hunt, Rt Hon David (Wirral W)
Dicks, Terry	Hunt, Sir John (Ravensbourne)
Douglas-Hamilton, Lord James	Hunter, Andrew

Hurd, Rt Hon Douglas	Patten, Rt Hon John
Jack, Michael	Pawsey, James
Jenkin, Bernard	Peacock, Mrs Elizabeth
	Pickles, Eric
Jessel, Toby	Porter, Barry (Wirral S)
Jones, Gwilym (Cardiff N)	Porter, David (Waveney)
Jones, Robert B (W Hertfdshr)	Portillo, Rt Hon Michael
Kellett-Bowman, Dame Elaine	Powell, William (Corby)
Key, Robert	Redwood, Rt Hon John
	Renton, Rt Hon Tim
King, Rt Hon Tom	Richards, Rod
Kirkhope, Timothy	Riddick, Graham
Knight, Mrs Angela (Erewash)	Rifkind, Rt Hon Malcolm
Knight, Dame Jill (Bir'm E'st'n)	Robathan, Andrew
Knox, Sir David	Robertson, Raymond (Ab'd'n S)
Kynoch, George (Kincardine)	Robinson, Mark (Somerton)
	Roe, Mrs Marion (Broxbourne)
Lait, Mrs Jacqui	Rowe, Andrew (Mid Kent)
Lang, Rt Hon Ian	Rumbold, Rt Hon Dame Angela
Lawrence, Sir Ivan	Ryder, Rt Hon Richard
Legg, Barry	Sackville, Tom
Leigh, Edward	Sainsbury, Rt Hon Sir Timothy
	Scott, Rt Hon Sir Nicholas
Lennox-Boyd, Sir Mark	Shaw, David (Dover)
Lidington, David	Shaw, Sir Giles (Pudsey)
Lightbown, David	Shephard, Rt Hon Gillian
Lilley, Rt Hon Peter	Shepherd, Colin (Hereford)
Lloyd, Rt Hon Sir Peter (Fareham)	Shepherd, Richard (Aldridge)
	Shersby, Michael
Lord, Michael	Sims, Roger
Lyell, Rt Hon Sir Nicholas	Skeet, Sir Trevor
MacGregor, Rt Hon John	Smith, Tim (Beaconsfield)
MacKay, Andrew	Soames, Nicholas
Maclean, David	Speed, Sir Keith
	Spicer, Sir James (W Dorset)
McNair-Wilson, Sir Patrick	Spicer, Michael (S Worcs)
Madel, Sir David	Spink, Dr Robert
Maitland, Lady Olga	Spring, Richard
Malone, Gerald	Sproat, Iain
Mans, Keith	Squire, Robin (Hornchurch)
	Stanley, Rt Hon Sir John
Marland, Paul	Steen, Anthony
Marshall, John (Hendon S)	Stern, Michael
Marshall, Sir Michael (Arundel)	Stewart, Allan
Martin, David (Portsmouth S)	Streeter, Gary
Mates, Michael	Sumberg, David
	Sweeney, Walter
Mawhinney, Rt Hon Dr Brian	Sykes, John
Mayhew, Rt Hon Sir Patrick	Tapsell, Sir Peter
Mellor, Rt Hon David	Taylor, John M (Solihull)
Merchant, Piers	Taylor, Sir Teddy (Southend, E)
Mills, Iain	Temple-Morris, Peter
	Thomason, Roy
Mitchell, Andrew (Gedling)	Thompson, Patrick (Norwich N)
Mitchell, Sir David (NW Hants)	Thornton, Sir Malcolm
Moate, Sir Roger	Thurnham, Peter
Monro, Sir Hector	Townend, John (Bridlington)
	Townsend, Cyril D (Bexl'yh'th)
Montgomery, Sir Fergus	Tracey, Richard
Nelson, Anthony	Tredinnick, David
Neubert, Sir Michael	Trend, Michael
Newton, Rt Hon Tony	Twinn, Dr Ian
Nicholls, Patrick	Vaughan, Sir Gerard
	Walden, George
Nicholson, David (Taunton)	Walker, Bill (N Tayside)
Nicholson, Emma (Devon West)	Waller, Gary
Norris, Steve	Ward, John
Onslow, Rt Hon Sir Cranley	Wardle, Charles (Bexhill)
Oppenheim, Phillip	Waterson, Nigel
Ottaway, Richard	Watts, John
	Wells, Bowen
Page, Richard	Whitney, Ray
Paice, James	Widdecombe, Ann
Patnick, Sir Irvine	Wiggin, Sir Jerry

Willetts, David	Yeo, Tim
Wilshire, David	Young, Rt Hon Sir George
Winterton, Mrs Ann (Congleton)
Winterton, Nicholas (Macc'f'ld)	Tellers for the Noes:
Wolfson, Mark	Mr. Sydney Chapman and Mr. Derek Conway.
Wood, Timothy

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments):—

The House divided: Ayes 275, Noes 247.

Division No. 79]	[10.15 pm
AYES
Ainsworth, Peter (East Surrey)	Cormack, Sir Patrick
Aitken, Rt Hon Jonathan	Couchman, James
Alexander, Richard	Cran, James
Alison, Rt Hon Michael (Selby)	Currie, Mrs Edwina (S D'by'ire)
Allason, Rupert (Torbay)	Curry, David (Skipton & Ripon)
Ancram, Michael	Davies, Quentin (Stamford)
Arbuthnot, James	Day, Stephen
Arnold, Jacques (Gravesham)	Deva, Nirj Joseph
Arnold, Sir Thomas (Hazel Grv)	Devlin, Tim
Ashby, David	Dicks, Terry
Atkins, Robert	Douglas-Hamilton, Lord James
Atkinson, David (Bour'mouth E)	Dover, Den
Atkinson, Peter (Hexham)	Duncan, Alan
Baker, Rt Hon Kenneth (Mole V)	Duncan-Smith, Iain
Baker, Nicholas (North Dorset)	Dunn, Bob
Baldry, Tony	Durant, Sir Anthony
Banks, Matthew (Southport)	Dykes, Hugh
Bates, Michael	Eggar, Rt Hon Tim
Batiste, Spencer	Elletson, Harold
Bellingham, Henry	Emery, Rt Hon Sir Peter
Bendall, Vivian	Evans, David (Welwyn Hatfield)
Beresford, Sir Paul	Evans, Jonathan (Brecon)
Biffen, Rt Hon John	Evans, Roger (Monmouth)
Bonsor, Sir Nicholas	Evennett, David
Booth, Hartley	Faber, David
Boswell, Tim	Fabricant, Michael
Bottomley, Rt Hon Virginia	Field, Barry (Isle of Wight)
Bowden, Sir Andrew	Fishburn, Dudley
Bowis, John	Forman, Nigel
Boyson, Rt Hon Sir Rhodes	Forsyth, Rt Hon Michael (Stirling)
Brandreth, Gyles	Fox, Sir Marcus (Shipley)
Brazier, Julian	Freeman, Rt Hon Roger
Bright, Sir Graham	French, Douglas
Brooke, Rt Hon Peter	Fry, Sir Peter
Brown, M (Brigg & Cl'thorpes)	Gale, Roger
Browning, Mrs Angela	Gallie, Phil
Bruce, Ian (Dorset)	Gardiner, Sir George
Budgen, Nicholas	Garnier, Edward
Burns, Simon	Gill, Christopher
Burt, Alistair	Goodlad, Rt Hon Alastair
Butler, Peter	Goodson-Wickes, Dr Charles
Butterfill, John	Gorman, Mrs Teresa
Carlisle, John (Luton North)	Gorst, Sir John
Carlisle, Sir Kenneth (Lincoln)	Grant, Sir A (SW Cambs)
Carrington, Matthew	Greenway, Harry (Ealing N)
Carttiss, Michael	Greenway, John (Ryedale)
Cash, William	Griffiths, Peter (Portsmouth, N)
Channon, Rt Hon Paul	Grylls, Sir Michael
Chapman, Sydney	Gummer, Rt Hon John Selwyn
Clappison, James	Hague, William
Clark, Dr Michael (Rochford)	Hamilton, Rt Hon Sir Archibald
Clarke, Rt Hon Kenneth (Ru'clif)	Hamilton, Neil (Tatton)
Clifton-Brown, Geoffrey	Hampson, Dr Keith
Colvin, Michael	Hanley, Rt Hon Jeremy
Congdon, David	Hannam, Sir John
Conway, Derek	Harris, David
Coombs, Simon (Swindon)	Haselhurst, Alan
Cope, Rt Hon Sir John	Hawkins, Nick

Hawksley, Warren	Oppenheim, Phillip
Hayes, Jerry	Ottaway, Richard
Heald, Oliver	Page, Richard
Heath, Rt Hon Sir Edward	Paice, James
Heathcoat-Amory, David	Patnick, Sir Irvine
Hendry, Charles	Patten, Rt Hon John
Heseltine, Rt Hon Michael	Pawsey, James
Higgins, Rt Hon Sir Terence	Peacock, Mrs Elizabeth
Hill, James (Southampton Test)	Pickles, Eric
Hogg, Rt Hon Douglas (G'tham)	Porter, Barry (Wirral S)
Horam, John	Porter, David (Waveney)
Hordern, Rt Hon Sir Peter	Portillo, Rt Hon Michael
Howard, Rt Hon Michael	Powell, William (Corby)
Howarth, Alan (Strat'rd-on-A)	Redwood, Rt Hon John
Howell, Rt Hon David (G'dford)	Renton, Rt Hon Tim
Howel, Sir Ralph (N Norfolk)	Richards, Rod
Hughes, Robert G (Harrow W)	Riddick, Graham
Hunt, Rt Hon David (Wirral W)	Rifkind, Rt Hon Malcolm
Hunt, Sir John (Ravensbourne)	Robathan, Andrew
Hunter, Andrew	Robertson, Raymond (Ab'd'n S)
Jack, Michael	Robinson, Mark (Somerton)
Jenkin, Bernard	Roe, Mrs Marion (Broxbourne)
Jessel, Toby	Rowe, Andrew (Mid Kent)
Jones, Gwilym (Cardiff N)	Rumbold, Rt Hon Dame Angela
Jones, Robert B (W Hertfdshr)	Ryder, Rt Hon Richard
Kellett-Bowman, Dame Elaine	Sackville, Tom
Key, Robert	Sainsbury, Rt Hon Sir Timothy
King, Rt Hon Tom	Scott, Rt Hon Sir Nicholas
Knight, Mrs Angela (Erewash)	Shaw, David (Dover)
Knight, Dame Jill (Bir'm E'st'n)	Shaw, Sir Giles (Pudsey)
Knox, Sir David	Shephard, Rt Hon Gillian
Kynoch, George (Kincardine)	Shepherd, Colin (Hereford)
Lait, Mrs Jacqui	Shepherd, Richard (Aldridge)
Lang, Rt Hon Ian	Shersby, Michael
Lawrence, Sir Ivan	Sims, Roger
Legg, Barry	Skeet, Sir Trevor
Leigh, Edward	Smith, Tim (Beaconsfield)
Lennox-Boyd, Sir Mark	Soames, Nicholas
Lidington, David	Speed, Sir Keith
Lightbown, David	Spicer, Sir James (W Dorset)
Lilley, Rt Hon Peter	Spicer, Michael (S Worcs)
Lloyd, Rt Hon Sir Peter (Fareham)	Spink, Dr Robert
Lord, Michael	Spring, Richard
Lyell, Rt Hon Sir Nicholas	Sproat, Iain
MacGregor, Rt Hon John	Squire, Robin (Hornchurch)
MacKay, Andrew	Stanley, Rt Hon Sir John
Maclean, David	Steen, Anthony
McNair-Wilson, Sir Patrick	Stern, Michael
Madel, Sir David	Stewart, Allan
Maitland, Lady Olga	Streeter, Gary
Malone, Gerald	Sumberg, David
Mans, Keith	Sykes, John
Marland, Paul	Tapsell, Sir Peter
Marshall, John (Hendon S)	Taylor, John M (Solihull)
Marshall, Sir Michael (Arundel)	Taylor, Sir Teddy (Southend, E)
Martin, David (Portsmouth S)	Temple-Morris, Peter
Mates, Michael	Thomason, Roy
Mawhinney, Rt Hon Dr Brian	Thompson, Patrick (Norwich N)
Mayhew, Rt Hon Sir Patrick	Thornton, Sir Malcolm
Mellor, Rt Hon David	Thurnham, Peter
Merchant, Piers	Townend, John (Bridlington)
Mills, Iain	Townsend, Cyril D (Bexl'yh'th)
Mitchell, Andrew (Gedling)	Tracey, Richard
Mitchell, Sir David (NW Hants)	Tredinnick, David
Moate, Sir Roger	Trend, Michael
Monro, Sir Hector	Twinn, Dr Ian
Montgomery, Sir Fergus	Vaughan, Sir Gerard
Nelson, Anthony	Walden, George
Neubert, Sir Michael	Walker, Bill (N Tayside)
Newton, Rt Hon Tony	Waller, Gary
Nicholls, Patrick	Ward, John
Nicholson, David (Taunton)	Wardle, Charles (Bexhill)
Norris, Steve	Waterson, Nigel
Onslow, Rt Hon Sir Cranley	Watts, John

Wells, Bowen	Winterton, Nicholas (Macc'f'ld)
Whitney, Ray	Wolfson, Mark
Widdecombe, Ann	Yeo, Tim
Wiggin, Sir Jerry	Young, Rt Hon Sir George
Willetts, David	Tellers for the Ayes:
Wilshire, David	Mr. Timothy Wood and Mr. Timothy Kirkhope.
Winterton, Mrs Ann (Congleton)

NOES
Abbott, Ms Diane	Dunnachie, Jimmy
Adams, Mrs Irene	Eagle, Ms Angela
Ainger, Nick	Eastham, Ken
Ainsworth, Robert (Cov'try NE)	Enright, Derek
Armstrong, Hilary	Etherington, Bill
Ashton, Joe	Evans, John (St Helens N)
Austin-Walker, John	Ewing, Mrs Margaret
Banks, Tony (Newham NW)	Fatchett, Derek
Barnes, Harry	Field, Frank (Birkenhead)
Barron, Kevin	Flynn, Paul
Battle, John	Foster, Rt Hon Derek
Beckett, Rt Hon Margaret	Foster, Don (Bath)
Beith,Rt Hon A J	Foulkes, George
Bell, Stuart	Fraser, John
Benn, Rt Hon Tony	Fyfe, Maria
Bennett, Andrew F	Galloway, George
Benton, Joe	Gerrard, Neil
Bermingham, Gerald	Gilbert, Rt Hon Dr John
Berry, Roger	Godman, Dr Norman A
Betts, Clive	Godsiff, Roger
Blunkett, David	Golding, Mrs Llin
Boateng, Paul	Gordon, Mildred
Boyes, Roland	Graham, Thomas
Bradley, Keith	Grant Bernie (Tottenham)
Bray, Dr Jeremy	Griffiths, Nigel (Edinburgh S)
Brown, N (N'c'tle upon Tyne E)	Griffiths, Win (Bridgend)
Burden, Richard	Gunnell, John
Byers, Stephen	Hain, Peter
Caborn, Richard	Hall, Mike
Callaghan, Jim	Hanson, David
Campbell, Mrs Anne (C'bridge)	Harman, Ms Harriet
Campbell, Ronnie (Blyth V)	Harvey, Nick
Campbell-Savours, D N	Henderson, Doug
Canavan, Dennis	Heppell, John
Cann, Jamie	Hill, Keith (Streatham)
Chidgey, David	Hinchliffe, David
Chisholm, Malcolm	Hodge, Margaret
Church, Judith	Hoey, Kate
Clapham, Michael	Hogg, Norman (Cumbernauld)
Clarke, Eric (Midlothian)	Home Robertson, John
Clarke, Tom (Monklands W)	Hood, Jimmy
Clelland, David	Howarth, George (Knowsley North)
Clwyd, Mrs Ann	Hoyle, Doug
Coffey, Ann	Hughes, Kevin (Doncaster N)
Connarty, Michael	Hughes, Robert (Aberdeen N)
Cook, Robin (Livingston)	Hughes, Roy (Newport E)
Corbett, Robin	Hughes, Simon (Southward)
Corbyn, Jeremy	Hutton, John
Cousins, Jim	Illsley, Eric
Cox, Tom	Jackson, Glenda (H'stead)
Cummings, John	Jackson, Helen (Shef'ld, H)
Cunliffe, Lawrence	Jamieson, David
Cunningham, Jim (Covy SE)	Janner, Greville
Cunningham, Rt Hon Dr John	Johnston, Sir Russell
Dalyell, Tam	Jones, Barry (Alyn and D'side)
Darling, Alistair	Jones, leuan Wyn (Ynys Mon)
Davidson, Ian	Jones, Jon Owen (Cardiff C)
Davies, Bryan (Oldham C'tral)	Jones, Lynne (B'ham S O)
Davies, Ron (Caerphilly)	Jones, Martyn (Clwyd, SW)
Davis, Terry (B'ham, H'dge H'l)	Jowell, Tessa
Denham, John	Kaufman, Rt Hon Gerald
Dewar, Donald	Keen, Alan
Dixon, Don	Kennedy, Jane (Lpool Brdgn)
Dobson, Frank	Khabra, Piara S
Donohoe, Brian H	Kilfoyle. Peter
Dowd, Jim	Lewis, Terry

Liddell, Mrs Helen	Prentice, Bridget (Lew'm E)
Litherland, Robert	Prentice, Gordon (Pendle)
Livingstone, Ken	Prescott, Rt Hon John
Lloyd, Tony (Stretford)	Primarolo, Dawn
Llwyd, Elfyn	Purchase, Ken
Loyden, Eddie	Quin, Ms Joyce
Lynne, Ms Liz	Radice, Giles
McAllion, John	Randal, Stuart
McAvoy, Thomas	Raynsford, Nick
McCartney, Ian	Redmond, Martin
Macdonald, Calum	Reid, Dr John
McFall, John	Rendel, David
McKelvey, William	Robertson, George (Hamilton)
Mackinlay, Andrew	Robinson, Geoffrey (Co'try NW)
Maclennan, Robert	Rogers, Allan
McMaster, Gordon	Rooker, Jeff
McNamara, Kevin	Rooney, Terry
MacShane, Denis	Ross, Ernie (Dundee W)
McWiliam, John	Rowlands, Ted
Madden, Max	Ruddock, Joan
Maddock, Diana	Sheerman, Barry
Mahon, Alice	Shore, Rt Hon Peter
Marek,Dr John	Short, Clare
Marshall, David (Shettleston)	Simpson, Alan
Marshall, Jim (Leicester, S)	Skinner, Dennis
Martin, Michael J (Springburn)	Smith, Andrew (Oxford E)
Martlew, Eric	Smith, Llew (Blaenau Gwent)
Maxton, John	Snape, Peter
Meacher, Michael	Soley, Clive
Meale, Alan	Spearing, Nigel
Michael, Alun	Spellar, John
Michie, Bill (Sheffield Heeley)	Steinberg, Gerry
Michie, Mrs Ray (Argyll & Bute)	Stevenson, George
Milburn, Alan	Stott, Roger
Miller, Andrew	Strang, Dr. Gavin
Mitchell, Austin (Gt Grimsby)	Straw, Jack
	Sutcliffe, Gerry
Moonie, Dr Lewis	Taylor, Mrs Ann (Dewsbury)
Morgan, Rhodri	Timms, Stephen
Morley, Elliot	Tipping, Paddy
Morris, Rt Hon Alfred (Wy'nshawe)	Turner, Dennis
Morris, Estelle (B'ham Yardley)	Vaz, Keith
Morris, Rt Hon John (Aberavon)	Walker, Rt Hon Sir Harold
Mowlam, Marjorie	Wallace, James
Mullin, Chris	Warden, Gareth (Gower)
Murphy, Paul	Wareing, Robert N
Oakes, Rt Hon Gordon	Watson, Mike
O'Brien, Mike (N W'kshire)	Welsh, Andrew
O'Brien, William (Normanton)	Wicks, Malcolm
O'Hara, Edward	Williams, Rt Hon Alan (Sw'n W)
Olner, Bill	Williams, Alan W (Carmarthen)
O'Neill, Martin	Wilson, Brian
Orme, Rt Hon Stanley	Wise, Audrey
Parry, Robert	Worthington, Tony
Patchett, Terry	Wray, Jimmy
Pearson, Ian	Wright, Dr Tony
Pendry, Tom
Pickthall, Colin	Tellers for the Noes:
Pike, Peter L	Ms Barbara Roche and Mr. George Mudie.
Powell, Ray (Ogmore)

Question accordingly agreed to.

MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved, That this House applauds the improvements in performance in the electricity supply industry since privatisation; welcomes the benefits which customers are receiving in terms of lower prices and improved service; supports the continuing development of competition in the electricity market and the maintenance of effective regulation where this is necessary; and notes that the Director General of Electricity Supply will continue to promote competition and protect the interests of consumers.