House of Commons Hansard Debates for 13 Dec 1988

Mr. Rifkind : The creation of a private sector hydro-electric company presents an exciting opportunity to the north of Scotland. It will be by far the largest company there. As hydro-electric power has often been seen as a resource that comes from the north of Scotland, and as a renewable source in the Highlands and Islands, I thought that the hon. Gentleman would welcome the opportunity that the Bill provides for the people of the Highlands and Islands, and of Scotland generally, to acquire at least a proportion of the company providing their electricity.

Column 797

I conclude by referring to remarks made in the House on 3 February 1947 by the then Minister of Fuel and Power, Mr. Emanuel Shinwell, when moving the Second Reading of the Bill nationalising the electricity industry :

"Electricity is an all-pervading service, and if it is to be satisfactory we must maintain the closest contact with local requirements, together with a sense of local responsibility It is far from my desire that problems which can be settled locally shall be taken to London."--[ Official Report , 3 February 1947 ; Vol. 432, c.1410.]

Mr. Shinwell's solution, and that of the then Labour Government, was to nationalise 560 separate electricity undertakings and to transfer control of them to London. The Conservative Government of the 1950s broke up that state monopoly to some extent by the creation of the South of Scotland electricity board with headquarters in Scotland and answerable to the Secretary of State for Scotland. It is entirely appropriate that it should be another Conservative Government that propose taking that policy one stage further and creating two new Scottish electricity companies to meet the requirements of Scottish consumers in a more efficient, successful and dynamic way than it has been possible to enjoy for the past 40 years.

5.8 pm

Mr. Donald Dewar (Glasgow, Garscadden) : If at some point during the course of this evening I descend into a strangled squeak, it will not be due to any lack of conviction in the arguments I advance. I was not greatly impressed by the arguments used by the Secretary of State, and I hope that he will not resent me saying so--although I give him praise for making a better speech than did his Minister of State last night.

Responding to last night's debate, the hon. Member for Galloway and Upper Nithsdale (Mr. Lang), argued, almost as the theme of his speech, that the Government are privatising the electricity industry "because we bother". It would be overstating the case to say that that was a memorable comment.

The Minister of State, Scottish Office (Mr. Ian Lang) : I am grateful to the hon. Gentleman, who has obviously caught my affliction, for allowing me to intervene. If he is to quote me, perhaps he will kindly do so accurately.

Mr. Dewar : The Minister said, "We bother", and then went on to speak of anything and everything except electricity privatisation. I thought that I would help him by trying to discover why the Government have bothered to take this course. I want to examine the rationale, and to look for some of the answers that Ministers have been unable to provide.

As I understand it, the crux of the Government's argument is that, although privatisation may not produce "classical" competition, it at least produces useful competition. Competition is of course a slogan with which Ministers are at home, but it is not one that is universally applicable, and I consider it particularly inappropriate when applied to the electricity industry.

The Secretary of State for Scotland criticised the industry's record, suggesting that it had either been negligent in some way or had simply not responded properly to market forces, with the result that we had been left with a heavy over-capacity. As one of my hon. Friend's

Column 798

pointed out, that was a rather odd argument, particularly as one of the few props on which it is balanced in Scottish terms is over-capacity in relation to the interconnector and the possibility of sales south of the border.

In any event, perhaps the Minister will agree with me that the electricity industry in Scotland has been--if I may coin a phrase--"efficient, well- managed and successful" in recent years. I use those words because the Minister used them in March this year. This is not a case of the industry having to hang its head in shame ; it has done splendidly, and the Minister has said so. We are left with the assumption that, splendidly though it has done, it could do better under what I suppose would be called the spur of competition.

Mr. Beith : I am grateful to the hon. Gentleman for giving way, and I hope that he can now rest his voice for a moment.

Why is the hon. Gentleman so fulsome in joining in the Minister's praise of the SSEB, which has built nuclear capacity far in excess of demand and in defiance of the wishes of many of the communities in which it has been based?

Mr. Dewar : I do not know which communities the hon. Gentleman means, but I hold to my general point that the electricity industry has served the communities well in the broader sense. I will not be put off by the hon. Gentleman, who is very much in the second division of the Scottish league.

Let us look at the arguments on competition which the Secretary of State has used, and to which he has very fairly referred today. On 2 March he said :

"I do not consider that it would be acceptable to create a single monopoly which would place the ownership and control of the entire Scottish industry in a single set of hands, whether or not involving a regional sub- structure."--[ Official Report, 2 March 1988 ; Vol 128, c. 977.]

That was a rejection of the case argued by the SSEB, which wished for one company in Scotland with two wholly owned operating subsidiaries. The right hon. and learned Gentleman invited us to assume that, while a monopoly supplier and generator would not do, if by some sleight of hand or alchemy that single monopoly were split into two monopolies, complete in their own right, Scottish consumers would be given the necessary advantages. As an argument, that is rather lame, as I think the right hon. and learned Gentleman recognises.

The Secretary of State returned to the argument on 7 March, however. On that occasion he unveiled for the first time the argument to which he referred today, the argument about non-classical competition. He said :

"I must advise those hon. Members"--

that is, those who had made a mockery of his arguments

"that they start from a false premise, so it is not surprising that they reach a wrong conclusion. They start from the false premise that the Government are somehow maintaining that it is possible to achieve classical standards of competition in the electricity industry my right hon. Friend the Secretary of State for Energy made it clear that, in transmission and distribution, we are dealing with natural monopolies."--[ Official Report, 7 March 1988 ; Vol. 129, c. 117] I am sure that he did make it clear, and for once he got it right : we are dealing with natural monopolies. Now, with great tenacity but no conviction, Ministers maintain that we are not dealing with natural monopolies, and that a form of useful competition is being achieved. That was given very short shrift by the House and by the Select Committee.

Column 799

On 2 March the Secretary of State went on to say :

"The two-company structure will provide competitive pressures within the industry in Scotland. In the short term, there will be potential for competition by comparison--".

At that point he was interrupted by laughter, an unusual accolade for one of his efforts. He continued :

"--by which means customers will have a basis for comparing and assessing the prices and service they receive. By helping to ensure effective regulation of prices, this will be an important gain for the consumer."-- [ Official Report, 2 March 1988 ; Vol. 128, c. 977.] If the Secretary of State believes that, he is the only person who does. The Select Committee on Energy, chaired by the hon. Member for Havant (Sir I. Lloyd) and with a Conservative majority, pointed out that yardstick competition was largely meaningless. That was a pretty fair and balanced summation.

I am prepared to concede that in theory there may be some marginal advantages for large industrial consumers, but only for a small handful, certainly in Scotland. Almost all other industrial consumers, and certainly all domestic consumers, will see the "competition by comparison" argument as empty and rather cruel nonsense. I believe that even in Government circles there is a lack of confidence about it. In their response to the Energy Committee report, at paragraph 62, the Government refer to

"Indirect competitive pressures The key role of the Director in analysing and publicising the performances of the two companies"-- here they strike a rather anti-climactic and unconfident note-- "should not be under- estimated."

It probably should not be underestimated ; it would certainly be very difficult to overestimate it. I should have thought that if it exists at all it is at the margin of the edge of any reasonable argument.

Let us suppose that I am a domestic consumer in the city of Glasgow--part of which I happen to represent--and, following the advice of the Secretary of State, do a comparative study in depth. I get hold of all the regulatory tables and figures and come to the conclusion that the privatised monopoly that services me is not doing the job that it should be doing. What can I do? I challenge the Secretary of State for Scotland to tell me what I can do except continue to take the electricity and nurse my anger to keep it warm.

Mr. Rifkind : May I make two points? First, certainly nothing could be done at present. Secondly, under the Bill, for the first time the consumer will be entitled to compensation if he is receiving inadequate services from his electricity company. I understand that the hon. Gentleman is proposing to vote against the Bill containing those provisions.

Mr. Dewar : If I can find a chartered accountant who will, on an analysis of financial performance, return on capital, assets and tariffs conclude that the SSEB--or a successor private company--is doing worse than, let us say, the East Anglia board, can I lodge a claim for compensation?

Mr. Rifkind : First, the hon. Gentleman knows perfectly well that we were talking about standards of service. Secondly, he should remember that bulk purchasers of electricity will indeed be able to change their source of supply, which they certainly cannot do now. Again, the

Column 800

hon. Gentleman is saying that, because perfect competition is impossible, we should stick with total monopoly.

Mr. Dewar : I do not think that for the vast majority of consumers there will be any competition worth talking about. The advantages being advertised simply do not exist, and the Government should face up to that.

The Government have been caught in complete confusion over their arguments. On the one hand they boast that privatisation will be an enormous asset : they have to do that to bolster the competition case. On the other hand they boast that regulation will stop or at least limit the damage that would result if competition actually existed.

The major point that the Secretary of State is making again and again--he made it, fairly, during this debate--is that Government interference in the electricity industry is a bad thing, as are inhibitions placed on managerial judgment ; that they should be done away with, and would be at least diminished by privatisation. On 7 March, the right hon. and learned Gentleman referred to the inevitability that

"any industry controlled by Government is subject to interference from Government."--[ Official Report, 7 March 1988 ; Vol. 129, c. 116.]

There is some truth is that, although interference is a pejorative way of putting it, yet in almost every speech the Minister will be spiriting up as a reassurance the all-embracing omnicompetent registrar, suggesting that he will protect us against the dangers and the damage that could result from competition and from handing over an essential service to a company that is run on the basis of profit and the interests of the shareholders.

Paragraph 29 of the Select Committee report states :

"There will be a price control formula which will limit the price to be charged to consumers."

We are being reassured that there will be someone to limit the price rises that we would have expected if we merely handed over a natural monopoly to a group of directors with a legal duty to maximise profits for the shareholders. That is the essence of our case. The Government are asking a group of directors, a private company, a profit engine to act in a way not normal to such an animal. On one hand the Government are saying, "That is what we are creating," and on the other hand they are rushing to stop it acting in the way for which it was built by appointing an all-powerful registrar.

Non-classic competition simply will not do. As the Secretary of State for Energy said, it is a natural monopoly, and natural monopolies force up profit margins and prices and have to be regulated. That is the catch 22, the inconsistency in the Government's case which has not been answered properly.

Mr. Allan Stewart (Eastwood) rose --

Mr. Dewar : I am happy to give way to the only Scottish Conservative Member in the House.

Mr. Stewart : Does the hon. Gentleman agree that, whatever may be the case about distribution, generation is certainly not a natural monopoly?

Mr. Dewar : It will be an actual monopoly in Scotland. If the hon. Gentleman dislikes that, no doubt he will table a relevant amendment to the Bill when the opportunity arises.

Column 801

I now turn to the arrangements for the regulator--a rather odd and distinctive argument. The Bill is silent here, and I take the Minister's point that it is not necessary to spell out which Secretary of State will be in control or which Secretaries of State will have a finger in the pie. However, there is a case for a separate regulator for Scotland. The arguments were set out perfectly well in the Select Committee's report to which I have referred. Paragraph 60 of the Select Committee report makes it clear that there will be a separate office in Scotland and a separate Scottish official who will

"be responsible to the Secretary of State for Scotland for all he does in relation to the Scottish industry."

Logically, there should be a separate regulator. It is not a matter of enormous principle, but that would be the sensible, practical approach. I certainly prefer the views of the Select Committee to those of the Secretary of State.

I am disappointed by what the Secretary of State had to say about the independence of the companies being created in Scotland. I make my point more forcibly because my disappointment was sharpened by the trailing in the press of the important and exciting things that the Secretary of State would say. Today's edition of The Scotsman remarked that he would

"outline the powers that will be taken to act as a barrier to a takeover from abroad or from England."

However, we received only an interesting account of the possibilities of share ownership in Scotland, but no guarantees as to how the control or the independence of the companies would be maintained.

This is not a minor point, and as the Secretary of State knows it is spelt out again in paragraph 14 of the Select Committee report : "The electricity industry is of considerable strategic importance. The new companies will therefore be protected from unwelcome takeover by the retention by Government of a special share."

We are entitled to a good deal more detail than that. Perhaps the Minister who replies to the debate will say something about it, as presumably it applies in England as it does in Scotland.

The Scottish companies will be small--certainly the northern company will be small by international or United Kingdom standards--and I should have thought that they will be open to a predatory raid. I hope that we shall hear something about the defences that will be put in place and how those defences will be manned. I am sure that the Minister will accept that there is cynicism in Scotland, particularly after the Britoil experience, about golden shares and the reserve of powers to Ministers. It is very important that those matters are spelt out adequately during the passage of the Bill.

Perhaps the Minister, or the Secretary of State for Energy, will say a few words about the terms and conditions of the sale and when the Scottish companies are likely to be on offer. Has a running order been decided? I am told, and there are certain strong rumours, that four English distribution companies will go first, then one of the generating companies and then possibly one or both of the Scottish companies. It would be fair and useful if we were told about those decisions, if they have been taken.

I was also disappointed that the Secretary of State remained pretty mum about the interconnector. We all know that its present capacity is equivalent to 850 MW and that plans or a scheme propose its expansion to 1,600

Column 802

MW. Obviously that is immensely important in terms of the coal burn in Scotland and the capacity of the Scottish power generating industry. I am told that the cost will be £180 million. I am not sure whether it will go ahead before privatisation, or if not, whether the English distribution companies or the Scottish Office will make a contribution to the costs. Again, we should know about that if we are to have an informed debate about the future.

Mr. George Robertson (Hamilton) : My hon. Friend makes some very cogent points about the Scottish dimension of this important Bill. Will he reflect on the absence from the particularly Scottish dimension of the debate and the previous debate, when Scottish public expenditure was considered, of the brand-new hon. Member for Glasgow, Govan (Mr. Sillars)? The hon. Member for Govan told the House, and constantly has been telling Scotland, about the way in which he would oppose the Conservative Government. He has not been here this afternoon, but I was telephoned by an irate constituent who saw the hon. Member for Govan at 1.30 pm today doing his Christmas shopping in Marks and Spencer in Argyll street, Glasgow. [Laughter.] Is it not amazing that on the very afternoon when the Secretary of State is making his diabolical statement about public expenditure, the man who was going to take Parliament by storm--the hon. Member for Govan--is not here?

Mr. Dewar : Occasionally, I think that we hear to much about the detailed doings of the hon. Member for Glasgow, Govan (Mr. Sillars). However, I share my hon. Friend's astonishment, particularly as the hon. Member for Govan might have seen Christmas as an unpleasant English importation into Scottish culture.

Mr. Salmond : I am having some difficulty with my arithmetic. I was trying to do a quick count of the number of missing Scottish Labour Members. I do not know whether they are doing their Christmas shopping, but perhaps the hon. Member for Glasgow, Garscadden (Mr. Dewar) will help me and give me the official version of where they are?

Mr. Deputy Speaker (Mr. Harold Walker) : Order. Interventions do not help us get on with the debate. Many right hon. and hon. Members seek to take part in a debate and interventions will have to be taken into account to determine who catches the eye of the occupant of the Chair.

Mr. Dewar : I promise you, Mr. Deputy Speaker, that it is not my fault. I am doing my best.

I turn back to the much less interesting subject of the debt structure of the SSEB, which is about £2.7 billion. It is not often remembered that the debt of the north of Scotland board is just as heavy pro rata as that of the southern board, which is not surprising as it has pooled generation and distribution costs. Despite what the Minister said about no decisions having been taken, I hope that he will at least note that we expect to have some details of what is intended, at least in Committee. Clearly, the amount that will be written off will affect the price of the share offer and have an impact on people's ability to afford electricity. I hope that the Minister will be more forthcoming.

Last Friday, in The Scotsman under the byline of Mr. Keith Aitken, the industrial editor, there was an interesting report of a meeting in Torness held by Mr.

Column 803

Donald Miller, the chairman of the SSEB. The burden of Mr. Miller's remarks was that the company cannot be privatised

"unless the Government writes off a large part of the £2.2 billion debts it incurred in building them."

He was referring to nuclear power stations. Clearly, the electricity board is as anxious as hon. Members. I hope that in Committee we shall hear more from the Minister.

I turn to the important matter of nuclear power. The Secretary of State has decided that there will be a nuclear company which will hold all the nuclear capacity of the south board and will be wholly owned by the south and the north companies in a 75:25

proportion--there has been some debate about the precise proportion. I understand that the minority position of the north board will be protected in the memorandum and articles of association and that there will be reserved functions--it sounds a little like the voting structure of the EEC. I gather that there will be reserved functions in terms of capital expenditure, pricing policy and so on, where the unanimity rule will apply. Apart from that, the company will run as a normal company. The Minister may want to say something about that point.

I should like the Minister to address his mind to the extraordinarily strong words uttered by Mr. Donald Miller, the SSEB's chairman, when dealing, not with the physical dangers but with the financial dangers of having an electricity board concerned with a substantial nuclear presence. Mr. Miller was blunt, strong and almost brutal on the subject. He said that there were a large number of uncertainties and unquantifiable possible costs which were dependent upon Government policy and the pricing policies of British Nuclear Fuels plc and which could create problems for any private company trying to operate. As the Secretary of State knows, Mr. Miller has good reason for fearing that problem. The SSEB's annual report for the last financial year shows a trading profit of about £13 million, which was promptly converted into a loss of £70 million because of the costs of transferring Chapelcross to Cumbria, the reprocessing costs--which the board had planned to postpone for decades but was told by the Government it could not--and the ever-escalating BNFL reprocessing charges.

Mr. Miller's message to the Secretary of State--it is important in view of its source--is that, unless he gets an undertaking that clause 88 will be fully implemented and the taxpayer will underwrite any of those bills as and when they come and unless he gets what he declares to be the "ultimate insurance", the company will be unsellable.Mr. Miller says that those assurances

"will have to be signed and sealed before one writes a prospectus-- otherwise it will not be worth writing."

That is a serious charge, coming as it does from the person who, presumably, will be the chairman-designate of the new private company. He says that his company will be unsellable unless he gets a great deal of information and a guarantee from the Government under clause 88.

Mr. Miller says that the Government must respond now and accept those liabilities on behalf of the taxpayer. If the Minister accepts that, there are serious repercussions for the taxpayer and the scheme's viability and acceptability. If he does not, we should in all honesty have--after all the glitz and the glamour and the wonders worked by the image-makers in the television advertising campaign to sell the company--a Government health warning saying, "Despite all this, the chairman of the

Column 804

company believes that his company is unsellable in the absence of guarantees that we are not prepared to give." If we doubt whether the honesty to give that guarantee and to face up to the problems will be forthcoming, we are entitled to say that there is a fundamental flaw in the scheme.

I ask the Secretary of State for Scotland to respond on this point. That is the bluntest possible warning from Mr. Miller and it is essential that the Goverment respond to it. [ Hon. Members :-- "Come on."]

Mr. Keith Mans (Wyre) rose--

Mr. Dewar : I am sure that the hon. Gentleman has an honoured place in the Conservative kindergarten on Scottish affairs but I am interested in the attitude of the Secretary of State. Does he accept the point made by the SSEB's chairman that the SSEB cannot be responsibly, sold unless we spell out the taxpayers' liability under clause 88? Does the Minister accept that or does he repudiate it, and, if so, on what grounds? [ Hon. Members :-- "Answer."]

The Secretary of State will not be surprised to know that we shall return to this matter at some length during later stages of the Bill. With such an important statement by such a central figure in the public domain, the Secretary of State is letting himself and the House down by refusing to address himself to those remarks.

Mr. Rifkind : As the hon. Gentleman is aware, the Bill already provides for certain guarantees and for certain provision to be made by the Secretary of State in appropriate circumstances. No doubt we shall have plenty of opportunities to consider the precise terms of the clause in question.

Mr. Dewar : Unless we get further information before we come to the selling point, we are entitled to go around quoting Mr. Donald Miller as saying that the company cannot be prudently bought by a prudent investor. I hope that that aspect will be properly represented in the Government's doubtless balanced advertising of the issue. With the Secretary of State, I have watched with fascination the growth of the energy debate, especially the debate on nuclear power. I am used to Ministers lecturing us. The Minister of State, Scottish Office did so yesterday. We are used to board chairmen courteously instructing us about the "competitive cutting edge" and the absolute advantage for the consumer, the board and the commonweal of Scotland of the nuclear baseload. The message is that every commercial piece of logic would drive any sensible board down the nuclear road. But then I read what is in the Bill--the references to fossil fuel levies and the 20 per cent. statutory obligation on generating companies. Now we have Mr. Donald Miller pointing to the dangers and uncertainties with which industry must live when 60 per cent. of the units sold, as in Scotland, come from the nuclear baseload. More interesting is Mr. Miller's view that, whether the industry can or cannot live with it, shareholders cannot be expected to do so and the taxpayer will have to take the strain. It is essential that the Secretary of State spell out exactly how much will be available and what it will cost, and that he come clean. He knows, as I do, that the public are nervous--they raise this matter repeatedly with hon. Members on both sides of the House--about the handover to the private sector of such a sensitive aspect as nuclear power. The scramble to reassure people with references to

Column 805

the nuclear installations inspectorate and the control which will be tightly imposed does nothing to eliminate the persistent and clamouring doubt that safety standards will possibly be squeezed in the long run and that we are moving a particularly inappropriate industry out of the public sector and putting it into the hands of the private sector.

The Government cannot walk away from the strategic decisions that must be taken and that dominate this important industry. My hon. Friend the Member for Dumfermline, West (Mr. Douglas) said that vital talks will take place over the next few days on the coal burn in Scotland and the contracts between the SSEB and British Coal. I use the word "vital"--a much misused term--advisedly because the future of the industry and the jobs of thousands of people could be at stake. The Minister talks about opportunities and challenges in a sort of dismissive way, a pep talk for the young. There has been major investment in our coal industry and designated pits have been sunk, such as those in the area of Longannet, to serve the power stations. Security of supply is still a weighty consideration in this nation's energy planning--or it ought to be. The Peterhead station will take 50 per cent. of its energy in the form of sour gas from the Miller field. British Petroleum is talking about importing coal from Australia and other companies are talking about importing it from Lord knows where else.

In 1987, the South of Scotland electricity board responded to the Monopolies and Mergers Commission audit report by making it clear that it did not think that it was in the long-term interests of its consumers, or in the public interest, to start importing all its coal rather than taking it from the Scottish fields. The board was right then and it will be right now to rethink what we understand to be its present position.

Mr. Mans : Is the hon. Gentleman saying that the Scottish industry or Scottish consumers should suffer a coal tax so that Scottish coal can be bought, even though it turns out to be even more expensive than imported coal?

Mr. Dewar : No, I am not saying that. I hope that the hon. Gentleman will apply the prejudice that he has just displayed to the fuel tax that is contained in the Bill.

There is a strong national interest in maintaining security of supply. That is what weighed with the SSEB in 1987, and it should not dismiss that consideration now. Of course, the Minister may say that it is different now because the industry is to be privatised and that there is no need to bother about the national interest to the same extent. If that is the argument, it reinforces the case against the Bill a hundred times. We have been trying for months to coax, persuade, or even force the Minister to go beyond the pious hopes that he has expressed that some agreement can be reached. We have not succeeded, but we shall continue to try because this matter is of real and vital national importance. We at least recognise that there is a public interest in the debate. The Government should recognise what we know to be there.

I note that the SNP amendment has been selected for a Division, and I shall advise my right hon. and hon. Friends to vote for that amendment. No doubt the Committee will be selected very shortly. Whatever the Minister's view about a separate Bill and the process of parliamentary

Column 806

scrutiny, he will surely join me in saying that it is important that the distinctive Scottish aspects of the argument to which he properly addressed his attention in his 30 to 40-minute speech are properly examined and echoed in the Committee. This is an important point, although it may sound like a narrow, procedural one. I hope that he will agree that that cannot be done if the Committee is cast on such a scale that it will contain, at most, two or three Scottish Members apart from a Front Bencher. We shall press, and shall expect to have his support, for an unusually large Committee on which there can be proper representation, not only by my hon. Friends but by hon. Members in all parts of the House. I am glad to see that the hon. Member for Tayside, North (Mr. Walker) is offering his services, as ever, in this cause. What a trooper!

We look at the Bill with growing gloom. I accept that it is attractive to the Treasury and I suspect that it has a great deal to do with the greater glory of the Secretary of State for Energy. Perhaps, if the price is outrageously discounted, there may even be something for a few shareholders looking for a quick profit. However, there is nothing in it for the consumer and nothing for the nation. When we look, for example, at the history of the gas industry since privatisation in terms of consumer experience, we see some of the warning examples that lead me to that conclusion.

I acknowledge that we know a little more about the Government's plans, although we still do not know enough. We have seen some horse trading on assets between the north and south boards. We have seen 600 MW of coal capacity being swapped for the Cruachan pumped storage system and we have seen 50 per cent. of Peterhead up for transfer and bought. All the patching and all the switching does not produce a plausible vehicle that can be offered honestly for sale to the people of Scotland or to people in any other part of the United Kingdom. There are too many ambiguities, confusions and internal flaws for the Bill to carry any real conviction.

The Government are not succeeding in convincing Scotland that its hostility to a measure that offers it nothing should be abated. Tories that I talk to in Scotland see it as driving the privatisation obsession past the edge of reason. The Government are taking a great public utility and turning it into a fragmented private monopoly, but still into a monopoly. It is asset stripping on a grand scale. It is not some sort of mean folly, but massive irresponsibility by the Government. They should think again.

In one of his early press statements the Secretary of State for Energy described the Bill as evolutionary. I think that that means that it has not been thought through properly and he knows that he will have to come back to the House with many amendments to try to get it creaking in some sort of unsatisfactory way. We want none of it, and we shall vote accordingly.

5.45 pm

Mr. Allan Stewart (Eastwood) : I reside in the constituency of Glasgow, Govan and welcome the news given to the House by the hon. Member for Hamilton (Mr. Robertson). I am a fairly typical constituent and I have no doubt that all the other constituents of the hon. Member for Glasgow, Govan (Mr. Sillars) will be as appalled as I

Column 807

am at the disgraceful and scornful way in which he clearly regards his duties in the House on behalf of his constituents.

[Interruption.]

The Labour party has presented a wholly bogus argument about the need for separate Scottish legislation. However, my right hon. and learned Friend the Secretary of State for Scotland clearly showed the case against that. It would be absurd to have two Bills, each with more than 100 clauses, when about 98 of those clauses would have been identical in both pieces of legislation. Some of the five or six separate Scottish clauses are simply technical.

The hon. Member for Glasgow, Garscadden (Mr. Dewar) made a great deal of his allegation that there would be an absence of control by consumers in the new privatised undertakings. Of course, that is a good argument for him to become a shareholder, because with other shareholders he could exercise his power, if he thought it necessary, to remove the board of directors of the privatised company. He could do that if he and other shareholders were dissatisfied with the board's performance.

In the short time available to me, I should like to make two points. First, we are clearly transferring financial control from the centre to Scotland. The Opposition have not appreciated that. Of course the Scottish Office is the present sponsoring Department for the two boards, but in any nationalised industry, financial control ultimately rests with the Treasury in London. We are now moving towards control being exercised by the boards located in Scotland. A board will be able to make its own investment decisions unaffected by the necessary constraints that the Treasury under any Government must impose for its own reasons. That is true, even under a Labour Government.

Next Section

Home Page