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Industry and Education

Part of the debate – in the House of Commons at 3:58 pm on 21st November 1994.

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Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade 3:58 pm, 21st November 1994

Madam Speaker made it absolutely clear that many hon. Members wish to speak in this debate, and I have already given way several times.

The gas competition Bill will aim to bring genuine competition to the gas market by creating a framework that will allow competition to be phased in to the domestic market, starting from April 1996. The average domestic gas consumer, who has already benefited from a fall in gas prices of more than 20 per cent in real terms since privatisation, will reap further benefits. I cannot authenticate the claims of those who want to enter the marketplace, but it is common to hear suggestions of price reductions approaching 10 per cent.

Under the Bill's provisions, newly licensed suppliers will be able to enter the domestic gas market, providing 18 million customers with choice for the first time. Competition will place powerful downward pressure on costs and prices and will provide a strong incentive for efficiency. It will promote innovation and development of the products and services that customers will choose.

Gas suppliers will be required to adhere to codes of practice in order to meet certain social obligations regarding procedures for debt and disconnection, the care of older and disabled customers and the provision of energy efficiency advice. We will have the opportunity to discuss this matter at length when the Bill comes before the House for a Second Reading.

I now turn to the privatisation of the commercial activities of the Atomic Energy Authority. As my right hon. Friend the Minister for Energy and Industry made clear last February, ownership and the safe management of the UK's atomic energy and nuclear responsibilities will remain in the public sector. The technology wing of that organisation, which deals with science, engineering and business and selling technical, environmental and safety advice, will be privatised.

The privatisation process will enable AEA Technology to realise the full potential of its commercial activities, allowing it the freedom to sell its services as it is and not as the Government see fit. It will benefit consumers and, of course, add to national competitiveness.

It is some time since we debated coal in the House. On 12 October I was pleased to announce that we had identified the preferred bidders for the regional coal companies and certain care and maintenance collieries. Subject to further detailed negotiations with each of the preferred bidders, we aim to complete the sales by the end of this year.

It might interest the House to look back over the past two years at what was said and what has actually happened as a result of the privatisation process. British Coal has ceased operation at all but 16 pits, including one which is in development. All of these pits will transfer under the privatisation packages.

Four other pits where British Coal has ceased operations are the subject of bids as part of the privatisation process, and an interest in another one—Frances— is being pursued. In addition, nine pits that British Coal had closed were licensed to the private sector in 1994. A total of about 30 collieries are likely to be operating in the private sector in 1995, compared with the 16 that British Coal currently runs.

The House will want to remember precisely the validity of the forecasts that were made when we took our difficult but courageous decisions two years ago. The Chairman of the Select Committee on Trade and Industry, the hon. Member for Sheffield, Central (Mr. Cabom), told us that we would have only 15 pits in two or three years' time. The hon. Member for Livingston (Mr. Cook), the Opposition spokesman on trade and industry, made his position clear: that 50 pits had been in operation at the time of the general election and that in the next month or two there might only be 15. For the hon. Member for Livingston to be only 100 per cent. out is, by his standards, to score a bull's eye. It is worth looking at the matter in more detail.