§ Mr. Bill WalkerTo ask the Secretary of State for Scotland what progress has been made by the South of Scotland electricity board in following up the report on the board by the Monopolies and Mergers Commission published in August 1986; and if he will make a statement.
§ Mr. RifkindI have now received the second response of the SSEB to the MMC report published in August 1986. This describes progress and the steps taken by the board to meet the Commission's conclusions. I have placed copies in the Library. The board has responded in a constructive way to the MMC's recommendations and good progress has been made since my statement to the House on 7 April 1987 on the SSEB's initial response.
I am encouraged by the initiatives taken by the board to reduce its meter reading billing and collection costs and its level of outstanding debt by the introduction of power-card registers and special payment schemes. Tight cost reduction targets have been applied to the board's budgets, and at the same time the board has made significant progress with the quality assurance programme and in setting targets for quality of service in relation to electricity supplies. Good progress has also been made in drawing up an assessment system for allocating priorities and resources for distribution network refurbishment and in preparing an investment appraisal manual.
I am satisfied that the board has picked up and pursued the points that concerned me in its initial response particularly in relation to staffing surpluses and adjustments to the tariff structure. The board has, however, decided against setting separate targets for contracting and appliance retailing. I consider that in due course this will be a matter for the privatised company to determine in the light of its commercial judgment. Meantime, I am pleased to note the improved profitability of this part of the board's activities.
I am grateful to the MMC for a very helpful and constructive report. The action outlined in this response which has been taken by the board to implement the MMC's recommendations to improve performance and increase cost-effectiveness will stand the board in good stead as it prepares itself to operate successfully in the private sector.