Scottish Electricity Privatisation (Hansard, 28 February 1990)

§ The Minister of State, Scottish Office (Lord Sanderson of Bowden)
My Lords, the Government have decided that the Scottish successor companies will begin operating on 31st March 1990, when they inherit the assets and liabilities of the two Scottish electricity boards.

§ Lord Kirkhill
My Lords, I thank the Minister for that reply, but can he now tell the House why the Scottish generating boards which apparently previously were at the top of the sell-off queue now find themselves at the bottom?

§ Lord Sanderson of Bowden
My Lords, I seem to recall that on previous occasions on other issues we have occasionally been called guinea-pigs and sometimes that name can be applied to certain Bills which come before your Lordships' House. In this case it may well be that we are not a guinea-pig. What does matter and what is important is that the whole industry in Great Britain will be floated within a period of six months and within the lifetime of this Parliament. Perhaps I should add that my right honourable friend the Secretary of State for Energy has still to announce the details so far as concerns England and Wales.

§ Lord Taylor of Gryfe
My Lords, can the Minister say what the logic is of putting at the end of the queue the privatisation of the Scottish electricity industry when it is a relatively simple operation of two integrated companies compared with the complicated business of the whole industry south of the Border? Has he seen the comment of the chairman of the South of Scotland Electricity Board who said that early birds get the best investment opportunities? There is a limited amount of investment available in the industry. Why should the Scottish one be relegated to the end of the queue?

§ Lord Sanderson of Bowden
My Lords, I am sure that with the noble Lord's undoubted knowledge of the market place he would rather make haste slowly and get the thing right. I am encouraged by the remarks of Mr. Donald Miller yesterday as regards the flotation of his company and also the North board.

§ The Earl of Lauderdale
My Lords, are we to understand that noble Lords opposite have now been converted to privatisation and want it to be hurried on as fast as possible?

§ Lord Sanderson of Bowden
My Lords, I do not think that I need answer that particular comment except to say that it is encouraging to find support for privatisation from all sections of this House.

§ Lord Williams of Elvel
My Lords, would the Minister care to explain to his noble friend Lord Lauderdale that our opposition to privatisation is much more consistent than his? We have constantly voted against the Government's measures for privatisation whereas the noble Earl has not done so. Given that the Secretary of State for Energy has 47 advisers in respect of the privatisation of the electricity industry in England and Wales, including one personal public relations adviser, paid by the taxpayer, can the Minister say how many advisers the Secretary of State for Scotland has, and does he also have a personal public relations adviser?

§ Lord Sanderson of Bowden
My Lords, north of the Border we are always very careful to have the right advice from the smallest number of people who have knowledge of the situation. If I may say so, I am well aware of my noble friend's views on electricity privatisation and welcome the healthy debate that we had when the Bill passed through this House.

§ Lord Ezra
My Lords, can the Minister say what effect if any the separation of nuclear power from the Scottish electricity boards has had on the privatisation programme and indeed on their prospectuses?

§ Lord Sanderson of Bowden
My Lords, first of all I should say that what is most important as regards the nuclear situation in Scotland is the price that will be paid by Scottish Power and Hydro Electricity. The price set in the supply contract to those two new companies will take full account of our commitment that tariffs should not rise in real terms as a result of the new industry arrangements. I have to say that good progress is being made on these matters.

§ Lord Kirkhill
My Lords, now that the Minister has given an indication of the sell-off date, can he tell the House when the licensing document is likely to be issued? I ask not as a supporter of the sell-off, as the noble Earl, Lord Lauderdale, seems to think I am, although I am a well known opponent, but rather I am concerned about the consumers of electricity in Scotland and about the workforces of the two generating boards.

§ Lord Sanderson of Bowden
My Lords, I know of the noble Lord's very distinguished chairmanship of the Hydro Electric Board and his knowledge. He made it very clear during the passage of the Bill. However, I was very glad to hear that he supported the idea of two privatised companies rather than one in Scotland. In answer to his question about licences, they will be published very shortly.

§ Lord Mackie of Benshie
My Lords, can the Minister tell us whether the privatised board which will succeed the Hydro Board will have an obligation to provide electricity supplies to people in the Highlands where the obligation is more social than economic?

§ Lord Sanderson of Bowden
My Lords, as to the tariff, the noble Lord knows very well that there is an equality so far as the Hydro Board is concerned.
736 Only a tiny number of existing dwellings remain unconnected, generally where costs are grossly uneconomic. The costs of connection to new dwellings need to be met by the individual consumer if he deems it economic. We believe that it is unfair for such costs to fall on the wider body of consumers. However, the noble Lord knows that we have come a very long way in bringing electricity up the most difficult glens and over the most difficult countryside there is in the United Kingdom.

§ Lord Mackie of Benshie
My Lords, do I take it that the answer is no, that they will not supply to remote areas whether or not it is deemed economic?

§ Lord Sanderson of Bowden
My Lords, so far as each individual case is concerned it is considered on its merits and so far as possible help is given. But at the end of the day the individual consumer will have to bear the cost.