HC Deb 06 November 1996 vol 284 cc1225-7
5. Mr. Alan W. Williams

To ask the President of the Board of Trade what proposals his Department has to strengthen the powers of the electricity regulator. [527]

Mr. Page

I have no such plans.

Mr. Williams

Given that the electricity companies have made combined profits of more than £14 billion since privatisation, that the pay of their fat cats has doubled and that they are reputedly submitting takeover bids for virtually all cash machines, is it not time that we said enough is enough for Tory-style regulation, and that we had a Government who put the interests of the consumer first?

Mr. Page

The hon. Gentleman got the last part right—we have put the interests of the consumer first. Since privatisation, under the regulator, the cost to the private home owner has fallen by some 10 per cent., excluding VAT, in real terms, and the cost to industry has fallen by 14.7 per cent., excluding VAT, in real terms—the lowest figures since records began in 1970. The consumer is first. The hon. Gentleman must not muddle large sums of money with return on capital. If he did that when running a business, he would soon find that it ran into trouble and chaos.

Mr. John Marshall

Will my hon. Friend confirm that, apart from the massive reduction in electricity prices in real terms, there has been a massive increase in productivity since privatisation? Does that not demonstrate how irresponsible it was of the right hon. Member for Sedgefield (Mr. Blair) to lead the opposition to privatisation?

Mr. Page

My hon. Friend is absolutely right, and there have been many other advantages. Since privatisation, disconnections are down by a massive 98 per cent. I endorse what my hon. Friend says. My only advice to the Opposition is, "If it ain't broke, don't fix it."

Mr. Battle

Disconnections are down only because most people have self-disconnection meters. Is it not the case that, since privatisation, eight out of the 12 electricity companies in England and Wales have been or are being taken over, for a total of £11.5 billion? Does not that show that, in this brave new world of takeovers and mergers, consumers increasingly are, and feel that they are, an afterthought in the face of high profits and redundancies? A Labour Government will positively put consumer interests first. Why do not the Government toughen up regulation to put consumer interests first now?

Mr. Page

I cannot square what the hon. Gentleman is saying with his party's willingness to have a windfall tax that would undoubtedly impact on prices for the consumer; it is double-talk. This country has the best inward investment record, and allowing our electrical industries to be owned by companies from other countries does not alter the fact that prices for the consumer have dropped. That has happened through privatisation, brought about by a Conservative Government.

Mr. Congdon

Does my hon. Friend agree that key proof of the success of privatisation of the electricity industry and of the role of the regulator is that consumers have benefited substantially from the reduction in prices in real terms, in contrast with what happened when it was nationalised and prices went up month in, month out? Does he share my concern that the proposals for a windfall tax on profits will put that success at risk and ensure higher prices for the consumer, who should beware the crazy proposals of the Labour party?

Mr. Page

My hon. Friend is absolutely right. I should like to think that the Labour party would listen to and learn from his wise words. In addition to what has already been achieved, there has been the £50 bonus from the flotation of National Grid. Further reductions will come through from the tightening of transmission price controls, which will help the consumer even more. All that has happened under a Conservative Government.