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Central Electricity Generating Board (Monopolies And Mergers Commission)

Volume 986: debated on Monday 16 June 1980

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asked the Secretary of State for Trade what are the terms of reference in the case of the reference of the Central Electricity Generating Board to the Monopolies and Mergers Commission under section 11 of the Competition Act 1980.

I announced the formal terms of reference for this inquiry on 3 June and have placed a copy in the Library of the House. The investigation will cover the efficiency and costs of the board in general, but the commission has been invited to pay particular attention to five areas which I believe deserve special scrutiny. They include internal cost control, purchasing policy, methods of stock control, plant maintenance programmes and planning and appraisal of new investments.

Will cost control cover possible cost differences in the price of imported coal? If so, will employment consequences for this country be taken into account?

I feel sure that the Monopolies and Mergers Commission will want to pay attention to every aspect of costs, including the availability of cheaper coal elsewhere, if that exists. The cost of electricity supplied in bulk to area boards by the CEGB is a large element in the final bill to the consumer, which has risen substantially in recent years. It is, therefore, important to establish that everything possible is being done by the CEGB to absorb costs and increase efficiency in order to keep prices as low as possible.

Order. I shall call the hon. Member for Derby, North (Mr. Whitehead) to ask a supplementary question. His question is next on the Order Paper and is almost identical.

Without having the benefit of seeing the main answer, may I ask the Minister to say why the public sector appears to be being treated more harshly in these referrals than the private sector? When will orders be drafted under the 1980 Act to allow restrictive practices in the private sector to be referred to the Monopolies and Mergers Commission?