§ 3.17 p.m.
§ Lord Holme of Cheltenham asked Her Majesty's Government:
§ Whether they expect electricity consumers in Northern Ireland to be getting value for money following the recent privatisation of the local electricity industry.
§ The Parliamentary Under-Secretary of State, Northern Ireland Office (The Earl of Arran)My Lords, yes. The structuring and privatisation of Northern Ireland Electricity will lead to increased efficiencies and greater competition in the electricity supply industry in Northern Ireland, which is the best guarantee of consumers' interests.
§ Lord Holme of CheltenhamMy Lords, I thank the noble Earl for that Answer, but is he aware that even in these momentous times in Northern Ireland, the ordinary cares of domestic life continue? Is he further aware that in Northern Ireland one of those principal cares is the high cost of domestic and industrial electricity which is between 20 per cent. and 30 per cent. higher than in Great Britain as a whole? Does the noble Earl agree that one of the contributory reasons for that is the bizarre system of charging by the generators who charge Northern Ireland Electricity not according to the units of electricity supplied, but according to their available capacity?
§ The Earl of ArranMy Lords, as the noble Lord, Lord Holme of Cheltenham, points out, these are indeed momentous times at this moment in Northern Ireland. But I think that the reports of a substantial disparity between electricity prices in Northern Ireland and those in Great Britain have been considerably exaggerated as domestic prices are only 0.1 per cent. higher than in Great Britain; this is mostly brought about through a heavily oil-dependent country, obviously, and also a widely dispersed population. The answer to his second point is that the higher availability which has been achieved since the industry's transfer to the private sector is in actual fact a measure of its own increased efficiency. The benefit for customers of higher plant availability lies in the fact that it delays the time when expensive new generator plant requires to be added to the system.
§ Lord Williams of MostynMy Lords, will the Minister confirm that widespread concern is felt by industrial consumers of electricity in Northern Ireland about the costs to their enterprises that are likely to 1457 ensue? Will he confirm that the new bulk supply tariff suggests an average cost increase of 10 per cent. to industrial users in Northern Ireland? If the Government's policy is that competitive forces will reduce prices, when is that competitive policy likely to take effect?
§ The Earl of ArranMy Lords, these are early days for the privatisation of electricity in Northern Ireland. There is much coming on stream as regards competition in Northern Ireland in the electricity sector. There is the anticipated system of the gas and electricity interconnector from mainland Scotland in 1997 coming through, and also the possibility of an interconnector from the south of Ireland. Overall, the prices have not increased as a result of privatisation. In fact, the price increase on 1st April this year was, in large measure, due to increased world oil prices.
§ Lord Cooke of IslandreaghMy Lords, the Minister will be aware that the high cost of electricity presently charged is largely a result of the manner in which the generators were privatised. That, unfortunately, is now water under the bridge. The total bill for electricity in Northern Ireland will not decrease for many years. So far as can be seen, it will be about 2010 before any real reduction from competition can come through the system.
§ Lord Cooke of IslandreaghMy Lords, is the Minister aware that large users—above 1 megawatt—are paying average increases which are 30.2 per cent., higher than they would be if they were positioned in the south west of England? Is the Minister aware that in a recent survey by the CBI, out of 77 responders, 35 expected a delay in investment because of the high cost, and 25 expected further development outside the UK? Will the Minister—
§ The Earl of ArranMy Lords, perhaps I can say to the noble Lord, Lord Cooke of Islandreagh that the questions he asked, in the first instance, are a matter for the Director General of Electricity Supply in Northern Ireland. Of course, naturally he is aware of the concerns which large industrial consumers have about electricity prices, but he also has a responsibility to protect domestic consumers' interests.
§ Lord Holme of CheltenhamMy Lords, as the Minister and I fell out over statistics, does he agree with the report issued yesterday by the regulator in Northern Ireland, Mr. Geoffrey Horton, who said of electricity prices in Northern Ireland:
The standard domestic tariff is the highest in the United Kingdom. It is only just above the next most expensive, but it is substantially above the UK average"?I find that difficult to reconcile with the 0.1 per cent. extra that the Minister quotes. I wonder whether he would care—perhaps not now but later—to check his statistics.
§ The Earl of ArranMy Lords, that is the figure that I have at hand. That is the figure that I believe to be correct. I think we really must ask the noble Lord, Lord Holme, to wait for further movement in the competition of the electricity supply in Northern Ireland, which we hope will bring down prices in the next few years.