Nuclear Electricity (Hansard, 13 March 1996)

§ 2. Mr. Pope
To ask the President of the Board of Trade what is his estimate of the total cost to the Exchequer of the nuclear electricity industry following privatisation. [18687]

§ 6. Mr. Eastham
To ask the President of the Board of Trade what is his estimate of the annual cost to the Exchequer of the nuclear electricity industry following privatisation. [18693]

§ The Minister for Industry and Energy (Mr. Tim Eggar)
The external financing requirement of the nuclear electricity industry is shown in table 6A.5 of the "Financial Statement and Budget Report 1996–97".

§ Mr. Pope
With the Red Book showing that the cost of privatising the nuclear industry in the first full year after privatisation will cost the Exchequer £650 million, is it not clear now to everybody except the Minister that consumers and taxpayers will be ripped off and that it is about time that the privatisation was stopped in its tracks?

§ Mr. Eggar
The hon. Gentleman, as he knows, is completely misconstruing the figures. The important thing about nuclear privatisation is that it will transfer significant potential and actual liabilities into the private sector along with the assets that are being transferred into the private sector. Furthermore, the reorganisation of the nuclear generating industry will increase efficiency both in the soon to be privatised entity and of course in Magnox Electric.

§ Mr. Eastham
Is it not a fact that billions of pounds have been invested by the taxpayer in the industry, yet it is now proposed that it should be sold for £2.6 billion despite an expected profit during the next five years of £2 billion? Is that not a reckless way to use taxpayers' money?

§ Mr. Eggar
I recognise the point that the hon. Gentleman makes, which is that, with the benefit of hindsight, I am sure that the Labour party would not have made the kind of commitment to expenditure on advanced gas-cooled reactors that it made. I am sure that the right hon. Member for Chesterfield (Mr. Benn) will apologise to his hon. Friend.

§ Mr. Congdon
Given the benefits that have flowed to the consumer as a result of electricity privatisation, what assessment has my right hon. Friend made of the benefits that are likely to flow from this privatisation?

§ Mr. Eggar
Clearly, there have already been very significant benefits for electricity consumers following privatisation. The average electricity consumer's bill this year is likely to be about £90 less than it was two years ago. Furthermore, flowing from the decision to privatise the 966 British Energy part of the nuclear industry, there is likely to be a further significant reduction, in excess of 6 per cent., in bills in future years.
Creating two new competing nuclear generating companies will put pressure on generating prices and will enable the whole generating industry to become more competitive and provide more flexibility, with lower prices for industrial and domestic consumers.

§ Mr. Battle
Is it not the case that, so far, the Minister for Industry and Energy has proposed flotation to the institutions without liabilities, and that he has then added in some—but not all—of the liabilities? Two weeks ago, a trade sale to the American company Duke Power was proposed, and yesterday a flotation of shares to the general public was suggested. Is not nuclear privatisation already proving to be a bad deal for taxpayers who will continue to foot the liabilities for years to come? Is this not the last desperate dash for cash for a tax bribe in November? Nuclear privatisation should be called off now because it is economically indefensible.

§ Mr. Eggar
The first part of the hon. Gentleman's question made it clear that he does not understand his brief. The second part of his question made it clear that he cannot even deliver the soundbite effectively.