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Electricity Privatisation

Volume 130: debated on Monday 28 March 1988

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3.

To ask the Secretary of State for Energy what is his timetable for the privatisation of the electricity supply industry.

The Government intend to introduce legislation to privatise the electricity supply industry as early as possible. I expect that this will be in the next Session of Parliament.

Has the Minister calculated the possible number of redundancies in the British coal industry as a result of privatisation of the electricity industry owing to the import of cheap, subsidised foreign coal, or does he simply not care about those redundancies?

I have explained before to the hon. Gentleman that our proposals mean that the industry will need about 75 million tonnes of coal a year and that the Government have funded the most extensive investment programme in the coal industry of any Government. We have done that because we believe that, with modern machinery and modern working methods, the British coal industry can capture a very substantial part of those 75 million tonnes.

Will my right hon. Friend, in concert with my right hon. Friend the Secretary of State for Social Services, make it plain to pensioners and others that, despite the increase in electricity tariffs being higher than the rate of inflation, the combined effect of that and social security legislation will leave them better off?

What account is the Secretary of State taking in his privatisation planning of the fact that the CEGB has been financing the fast reactor programme to the extent of 30 per cent., and that there is great anxiety about the withdrawal of that support and whether the Government intend to continue the fast reactor programme?

I know of the hon. Gentleman's deep concern about this matter, as he and I first met and discussed it at Dounreay. No decisions have yet been taken. The CEGB has to decide whether to continue with this funding. These matters are for discussion, but I recognise that they should be resolved as soon as possible and that his constituents should be kept fully informed.

Will my right hon. Friend ensure that there are safeguards over the operation of the local distribution networks so that privatised area boards cannot exert monoply control to prevent small local generators from delivering electricity to local industrial consumers?

Yes. We are anxious that the small generators should have an opportunity to get into the system. We believe that under our proposals that will be possible, whereas under the present arrangements it has proved difficult.

At what point in the timetable does the Secretary of State expect to be able to advise the House and the country of the price at which the electricity supply industry will be sold? Would he care to suggest whether an industry with a net asset value of £55 billion will be sold for less than 40 per cent. of its worth?

I am afraid that I do not recognise the figures that the hon. Gentleman has just used. I have never heard anyone suggest that the net assets of the organisation are worth £55 billion. I am constantly being told by Labour Members that I am seeking too high a price for the industry, so it is a relief to be told now that the Government are thinking of selling it too cheaply. We intend to get a fair price for the industry, and that will become clear as time goes on.