| Previous Section | Index | Home Page |
8.37 pm
Sir Michael Grylls (North-West Surrey): I should like to follow the remarks of the hon. Member for Truro(Mr. Taylor), but I think that the point I made in my intervention was right. The value of something is its marketplace value, and that is what we should be considering, but we have been around that course. Decommissioning costs, as the hon. Gentleman knows very well, since he has been talking about them, have been dealt with very effectively through the segregated fund. I know that some of my hon. Friends have been very patient and want to speak, so I shall be brief.
Privatisation of the nuclear industry is one more step down the path of the innumerable privatisations that we have successfully launched and seen through during the past 16 years. The hon. Member for Truro said that it is all about money. Governments need money, and taxpayers resent being robbed of too much money, but a much more important reason for privatisation--I say this seriously to the hon. Gentleman--is freeing industry from the dead hand of government. I include our Government in that. I may be able to take the hon. Gentleman with me at least some of the way, because he has just said that his party has not opposed all the privatisations. My recollection is that the Liberal Democrats have not been very enthusiastic about them, but I shall not go down that path.
The real point is that Governments of all complexions have been bad owners of businesses. Business is the real bottom line. Our post-war history shows that to be true. Governments have been bad owners because they have
not looked at businesses in a commercial or industrial way. Too often we--I include the Labour party, and I am sure that the Conservative party has done this in the past as well--have been tempted by short-term political advantage to freeze prices in the Post Office or, when the Post Office ran telecommunications, to say that it should not put up prices because a general election was coming up, or to tell British Airways, when it was owned by the Government, that although it had plenty of passengers it could not buy any more aircraft because the Government thought that the electorate would be more impressed if they spent money on schools or hospitals.
The argument has only to be put in that way to show how absurd is the ownership of industry by government. We are bad owners. We look at things in the wrong way. We are politicians. Let us be frank: we are concerned with garnering the votes when a general election or a by-election comes along. We would not be here otherwise. Those are the things that guide us; we should not have industries near us with which we can play around.
I remember Sir Ian MacGregor saying, when he was looking after British Coal--he also successfully guided British Steel to privatisation--that when he made decisions they reverberated all the way down the organisation, and the Secretary of State would be on the telephone asking why he was doing what he proposed, was he sure it was the right thing to do and might it not be better to think again because there was to be a question in the House, or the Select Committee wanted everyone up in front of it. Businesses cannot be run in that way.
My first point is that freeing this industry is just one more step down the path of getting industry out of the hands of government--out of state control, freeing it to make its own decisions, get its own investment and recruit its own people. Some of my hon. Friends will remember when some nationalised industries could not recruit, for example, the best finance director for their businesses because they were not allowed by statute to pay them more than a certain sum of money. The Minister was nervous of saying that a finance director should be paid X in case people said that that was a lot of money and he was blamed. Putting it that way shows the absurdity of it all, but that was the world in which we lived before. Changing that world is what privatisation has been about.
If there is change, and people are allowed to run businesses properly and efficiently according to private sector rules and away from politics, in the end--as we have seen with the other privatisations--consumers will benefit. I believe that exactly the same will happen with the nuclear industry. There will be price cuts for the benefit of consumers.
We in the House of Commons should be proud that, in the earlier privatisation of the rest of the electricity industry, we were one of the first countries, including the United States of America, to try--to a large extent we have been successful--to create a competitive market for electricity. That was done not for the Conservative party, not for doctrinaire reasons, not to bring in the money, but for the benefit of consumers. Consumers who gain from a competitive marketplace.
All sorts of clever people can write articles saying that the present electricity market, with a regulator, the pool and all the complications, is not perfect--I am sure that
they can make some cogent arguments--but we should take some credit from the fact that we have started, and the market will be refined as the years go by. It is right that we should have privatised electricity generation and that we are now successfully introducing privatisation of the nuclear industry.
I grant the hon. Member for Truro that the establishment of the segregated fund is a fudge in a sense, because nuclear is special. His riposte to me was right, but I think that I, too, am right to say that the actual cost has no relationship to the market price. The hon. Gentleman is right to say that it is a fudge, but it is a balancing act between the contribution that the Government rightly feel that taxpayers should pay for decommissioning, and the contribution that the shareholders will pay for decommissioning. We can argue that the figures should be different, that there should be more for one and less for the other, but that again is a judgment that the Government have had to make. That judgment has to be right, or the privatisation will not be successful.
Mr. Matthew Taylor:
My problem is that the Government are sacrificing a known income stream. If someone is to take it over, they have to make a profit, so there must be a loss on that. The only way of making that up is by making efficiency gains in the industry, but nobody will be building new privatised nuclear stations--so how can there be a sufficient gain for the shareholders and how can the Government's return make up for the loss of the income stream? The figures do not add up and nothing the Government have published suggest that they do.
Sir Michael Grylls:
The hon. Gentleman will have to wait and see what the efficiency gains will be. We cannot prejudge the matter. It would be ridiculous for me to say that they will be X, Y or Z, and it would be equally ridiculous for him to say that they will not be X, Y or Z. We can, however, make a judgement on the basis of experience. There is no doubt in my mind that the Government underestimated the costs that could be taken out of the regional electricity companies. They were even more inefficient than we thought they were when we privatised them, and huge costs have been taken out of them. I do not know whether there will be such a big cost reduction in the nuclear industry. Let us say that it will not be so much, but I am sure that there will be a large cost reduction in getting away from the Government and running the industry efficiently.
We should also knock on the head the question of safety. Of course it is paramount. In a way, that is a ridiculous thing to say. That is true of any industry. There is nothing particularly special about the nuclear industry, except that a disaster such as occurred at Chernobyl is horrific. In an ordinary factory, a few people are hurt, which is terrible, but it is not a massive disaster that affects thousands of people. It is a question of scale, but the principle is the same.
Parliament has laid down, as hon. Members know, in the Health and Safety at Work etc. Act 1974, how industries should be run safely. The Health and Safety Executive has clearly said that it is happy with the arrangement. If it is not, it will tell the company, and the company will make changes. Once an industry is in the private sector, its directors have a clear responsibility for
safety and, ultimately, they can end up in prison if they neglect their duties. It is a serious business for the people who run companies.
I am sure--I think that the House will agree--that the industry will take the same rigorous approach to safety whether it is in the public or the private sector. It could be argued that it might be even more rigorous in the private sector, because people's personal futures and the shareholders will be involved. I believe that it will be exactly the same. I compliment those who have worked for so long in the British nuclear industry on the very high standards that have been attained, and which I am sure will be maintained in the future--so we need not have any concerns about that. The structure is in place, through health and safety legislation, the Health and Safety Executive, the duties of the directors and the general responsibilities of the nuclear inspectorate. It is a tightly regulated industry, and quite rightly.
I am confident that this privatisation will follow the path of earlier privatisations, and be another success. I hope that it will be. Some hon. Members have always been against the nuclear industry. I do not want in any way to deride them, because we are all entitled to our view, but it is wrong to carry those views forward to an industry that is successful, has a good safety record, and now has the opportunity to proceed into the private sector. I hope that it will do very well.
| Next Section
| Index | Home Page |