Electricity Privatisation: PR Advisers; (Hansard, 13 February 1990)

§ Viscount Ullswater
My Lords, the Government and the area boards appointed Lowe Bell Communications in July 1988 to provide marketing advice for the flotation of the distribution companies, as part of the electricity privatisation programme. This role did not include any public relations activities. Since then Lowe Bell Communications has been appointed as special marketing and PR advisers to the Secretary of State. The Government and the electricity supply industry have appointed Dewe Rogerson as joint marketing and PR adviser for the privatisation of the electricity supply industry in England and Wales. Detailed information concerning contracts with individual advisers is commercially confidential.

§ Lord Hatch of Lusby
My Lords, frankly, that does not answer my Question. I am asking the Government how much public money is being spent on their public relations exercise as regards the privatisation of electricity. I do not believe that any Member of this House would disagree that the Government certainly need advice on their public relations on privatisation after all the messes they have got themselves into. However, we are entitled to know what the Government are spending on public relations in order to further the policy which the Conservative Party is putting over and what public money is being spent on that public relations exercise.

§ Viscount Ullswater
My Lords, I must repeat part of my original Answer. Lowe Bell Communications 1244 was appointed by the Government and the area boards jointly in July 1988 to provide marketing advice in respect of the distribution flotation. That company was not appointed to give public relations advice under that contract, which was terminated in January 1990.

§ Lord Hatch of Lusby
My Lords, that still does not answer my Question. I have a news release from the Department of Energy which states that John Wakeham, Secretary of State for Energy, has appointed Lowe Bell Communications to be special marketing and public relations advisers. I ask how much money the Government are spending on their public relations exercise as regards the privatisation of electricity.

§ Viscount Ullswater
My Lords, I expect that the news release which the noble Lord has, is dated January 1990. No money has been spent to date on public relations activity. Detailed information concerning contracts with individual advisers is commercially confidential.

§ Lord Taylor of Blackburn
My Lords, do we take it that that company is doing the work free and gratis?

§ Viscount Ullswater
No, my Lords.

§ Lord Williams of Elvel
My Lords, we all understand that the Secretary of State for Energy needs serious public relations advice on privatisation. We take that for granted. However, can the noble Viscount answer my noble friend's Question? How much money is the taxpayer—because this is the taxpayer and not the electricity industry —going to have to pay for public relations advice to be given to Mr. John Wakeham?

§ Viscount Ullswater
My Lords, it is not advice to Mr. John Wakeham but advice to the Department of Energy, as the news release makes clear. As regards marketing, which I believe is what the noble Lord is driving at, any expenditure on marketing will be designed to achieve value for money. Previous privatisations have demonstrated that expenditure on marketing generates strong retail demand and secures wide share ownership, including within the company's employees.

§ Lord Grimond
My Lords, is there any reason the taxpayer cannot be told what is being spent on marketing? There cannot be any secrecy. That is clearly expenditure from public funds and surely the public have a right to know what has been expended.

§ Viscount Ullswater
My Lords, the money involved in marketing will be declared. However, the money so far advanced has come from the Vote to the department.

§ Lord Stoddart of Swindon
My Lords, this House really cannot understand why the Minister is so diffident about public money being expended apparently for some public good. First, I certainly do not know what is the public good. Surely the 1245 Government are not trying to persuade the public that they are going to give them a nice gift, as they did regarding the water industry. Everybody knows that the Government are out to ensure that shareholders will make 50 per cent. or 60 per cent. profit. Exactly what, therefore, do the Government intend by the expenditure of this money, and how much is it?

§ Viscount Ullswater
My Lords, I have already told the House that the marketing of the privatisation is to ensure that the taxpayer gets value for money. A proper marketing campaign maximises proceeds for the taxpayers.

§ Lord Cledwyn of Penrhos
My Lords, the noble Viscount must realise that this is a serious matter. Can he tell the House whether there is any precedent at any time for any Secretary of State engaging a firm to give advice in this way?

§ Viscount Ullswater
My Lords, I understand that this has been done. The amount spent is commercially confidential.

§ Lord Williams of Elvel
My Lords, what is commercially confidential about the amount of money the taxpayer will pay for this?

§ Viscount Ullswater
My Lords, the various sides require information and advice and I do not think it is necessarily right to allow these commercially confidential details into the public domain.

§ Lord Hatch of Lusby
My Lords, I am afraid the Minister has made a mistake. He says that this organisation has been appointed to the Department of Energy, but that is not what the press release states. It states that it has been appointed as public relations adviser to the Secretary of State —not to the department but to the Secretary of State. This is public money used in order to obtain public relations advice for the Secretary of State. That money comes from the taxpayer. Whether or not money has been spent yet does not make any difference. What money has been contracted to be spent from the taxpayers' pocket in order to give public relations advice to the Secretary of State?

§ Viscount Ullswater
My Lords, I have answered the question already. The details are commercially confidential. The Secretary of State requires the information while he is preparing the industry for privatisation and I am quite certain that most people feel that he should be properly briefed.

§ Lord Hatch of Lusby
My Lords, in that case, if the Public Accounts Committee were to ask him to appear before it, would he then claim commercial confidentiality in revealing what public money has been spent for private advice to him on a public relations matter?

§ Viscount Ullswater
My Lords, I cannot possibly answer for my right honourable friend to a committee of another place.

§ Lord Taylor of Blackburn
My Lords, is it true that this firm is also the principal adviser to the Conservative Party?

§ Viscount Ullswater
My Lords, I do not know.

§ Lord Cledwyn of Penrhos
My Lords, I recognise the difficulties of the noble Viscount at this time, but will he convey to his right honourable friend the need for a statement to clarify the position?

§ Viscount Ullswater
My Lords, I shall certainly draw to the attention of my right honourable friend the exchange of remarks in your Lordships' House.