Labour warns utilities not to attack tax plans

Labour will today warn heads of the privatised utilities not to indulge in public attacks on the party's planned windfall tax during the election campaign.

The assault by John Battle, Labour's energy spokesman, to a conference of managers in London this morning, comes after David Jefferies, chairman of the Electricity Association and of the National Grid, used a dinner speech last week to plead for the Labour Party to drop the tax proposal. Mr Battle, who was a guest on Mr Jefferies' table at the dinner, said he was given no warning about the onslaught.

Mr Battle said yesterday Mr Jefferies' remarks had "echoed Conservative policy on the windfall tax". His speech, the last policy address he will give before the election, urges utility chiefs to work with Labour to implement the tax. Mr Battle will warn: "It is often difficult to have a constructive dialogue when some utility executives choose to use megaphone diplomacy in support of the Conservative propaganda machine."

He will say: "We are facing a heated few weeks and I hope that the utility industries will continue to work with us to discuss the best way forward, rather than joining with those who use public comment and after-dinner speeches to close down the conversation in favour of a political slanging match."

Mr Jefferies could not be contacted yesterday. National Grid said he was speaking in his capacity as head of the Electricity Association, which represents privatised power companies, and not as head of the transmission business. A spokeswoman for the association said the industry "welcomed" Mr Battle's call for greater co-operation.

She said: "Any public comment on the windfall tax made by an electricity industry executive will have already been voiced privately with senior Labour Party representatives. Several meetings on the matter were held between January and June 1996. Subsequently, further meetings were requested by the industry but were discouraged by Labour."

The speech today also gives the clearest indication yet that Labour might be prepared to extend the six-month timetable for introducing domestic electricity competition next year if the process looks likely to cause disruption to customers.