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Orders of the Day — Electricity Bill

Part of the debate – in the House of Commons at 8:19 pm on 13th December 1988.

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Photo of Mr Harry Barnes Mr Harry Barnes , North East Derbyshire 8:19 pm, 13th December 1988

When he opened today's debate, the Secretary of State for Scotland said that there is no such thing as perfect competition in the electricity supply industry. That is a simple truism. He should also have added that there is no such thing as what might be termed imperfect competition in the electricity supply industry, for the notion of imperfect competition is itself an economic theoretical concept. Very little competition is possible within the electricity supply industry. Neither perfect nor imperfect competition possible because masses of competing producers and competing consumers are required. The electricity supply industry's production is termed a natural monopoly. That term has been used by the Minister and it has been used in connection with the water privatisation Bill—that public utilities are natural monopolies. That means that they cannot help but be monopolies.

The idea of natural monopolies was introduced near the end of the 19th century by essentially Conservative theorists to explain certain changes that were occurring in society, so they said that utilities such as the railways were natural monopolies and therefore had to be regulated. That old-fashioned notion is now re-emerging in connection with how the electricity and water industry privatisations are to take place. It is not just that competition is impossible among electricity producers: it is difficult to have anything that amounts to competition among consumers. We cannot easily opt—except at great capital or consumer cost—for oil, gas, coal or electric heating, thereby turning away from the method that we previously used in the home or industry. Theoretically we can do so, and, sometimes, people will.

However, it is much less easy for consumers to opt for other utilities. We cannot have nuclear-powered microwaves—except in the sense that nuclear power can be fed into the electricity industry and used in microwaves. Nowadays, we do not opt for gas street lighting as distinct from electric lighting. We do not opt for oil-driven television sets as distinct from electrically powered ones. We do not opt for coal-fired computers. It is nonsense to claim that there is competition in those utilities.

As utilities are privatised, what is to happen to those who will control and own them? Are we to have special legislation to prevent interlocking directorships when the barons of the energy industry grow up to control what is being done? The little people might initially get their hands on a few shares that give them no control over the industry, apart from being able to ensure that it operates according to what are considered to be market principles, which means that the work force and others will suffer considerably.

In such circumstances, monopolies, duopolies, cartels, or whatever, display considerable similarities. They restrict output to raise prices, control their labour forces by their power, and manipulate demand by advertising. The Government are privatising and doctrinaire. They solidly believe in controlling people by advertising. That is exactly the technique that they use to persuade the electorate to co-operate and to sell off public assets and hand them over to small groups in society.

The only answer to natural monopolies in public utilities is public ownership, but, by itself, public ownership is not sufficient. We also require public regulation to control how the public industry is run. That means that restraint should be exercised upon any monopoly. The only possible restraints that can be operated upon the monopolies that we are talking about —natural monopolies—are those of a democratic nature. That means producer democracy in which workers operate self-management techniques, and it means consumer democracy in which consumers operate, influence and control.

One aspect of consumer democracy should be parliamentary democracy. It should be possible, through the operation of parliamentary democracy, civil liberties and rights, and parliamentary and council elections in this country, to influence what takes place. We have an elected dictatorship, rather than a democratic system. The Government are destroying the possibility of producer democracy and consumer democracy, which are the answers to any problems that have emerged.

The use of private monopoly, duopoly, cartels or whatever we like to call them in the electricity supply industry will lead to massive coal imports from South Africa and Colombia, and the destruction of the remnants of most of the remaining coal industry in this country, especially in north Derbyshire. The north Derbyshire coalfield will be under considerable threat. To try to defend its interest, the Coal Board will react by closures and the development of super-pits and opencast mining techniques. The heart of the constituency of Derbyshire, North-East can be ripped out by opencast mining techniques.

I have a map from the Opencast Executive, which shows that in the rural and Conservative areas of my constituency, which are considerable, there is massive opencast potential. In the working-class areas, where there was a great number of pits, even existing pits will be closed and coal will be mined by opencast methods. That is the approach that the Government will take.

There will also be an attack upon supply industries that have many export markets. They will be destroyed by the import of coal into this country. Shops and services and the local business rateable values will collapse. There are also social implications. In Derbyshire, for instance, 9,700 jobs are estimated by the Coalfield Communities Campaign to be put at risk because the measures that are associated with this development will produce problems. There is also the development of nuclear power and the nuclear nonsense, and the considerable environmental and social dangers that will be created by it. The Government are introducing a dangerous system of private monopoly power to be used against the interests of people.