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Electricity (Privatisation)

Volume 124: debated on Monday 14 December 1987

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To ask the Secretary of State for Energy when he last met the chairmen of the area electricity boards to discuss privatisation of the industry.

I met the area board chairmen collectively on 1 October to discuss various aspects of the privatisation of the electricity supply industry, and I plan to meet them again early in the new year.

Will my right hon. Friend confirm that the area board chairmen are overwhelmingly in favour of privatisation and believe that they will give customers a better deal in the private sector?

My hon. Friend is absolutely right. The area board chairmen are overwhelmingly in favour of the industry's privatisation.

What did the area board chairmen tell the Secretary of State about the future of the national grid, and, secondly, about the maintenance of jobs within their areas and in the industry generally? Would he care to express his own view on those matters?

The area board chairmen and I discussed the question of privatisation. In spite of rumours to the contrary, nobody in the Electricity Council, the area boards, the CEGB, or the Government wants the grid to be broken up. The area board chairmen believe that their industry has a bright future — the consumption of electricity has been increasing—and that in the private sector they can offer their employees a more secure and better-paid future. They all intend to ensure that their work force receives worker-shareholdings at preferential rates.

I am delighted to hear what my right hon. Friend has said about the national grid. Does he agree that the national grid is the jewel in the crown of our electricity industry? Is he prepared to go a little further and give a categorical assurance that, when the legislation comes, the preservation of the national grid will be written into it?

There is not and never has been at any time any question of breaking up the grid. An integrated grid has served the country well and will continue to do so in the future.

Does the Secretary of State intend the ownership of the national grid to be in private or public hands? Did the chairmen of the electricity boards make it clear to him that the 9 per cent. increase in prices was completely unjustified, that the industrial rebate for prices may mean that, yet again, consumers will pay more for electricity, and that it may be illegal?

No. When I talked to the area board chairmen about prices I explained that the industry was entering a period of substantial capital investment and that it had to develop an income base to fund that investment, whether it be in the private or public sector. They saw the sense of that argument, as, I am sure, one of these days the hon. Gentleman will.

Will my right hon. Friend note that the area boards want not only privatisation but that 10 out of the 11 wish to be privatised as individual utilities? They believe that they can compete against one another, and one or two have confirmed that they can produce electricity in their area more economically than they can buy it from the national grid.

My hon. Friend is correct. The area board chairmen all said that they would like to have the right to generate in their areas. At the moment, with the exception of one power station in Hereford, none of the area boards has any generating capacity. They would like such a right to be among the rights that they will acquire when they are privatised.