Electricity Privatisation

Oral Answers to Questions — Energy – in the House of Commons at 12:00 am on 26th June 1989.

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Photo of Ann Clwyd Ann Clwyd Shadow Secretary of State for International Development 12:00 am, 26th June 1989

To ask the Secretary of State for Energy what is his current estimate of the total costs of advertising and other expenditure to be incurred in the flotation of the electricity supply industry.

Photo of Mr Martin Redmond Mr Martin Redmond , Don Valley

To ask the Secretary of State for Energy what is the total cost incurred to date by his Department on advice on public relations and advertising aspects of the privatisation of the electricity supply industry.

Photo of Michael Spicer Michael Spicer Parliamentary Under-Secretary (Department of Energy)

No advertising expenditure by Government will take place before the Electricity Bill receives Royal Assent. It is therefore too early to provide estimates of costs.

Photo of Ann Clwyd Ann Clwyd Shadow Secretary of State for International Development

It is perhaps not surprising that the Minister ducks the question. Will he confirm or deny that the cost of pursuing the Government's half-baked dogma will be between £200 million and £370 million? Does he agree that that kind of money would be better spent on the Energy Efficiency Office—instead of halving its budget—so that it can help people to save energy, to reduce pollution and to cut fuel poverty and wastage? That would be a much better use of the money than electricity privatisation.

Photo of Michael Spicer Michael Spicer Parliamentary Under-Secretary (Department of Energy)

I assure the hon. Lady that whatever costs are incurred will achieve value for money for the taxpayer. We cannot help it if the Labour party does not like wider share ownership. We do, and we will continue to back it.

Photo of Mr Martin Redmond Mr Martin Redmond , Don Valley

Does the Minister agree that the money that will be spent flogging off the industry would be better spent reducing standard charges for old-age pensioners—or is it party dogma against old-age pensioners?

Photo of Michael Spicer Michael Spicer Parliamentary Under-Secretary (Department of Energy)

The Government are absolutely committed to the privatisation of the electricity industry, because we believe that it will achieve much better standards for the consumer, will put a downward pressure on the prices for the consumer and will achieve things that the Labour party would never have achieved in its wildest dreams by keeping the industry nationalised.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

Will my hon. Friend explain to the mixture of simpletons and troublemakers on the Opposition Benches that if, in privatising an industry, the advertising cost is more than recouped by an increase in the price that the Government get, it is a jolly good idea for the taxpayer? Will he also point out that companies like Unilever, ICI and other people spend money on advertising, and they do so because they feel that it is commercially beneficial?

Photo of Michael Spicer Michael Spicer Parliamentary Under-Secretary (Department of Energy)

My hon. Friend is absolutely right. The net benefits to the taxpayer are precisely as he states them.

Photo of Mr Hugh Dykes Mr Hugh Dykes , Harrow East

Will my hon. Friend re-examine the consumer advertising, both before and after flotation, of the area boards now and the area plcs afterwards, in view of the still prevailing serious allegations of unfair competition against the private sector retailers, notably in the form of the latest advertisements of the Eastern electricity board—"£50-worth of free current if you buy a cooker from us"?

Photo of Michael Spicer Michael Spicer Parliamentary Under-Secretary (Department of Energy)

My hon. Friend has for some time been a champion of the independent sector. The Bill and the restructured industry will recognise the anxieties that he and others have expressed by making certain that the retailing aspects of the privatised industry will be ring-fenced, kept entirely independent, and will not be able to trade in that unfair way.

Photo of Mr James Lamond Mr James Lamond , Oldham Central and Royton

Although we understand that it is Tory party policy and dogma to spread share ownership much wider, is it right to use public money to publish propaganda for that purpose?

Photo of Michael Spicer Michael Spicer Parliamentary Under-Secretary (Department of Energy)

We are absolutely committed to a policy which since 1979 has resulted in an increase in private shareholders from 3 million to 9 million. We absolutely agree with that and think that it is right in every possible sense, not least because it provides a great incentive to greater efficiency within the industry. The process of privatisation involves projecting the industry to the public.