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9.39 pm
Mr. Paddy Tipping (Sherwood): I am very conscious of the time, and I hope that the House will forgive me if my contribution to the debate is very much on a constituency issue. In the Sherwood constituency, there are still four collieries.
I believe that the coal industry faces a major challenge. New contracts are due in 1998, and the challenge before the coal industry can be risen to. I estimate that the newly privatised coal industry is producing at £1.30 per kJ. I estimate that that price will have to come down to £1.10 to compete in the highly competitive market.
In the long term--[Interruption.]
Madam Deputy Speaker (Dame Janet Fookes):
Order. I do not expect to have sub-conversations between the two Front Benches.
Mr. Tipping:
In the long term, there is a place for coal in the energy market. In the short term, we are likely to witness the growth of gas. In the medium term, it is likely that nuclear companies will diversify and go into gas. No new nuclear power stations will be built. When gas goes, coal will be our only national natural asset. That is why we need to keep it going.
Mr. Nigel Griffiths (Edinburgh, South):
I thank hon. Members from both sides of the House for their condolences following my father's death in a mountaineering accident. In the House, many harsh words are often exchanged in the passion of debate, but when tragedy strikes, no more generous spirit is to be found anywhere.
This has been an illuminating debate because it has exposed the great shortcomings in the Government's energy policy. In fact, they cannot even claim to have an energy policy. The Government abolished the Energy Secretary's office and the Select Committee on Energy. The casualties included not only tens of thousands of miners, electricity workers and gas workers but the distinguished hon. Member for Rochford (Dr. Clark), who chaired the defunct Select Committee with such distinction.
The Government have pursued a policy of privatisation, not for the prosperity of consumers in British industry, but to enable them to make short-term tax cuts. The main beneficiaries of that policy have been company directors and ex-Ministers, while consumers have often had to put up with poorer services. Even the supposed benefits of price cuts are eroded by the Government's tax increases.
There is no concept in this country of any strategic importance of fuel. We are a major energy-producing country without an effective voice in Cabinet. Coal, our greatest natural resource, the foundation of our industrial power, has been relegated to a minor role. The standards in our pits have continued to tumble and accidents have reached horrifying levels. On oil, we have a licensing and compliance regime that has made Britain the softest touch to the multinationals. Gas, once the Marks and Spencer of energy, is now judged to deliver the poorest service. Untold damage has been done to public confidence in nuclear energy by complacency about the ownership and control of that potentially hazardous resource. There has been minimal investment in alternative energy--such as gas and electricity for cars, wind power and wave power--and there have been cuts in the energy conservation budget. We condemn those Tory failures.
As my hon. Friends have pointed out, the Labour party has a battery of positive energy policies to tackle the real problems of the 1990s. The energy industry must be regulated for the benefit of consumers, not producers; there must be specific protection for vulnerable consumers, who must not be left prey to higher prices and no choice of supply; there must be wider access rights for rural households; there must be a major scheme to conserve energy and to bring the benefits of energy savings to every household; there must be energy labelling so that buyers of products know how much energy an appliance consumes; and there must be a windfall tax that attacks the boardroom abusers--we do not need the Tory tax, a VAT on millions of ordinary consumers.
The Minister put four questions to the Labour Front Bench, and I shall answer them. First, he asked whether the windfall tax will be retrospective. It will be based on the profits and the investment record of each of the utilities. Secondly, he asked which electricity companies will be taxed. Every company is being scrutinised. Thirdly, he asked how much money will be raised by the tax. Approximately £3 billion will be raised. Finally, he asked how long it will last. It will last as long as it takes to achieve a proper balance in the charges, profits and investment strategies of companies--and it will last as long as salaries as long as telephone numbers are paid to the directors in the boardroom.
It is hard for Ministers to face reality. On 18 June, when he last addressed the House, the Minister said:
However, the Minister claims that consumers are better off. Post offices are no substitute for high street showrooms, where people could get advice on their bills, energy efficiency and appliances. People can pay their bills in post offices, but many post offices do not allow them to pay their bills for free--they add 88p to the bills of senior citizens and others. The Government have created a two-class system--some people are paying up to 12 per cent. more for their gas than others because they have bank accounts and direct debits while others are on pre-payment meters.
Every consumer wants to know why they are paying such high prices for fuel. We had the fastest falling raw energy prices in the 1980s and the 1990s, and only a shower of incompetents could fail to bring prices down, no matter who owned the utilities. Between gas privatisation in 1986 and now, gas prices have fallen by 23 per cent. and the cost to consumers has fallen by only 19 per cent. What has happened to the missing 4 per cent? The Government taxed it--they added VAT to fuel and wiped out any claimed savings from privatisation. They added £24 to the average household's gas bill--the Tory fuel tax.
Since electricity was privatised in 1990, the average bill has increased by 21 per cent., yet the cost of coal has decreased by 20 per cent. and the cost of gas has decreased by 9 per cent. The Government have taxed any benefits from privatisation and they have allowed the companies to pocket the savings. The latest abuse is the mis-selling of gas contracts, which has been highlighted in the debate tonight.
The Minister for Small Business, Industry and Energy (Mr. Richard Page):
I came to the Chamber tonight looking forward to the debate with some enthusiasm. As the seconds tick away to the next general election, I hoped that we would hear something about the Opposition's energy policy. I am in the same position as the man leaving a hall where a Member of Parliament was speaking. He was asked how long the Member of Parliament had been speaking and he replied half an hour. He was then asked what the Member of Parliament had said, and the man replied, "Well, nothing yet". As I rise to speak at the Dispatch Box, I am no wiser about the Labour party's policy than I was when the debate began.
The Opposition have had a good go at the Government--that is what Oppositions are for; it is all part of the game. As to policy, we got a big, fat zero. One might say that it is enough for the Opposition simply to oppose--there is no need for them to do anything else. However, is negativity the right approach of a potential Government who are waiting to provide positive leadership to voters? No, it is not. Whatever the slogans and however skilled the airbrush techniques of the new Labour spin doctors, the centralised ethos of the old Labour party has not disappeared; it lies like an old rotting log in the stream. [Interruption.] The hon. Member for Leeds, West (Mr. Battle) should keep quiet, because I shall come to his contribution and I will sort him out.
The Labour party's policy manifests itself in schizophrenic behaviour and policy announcements. It is bedeviled by paradox and inconsistency. The Opposition do not like privatisation, but they will not renationalise. They want to fine companies with a windfall tax, but they do not want the consumer to pay any part of the cost. They complain when people make a profit from buying privatised shares and then complain when others make a loss. They say that they want competition, but they hedge their bets by restricting market freedom with controls on pay, retrospective taxation and limitations on the regulator's independence. The list goes on and on, and it makes the Vicar of Bray seem the model of theological consistency.
"We believe that the privatisation of Nuclear Electric will be as successful as previous privatisations."--[Official Report, 18 June 1996; Vol. 279, c. 779.]
It has been such a flop that they can hardly give the shares away. The Minister was an early advocate of giving the shares away--he gave a powerful speech in favour of doing just that on 21 July 1980, and he has never regained any sense of reality. Since the present Minister took office in 1992, energy consumers have been hit by the imposition of a VAT, the closure of 200 high street gas showrooms and 400 electricity showrooms, and tens of thousands of jobs have been lost, including two thirds of the British Gas home energy advisers.
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