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That, at this day's sitting, the Ways and Means Motion may be proceeded with, though opposed, until any hour.-- [Mr. Garel-Jones.]
Queen's recommendation having been signified--
Motion made and Question proposed,
That, for the purposes of any Act resulting from the Electricity Bill, it is expedient to authorise--
(1) the payment out of the National Loans Fund of any sums required by the Secretary of State for making loans to successor companies in England and Wales which are for the time being wholly owned by the Crown, so long as the aggregate of any amounts outstanding by way of principal in respect of such loans and sums issued out of the Consolidated Fund for fulfilling guarantees given by the Treasury in respect of sums borrowed by such companies from persons other than the Secretary of State shall not exceed £2,000 million ;
(2) the payment out of the Consolidated Fund of any sums required by the Treasury for fulfilling guarantees given by them in respect of sums borrowed from persons other than the Secretary of State by successor companies in England and Wales which are for the time being wholly owned by the Crown.
In this resolution "successor company" has the same meaning as in Part II of that Act.-- [Mr. Norman Lamont.]
Mr. Bob Cryer (Bradford, South) : I am very grateful to you, Mr. Speaker, for giving me the opportunity of raising a number of questions about this money resolution, because I think the procedures of the House are remiss in one or two circumstances. One is in examining statutory instruments and the other is in examining the enormous sums of money which this House authorises. I have a number of questions, which I hope the Minister is briefed to take account of. The first is that paragraph (1) of the money resolution suggests that the payment out of the national loans fund can be made to successive companies in England and Wales, for the time being wholly owned by the Crown, up to a total of £2 billion. That is an enormous sum of money and I would be pleased to learn the terms of that loan from the Minister.
I imagine that the purpose of this money resolution is to take account of questions that have arisen in Committee, because the first money resolution does not cover expenditure which the Government now feel is required. The expenditure that we are considering is of some £2,000 million by way of loan. Will that loan be open-ended? I imagine that it will be subject to the Treasury's consent. What terms and conditions will the Treasury lay down?
Can the Minister clarify the position? Is this a way of handing over up to £2,000 million to the corporations which are, for the time being, wholly owned by the Crown, before they are taken over by successor companies--in effect, handing over this enormous sum of taxpayers' money direct to the Government's cronies who will purchase the electricity generating companies?
I am wholly opposed to the privatisation of the electricity industry.
Mr. Cryer : We are not talking about a supplement of 2 per cent. or 3 per cent. to recipients of supplementary benefit ; or the purchase of the House of Fraser. That could be bought three times with this amount. We are talking about £2,000 million.
Column 147Trade and Industry, which has not been released to the public, it was purchased through fraud and deceit with what it called funny money.
Mr. Cryer : I am grateful to my hon. Friend. The Government have been giving licence to such tactics in the City. The Secretary of State for Trade and Industry suggests that the report has been withheld from publication to avoid any difficulties in prosecution, but I think that it is because the Government want to cover the whole thing up. In this enterprise culture, large chunks of public assets are being taken from the public. The public are being robbed by this procedure. Assets are being taken from the citizenry and handed over to a clique of the Government's cronies. In those circumstances, it behoves Parliament to know exactly what conditions will be laid down for this loan of £2,000 million.
We have heard before from Department of Trade and Industry reports about loans from company directors to associated companies in which no time limits have been laid down for the repayment of loans. They have been open- ended. I want an assurance from the Government that the loans will be properly laid out, with arrangements for repayment. I want an assurance that we will not have another Blue Arrow situation, with virtually open- ended loans. I want an assurance that the taxpayer will not be left empty- handed as a result of the authorisation of this £2,000 million loan tonight.
I hope that the Minister can give me such an assurance. I am sure that he will agree that, in this enterprise culture, private firms must stand on their own feet and not be feather-bedded by loans of £2,000 million from the taxpayer. I take it that all the Government's cronies who are buying these companies are sturdy entrepreneurs who, if they were offered £2,000 million in loans from the taxpayer, would reject it as out of line with their philosophy.
Mr. Skinner : Some privatisation deals did not work out in the way that the Government anticipated. In the beginning--with British Gas, and so on--it was easy, but my hon. Friend will recall that in the case of British Petroleum, the Government underwrote the shares, with the result that the Kuwait Investment Office started buying most of BP. The Government became scared and said, "Just a minute. All of BP is being bought by people who are friends of the Al-Fayeds, who bought the House of Fraser." Consequently, the Government stepped in and asked, "Can we have those shares back? We shall give you more money to take them off your hands." It could be that the £2,000 million is only a tiny proportion of what might eventually materialise.
Mr. Cryer : My hon. Friend suggests that both the Government and private entrepreneurs can be greedy, unprincipled and unscrupulous. That takes my breath away. There is a suggestion that the Government are using £2,000 million of taxpayers' money when they claim that they are the guardian of the taxpayers' money. I want a complete and adequate explanation of why it is that that £2,000 million is needed.
I see the Chief Secretary to the Treasury sitting smugly on the Government Front Bench, apparently viewing with equanimity the disappearance of £2,000 million in loans in pursuit of privatisation. Yesterday, I visited one of the
Column 148schools in my constituency where a temporary classroom in the schoolyard has been temporary so long that its plywood panels are warping off. That school has been waiting for a new classroom for two years, yet a £2,000 million loan cannot be found to improve schools across the length and breadth of the country. Nevertheless, £2,000 million can be found to facilitate the handing over of publicly owned assets to the Government's cronies. The Government's priorities need some explaining.
Mr. Skinner : The privatisation of electricity takes account of nuclear power. In order to sell off the nuclear ingredient, the Government have had to wrap it up in coal. It is ironic that the Government are running down the coal industry but cannot sell off nuclear shares on their own, but must cover them up with coal. Consequently, the Government may not be able to sell those shares as well as they thought. Many people will fight shy of buying nuclear shares, even if they are wrapped in coal. The Government need that £2,000 million because they are not sure how well they can sell those shares.
In charge is a Minister who could not even sell computers to the Conservative Party. They all broke down. The entire Tycom computer network serving the Tory constituency parties could not be made to operate, and the whole firm went bankrupt. One can understand why this latest measure is costing the country £2,000 million.
Mr. Cryer : I am grateful to my hon. Friend for his illuminating comments. He makes a relevant point. One questions whether that £2, 000 million is a form of subsidy from a Government who oppose the principle of subsidies. As my hon. Friend says, the cost of nuclear power is enormous. The nation has been cheated. We were told by the overpaid decision makers in the electricity generating industry that nuclear power would be cheaper. It has turned out that that is not the case.
We cannot calculate the precise cost of decommissioning a nuclear power station, so we are faced with expenditure of several thousand million pounds just for decommissioning. The Secretary of State for Energy is here. If he has any hard facts that he can contribute to the discussion on the cost of decommissioning, I would be happy to hear his comments. But, of course, he has none : they are entirely unknown.
It may well be that the Minister wants this authorisation in order to hand over £2 billion to help the privatised industry to embark on the decommissioning process. I have been asking a few questions about decommissioning and the cost of running nuclear power stations, the cost of repairs and percentage availability ; and it is a pretty appalling story. Yet the Government are proposing privatisation. In view of Three Mile Island and the fact that the American nuclear power industry has not commissioned a new nuclear power generating plant since before Three Mile Island, because of the enormous cost of investment in nuclear power, it may well be that the sort of money that is being authorised here is to cushion the privatisation process and lure the shareholders into taking up the option the Government are providing. If they do not, the Government and, in particular, the Secretary of State for Energy, will be shown to be as dismal failures as we believe them to be and their policies the disaster that we know them to be.
Mr. John Maxton (Glasgow, Cathcart) : My hon. Friend will be aware that, while this money resolution talks about £2,000 million, the Bill itself, particularly paragraph 88 of schedule 12, shows that the Secretary of State has the ability to write off any debt that is incurred up to the point of privatisation. This may not, therefore, be a £2,000 million loan at all ; it may be a £2,000 million gift.
Mr. Cryer : That is a very interesting observation by my hon. Friend. I was coming to paragraph 88 of schedule 12 in a moment, but he has anticipated my remarks. There is, however, a second section of the resolution which refers to guarantees by the Treasury in respect of loans, and paragraph 88 of schedule 12 also impinges on this. I should be very interested to learn from the Minister what sort of guarantees the Treasury will give. Will they be open-ended guarantees in which they hand over a guarantee against borrowing to the privatised companies through the successor companies? Will the successor companies carry with them from the companies which are, for the time being, under this resolution, wholly owned by the Crown, the Treasury guarantees in addition to the loans? Once the companies that are wholly owned by the Crown have been wound up and have disappeared, and once the successor companies have taken over, what is the position with regard to, first of all, loans under paragraph (1) of the resolution and, second, the guarantees under paragraph (2)? We should be very wary of guarantees given by the Government on behalf of the taxpayers, because they amount to a guarantee that payment will be made by the taxpayers if there is a default on a repayment. That is surely something that we should look at. After all, when constituency Members like myself ask the Government for more money to provide better payments for people who are at the very poorest end of the scale, the Government say that they cannot afford it because it would cost another £10 million, £15 million or £20 million a year. So they cannot give family credit on a better basis or transitional payments for pensioners, which would be the guarantee after the cuts on 11 April last year--the new, savage cuts because the Government were short of money. They could not provide transitional payments very effectively.
One of my constituents, indeed, is still waiting for payment, having applied a year ago. It seems that, while the ordinary citizen has considerable difficulty in getting a few hundred quid out of the Government, a successor company may have its pockets lined with £2 billion-worth of loans and some guarantees as well.
It is not the first time that this has happened. British Leyland was sold off to British Aerospace--a company with assets worth some £750 million--for £150 million, and BAe was given £500 million to put in its pocket.
Mr. Cryer : Not Sunderland. They are quite happy to see 2,000 workers there shoved on the scrapyard and into the dole queue. It is worth pointing out that £2,000 million was put into British Leyland by successive Governments to retain jobs
Column 150and an indigenous motor vehicle industry. It is important to raise such questions in the light of the £2,000 million mentioned in the resolution.
Mr. Cryer : I have always thought that an economy should aim to provide the community at large with resources, including the provision of work. Between 1974 and 1979, the Labour Government used their best endeavours to provide work. During their 10 years in office, the present Government have never achieved the low level of unemployment that they inherited. It has been higher each year. The truth is that they do not care about shoving people on to the dole.
Mr. Skinner : When hon. Members start talking about subsidies, they cannot travel much further than the subsidies to the Common Market and the common agricultural policy. My hon. Friend knows a bit about that. He knows that £16 a week for every family in Britain goes in subsidy to prop up the West German farmers and the rest of them. We have now discovered that some £6,000 million-worth of fraud--three times as much as the figure in the resolution--
Mr. Skinner : When we talk about money and subsidies--like the £2, 000 million referred to here as "loans"--let us think about what we could do with it to provide security for the railways and airports : the sort of security that the Prime Minister was given when she went up to Scarborough. If there was any left over, we could give it to the pensioners and the National Health Service.
Mr. Cryer : I am grateful to my hon. Friend for his contribution. There is a legitimate argument for subsidies to retain jobs. The present Government use that argument in Northern Ireland. Because, they say, it is an area of high unemployment and because there is strife and trouble there, Northern Ireland has the highest level of subsidy per job in the United Kingdom. The argument adduced by the hon. Member for Leicestershire, North- West (Mr. Ashby) that subsidy is somehow wrong is simply not based on facts. If I recall correctly, the hon. Gentleman is something of a Euro- fanatic. I am not absolutely sure, because many Tory Members are very similar : they are clones, and it is sometimes hard to distinguish one from another.
The £2,000 million-worth of loans and guarantees is not specified in the resolution, but payment may be made
"out of the Consolidated Fund for fulfilling guarantees given by the Treasury in respect of sums borrowed from persons other than the Secretary of State".
So they are getting £2 billion-worth of loans from the Secretary of State and guarantees for loans from other institutions. The Government, who are giving potential subsidies to their cronies whom they hope to persuade to buy the publicly funded electricity generating industry, have given between 1984 and 1987 a total of £4.7 billion to the Common Market, yet they claim to be against subsidies.
Local authorities go cap in hand trying to get back a tiny fraction of that sum, most of which, as my hon. Friend
Column 151the Member for Bolsover (Mr. Skinner) pointed out, went to the farming community, including to cereal farmers in this country. When I see the serried ranks of the Tory party standing up and criticising farmers for receiving subsidies, then I will know that there has been a change of heart on their part.
Mr. Cryer : Is the hon. Gentleman seriously suggesting that privatisation will create more jobs? The only jobs that this measure will create will be in the advertising agencies used by the Government, in the finance houses which facilitate the placing of shares and in the paper chase that will occur in the City, although the number of jobs so created will be but a fraction of the number of jobs that have been lost in the City. But no real jobs will be created in genuine services that ordinary people can use. Every privatisation has started with claims of rationalisation but has ended with more people being put on the dole.
Mr. Rhodri Morgan (Cardiff, West) : I confirm what my hon. Friend says about job losses arising from privatisation. Indeed, 85 jobs have disappeared in the past week through a voluntary redundancy scheme at Aberthaw A and B power station, the main power station in south Wales.
Mr. Cryer : Society must provide an opportunity for people to train and improve and a chance for our young people to find jobs. The money that is being provided under this measure could be used, for example, to improve import facilities at docks so that cheap coal from South Africa, brought out of that country on the bloody backs of black miners--
Mr. Cryer : It is all very well for Conservative Members to make such remarks, but, then, some of them will have been on free trips to Namibia and South Africa, paid for by the propaganda merchants in the South African Government.
We are concerned at the thought that the British Government have been deliberately planning to destroy village communities around the pits in every major region in this country as part of a planned vendetta against the coal industry and the NUM. The Government's cronies, who share their vindictive and nasty values, would not hesitate to import coal from anywhere that people are exploited if that would make the electricity generating industry what they call competitive. The publicly owned electricity generating industry is competitive and well organised. As a matter of fact, that was recognised in the 1920s : the standardised electricity generating system and the national grid were actually introduced by Conservative Governments, who recognised the virtue of public ownership. Of course, this Government recognise the virtue of public ownership in the case of certain public services. For instance, they have not yet arranged to sell the Army off to Securicor. If the standard of competitive endeavour is good enough for the electricity industry, why not for the Royal Air Force? Why should not the RAF be sold off to
Column 152British Midland and the Royal Navy to P and O? After all, P and O is one of the great heroes of the Conservative party, and it pours money into the Conservative coffers. Do not the Government think that that company could run the Navy better, or is it just that a public service provides a more effective and efficient defence of this country?
Mr. Skinner : My hon. Friend is moving into an area of privatisation based on what could happen next. He has referred to the armed forces. Is he aware that the Government have already made inroads into the police in that respect? They have introduced an element of privatisation in respect of people being transported from remand centres and so on. As a result, a police review that is given to every Member of Parliament--unlike the Department of Trade and Industry report on the selling off of Harrods-- shows that the police are seething because they realise that this is a dilution of their jobs. Now the Police Federation is supposed to be taking- -
Mr. Cryer : I am very grateful to my hon. Friend the Member for Bolsover (Mr. Skinner) for illuminating the debate once again with a very apt comment. We are talking about £2,000 million in loans and, in addition, open-ended guarantees for loans from sources other than the Treasury. This is a very important matter.
Conservative Members claim that there is no particular virtue in public ownership. All that I am saying--in a very brief and reasonable way--by way of explanation, is that the Government are not selling off the Navy, the Army and the Air Force. That must be because they see virtue in public ownership of those forces. Labour Members say that public ownership is an important principle, and that it is a disgrace that public assets are being sold off and put beyond the control of this House.
Mr. Alex Salmond (Banff and Buchan) : If the armed forces were put out for privatisation, or to competitive tendering, would the hon. Member care to speculate what the Government's attitude would be were the Red Army to put in the lowest tender?
Mr. Cryer : What I am concerned about, as you, Mr. Deputy Speaker, rightly imply, is this £2,000 million by way of loan that British citizens are handing over to some corporations wholly owned by the Crown. We want to know what will be done with this money when the successor companies take over and follow the evil pattern of this Government. The Government have announced that when an organisation is put out to tender, by and large it is sold to any comer. So my hon. Friend's illustration is very neat : if the Army were to be sold off, we could get Russian domination by another route. That is something that I did not think of when the Government spent £11,000 million on Trident nuclear weapons to deal with the very sort of domination that they could let in by the back door--by selling off the Army.
Column 153There is also the question of control. The Minister is making notes and civil servants are ready to provide him with additional information about the issues that we have raised. When the successor companies take over, all that will disappear. It will become a Treasury matter. Ministers will not have to sit here listening to speeches by me and other Opposition Members. Public accountability will be removed. That is wrong.
Even with a publicly owned electricity industry, the position is unsatisfactory. If we table parliamentary questions, we are told that they have been forwarded to the chairman of the CEGB, and we get a letter from a public relations merchant who says that nuclear power is not quite so expensive as it seems ; it is just that we have been spending an enormous amount of money on it. That is not good enough, even in today's terms.
After privatisation we shall be unable to ask questions about the successor companies that are mentioned in the resolution. When loans are given not to the wholly owned corporation but to the successor companies, parliamentary questions about those companies will not be answered in full by Ministers. The purpose of successor companies is to remove public accountability. The spivs and crooks who rule in the City with such seedy generosity towards the Conservative party are thought by the Government to be fit people to take over this enormous industry that is so crucial to the people of this country. Townsend Thoresen directors may become directors of the successor companies. They could be steering the nuclear ship to Zeebrugge, with disastrous consequences for us all.
Mr. Frank Haynes (Ashfield) : My hon. Friend will be aware that foreigners will be allowed to buy into our electricity industry. They too will enjoy this subsidy. Is my hon. Friend also aware that some of those foreigners could be put up as a front to buy into the industry? A foreign country that supported terrorism could end up in possession of a nuclear power station. How about that?
Mr. Cryer : I am alarmed about it. There have been lots of links between private enterprise companies and Colonel Gaddafi. My hon. Friend the Member for Bolsover will recall the vitriolic criticism that money was being collected in Libya for the miners. There was a torrent of abuse, yet the Government appear to be opening the door to Libyans to buy into the industry.
I make no distinction between British people and foreigners, but I am concerned about capitalists, wherever they come from, getting hold of a public asset. In the words of the people who sold shares in the 1956 bank rate leak scandal, it is anti-British and derogatory to sterling, but it makes sense to me. They are the people who wrap themselves in the Union Jack and sell Britain down the river, if they think that they can make more money out of it.
The Minister has some questions to answer about the resolution. I do not intend to take up too much time because I want to give the Minister time in which to respond to the debate. I remind the House that as this legislation continues down its slimy path through Parliament, its disreputable origins and aims mean that the opportunities for Members to ask these questions are diminishing all the time.
Mr. Malcolm Bruce (Gordon) rose
Column 15410.54 pm
The Parliamentary Under-Secretary of State for Energy (Mr. Michael Spicer) rose
Mr. Malcolm Bruce : Further to the point of order, Mr. Deputy Speaker. I seek your ruling. I had understood that it was normal practice to allow hon. Members who rise to speak in a debate to be heard, and to call the Minister last
Mr. Spicer : Perhaps I can help the hon. Member for Gordon (Mr. Bruce) by letting him intervene in my speech, although that will take some time out of it. I feel that, as the hon. Member for Bradford, South spoke for 40 minutes or so, I should give him the answer he is looking for.
The hon. Member for Bradford, South was right about one thing : the resolution enables the provision of an upper limit on the industry's borrowing of £2,000 million while it remains in the public sector. But I thought that the hon. Gentleman missed something. He talked about the Government giving the money away to their cronies, by which I imagine he meant ultimately the British people. That is his definition of privatisation, not mine.
The hon. Gentleman asked why the figure is £2,000 million. The best way to answer that is to remind him that the latest published figure for the industry's borrowings is £1.6 billion, so the £2 billion must be seen in that context. I cannot refrain from reminding hon. Members who served on the Standing Committee on the Electricity Bill that some of them had reservations at that stage about whether we had provided for adequate borrowing during the period before the industry is privatised.
Mr. Malcolm Bruce : The fundamental question to which the House is entitled to know the answer is what has happened since Second Reading to warrant the measure before the House. After Second Reading the House voted for a money resolution of £6 billion, although my party voted against it and will vote against this one. What has happened to justify the authorisation of £2 billion more borrowing in this short space of time?
Column 155connected with the fact that we shall allow the industry to borrow short in order to re-finance the long-term borrowing that we shall insist it pays back. We shall discuss that under the ways and means motion.
Another aspect that was openly discussed in Committee, and to which I alerted it, is that as we approach the vesting of these companies, estimates of borrowing become much clearer. The moneys are comparable with existing borrowing levels. To answer the hon. Member for Bradford, South, the borrowing will be subject to Treasury consent. It will cease--the hon. Gentleman did not appear to take this on board--on flotation of the companies in the private sector. The Treasury guarantees, also covered by the resolution, will cease when the successor companies are floated.
I wanted to intervene to answer those specific points raised by the hon. Gentleman. There is nothing untoward about the money resolution. It provides for moneys absolutely in line with the present borrowing of the industry within the public sector. How the hon. Gentleman can make a 35 to 40-minute speech relating this to his prejudices about privatisation I am not quite sure, but I certainly wish to commend the resolution.
Question put :
The House divided : Ayes 185, Noes 57.
Division No. 138] [11.00 pm
Alison, Rt Hon Michael
Arnold, Jacques (Gravesham)
Baker, Nicholas (Dorset N)
Bennett, Nicholas (Pembroke)
Bevan, David Gilroy
Blackburn, Dr John G.
Blaker, Rt Hon Sir Peter
Boscawen, Hon Robert
Brown, Michael (Brigg & Cl't's)
Buck, Sir Antony
Carlisle, John, (Luton N)
Carlisle, Kenneth (Lincoln)
Clarke, Rt Hon K. (Rushcliffe)
Coombs, Anthony (Wyre F'rest)
Currie, Mrs Edwina
Davies, Q. (Stamf'd & Spald'g)
Davis, David (Boothferry)
Douglas-Hamilton, Lord James
Fairbairn, Sir Nicholas
Fenner, Dame Peggy
Fishburn, John Dudley
Forsyth, Michael (Stirling)
Fox, Sir Marcus
Goodson-Wickes, Dr Charles
Grant, Sir Anthony (CambsSW)
Greenway, John (Ryedale)
Griffiths, Peter (Portsmouth N)
Gummer, Rt Hon John Selwyn
Hamilton, Hon Archie (Epsom)
Hamilton, Neil (Tatton)
Hargreaves, A. (B'ham H'll Gr')
Hargreaves, Ken (Hyndburn)
Hayhoe, Rt Hon Sir Barney
Howarth, Alan (Strat'd-on-A)
Howarth, G. (Cannock & B'wd)
Hunt, David (Wirral W)
Hunt, John (Ravensbourne)