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Orders of the Day — Electricity Bill

Part of the debate – in the House of Commons at 8:14 pm on 13th December 1988.

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Photo of Mr Andrew Hargreaves Mr Andrew Hargreaves , Birmingham, Hall Green 8:14 pm, 13th December 1988

I am grateful for the opportunity to speak in the debate because I have had experience of dealing with foreign power-generating companies and their experience is relevant to some of the proposals in the Bill.

In contrast to what has been said by some Opposition Members, I shall begin by saying that the Bill is long overdue. That is because there are no longer any valid reasons for the provision of power being in the state's hands alone, other than because of a threat to continuity of supply, strategic national interests on security. In peace time and with an increasingly sophisticated generating and distribution system, none of the reasons that I have mentioned is valid.

If one looks to America or nearer home to Finland or Socialist Sweden, one sees excellent examples of private, non state-owned generation and distribution companies providing a superbly reliable service to the customer. I remind Opposition Members that in both those Scandinavian countries even nuclear power generation is in private or non state hands and has a magnificent safety record. They should look at the relationship and shareholding structures of OKG and Forsmarks Kraftgrupp of Sweden and at Teollisuuden Voima Oy and Imatran Voima Oy of Finland. So much for the argument about whether the industry should be state-owned or private.

In welcoming the move to the private sector, I am relieved to see that efforts have been made to ensure that the progress which has been made by the CEGB on the sophistication of the national grid will not be lost in the division and transfer into private hands. I welcome the considerable emphasis on regulation and supervision when normally I would be suspicious of those things. I am relieved that the merit order dispatch system will be preserved, but I know that many hon. Members will want to question the Minister about contracts between generators. They will want to be sure that take or pay contracts, or contracts direct to customers or between supply companies and other generators, will not harm this system or make difficult the concept of a pool of generators. That is important and I am sure that hon. Members will elaborate on it in Committee.

I have already had discussions with one major consumer near my constituency who has been approached with a direct supply contract from EDF of France. The impact of this type of competition, while beneficial to customers in cost terms, should not be allowed to destroy a sophisticated system that benefits all customers, especially domestic customers, and which has taken a long time to evolve. It may place the new supply companies in a less than competitive position, and that might result in higher rather than lower costs to the domestic user.

I support my hon. Friend's contention that competition should be the best guarantee of customers' interests. I am pleased to see that the Bill lays a framework for the industry in which decisions about the industry's future and the supply of electricity should be driven by the needs of all customers and, above all, will give the industry's managers more scope to use their initiative in the interests of their customers. This is, of course, reinforced by the measures in the Bill for giving customers new rights rather than just safeguards. That is important and I hope that it will be expanded in Committee.

This is an exciting opportunity for those working in the industry and I am pleased that my right hon. Friend will ensure, when it comes to the flotation, that those who work in the industry as well as customers will be offered a direct stake in their industry. I hope that my right hon. Friend will make these proposals clear in Committee. Although the Bill leaves open some technical and operating questions which I spoke about earlier and which will need to be clarified in Committee, it is radical yet structured and deserves the support of the House.