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Orders of the Day — Electricity Bill

Part of the debate – in the House of Commons at 7:36 pm on 13th December 1988.

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Photo of Mr Terry Patchett Mr Terry Patchett , Barnsley East 7:36 pm, 13th December 1988

I do not propose taking up a great deal of time, as I am anxious to hear the contributions of Conservative Members. This is the second day of debate on the Bill but, as yet, I have heard not one convincing argument from Government Members, including the Secretary of State, for privatising the electricity supply industry. We keep getting a parade of parroting about competition and its benefits to the customer, which, I feel sure, Conservative Members know in their hearts not to be true.

Private power companies may be forced into making deals with large industrial users, such as car manufacturers, who may threaten to build their own generating plants as part of their bargaining power in negotiating electricity prices. No such tactic is available to the domestic consumer. Where industrial users take advantage of the new situation, the power companies' shareholders will expect them to find their profits from elsewhere—and they can come from no other source than domestic users.

Much has been said about competition, but there is only likely to be any between the big City corporations, over which of them is prepared to pay more into the Chancellor of the Exchequer's kitty to reap the benefits of the captive market. They are the "fat cats" to whom my hon. Friend the Member for Clydesdale (Mr. Hood) referred yesterday. They can do so safely, in the knowledge that a great deal of the money that they pay to the Chancellor will be returned to them personally by way of promised tax cuts. So those people will win twice on the deal.

It is ironic that, while the Government appear to advocate competition, they consider it unfair that the nuclear power industry should compete equally with other energy sources, and they insist on its being guaranteed 20 per cent. of the energy market. Not only that, but the Government are prepared to prop up the nuclear industry, given the unknown costs of decommissioning nuclear power stations in the future. The Government leave the nationalised coal industry to fend for itself in its battle against cheap, subsidised foreign coal that is flooding the world now, but which may not be available at a future date, by which time the Government's policies may have annihilated our domestic coal industry.

The Government are not only deserting our coal industry but openly and actively contributing to its downfall, even to the cynical use of private Bills. The North Killingholme Cargo Terminal Bill and others like it were introduced as private Bills, then openly and avidly supported by the Government payroll vote. The last time that the Killingholme Bill came before the House, there was an open if unofficial Whip on it: the Government had put a two-line Whip on the business that followed it, when they knew that there would be no vote on the matter. The two-line Whip was dropped immediately after the vote had been taken on the private Bill.

I deem that cynical politics, and would expect it to leave a nasty taste in the mouths of Members of Parliament who believe in the parliamentary procedures of the House. The only reason for supporting that Bill was to allow easy access for cheap imported coal and to decimate our own coal industry, which would have considerable difficulty in competing with cheap imports born of subsidies and cheap labour—even, in some instances, child labour.

It has been estimated that unrestricted foreign coal imports by privately owned power stations could lead to the loss of 160,000 jobs, of which 65 per cent. would be in the coal industry. That would decimate constituencies such as mine, which are already reeling under high unemployment because of the Government's earlier pit closure programme. The number of collieries is expected to halve. By 1992, British Coal will be reduced to 48 collieries employing 45,000 people and producing between 73 million and 80 million tonnes of coal a year. That forecast is based on coal imports of 40 million tonnes.

The level of import penetration in the electricity industry will ultimately depend on the relative value of sterling. Nevertheless, there are reasons for expecting a massive increase. For example, the coal division of British Petroleum is understood to have held informal talks in Britain about the possibility of buying Australian coal for power generation. Despite the extra transportation costs, BP believes that it could undercut British Coal by quite a margin. While private electricity industry may gain from such deals in the short term, our country will lose. Not only will our balance of payments be affected, but huge numbers of people will be out of work and have to be paid dole rather than contribute from their taxes, as they would much prefer to do.

The Bill has been described by an outside expert on the electricity industry as a mixture of political prejudice and technical ignorance. The industry itself cannot easily forecast supply and demand, which can fluctuate daily. In an emergency, when demand may shoot up surprisingly in a few days, we are told that the various groups would have to co-operate rather than provisions being included in the Bill to control such an emergency.

We are asking companies to compete to benefit the consumer; in a crisis, however, they are expected to co-operate with one another. That seems to me a contradiction in terms. The electricity industry is much too serious a matter for this flippant Bill, born out of pure political dogma and with no concern or benefit for the consumer. It is merely yet another example of the Government's selling off the family silver to prop up their economic policy—which, like the Bill, is a complete failure.