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Orders of the Day — Electricity Bill

Part of the debate – in the House of Commons at 8:09 pm on 13th December 1988.

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Photo of Mr Allen McKay Mr Allen McKay , Barnsley West and Penistone 8:09 pm, 13th December 1988

I wish that we had more time to develop the arguments advanced by the hon. Member for Thurrock (Mr. Janman) because we could show the House how wrong he is. I shall deal with two of the matters that he raised, the first of which is consumer choice. There is no such thing in the Bill, and the consumer cannot do a thing about it. He has to take the electricity that is supplied to him. The domestic consumer does not have a row of switches enabling him to take his supply from a Scottish board, a Yorkshire board or a board in the south. He must take the electricity from wherever it is distributed. He has no choice in the matter and it is time that we got away from that argument.

I should like to nail the lie about price increases in 1963, 1964 and 1965. I worked for British Coal from the 1950s up to the 1960s, and we said at that time that the Labour Government were wrong in their policies towards the coal industry. We told them that the Arabs would not always live in tents. That proved to be right, because in the 1960s the price of oil was increased not two or three times, but four times. That was the reason for higher prices to industry. The Government were warned then, and we are warning the Government now, to be careful how they treat the electricity industry. In the Army there used to be a saying, "If it moves, salute it, and if it doesn't, whitewash it." That is the Government's idea of privatisation. Everything goes and they are whitewashing the costs of nuclear generation.

The generation and supply of electricity are not marketable commodities. This is a key strategic industry, but what is wrong with it? It is clearly efficient and provides an excellent service and the customer trusts it. I am not convinced by the argument about competition. Perhaps later the Minister will explain where the competition will come from and how it will arise. Perhaps he will also give us an estimate of how much prices will fall. We have been told that prices will continue to fall, but the Minister should say when that will happen.

Electricity is a marvellous commodity. One cannot hear it, touch it, taste it or smell it and it cannot be stored. It must he used at the point of production. The Government are selling something that we cannot hear, smell or touch. This is competition in the industry, because the merit system used by the distribution boards ensures that electricity is supplied at the cheapest possible price. Anybody who goes to the distribution boards to see how they work will see that, if a small pump breaks down and causes an increase in the generation price, it is stopped and the next cheapest one is used. That goes on throughout 24 hours.

The Magnox nuclear power station is nearing the end of its life, and will probably finish in about 10 years. We have five AGRs and three of them are not working properly. Millions of pounds have been poured into those three AGRs to try to get them working before privatisation. The generating boards will tell any hon. Member who wants to ask that Magnox electricity is far dearer than that produced by a coal-fired power station, that AGR electricity is marginally dearer than coal-fired electricity and that the PWR electricity is the only one that is cheaper. However, we have only one of those. It is said that we need four more and that they will cost £6 billion.

Who will pay £6 billion without an assurance that at the end of the investment there will be a sale? That is what it comes down to. Clause 4 of the Bill makes it an offence to (a) generate electricity for the purpose of giving a supply to any premises or enabling a supply to be so given;(b) transmit electricity for that purpose; or(c) supply electricity to any premises unless the Secretary of State gives a licence.

People who talk about small power stations being allowed to operate are fooling themselves. The Secretary of State will not allow small power stations. He wants to ensure that they do not compete with nuclear power stations so that they can be kept. That is what the clause is all about. If that is what the Government intend to do, they should say so. Of course we shall continue to oppose them, but there is far more of a quarrel when they try to cover things up. Who will bring in small generating plants and feed the electricity into the grid? If such small generating stations are allowed, what will happen to the large boys and to the £6 billion that is to be invested? They will not allow small generating stations to depress their profit margins. The domestic customer, not the industrial customer, will suffer.

Prices will not decrease—they will increase. My hon. Friend the Member for Sedgefield (Mr. Blair) was right when he spoke about a 25 per cent. increase in prices. The figures have been worked out and I am sure that my hon. Friend is correct. There will be no competition and no consumer choice and there is no need for the Bill.