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Orders of the Day — Electricity Bill

Part of the debate – in the House of Commons at 6:35 pm on 13th December 1988.

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Photo of Mr Dick Douglas Mr Dick Douglas , Dunfermline West 6:35 pm, 13th December 1988

I do not propose to take up the remarks of the hon. Member for Cambridgeshire, North-East (Mr. Moss).

It seems that the argument in favour of having two Bills, and not the one that is before us, has been advanced during the debate. We seem to have been talking about two Bills. Arguments that have been adduced on behalf of England and Wales have had little bearing on Scotland. This afternoon, the Secretary of State talked about the Scottish coal industry and its relationship to the privatisation of electricity, but before referring to his remarks I shall draw the attention of the House to what was said by Mr. Donald Miller, the chairman of the South of Scotland electricity board, in answer to questions put to him by members of the Select Committee on Energy.

On 23 March, my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) raised the issue of the relationship of the SSEB to British Coal, and Mr. Miller's reply to question 555 was illuminating: First of all, we cannot be in the business of conniving with British Coal to charge the Scottish electricity customer on the basis of dear coal and subsidising other users; that is not what our board is paid for. I am sure that his words were carefully chosen. He has said that he is not to "connive" with British Coal. My hon. Friend pressed him further, and he said: On the first point, whether I have discussed with the Secretary of State for Scotland the implications of the Scottish coalfield being wiped out: the answer is 'no', because it does not arise, there is no need for it to arise. Eight or nine months on, we have news for the Secretary of State and Mr. Miller. We are witnessing the possibility of deep-mined coal being wiped out in Scotland because of a slavish, doctrinaire approach to market forces. I have known Mr. Miller for a long time—I do not like talking about personalities in this way—and previously he was an eminently sensible gentleman. It seems, however, that he is being pushed by privatisation into adopting the following posture and statement— this is the effect of what he said—"I am not conniving with British Coal."

Let us not say that Mr. Miller should connive, but let us suggest to the Secretary of State that he should show an interest in the future of a vital Scottish industry. Let him do what his hon. Friend the Under-Secretary of State for Energy did recently and visit the site of a vital investment of about £60 million in the constituency of my hon. Friend the Member for Clackmannan (Mr. O'Neill), just outside the borders of my constituency. The Under-Secretary visited the Longannet complex, and yesterday, in answer to my question, said: Under privatisation, and with our plans to expand the interconnector between Scotland and the rest of the United Kingdom, the coal can produce electricity which can be sold freely into the British system."—[Official Report, 12 December 1988; Vol. 143, c. 639.] As my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) asked, what are the plans for the interconnector? Is it the Department of Energy, the South of Scotland electricity board or some other body that will facilitate its expansion and strengthening? My constituents and those of other hon. Members are entitled to know what will happen to the future of a vital industry in Scotland, and they are entitled to know tonight.

If the issue is to be left to market forces, and if Mr. Miller is to be allowed to import 2 million to 3 million tonnes of coal, he may be able to proceed without necessarily influencing and jacking up world prices, although I have doubts about that. Lord Marshall of the CEGB could not import 65 million tonnes of coal without having an effect on world prices. It would seem that my hon. Friend the Member for Garscadden is correct: the interests of the nation lie in security of supply, not the short-run equilibrium of supply and demand.

Mr. Miller, who does not now desire to connive with British Coal, had previously to sit down and reach long-term contractural agreements with British Coal to safeguard the supply. If that is not a vital responsibility for people with the national interest of all Scotland and the United Kingdom at heart, I do not know what is.

I have heard a lot of rubbish about what happened in the miners' strike and how we broke the miners' strike because we had nuclear power. Unfortunately, the breaking of the miners had a lot to do with the public sector. A major reason for the miners being broken in the strike—they were not humiliated, because they preserved their dignity—was the imposition and unification of what was tantamount to a national police force. When it suits them, the Government can misuse the public sector. We are interested in using the public sector for the long-term benefit of the people of this country.

The Secretary of State defended his new desire to introduce to us his views about perfect competition. We know that there is no such thing as perfect competition in the real world —page 1 of Cairncross taught us that. I notice graduates from St. Andrew's university on the Conservative Benches; I am always willing to educate St. Andrew's graduates.

Under the Scottish proposals, two companies will own the nuclear sector. That will create a company with 80 per cent. of the assets and 60 per cent. of the generating capacity. How on earth can that be called competition of any magnitude? That is prostituting competition and duopoly. The Secretary of State cannot defend that on the basis of the consumer. However, we are told that the Scottish board will have the magnificent possibility of selling surplus capacity over the wires. There will be no new capacity in Scotland before the year 2000, but the Scottish board can export it, provided that it goes to the market at a price that will bear the costs.

If the price of the Scottish assets is high, it will be difficult to sell the electricity over the wires. Conversely, that will relate to the low price of the English assets. There is a conundrum. The only way to solve it is to cook the books in pricing terms. We can suggest that here, but that does not mean to say that investors in Charlotte square would be daft enough to be taken in by such action.

We have heard about the criteria for public or private ownership. I am no slavish adherent to the public sector. The public sector should deliver facilities efficiently. I do not believe in feather-bedding any public sector employee. However, there is duplicity on the Conservative Benches.

People in the public sector are sick and tired of being praised when there is an emergency in the North sea, on the railways, or in the Soviet Union. At the Dispatch Box last week, the Prime Minister was pleased to say that the public sector would be the first to respond because London firemen were to fly out. She was cutting those firemen's facilities, but she had the cheek and audacity to praise them. We have a responsibility to the public sector to ensure that the employees are adequately rewarded.

Yesterday, the Minister of State, Scottish Office said that the Labour Government brought the organisations into the public sector with one Bill. Unfortunately, he omitted the North of Scotland Hydro-Electric Board. The test of private versus public is an extreme test when one is in difficulty. In the dark days of the war, Churchill went to Tom Johnston to argue for the creation of a public sector board for the Highlands. I am not going to quote Tom Johnston. Instead, I will quote Lord Airlie. On 9 June 1943, he said: I believe that what will happen is that in certain areas which are at present supplied by private companies, would-be consumers will be unable to get electricity on account of the fact that they will he unable to afford, after this war, to pay the charges which the private companies have to impose…There is only one way it can be done,"— he was talking about the Hydro Board— and that is for the State to do it."—[Official Report, House of Lords, 9 June 1943; Vol. 127, c. 973, 974.] That is what a traditional Tory anxious to preserve the rights of Scotland and the Scottish Highlands said. Today, we see the Tories reneging on Scottish responsibility.