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Orders of the Day — Utilities Bill

Part of the debate – in the House of Commons at 3:31 pm on 31st January 2000.

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Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry 3:31 pm, 31st January 2000

My hon. Friend makes an important point. By its nature, pre-payment means that many people who cannot afford it in the first place do not get access to energy. That is reflected in the figures as well.

The previous Government failed to introduce effective competition and created a system that was unstable. The result was that prices were higher than they needed to be and consumers were regarded as second-class citizens. Directors could end up getting vast amounts of money simply from being in the right place at the right time.

Furthermore, as regards energy in particular, the system that was set up paid almost no attention to environmental or social issues. Under the previous Government, the utility companies were allowed to put profits before service. They were generally sold as monopolies, with no provision for additional competition, making it difficult for new entrants to enter the market.

We need only look at the knock-down prices for which those national assets were sold. Vickers and Yarrow calculate that British Telecom and British Gas were undersold by £2.5 billion each, and Ernst estimated that the water and electricity privatisations were underpriced by £3.4 billion each—a total of £11.8 billion lost to the taxpayer because dogma was allowed to triumph over reason.