Privatised Utilities (Hansard, 14 June 1995)

§ 4. Mr. Harry Greenway
To ask the President of the Board of Trade what is his estimate of the changes in productivity achieved in the privatised utilities since privatisation; and if he will make a statement. [26806]

§ The Minister for Industry and Energy (Mr. Tim Eggar)
Generally, the privatised utilities have demonstrated higher productivity increases than those of manufacturing industry as a whole. The productivity performance of the electricity industry and of BT is particularly impressive. In terms of annual averages between privatisation and 1993–94, the regional electricity companies' productivity was up 6 per cent., BT's up 7 per cent., PowerGen's up 15.5 per cent., and National Power's was up by nearly 21 per cent.

§ Mr. Greenway
Does my right hon. Friend accept that no one has questioned Cedric Brown, lain Valiance and company harder than I have about their salaries and emoluments? Does not the fact that footballers are being paid £15,000 a week put the envy expressed by the Labour party and the Liberal Democrats into perspective? The reductions in the price of gas, telephone calls and electricity are what matters—not the sneering, envy and meanness expressed by the Opposition.

§ Mr. Eggar
As usual, my hon. Friend makes his point powerfully and effectively. BT's prices for domestic consumers have fallen in real terms by 35 per cent. since privatisation. Gas prices for domestic consumers are down in real terms by 21 per cent. Electricity prices have fallen by 8.5 per cent. over two years. Gas prices for industry are down by almost 40 per cent. in real terms, and in recent weeks there has been a fall of no less than 20 per cent. in interruptible gas prices, over and above last year. That is a record of which the privatised industries can rightly be proud.

§ Mr. Pike
Does the Minister accept that the privatised utilities are obsessed with getting rid of jobs and employees in order to make a profit? Last year, when 781 BT's system was affected by thunderstorms, the company did not have enough workers to get the system working again and had to bring in engineers from the Republic of Ireland. Is that not nonsensical?

§ Mr. Eggar
The hon. Gentleman lives in another era. He forgets the time when there was a waiting list for telephones and there was only one kind to be had—a big black one. During that period there was nothing like the number of telephones in houses compared with nowadays and the standard of efficiency was unbelievable compared with the present high standard. I suggest that the hon. Gentleman should assess the evidence objectively.

§ Mr. Quentin Davies
Although the Labour party does not want to acknowledge it, an amazing number of privatised industries have become international leaders in their sectors, setting the pace in profits, productivity and growth. Does my right hon. Friend agree that that is the position with British Airways, British Steel, British Gas and British Telecom, and is that not the finest vindication of the correctness of Conservative privatisation policies?

§ Mr. Eggar
I completely agree with my hon. Friend. Anyone who has seen, as I have, British Gas operating in Argentina or Kazakhstan will recognise the major contribution that British Gas is making to economic growth in those countries and in bringing profits back to the United Kingdom. We must recognise that the sale of services by utilities in the energy and telecommunications sectors is a worldwide effort, not a domestic effort within the United Kingdom. Our former state-owned utilities are leading the way for Britain. That means good profits and jobs for Britain.

Mr. O'Neill
Does the Minister agree that the ability of directors of former public utilities to earn football players' wages, or to win them, is not related to their ability to score own goals? Will the right hon. Gentleman comment on today's statement by the Centre for Regulated Industry that profits of £4,553 million were made in 1993–94 in the former public utility sector? Indeed, profits rose by about 14.3 per cent. What does the right hon. Gentleman suggest should be done to give some consolation to the consumers of electricity, for example? Does he agree that the regulator should give greater countenance and support to the other stakeholders—the consumers? A 14.3 per cent. rise in profits is nothing compared with price controls. Surely the regulator should be defending the consumers rather than the shareholders.

§ Mr. Eggar
Even by the hon. Gentleman's standards, that was a particularly churlish question. The benefits of privatisation have flowed through directly to consumers in lower prices in virtually all the privatised industries, and in higher standards of performance and service to consumers. The hon. Gentleman and the newspapers seem to have ignored the fact that the statement made by the centre that he mentioned referred to results for the year before last.