Regional Electricity Companies (Hansard, 8 March 1995)

§ 2. Mr. Tony Banks
To ask the President of the Board of Trade what consultations he has had with the Director General of Electricity Supply about the pay and perks of directors and executives of the South Wales, Northern and Eastern regional electricity companies.

§ The Minister for Energy and Industry (Mr. Tim Eggar)
My right hon. Friend has had no such discussions. The regulator has no responsibility for these matters.

§ Mr. Tony Banks
Is it not a fact that the chairman of the South Wales electricity company has received a 68 per cent. rise in pay, that the chairman of Northern Electric has received a 46 per cent. rise and that the chairman of Eastern Electricity has received a 110 per cent. rise? When will it dawn on Ministers that the British public are scandalised by the way in which the bosses of privatised monopolies are making vast sums, beyond the dreams of avarice, out of consumers? The bosses are up to their ankles in the trough and they went in head first. When will Ministers realise that this scandal must be dealt with, that the responsibility is theirs and that they must take action?

§ Mr. Eggar
My right hon. Friend the Prime Minister has made it absolutely clear that we are awaiting the 319 consideration of the Greenbury committee. The committee will consider these issues, among others. The Government have made it clear that if, after receipt of the recommendations, it is felt appropriate to legislate, we shall certainly consider doing so.

§ Mr. Batiste
Is not the real point that, as Professor Littlechild demonstrated so clearly this week, the regulator has all the powers necessary to look after the interests of the British consumer? His new intervention is good news for the British consumer, who will get even lower electricity prices as a consequence of the privatisation programme.

§ Mr. Eggar
I very much agree with my hon. Friend. The right hon. Member for Copeland (Dr. Cunningham) in the debate only 10 days ago criticised the regulator because, allegedly, he was not taking enough account of the interests of consumers. Following the regulator's announcement yesterday, the right hon. Gentleman attacked him for not taking account of the interests of the shareholders.

Dr. John Cunningham
Is it not strange that, after the extraordinary events of the past 48 hours, the President of the Board of Trade is not making a statement about them and about the consequences of the regulator's announcement? Far from attacking Professor Littlechild, as the Minister wrongly claimed, I welcomed his belated action yesterday. Is it not clear from his announcement that electricity consumers have been massively overcharged and fleeced of perhaps billions of pounds over the past four or five years? What action do Ministers intend to take to ensure that the regulator acts now to reduce electricity prices further? Is it not clear that electricity shares are overpriced exactly because consumers have been overcharged?
As officials and Ministers in the Treasury and the Department of Trade and Industry knew of Professor Littlechild's intention to consider a price review before the sale of PowerGen and National Power shares, is not that inside information, as defined in part V of the Criminal Justice Act 1993? As we saw yesterday, beyond question the matter was price-sensitive. In withholding that information, are not Ministers and officials guilty of either absolute negligence or complete dishonesty in their handling of this affair?

§ Mr. Eggar
What is absolutely clear is that the Labour party opposed privatisation, and therefore opposed the benefits to consumers which have already flowed from privatisation, including a reduction in real terms in electricity prices of 9 per cent. over the past two years. The right hon. Gentleman says that the consumers have been ripped off. He seems to have forgotten the record of the previous Labour Government, when real electricity prices rose by 22 per cent. between 1974 and 1979.
With regard to the right hon. Gentleman's outrageous allegation towards the end of his long question, may I refer him to the article in The Guardian on Saturday, which made it very clear that he had written to the regulator asking for a reduction in prices ahead of 1 April? Did he say to the stock exchange—[Interruption.] This is very relevant. The right hon. Gentleman has accused my right hon. Friends and me of misleading the public who have bought Generating Company shares. The right hon. Gentleman did not refer the letter that he wrote to the regulator to the stock exchange, nor did he give any 320 indication in that letter, as I understand it, that there was any expectation that the political pressure that the right hon. Gentleman was trying to bring to bear on the regulator would have any impact on the Genco sales.

§ Mr. Anthony Coombs
When considering the pay of directors of regional electricity companies and, indeed, companies as a whole, does my hon. Friend agree that those matters are not for the Government but for the shareholders who own the companies? To make that system effective, will my hon. Friend consider the possibility of shareholders having, by law, to vote every year on the pay and perks of their directors, just as they presently have to vote for the reappointment of auditors?

§ Mr. Eggar
My hon. Friend has made an interesting suggestion, and it may be one of the things that the Greenbury committee will consider.