§ Mr. Bill WalkerTo ask the Secretary of State for Scotland if a date has been set for the flotation of the Scottish electricity supply industry; and if he will make a statement.
§ Mr. RifkindWe have considered carefully the options for floating the Scottish electricity companies in 1990 and 1991. We have concluded that the best time to float Scottish Power plc and Scottish Hydro-Electric plc will, subject to market conditions, be in May or June of 1991. The Scottish successor companies will begin operating on 31 March 1990, when they inherit the assets and liabilities of the two Scottish electricity boards. The Scottish nuclear company will remain in the public sector.
The Government's decision on flotation timing will enable the Scottish companies to present to investors a satisfactory track record of successful performance following the withdrawal of the nuclear element from the privatisation programme. It will also give them an opportunity to firm up arrangements before privatisation to export Scottish electricity to England and Wales. However, the decision will not prevent two of Scotland's largest plcs from competing for new business and operating on a fully commercial basis while they remain in Government hands.
I believe that this is the right decision for Scotland. The privatisation of Scottish electricity will be of tremendous significance to the Scottish economy, and we are anxious that there should be sufficient time to get it right. We considered the possibility of a much earlier flotation date but decided that this would not be wise. The new plcs will, following this decision, have a full opportunity to consolidate the new industry structure and to make their mark with the public, the financial community and with electricity customers both north and south of the border in advance of their flotation.