| Previous Section | Index | Home Page |
Mr. Ken Purchase (Wolverhampton, North-East): The Conservative party is not bankrupt of policy because it does not have one. Its energy policy, as with so many things, is to rely on the market. I shall return to that point.
It has been two short years since the Confederation of British Industry called on the Conservatives to provide a champion for industry. It wanted that because it took a sensible Keynesian approach to manufacturing and recognised that there must be partnership between industry, Government and the people. The Conservatives long believed that we could leave everything to the market. The first 15 years of their rule after 1979 were about the market. Their policy aim has been to privatise everything that they can. As the Government, they are entitled to do that. However, they have never recognised that there is a role in any economy for the pragmatic approach that some things are best done in one way, and others in another way, but that usually there is also a middle way.
Without support from a Government committed to it, manufacturing industry will fail. Indeed, it has almost failed and is only now starting to make its way back. The energy industry shows the lack of a policy save that of leaving things to the market. That will not work because the market, sensibly, is driven by profit. The idea that we should exploit the cheapest form of energy and then move on to the next cheapest form is bound to lead to disaster because its effects on the rest of the country and, most importantly, on discovery and exploitation, are unpredictable.
There is also the British Gas problem with take-or-pay contracts. It seems only a few short weeks since there were calls to assist British Gas because of the great expense of such contracts, which were negotiated only a few years ago. Now a report entitled, "The Disappearing Gas Bubble" suggests that, far from creating a loss, it is likely that British Gas will make a profit from those long-term contracts.
In respect of oil, variations have been created in the short, medium and long-term time scales such that it is difficult, without a proper policy, to make any sense of the exploitation and production of energy sources. Industry cannot work--the wheels will not turn--without sources of energy. That is why energy policy must be at the heart of industrial policy.
British Energy said that its decision not to proceed with Sizewell C and Hinckley Point C was taken because it was
Our energy companies have been exposed to possible foreign buyers. The Americans have bought Midlands Electricity and any hope that the Government may have of creating a balanced energy policy sinks further into the sunset with each buy-out. The logic of the market is not to create competition ad infinitum but to create monopolies. That is the only way in which finance capital can work. Control is impossible and despite all our
attempts to regulate, we will find that in this activity, which is so crucial to our manufacturing capacity, the state--the Government--will have to have a hand on the wheel.
Conservative Members may ask how we would pay for renationalisation. Renationalisation is not the only option. It is right to point out, however, that if the Government had not spent, given away, wasted and thrown away all the money that they have received from North sea oil and from privatisations, for example, there would be money aplenty to renationalise those industries if that was the right and proper approach to creating an energy policy.
The truth of the matter is that we cannot have an energy policy that makes any sense for the vital manufacturing sector under a laissez-faire system. Without a policy, manufacturing will always be at the mercy of finance capitalists, who see it as in their own interests to exploit that which brings them the fattest and quickest profits, without regard to what may happen in the future.
Mr. Piers Merchant (Beckenham):
I was very entertained by the speech of the hon. Member for Leeds, West (Mr. Battle). I do not know whether he intended to be amusing, although I suspect that he did not. When he was not frightening the House, however, he certainly was amusing. He seemed to suggest, for example, that a price could be too high and too low at the same time. He also pretended that he did not know anything about depreciation. The logical assumption is that he thinks that an old second-hand car should command the same price as a brand new car. If he believes that, I recommend that he tests the assumption.
I am more concerned about the serious set of deficiencies in the Labour motion itself. It is about energy policy, but it makes no mention whatsoever of energy conservation. As hon. Members have already mentioned, Labour's motion is being debated--of all weeks--in the week in which representatives of the United Nations are discussing the impact of man's activities on the global climate. I find that timing utterly bizarre.
Energy conservation is a very important part of the formula in the balances between supply and demand and between consumption and production. It should play an important role in this debate and in any discussion on energy. The Government have realised that fact, and they have introduced measures that deal with the need to take resolute action to achieve energy conservation.
I have time to mention only one such measure, but it is an important one--the home energy efficiency scheme. I pay tribute to my hon. Friend the Minister for
Construction, Planning and Energy Efficiency for the energy that he has put into making the scheme successful. Since it was introduced in 1991, 1.8 million households have benefited from grants made available to them to ensure that their properties are brought up to a high standard of energy conservation--in simple, low-technology terms, such as by the use of insulation. Many of my constituents have benefited from the scheme.
Like many other hon. Members, I have accompanied representatives of the scheme to constituent's houses to see the installation of measures that not only reduce energy use and help with the environmental problems caused by pollution but that reduce the cost of the energy used by those people, many of whom are on low incomes. The average household benefiting from the scheme has had an annual reduction of more than £40 in its energy bills. In the last full financial year, the Government put some £105 million into the scheme. That is a worthwhile contribution to the problem of energy use, cost and conservation. It is a great shame that the Opposition should be so blind as to fail to recognise the part that that plays and therefore to include it in the motion.
The motion is deficient in other ways, too. It is full of internal contradictions, which reflect the Labour party's deficiencies in energy policies and its approach to the energy industry. One question that is worth asking is: does the Labour party believe in a private sector energy industry? Labour Members owe the House a simple answer. They have opposed every measure that the Government have introduced slowly to privatise the entire industry over the past decade and more, yet they now pretend that they accept a private energy industry. However, their motion and other policy statements show that, in practice, they would restrict the market. They would bring back state planning and Government control so that we would see nationalisation in another guise. That would bring severe danger to all sectors of our economy.
Mr. Battle:
New Labour, new dangers.
Mr. Merchant:
The hon. Gentleman admits as much.
Gas consumers have benefited considerably from reductions in gas prices: industry has benefited from a 48 per cent. reduction; and domestic consumers from a 24.5 per cent. reduction. And electricity consumers have benefited from reductions in electricity prices: industry has benefited from a 10.5 per cent. reduction; and domestic consumers from an 8 per cent. reduction. Those benefits will be wiped out by a return to a command economy. Under a Labour Government, we would see the return of the sort of policies that contributed, in the last year of the last Labour Government, to an increase in the price of fuel by 2 per cent. every six weeks.
Millions of ordinary people who have invested in shares in the energy industries would also lose. Under privatisation, shareholders have gained through the long-term increase in the value of their investments, and the large yields and returns that they have brought. They would lose all those benefits if the industry was so rigidly controlled that profits were squeezed to a minimum. The Labour party admits that that is its objective. Millions of members of the public who have invested in the industry and benefited from it would lose out.
Taxpayers would also lose because, under a command economy, we would return to the day when, instead of taxpayers benefiting from £55 million in tax revenues, subsidies of nearly that sum would be required from the taxpayer.
Finally, the industry would lose because, since privatisation, it has been set free to diversify, compete and strive for greater efficiency. It has been free to pursue activities in other areas where necessary. That is part of a free market economy. It is also free to change ownership because that, too, is part of a free enterprise economy. It all adds diversity, strength and flexibility, and drives towards efficiency and a better deal for consumers.
All those benefits would go if the industry were put back into the state straitjacket. All that the Labour party has to offer are old policies dressed up in a new tinselled package, offered in a new way but representing exactly the same threats and weaknesses as its policies represented before. We should not be fooled by that.
The motion is deficient by virtually every test. I bitterly regret the fact that the Labour party could not deal with the subject seriously today and look at the real issues and challenges that the future presents in terms of energy policies.
"a sensible response to the realities of the current energy market which is characterised by an excess of generating capacity, falling electricity prices, and uncertainties over the structure of generating and distributing industries".
It calls for a balanced energy policy.
| Next Section
| Index | Home Page |