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Column 293We also have the problems of decommissioning. When Magnox stations were built, it was clear, before we built them, how they would be decommissioned : people would remove all the parts that could be removed, take out the very radioactive material--the fuel, and so on--which would be taken away for reprocessing, and the inside of the nuclear reactor, which would be only marginally radioactive, would be inside a large shield, purpose-built to keep it in, even when it contained very radioactive material, and would simply be buried in a hill. That is the cheapest and most sensible way of getting rid of a nuclear power station.
The amount of radioactive material left in a pressurised water reactor will be even less, and these reactors will be even easier to deal with. To want to break the reinforced concrete shielding at Sizewell, in order to take away a small amount of radioactive material when the life of the power station is at an end, is totally mad. Why not have the highest hill in Suffolk, simply by covering it over and leaving it? That is the best and cheapest way of getting rid of it.
Again, National Power will be worried about the costs of having to reprocess.
Mr. Eric Illsley (Barnsley, Central) rose--
It will be worried about reprocessing fuel that has no use. We have said in the past that we were reprocessing this fuel because we would run out of uranium which we would need for fast breeder reactors. The Government ought to look at what is to be done with the fuel. Magnox fuel needs to be reprocessed because it is unstable in its unreprocessed state, but the fuel from AGR and PWR reactors could be stored without reprocessing.
The Government must therefore look at the cost of waste disposal, the cost of decommissioning, and the cost of reprocessing and perhaps see that as the way to control the additional costs that may or may not come through in nuclear power. I believe that we have an opportunity to do something about costs while we are selling off this part of nuclear generation, because on- going costs of nuclear generation are lower than those of any other fuel ; that is why they are left on as base load in all our power systems. By selling these power stations at a price that the market believes they are worth rather than at the cost of building them, one can get an economic cost for the operator to operate them at the price the shareholders paid for them rather than the price that the CEGB paid for them. In that way the market could decide the best economic rate for running the power stations.
New power stations will show on an economic basis that they can be cost effective. The two organisations currently licensed to run nuclear power stations--the Atomic Energy Authority and BNFL--are considering the possibility of going into partnership with private companies. That demonstrates graphically that when decisions are taken away from the monopoly supplier, the CEGB, other people want to get into nuclear power generation. I should be grateful if my right hon. Friend would address a few remarks to how he sees power stations being run effectively by the Atomic Energy Authority or BNFL if they eventually get into private hands.
With the use of present technology, the private approach will mean that nuclear power will be generated far more cost effectively than before. The same efficiency
Column 294that the CEGB has demonstrated in running coal-fired stations, which provide 80 per cent. of its production, will be shown in a group of nuclear reactors which will have to come inevitably because we do not have an unlimited supply of coal. The economic cost of taking coal from the ground will get higher and higher, while the cost of nuclear energy will get lower and lower.
Mr. Hardy : I will try not to respond at length to the hon. Member for Dorset, South (Mr. Bruce) but some parts of his speech cannot pass unremarked. His was the first reference today to cheap French nuclear power. We have shown over the last three or four years, after listening to a succession of Conservative Members in previous energy debates making the same point, that it is unjustified. Electricite de France is the largest single corporate debtor in the world. It is sustained by the French Government because they are determined to ensure that it corners the market and supplies heavily supported nuclear power to keep French industry in a competitive condition. The hon. Gentleman also referred to Polaris submarines. I thought that at one point he was about to suggest beaching them all in order to provide new little top-ups. If they were privatised as well, they could be used to serve the spot market in power stations, as was recommended in Committee.
I do not want to respond further to the hon. Gentleman although I think that his speech was the first of the penal sanctions that will be taken against the hon. Member for Bedfordshire, North (Sir T. Skeet). The hon. Member for Dorset, South gave the credit for the decision to reverse the Nirex clay bed burial proposal to the Opposition and not to the three Conservative Members who were instrumental in changing that decision just before the election. I want to compliment my hon. Friends on their comments. My hon. Friend the Member for Pontypridd (Dr. Howells) echoed the Secretary of State's concern for priority for security of supply. The Secretary of State joined us only on rare occasions in Committee. He never finished a speech that I interrupted on a point of order before we finished one day. I do not think that we saw him in Committee after that. However, the Secretary of State is right to serve the priority of security of supply. The only difficulty is that he seems to see security only in the nuclear context. If he was really keen on security of supply, and if he was really in pursuit of
diversification, the Government's record on energy efficiency would be more commendable. Our Government's record is the worst in the civilised world. The jobs which would have accrued had we copied the other countries of northern Europe would have made a substantial genuine contribution to reducing Britain's unemployment figures. Some people believe that hon. Members who represent coalfield constituencies have only the interests of the coal industry at heart. Obviously I have. I am sponsored by the National Association of Colliery Overmen, Deputies and Shotfirers and I have a mining constituency, although it is much less a mining area than it was three years ago. There are more redundant miners in my constituency than there are people working in the coal industry. The number working in the industry is shrinking and could shrink to a dangerous level before long.
We must have diversity and give a higher priority to energy efficiency and conservation. At the same time, if the Secretary of State is sincere in his pursuit of security of supply, he must resist the blandishments of some of his
Column 295hon. Friends and pay attention to that small band of Conservative Members who agree with our view and who are worried lest we develop a dependency on imported coal.
At present--the Under-Secretary of State knows this, even if he will not say so with the clarity that the situation requires--we are in a buyers' market in the world coal trade. But add 10 million tonnes, let alone 30 million tonnes, to the increased demand for coal in that market, and it will rapidly transform from a buyers' to a sellers' market, and I think I see the Under-Secretary nodding in agreement. That transformation could occur rapidly. Indeed, because of the antics of some people who cannot see further than the end of their noses, in the coming few years the British coal industry could be reduced to a tiny rump. Then we would not be able to meet our demand for coal and we would have to buy as world coal prices rise. Today, world coal is available at $3, $5 or even more per tonne less than the cost of production at the colliery, before transport costs are incurred. It would be stupid for us to develop a reliance on imported coal while it is cheap, discounted and offered at a dumped price.
The action of the Government is not that of pure dogmatism. It is the action of an Administration who are worried about the level of trade deficit and international indebtedness. They believe that one answer to that problem--an answer which is also comfortable in a party political sense--is to rattle the begging bowls around the world and to dispose of an industry on the cheap, thereby creating problems, some of which we have mentioned in this debate, which the Secretary of State hopes will go away. If the right hon. Gentleman's first priority is security of supply, he cannot maintain the posture which dominates this part of the Bill.
I am glad that the hon. Member for Bedfordshire, North has provided us with an opportunity to discuss these issues. He appreciates, as do my hon. Friends and I, the way in which the research and development base in Britain is declining. He was right to express anxiety about that. Indeed, in 10 years time that may appear to have been the most important part of his speech. We are relying on others' research. Our nuclear programme demonstrates that we have turned our backs on some difficult and costly decisions. It seems to me that we are developing a dependency not merely on other people's research and other people's money but on other people's coal.
Mr. Geoffrey Lofthouse (Pontefract and Castleford) : Is my hon. Friend aware that Mr. Malcolm Edwards, giving evidence to the Select Committee on Energy, said that, because of the Government's refusal to find £11 million to continue the research and development of the fluidised bed at Grimethorpe, it may have to be discontinued? If that happens thare will be very little research and development into such schemes.
Mr. Hardy : I am delighted that my hon. Friend raised that point as it answers many of the comments that we have received from Conservative Back-Benchers. We are in favour of research and development in support of the environment for which the Prime Minister occasionally expresses some sympathy. If that research were to founder, the Government would be acting with the most abject irresponsibility.
Column 296When Conservative Members spoke at their counts after the last general election, they did not merely thank the 25, 30 or 35 per cent. of their electorates that voted for them, but made the point that they would be representing all the people in their constituency. As that obligation exists for every individual Conservative Member, surely the Government must accept that their responsibility is national and is not merely to the City of London and to the affluent and favoured areas of these islands. They should understand that they have inflicted on many communities in coalfield areas, particularly in the past three or four years, dereliction and devastation, the dampening and destruction of hope, the slaughter of jobs, the depression of wage rates and the creation of an environment which, unless something is done very soon, will cause further dismay and destruction.
For example, we still await decisions about derelict land grant. For the Government to embark on a further round of job destruction and annihilation -- [Interruption.] It is no good the hon. Member for Dorset, South (Mr. Bruce) smirking. These islands are too small for the regional differences which he views with equanimity. It is time that he understood that hon. Gentlemen representing areas as far from the coalfield as his constituency are beginning to worry about the differences between one part of the country and another which are daily being exacerbated.
These islands are small and while hon. Gentlemen can happily engage in short-term calculations with no long-term wisdom whatsoever, in importing coal and destroying our communities, it would be not merely injurious to the Secretary of State's first priority, which is security of supply, but that short-term folly would bring about utter destruction and injury to our constituents. If Conservative Members resent our making such points because we come from the coalfields, that does not mean that our arguments are unjust or invalid. Our arguments have a great deal more wisdom than some of the points raised by Conservative Members. It is certainly time that the Secretary of State recognised that enough damage has been done and that further risk should not be incurred.
Mr. Beith : I shall concentrate on what the Secretary of State said. First, I acquit him of the charge that he played no useful part in Committee. At least he was on the Committee, which is more than can be said of the Secretary of State for the Environment in respect of the Water Bill. The Secretary of State illuminated some of the contradictions in the Bill, sometimes deliberately and openly, sometimes by accident, but he made a valuable contribution to the Committee and I do not agree with the charge that he did not. I also agree with the key aspect of the Secretary of State's analysis of the industry now. The present system is indefensible. It has allowed the industry, as a monopoly supplier, to make decisions about investment without any real regard for the return on the investment or the cost to the consumer. The Labour party would have perpetuated that system in an even worse form. I have vivid recollections of what it had in mind. It wanted to create a single nationalised monolithic industry under the leadership of Sir Francis Tombs, who has a greater reason
Column 297than anyone not to vote for my party as it was I, with my late friend David Penhaligon and other colleagues, who refused to allow that proposal to pass during the Lib-Lab pact. Sir Francis Tombs thus never became the head of the single nationalised monolithic electricity industry that the Labour party preferred, although he has managed to carve out a lucrative career elsewhere. That system would have been even more damaging than the system that we now have. The current system has produced colossal excess capacity, especially in Scotland. The South of Scotland electricity board has more than double the capacity that it requires on the coldest day of the year. The Secretary of State has failed to follow through his analysis in the shape that he is creating for the industry. He is in a ludicrous dilemma. He claims to be creating a market system for electricity while shielding nuclear power from that market. He is engaged in ensuring that shareholders do not take any risks. How can a market system work other than on the basis that shareholders have to take risks with their capital and are therefore concerned about the level of risk? The purpose of the Bill is to protect shareholders from any of the risks of investment in nuclear power. That is the contradiction at the heart of the matter.
The Minister referred to the two manifesto commitments that he and his colleagues made--to privatise electricity and to retain a substantial nuclear power industry. When they made those commitments they did not realise that they were incompatible. That discovery came later but the Minister and his colleagues decided to plough on and try to do both. They should have changed their minds and recognised, as we did long ago, that the protection and feather-bedding of the nuclear power industry is against the interests of the consumer. The Minister criticised the investment decisions that were made in the past, but he and his colleagues did not oppose them at the time. When Labour Governments made crazy investment decisions, my hon. Friends and I were described, often by Labour Members, as the brown bread and sandals brigade because we objected to the absurdity of those decisions. Now the Minister, too, realises how absurd some of those decisions were, yet he has created a system in which such decisions can still be made--a system in which the disadvantages of nuclear power will be paid for by the consumers without any choice on their part. There is a higher cost and an incalculable level of risk involved in nuclear power. We all know that, although the risks of nuclear power are statistically smaller in incidence, they are incalculably greater in terms of the character of what is involved, as we all saw in the Chernobyl incident.
I shall not go into the many other problems with nuclear power, but one pressing problem that has been pointed out in some of the speeches today is the dependence on the creation of more green field site nuclear power stations. They are then sterilised for 100 years, for the reasons given by the hon. Member for Dorset, South (Mr. Bruce). All that is built into the Government's privatisation plan instead of being exposed to the market considerations to which they attach such importance.
When the Secretary of State talks about diversity of supply, why does he not look at the energy efficiency and energy conservation side of the problem? It is argued that
Column 298the amount of expenditure involved in building one pressurised water reactor would yield many times that saving in output if it were invested in energy efficiency and energy conservation. If there is a danger that we may have insufficient power in certain circumstances, such as those of the miners' strike which the Minister described, we could take the precaution of investing in more efficient use of power and less use of power in some areas in which we are profligate with it now.
The Secretary of State sought to argue that the Government were being open about nuclear power and bringing about a situation in which we could make real choices, but I am profoundly worried about what will happen at future public inquiries on nuclear power stations, such as could take place in my own constituency because of the Druridge bay proposals. It will be argued that all the planning considerations must be swept aside because Parliament has decreed that there has to be a non-fossil fuel quota, so we have to have that and other nuclear power stations. There will be a distortion of the decisions in which local communities seek to be involved as they argue the case against nuclear power. We have seen signs of that already at the Hinkley Point inquiry and the provision may prove to be the destruction of future public inquiries into nuclear power. The hon. Member for Bedfordshire, North (Sir T. Skeet) has gone to the heart of the illogicality of the Bill, arguing cogently that, if nuclear power is to be ring-fenced and singled out, as he wants it to be, it should remain in the public sector at least for the time being. I do not want it to be ring- fenced and protected, but I accept the logic of his argument--that if that is to be so, the place for the industry is with the Government, who are imposing all these conditions to protect it. It is significant that the examples produced by Conservative Members of the new interest in diversified nuclear power generation came from the public sector. They were drawn from the Atomic Energy Authority and British Nuclear Fuels plc, both of which have shown interest in nuclear power generation and both of which are in the public sector. As public sector bodies, they are putting forward such proposals on the basis that they would have a guaranteed return.
Mr. Ian Bruce : The reason why the Atomic Energy Authority wants to go ahead with research into a small, integrated reactor is that private enterprise, not the Government, will provide the funds to carry out that research and build that power station.
Mr. Beith : That is only because its shareholders will be protected to the ludicrous extent provided in the Bill. It is as though a Government about to introduce a breathalyser announced widely that a previously unknown device was to be required by police forces all over the country and that any company which decided to manufacture them would have its shareholders protected from any risk that its particular version would go wrong. The Government are creating the market and protecting the shareholders who go into it. That cannot make sense by the Government's own standards, and it makes no sense by ours.
Mr. Alan W. Williams (Carmarthen) : I want to outline some of my criticisms. I support the proposal to keep nuclear power in the public sector and my main concern is with nuclear safety. Since Chernobyl, the British public has become aware that nuclear reactors can go badly wrong and completely out of control. In the 1960s and
Column 2991970s the industry used to argue that so many fail-safe systems were installed in reactors that they could not go out of control. But they can and not merely once in every 1 million or 1,000 million reactor years, as the industry would have us believe.
We have had two major catastrophes, at Three Mile Island and Chernobyl, in 3,000 reactor years of experience. The statistics show that reactors will go wrong once every 1,500 reactor years. That means that if we build a pressurised water reactor with a design lifetime of 40 years at Hinkley Point, there is a one in 40 chance that it will become a Chernobyl or a Three Mile Island--and that goes for every pressurised water reactor that we build. The safety of nuclear reactors must be paramount and I am certain that the British public feel that they will be run more safely in the public sector than in private ownership, where a profit will be sought. Once the industry is privatised, there is no question but that de-manning will follow. There will be pressure to cut the number of staff. Curiously, nuclear power stations are labour-intensive. For the same power output, nuclear power stations employ twice the number of staff of fossil-fuel power stations. Therefore, the pressure to shed staff will be all the more severe in nuclear power stations and that must mean compromises on safety.
I shall be brief because of the time, but I too have strong reservations about decommissioning, nuclear waste and about the fate of the plutonium recovered by reprocessing. With decommissioning, we are talking about a time scale of 100 years or more. When we remember the time scale it strikes me as irresponsible to hand to private industry the important task of decommissioning.
The same goes for nuclear wastes, which we must keep from the environment, not for 100 years but for hundreds of thousands of years. Again, it is the height of irresponsibility to pass the safeguarding of such wastes to the private sector. Under the Bill plutonium will become private property. About 20 tonnes of plutonium will be handed over to private companies.
I turn now to economics and echo some of the points made earlier by the hon. Member for Bedfordshire, North (Sir T. Skeet) when he moved his new clause. What exactly will National Power be buying when it buys the nuclear industry? Well, it will be buying 10 Magnox reactors and five advanced gas- cooled reactors. That is the bargain. Of the 10 Magnox reactors, Berkeley is already closed, Hunterston is due for closure and the other eight will all be closed during the 1990s. The Magnox reactors are a fleet of old crocks. That is what is being sold off.
We heard the Secretary of State himself make critical comments on the AGR programme. Dungeness is a legend on its own. It took over 20 years to build. Three of the other five AGRs are clearly performing poorly. They are lame duck reactors.
The proposal to build four PWRs is a speculative venture because they are large reactors and their future economics is uncertain. The City of London knows that nuclear power is uneconomic. The figures that we received in Standing Committee from John Baker of the CEGB showed that at 5p per unit nuclear electricity is 40 per cent. more expensive than electricity from coal at 3.5 pence per unit. It is clear that nuclear power is the Achilles heel of the Bill. There is the danger that, in the flotation, the
Column 300distribution companies and PowerGen may go all right, but that National Power, with its 20 per cent. nuclear component, may be unmarketable.
I ask my hon. Friends to support the new clause tabled by the hon. Member for Bedfordshire, North and I hope that he will also receive a lot of support from his own party.
Finally, I should like to draw attention to the document that we have all received today from the Confederation of British Industry. It is rare that I support anything from the CBI but, for different reasons, on this issue we are in agreement. Safety is the paramount issue to the general public and I believe that privatising nuclear power stations is irresponsible purely on safety grounds.
I cannot support the new clause. It is logical and desirable to include the nuclear industry in the privatisation measure now. I want the industry to be privatised in its entirety at once. It is quite right to do so. It is right also to have a non-fossil fuel obligation, with 15 to 20 per cent. generation coming principally from nuclear power. We cannot risk one supply of energy holding us to ransom. That occurred during two long strikes.
The significant point about the non-fossil fuel obligation is that provision has been made by my right hon. Friend the Secretary of State for renewable sources of energy. I look forward to renewable sources being part of that non-fossil fuel obligation.
I support also the non-fossil fuel levy. For the first time, the cost of generating electricity from different fuel sources will be crystal clear for all to see. That is a great step forward. It is vital to share any additional nuclear costs between the area boards. It is quite right for my right hon. Friend to stipulate that. There was much talk in Committee about the so-called future nuclear levy. That is absurd as consumers are already paying for nuclear power through the current electricity pricing structure. Of course, customers have been paying a coal levy for over 30 years, as the CEGB has been paying over the market price for British coal. The Opposition cannot escape that fact.
It is vital that the nuclear industry is privatised now, particularly as we move towards 1992, when the single European market will be with us. We will have a more efficient nuclear industry, and that will be better for consumers, the country and for all of us.
Mr. Ieuan Wyn Jones (Ynys Mo n) : This has been an extremely wide- ranging debate. [Interruption.] I remind hon. Members that I have been present for most of the debate, and I have listened carefully to all the arguments that have been advanced. I even listened carefully to the excellent speech of the hon. Member for Bassetlaw (Mr. Ashton). There has been little support by Conservative Members for the new clause which was put down by the hon. Member for Bedfordshire, North (Sir T. Skeet). I listened carefully also to what he had to say.
There is one matter which I should like the Secretary of State to clarify. He made it clear that the Government have
Column 301an unqualified commitment to build four new PWR stations. I assume that he is prepared to assure the House that that is subject to the normal planning inquiries. I ask him to confirm that there will be public inquiries into the proposals. As he is aware, there is a proposal to build a nuclear power station in my constituency. My constituents would welcome an assurance tonight.
I shall concentrate briefly on the consequences of privatisation for jobs in the nuclear sector. It has already been said that privatisation has consequences for jobs. It is clear that, in putting forward its plans for a nuclear power station in my constituency, the CEGB stressed the economic benefits in terms of jobs and investment that will occur. Irrespective of the arguments for or against nuclear power, the CEGB knows that the only way that it can persuade people in my constituency to support that proposal is on economic grounds--jobs, infrastructure and investment. There remain a number of question marks about that commitment, because already in readiness for privatisation there are changes in the working structures within the Magnox station in my constituency. There is a shift away from full-time maintenance staff to contractors, many of whom come from outside the area.
When the CEGB announced that there would be an application for a nuclear power station in my constituency, we were told that at the height of the building programme 3,500 jobs would be created. That was dangled as a carrot in front of the people who would consider the planning application. Consequently, the CEGB considered that that should have been sufficient for us to accept the building of a nuclear power station. However, the problem is that the CEGB says that only half of those temporary jobs--1,750--will be created locally. It is clear that people within the county of Gwynedd would be capable of undertaking the task, but the CEGB is not prepared to give them the opportunity. That is irrespective of the argument for or against nuclear power.
The privatisation programme is making it impossible for the CEGB to overcome the problems presented by the economic case. My constituents feel very much like pawns in the game. They wonder whether the indemnity given to nuclear power under the Bill will be a temporary commitment that will allow National Power to build those nuclear power stations or whether it will be a continuing one. There will not only be the initial investment and the building costs, but there will be ongoing costs for at least 20 years during the useful life of a nuclear power station and the decommissioning costs at the end. That is why I believe that there are great dangers involved in privatising the industry and why I believe that the House should support the new clause.
Mr. Parkinson : I shall be brief, but I feel that I owe it to the House to reply to a number of specific points. I am glad to see that the hon. Member for Bassetlaw (Mr. Ashton) is back in his place, because I wanted to deal with his point about West Burton power station.
As a result of the Bill, the obligation to supply is being switched from the Central Electricity Generating Board--the generator--to the area boards. That means that in future the generating companies will be able to build power stations only if they can find a customer for the electricity. In the past, because they had the obligation to supply, they decided on the technology, the site and the
Column 302size. If it turned out that they had over- estimated and that the industry did not need the power station, we still paid. In future, they will be able to build a power station only if they can find a customer for the electricity. I believe that at present they are negotiating with the area boards to seee if they will buy the electricity that West Burton could produce. This is an inevitable consequence of the change in the obligation to supply. If the hon. Member for Bassetlaw would like to discuss it with me, as he suggested, I should be happy to meet him.
The hon. Member for Pontypridd (Dr. Howells), in a very good speech, the hon. Member for Wentworth (Mr. Hardy) and the hon. Member for Midlothian (Mr. Eadie) made the point that, because there is a non-fossil fuel obligation, that is evidence of an anti-coal attitude. We do not regard it as any such thing. The non-fossil fuel obligation will fix the level of electricity from nuclear sources at exactly the same level as at present-- 15 to 20 per cent. of the market. That means that 80 to 85 per cent. of the market will be supplied from fossil fuel sources.
In future, coal has the same possibilities as it has now. The difference will be that the generators will be able to buy their coal where they will. As the hon. Member for Wentworth has said, however, if a major purchaser went into the fairly small international market for steam coal, that would have a spectacular effect on prices. We believe that the prospects are extremely good for the British coal industry.
Mr. Hardy : I am grateful to the right hon. Gentleman for that comment, but does he accept that some overseas suppliers will be prepared to face a continuing loss to ensure the destruction of British capacity?
Mr. Parkinson : A number of things work in favour of the British coal industry : first, its location ; secondly, the fact that it is extremely well equipped ; and, thirdly, the facilities do not exist to handle huge imports of coal. For those reasons, the market is open to British coal and I believe that it will supply a substantial part of the market.
The hon. Member for Carmarthen (Mr. Williams) talked about safety and is worried that the industry will be less safe in the private sector. The safety standards will not be relaxed. The nuclear inspectorate is an independent body, and it will supervise the industry as it does now. There will be no change in the codes of safety, the standards expected or the supervision of them. The hon. Gentleman mentioned the two major incidents at Three Mile Island and Chernobyl. Three Mile Island was a privately owned power station and Chernobyl was state owned. It is a question not of who owns a power station, but of how it is built, supervised and operated. Standards will be enforced as rigorously in the private sector as they would be in the public sector.
The hon. Member for Berwick-upon-Tweed (Mr. Beith) mentioned planning and suggested that, in future, things will be much easier for those who wish to build nuclear power stations. I do not see that happening. Perhaps we will reach the stage where every application for a nuclear power station will not result in a debate on whether we should have nuclear power. However, whether the location suggested is correct and whether the technology used is correct will still need to be settled. If there is a demand for a public inquiry--the hon. Gentleman knows how such inquiries come about--it
Column 303must be held. The legislation will not short -circuit the planning system as suggested by the hon. Member for Ynys Mo n (Mr. Jones). The Government have no plans to build any nuclear power stations. We are planning to get out of the business of being responsible for the building of power stations. The non-fossil fuel obligation means that we shall need about four PWRs if we are to continue with the same level of electricity generated from nuclear power. Where they will be and what they will be is a matter for the generating companies that apply to build them. There will be no short-circuiting of the planning system, which must be followed properly.
I made a long speech earlier tonight and I have attempted to answer some of the points raised since I spoke. I conclude by thanking my hon. Friend the Member for Bedfordshire, North (Sir T. Skeet) for the way in which he moved his new clause. He did so in an interesting, almost intimidating, fashion, and it is a disappointment to me that I have to advise my right hon. and hon. Friends to vote against him. I am only sorry that I am unable to accept the new clause, and I hope that my hon. Friend will not feel too lost as he goes into the other Lobby with Opposition Members.
Mr. Barron : We heard the thanks of the Secretary of State to the hon. Member for Bedfordshire, North (Sir T. Skeet) for his earlier speech on new clause 3, which will no doubt be repeated during the next 12 months or more, prior to the flotation of the electricity industry, if the Bill becomes an Act. It is ironic in many ways that they seem to be on the same side, while both purporting to be major exponents of the nuclear power industry in their different ways. The speech of the hon. Member for Bedfordshire, North was enjoyed by hon. Members from both sides of the House, but perhaps a little more quietly by Conservative Members than Opposition Members. It will probably go down as a memorable speech, although perhaps not as memorable as the speech mentioned by my hon. Friend the Member for Pontypridd (Dr. Howells), which was made in the other House a few years ago, and which mentioned the selling of the family silver. I cannot remember what position the hon. Member for Bedfordshire, North took on that matter at the time but I think we can see what his position is on the selling of the family plutonium. He appears to be against that, and to wish it could be kept in the public sector. We discussed the nuclear levy at some length in Committee, and highlighted the effect that it would have on consumers' bills. An amendment was tabled by the Opposition but was fortunately defeated. In that debate the Minister said that he would not accept the amendment because National Power would publish separate, full accounts for its nuclear business when it publishes its main accounts. Most people do not see the accounts of businesses such as National Power unless they are politicians, have a vested interest, or perhaps know a local librarian who is interested in them. Earlier today the Secretary of State said that the cost of nuclear power would be transparent and that the transparency would, apparently, go no further at this stage than the annual accounts, of National Power. There is no doubt that new clause 16 would involve much more than the national accounts, of National Power, which we assume will be published annually. Without being able to
Column 304see those accounts most people will be unable to see how uneconomic the nuclear industry is at present. Without the protection afforded to the nuclear industry by the Bill, I and many others are sure that consumers and producers would resist the nuclear industry, and would, instead, concentrate more on debates about developing our resources for renewable energy.
I was pleased that the Secretary of State said that the non-fossil fuel obligation of between 15 per cent. and 20 per cent. would be highlighted. We shall watch with great interest to see what percentage the Government believe that they should aim for. We shall also watch how much research and development the Government put into that area to ensure that targets set are feasible.
I should also like to see the developing and sustaining of the British coal industry--more so within a national and rational energy policy, which is now absent. At this stage, the Government seem prepared to plan energy in terms of nuclear and some small renewables, but not in terms of the rest of the country. We are firmly against that and believe that it highlights a great contradiction in the Government's flotation of the electricity industry. The Government have obviously failed to convince many people in the country that selling off the nuclear power industry is in their interests. We shall wait to see what happens to it when we come closer to the flotation date.
The nuclear levy is another tactic for sustaining the industry. We have been told that while nuclear power might be more expensive now--an admission that has come only in the past 18 months--we must wait because in the future it may seem better when compared to fossil fuel.
In October 1987, when the matter first came to light, Lord Marshall spoke of "jam tomorrow". The Minister has said that if nuclear power were "transparent", as the Secretary of State would wish--and as I would wish even more strongly--10 per cent. on our domestic electricity bills would be shown to be due to it. The CEGB's forecast, which has been highlighted by Opposition Members, suggests that the PWRs at Sizewell and at Hinkley, one of which is under construction, will for the foreseeable future also be more expensive than coal. Consumers have been offered not jam today or jam tomorrow, but, perhaps, no jam at all.
The Secretary of State argued for diversity as the basis for security of supply. Can he picture someone sitting at home, eating a meal cooked on an electric cooker, watching television or perhaps listening to music on the radio? How many people using consumer goods at home wonder how much electricity for them has come from nuclear fuel, how much from renewable fuel and how much from fossil fuel--coal, oil or gas? It is nonsense to suggest that people are concerned about diversity. What people are concerned about is security of supply. The other thing that concerns them is cost--and, as I have said, what the Bill offers is not jam today, tomorrow or in the foreseeable future, but extra costs on electricity bills from nuclear generation.
The Secretary of State told the Committee :
"diversity may have its price. We are prepared to identify, and justify, that price."--[ Official Report, Standing Committee E, 7 February 1989 ; c. 736.]
Many Opposition Members feel that the Government have not done that. We cannot see how diversity can be used as a justification for putting up electricity prices now.
The Secretary of State also said in Committee that the cost of coal was a secondary consideration for the CEGB.
Column 305The right hon. Gentleman knows better than anyone that in 1986, after the fall in the oil price, British Coal immediately lowered it price to the CEGB, which it has consistently done since then. In real terms, the cost of British coal to the electricity industry has been reduced. It is not the burden that hon. Members have described. That price is an important consideration can be seen from the offer made by British Coal to the new generating companies--long-term contracts below or within the RPI for the next five or 10 years. That offer has been made nowhere else. In the past 12 months there has been a reduction in the coal price of some 30 per cent. in real dollar terms, and that is likely to continue. Everyone knows that if the new generators went on to the market now there would be colossal balance of payments problems, and also an increase in world coal prices. That is not an option for Britain at this time.
My hon. Friend the Member for Bassetlaw (Mr. Ashton) mentioned the Humber ports. Today we have seen for the first time the report from the Committee on the Associated British Ports (No. 2) Bill. In what, as the Secretary of State knows, is a preamble to its decision, the Committee says :
"In our view it is the Government's duty to take whatever steps are necessary, in the overall national interest, to protect the indigenous coal -mining industry."
That is what we hope that the Minister will do. Rather than merely speaking at the Dispatch Box, we want him to make sure that there is as much protection for the British coal industry as there has been for the nuclear industry.
The Secretary of State for Energy said earlier today that his party had been elected on a commitment to maintain nuclear power. He got it nearly right : his party was elected on this commitment, but the Conservative party campaign guide for 1987 said :
"More nuclear power means that the rise in demand for electricity can be met cheaply and effectively",
and the Conservative manifesto of 1987 said :
"We intend to go on playing a leading role in the task of developing abundant, low-cost supplies of nuclear electricity". Neither of those got it right, as might have been clear for the last 30 years if there had been the transparency for which the Secretary of State now argues.
What the Government have been saying is commonly not the case. There is a central contradiction in what the Government stand for in relation to privatisation. They will feather-bed the nuclear industry, whether in respect of decommissioning, day-to-day running, or investment in the new PWRs. In Committee the Secretary of State said of the nuclear industry :
"If there is a price to pay, we are prepared to pay it."--[ Official Report, Standing Committee E, 7 February 1989 ; c 738.]
Well, we in the Opposition believe that that price is one that the nation cannot afford, and we will oppose this sale.
Question put, That the clause be read a Second time.
The House divided : Ayes 199, Noes 254.
Column 306Division No. 141] [11.31 pm
Abbott, Ms Diane
Adams, Allen (Paisley N)
Archer, Rt Hon Peter