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Orders of the Day — Electricity Bill

Part of the debate – in the House of Commons at 5:08 pm on 13th December 1988.

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Photo of Donald Dewar Donald Dewar , Glasgow Garscadden 5:08 pm, 13th December 1988

It will be an actual monopoly in Scotland. If the hon. Gentleman dislikes that, no doubt he will table a relevant amendment to the Bill when the opportunity arises.

I now turn to the arrangements for the regulator—a rather odd and distinctive argument. The Bill is silent here, and I take the Minister's point that it is not necessary to spell out which Secretary of State will be in control or which Secretaries of State will have a finger in the pie. However, there is a case for a separate regulator for Scotland. The arguments were set out perfectly well in the Select Committee's report to which I have referred. Paragraph 60 of the Select Committee report makes it clear that there will be a separate office in Scotland and a separate Scottish official who will be responsible to the Secretary of State for Scotland for all he does in relation to the Scottish industry. Logically, there should be a separate regulator. It is not a matter of enormous principle, but that would be the sensible, practical approach. I certainly prefer the views of the Select Committee to those of the Secretary of State.

I am disappointed by what the Secretary of State had to say about the independence of the companies being created in Scotland. I make my point more forcibly because my disappointment was sharpened by the trailing in the press of the important and exciting things that the Secretary of State would say. Today's edition of The Scotsman remarked that he would outline the powers that will be taken to act as a barrier to a takeover from abroad or from England. However, we received only an interesting account of the possibilities of share ownership in Scotland, but no guarantees as to how the control or the independence of the companies would be maintained.

This is not a minor point, and as the Secretary of State knows it is spelt out again in paragraph 14 of the Select Committee report: The electricity industry is of considerable strategic importance. The new companies will therefore be protected from unwelcome takeover by the retention by Government of a special share. We are entitled to a good deal more detail than that. Perhaps the Minister who replies to the debate will say something about it, as presumably it applies in England as it does in Scotland.

The Scottish companies will be small—certainly the northern company will be small by international or United Kingdom standards—and I should have thought that they will be open to a predatory raid. I hope that we shall hear something about the defences that will be put in place and how those defences will be manned. I am sure that the Minister will accept that there is cynicism in Scotland, particularly after the Britoil experience, about golden shares and the reserve of powers to Ministers. It is very important that those matters are spelt out adequately during the passage of the Bill.

Perhaps the Minister, or the Secretary of State for Energy, will say a few words about the terms and conditions of the sale and when the Scottish companies are likely to be on offer. Has a running order been decided? I am told, and there are certain strong rumours, that four English distribution companies will go first, then one of the generating companies and then possibly one or both of the Scottish companies. It would be fair and useful if we were told about those decisions, if they have been taken.

I was also disappointed that the Secretary of State remained pretty mum about the interconnector. We all know that its present capacity is equivalent to 850 MW and that plans or a scheme propose its expansion to 1,600 MW. Obviously that is immensely important in terms of the coal burn in Scotland and the capacity of the Scottish power generating industry. I am told that the cost will be £ 180 million. I am not sure whether it will go ahead before privatisation, or if not, whether the English distribution companies or the Scottish Office will make a contribution to the costs. Again, we should know about that if we are to have an informed debate about the future.