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House of Commons

Monday 15 May 1989

The House met at half-past Two o'clock


[ Mr. Speaker-- in the Chair ]

Oral Answers to Questions


Energy Efficiency

1. Mr. Win Griffiths : To ask the Secretary of State for Energy what is his Department's most up-to-day estimate of the energy savings that would accrue if the latest standards of energy efficiency in buildings were implemented.

The Parliamentary Under-Secretary of State for Energy (Mr. Michael Spicer) : The Building Research Establishment has estimated that theproposals for amending the requirement in the building regulations for the conservation of fuel and power would improve the energy efficiency of new buildings by about 20 per cent. compared with existing regulations.

Mr. Griffiths : Is the Minister aware that if the Government were to back a scheme of energy conservation along the lines either of the Eurisol report or that of the Milton Keynes' energy cost effects, we could cut CO emissions by between 39 million and 43 million tonnes a year? Does he think that that would be an extremely good investment for the Government because at a stroke they would reduce those emissions and energy costs, and cut the need to build so many more power stations?

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Mr. Spicer : The Government are in favour of energy conservation measures, but we must balance the position by accepting that, even taking account of energy conservation measures, on most estimates there will be a continuing increase in the demand for electricity. If one is interested in CO emissions, as the hon. Gentleman is and as we are, the issue is how to get balanced fuel production which will reduce CO . That is why we are in favour of nuclear energy and why we are surprised that the Labour party is not.

Mr. Holt : Does my hon. Friend agree that a great deal of energy is lost through the windows of our homes? How much longer will it be before he prevails on the Secretary of State for the Environment to have double glazing as an integral part of new build houses? That is needed as much as damp courses. If double glazing were installed at the beginning, it would save all the conversions which must take place later and it would be an enormous saving of energy.

Mr. Spicer : I shall certainly draw my hon. Friend's remarks to the attention of my right hon. Friend the Secretary of State for the Environment, who is responsible for building regulations. Only about 1 per cent. of building stock is replaced every year, so taking the 20 per cent. figure that I mentioned in my original answer, the potential savings are 1 per cent. of 20 per cent. The matter must be seen in context.

Mr. Hardy : Does the Minister admit that the Government's record on energy efficiency and insulation during the past decade has greatly worsened and is most unsatisfactory, particularly compared with the rest of western Europe? Does he accept that if we reach those standards we would not need to build any more nuclear power stations?

Mr. Spicer : Speaking from memory, we are above the European Community average for energy conservation and efficency.

The Secretary of State for Energy (Mr. Cecil Parkinson) : Five per cent. above.

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Mr. Spicer : My right hon. Friend says that we are 5 per cent. above the EC average. If one takes CO emissions as a proportion of electricity generated, our position has greatly improved.

North Sea Wells

2. Mr. Arbuthnot : To ask the Secretary of State for Energy how many exploration and appraisal wells have been drilled in the North sea since drilling began.

The Secretary of State for Energy (Mr. Cecil Parkinson) : Up to the end of April 1989 a total of 2,114 exploration and appraisal wells had been started on the United Kingdom continental shelf since drilling began in December 1964.

Mr. Arbuthnot : Will my right hon. Friend confirm that the reserves are much higher than orginally envisaged? does he accept that it is an encouraging sign that applicants are now finding viable much smaller fields than the large fields that were orginally viable?

Mr. Parkinson : Yes, I can confirm that the past two years have been extremely good years in the North sea with record exploration, good finds and record investment. It is now clear that we shall be a substantial producer of oil and gas for at least the next 25 years.

Mr. Robert Hughes : As the Secretary of State has accepted that there may be some danger to safety in the North sea if the geomagnetic survey comes to an end and as his Department has accepted that there are circumstances in which he may be prepared to pay a contribution for the continuation of that programme, will he consult the Secretary of State for Education and Science and ensure that funding continues beyond 15 July so that a package of finance can be put together?

Mr. Parkinson : Yes, Sir. I will.

Mr. Hannam : Do not those welcome figures show that the tax regime following the Budget is about right? Can my right hon. Friend tell us how developments are proceeding in the North sea and whether our self- sufficiency will extend into the years ahead?

Mr. Parkinson : Yes, Sir. In the last year, not only was there a great deal of activity and exploration, but 24 developments, representing an investment of more than £3.2 billion, were approved by my Department. It is now clear that our reserves will last considerably longer than anyone originally dreamt. That is no reason why we should not take action to find more and to conserve what we have, but the picture is promising.

Mr. Doran : The Secretary of State is rightly encouraged by the rate of development in the North sea, but he will be aware that the rate of discovery is still much less than the rate of production. Can he give us a precise date for the latest estimates of our self-sufficiency, and what measures has he taken to extend the period of self-suficiency?

Mr. Parkinson : I cannot give those exact figures. It is clear that 1988 was not a good year for discovery as compared with exploration, but this year is much better. There have been seven discoveries in the first three and a half months of the year, and it is clear that the rate of production in the future will tail off much more gently than we had expected.

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West Burton Power Station

4. Mr. Haynes : To ask the Secretary of State for Energy when he expects to receive firm proposals for starting construction of the proposed West Burton 1800 MW coal-fired power station.

Mr. Michael Spicer : My right hon. Friend is still waiting for Nottinghamshire county council, Bassetlaw district council and the CEGB to sign agreements. When he receives them he will decide whether to give his consent to construct the station. The timing of construction is a matter for the applicant.

Mr. Haynes : The Secretary of State usually answers this question, but today he has put up the junior Minister. What does he think he is playing at? Before the election, he said that we would have a station at West Burton. Look at him laughing and grinning all over his face! He has used the excuse of planning problems and problems with the CEGB, but those problems are now out of the way. Why does not the Minister pull his socks up and let us have this station? It would be in the interests of jobs and power for Nottinghamshire and the nation. The Secretary of State should be ashamed of himself for laughing when I am putting this serious problem to him. Come off it! He should get up at the Dispatch Box and tell us that we are going to have that power station.

Mr. Spicer : Somewhere in there was a question trying to get out. I shall answer it in these terms. Tripartite agreement between the local authorities and the CEGB on the main conditions has been reached, although several minor issues on highway matters are outstanding. I believe that the signed agreements will be with us shortly, after which my right hon. Friend will be able to decide whether to hold a public inquiry.

Mr. Andy Stewart : I am delighted by my hon. Friend's answer to the hon. Member for Ashfield (Mr. Haynes). We and everyone else in Nottinghamshire know that the 25 per cent. reduction in real terms in the cost of raw materials to the CEGB was due to the increase in productivity by the Nottinghamshire miners, who can guarantee a secure supply to the new power station. Will my hon. Friend bring that fact to the attention of the authorities who will decide when the station is built?

Mr. Spicer : My hon. Friend is right. The nation and the electricity consumer owe a great deal to the Union of Democratic Mineworkers, for whom I think he was speaking. The Opposition would do well to think about that occasionally. The area boards, which will be a key determinant in the future of West Burton, believe that it is a good site for a coal-fired power station. Their precise needs will be determined by their obligation to supply and by the estimates that they make of future demand for electricity.

Mr. Wallace : If a coal-fired station is built at West Burton, can the Minister estimate what percentage of the coal burn will be imported coal? Does he propose to introduce regulations covering the sulphur content of imported coal, bearing in mind the low sulphur content of much of the coal mined in the United Kingdom, not least in Scotland?

Mr. Spicer : There are strict regulations covering SO emissions, and the intention is that SO will be reduced by

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60 per cent. by the year 2,003. We have always made it clear that there are no import controls at present and that there will be none in the future. Unlike many Opposition Members, we are completely confident that the core business of the British coal industry will be the production of electricity. We believe that that is evidenced by the vast amounts of money that we have been putting into the industry and the response that we are getting from the work force.

Mr. Brandon-Bravo : Does my hon. Friend agree that a station of that size will be commissioned only if the generator has a long-term contract to supply? Does he further agree that the reverse side of that is that the generator will need a long-term contract for the supply of the basic fuel? I suggest that such long-term security will come about only if the coal used is coal produced by British Coal, and that may involve the Government knocking a few heads together. May I ask my hon. Friend, therefore, whether he feels in an aggressive mood?

Mr. Spicer : My hon. Friend makes some extremely good points about the reasons why a British electricity industry would wish to buy from an indigenous supplier such as British Coal, especially as the industry has very good coal at its disposal. My hon. Friend asked me to join the negotiations that are taking place between British Coal and the electricity industry. I have to say, on behalf of the Government, that we wish those negotiations to be conducted freely between the two sides. That is why it was quite wrong for the hon. Member for Sedgefield (Mr. Blair) to run round town this morning saying that we have predetermined plans for British Coal.

Mr. Blair : Then perhaps the Minister will answer the question that he failed to answer this morning. Is it the case that, as matters stand at present, the electricity industry will order 15 million tonnes less from British Coal next year, despite being offered it at market prices? Even if the Minister feels no concern about the effect that that will have on jobs, on the balance of payments, on the midlands economy and on the future of electricity supply in his capacity as an Energy Minister, does he not feel even a twinge of conscience, as a member of the Conservative party, towards those UDM members whose support the Government was happy to exploit during the miners' dispute and whose reward may now be a P45?

Mr. Spicer : It is a matter of great interest to the Government that the hon. Gentleman should suddenly discover the UDM. It is a little rich for Labour Members suddenly to be defending the UDM. I have already made it quite clear to the House--I should have thought that the hon. Gentleman would join me in this--that the nation owes a great deal to the UDM, and we do not need to be taught that lesson by the hon. Gentleman.

The hon. Gentleman asked about our responsibilities for the future of energy in Britain. We have an interest in this matter, and we take a balanced view of it. We have an interest in ensuring that electricity prices are as low as possible--and that involves fuel prices--and at the same time in ensuring that we have a thriving indigenous coal industry. That is why we have spent £2 million every working day on developing our coal industry.

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Electricity Privatisation

5. Mr. Thurnham : To ask the Secretary of State for Energy if he will make a statement about his proposals for employees in the electricity industry being offered a stake in their own companies.

Mr. Parkinson : There will be attractive terms to ensure that employees can acquire shares in the successor companies. Decisions on the details of the offers that will be made to employees will be taken nearer the time of the sales.

Mr. Thurnham : When allocating shares, will my right hon. Friend give every encouragement to employees to take up their full individual entitlement, to spread the benefits of share ownership as widely as possible?

Mr. Parkinson : We think that it is very important for individual employees of the industry to have their own shareholding. We therefore intend to put together a package of discounts and encouragements which we hope will encourage more than 90 per cent. of employees to take up their shares, as has happened with previous privatisations.

Mr. Foulkes : However welcome the proposal may be in principle, will this not remain merely a cosmetic exercise unless the Secretary of State is willing to ensure that the majority of shares go to people who have staked their lives in the electricity industry, rather than to big business, which happens to have the capital to put into shares but which has no real long- term interest in the industry?

Mr. Parkinson : I do not believe that the hon. Gentleman is seriously suggesting that the rest of the nation should make a present of something up to £10 billion to the 131,000 people who work in the industry. It is a national asset. The employees receive a proper wage and salary, but we want them to have the chance to have a stake in the industry and we intend to ensure that they do.

Mr. Mans : I welcome my right hon. Friend's reply on this matter. Has he given any thought to setting up employee share ownership plans trusts--ESOPS trusts--as part of the offer for sale of the companies as a way of ensuring that employee share ownership is ongoing?

Mr. Parkinson : That is a possibility that has been put to us. I have not taken a final decision nor have the companies, but we are slightly dubious about collective ownership in this case. We believe that, initially, the employees should become individual shareholders in their own right.

Mr. Pike : Rather than just giving the employees a stake in the industry if it must be privatised, why does the right hon. Gentleman not take the opportunity, while the Bill goes through the House, to enable them to have a say in the industry by making provisions for employee participation at board level on the various boards? The right hon. Gentleman could do that and he could ensure that the employees are allowed to elect their own representatives on to those boards.

Mr. Parkinson : We do not believe that trade union representation is necessarily the same as representation by the labour force. We do not believe in the institutionalised representation of the work force on the board. We want

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individual members of the work force to have shareholdings, to go to the AGM and to use their votes to vote on to the board directors of their choice.

Carbon Dioxide Emissions

6. Mr. Amess : To ask the Secretary of State for Energy what was the level of emissions of CO by the Central Electricity Generating Board's power stations in 1970 and 1987 ; and what was the amount of electricity supplied in the same years.

Mr. Michael Spicer : CEGB emissions of carbon dioxide in 1970 and 1987 were 184 million tonnes and 182 million tonnes respectively. Over the same period electricity supplies by the CEGB rose by 23 per cent. ; The amount of CO emitted by the CEGB per unit of electricity production has fallen over the period by 20 per cent.

Mr. Amess : Can my hon. Friend confirm that the CEGB has no plans to increase emissions of carbon dioxide by 25 per cent., as rumoured in some quarters?

Mr. Spicer : Yes, Sir. I can give that assurance. A number of predictions have been made about future CO emissions, but they depend upon what assumptions are made about demand or the future make-up of electricity generation. For instance, a continuing switch from coal to gas or an increase in nuclear power will reduce CO levels considerably.

Mr. Anderson : Surely the best way of reducing CO is by conservation, by alternative energy means and by ensuring that we can green our cities and plant trees on derelict land to fix the CO in the biomass.

Mr. Spicer : As we discussed earlier, undoubtedly one way to reduce CO emissions is to engage in conservation measures. We certainly intend that that should be the case. Our main policy to combat CO emissions however, has been to encourage a variety of non-CO emitting fuels, such as nuclear and renewables and reduced CO emitting fuels such as gas and clean coal technologies. Since the Opposition oppose most of those measures, especially nuclear power, it is fair to ask them what they propose to do about it.

Mr. Rost : In order to reduce greenhouse gas emissions, can my hon. Friend confirm the rumour that the Government are, after all, to introduce amendments in the other place to the Electricity Bill to strengthen the obligations to improve energy efficiency and to provide incentives for the production of electricity combined with the marketing of the heat?

Mr. Spicer : My hon. Friend has been pressing the case for combined heat and power for many years and with increasing effect. He will know that a number of measures associated with the Bill greatly improve the chances of CHP and will particularly ensure that it has a fair and even playing field in comparison with other forms of electricity. That is the only assurance--it is a good one--that I can give my hon. Friend about the terms of the Bill.

Mr. Morgan : Some 10 days ago a seminar was held at 10 Downing street on the greenhouse effect. Can the Minister or the Secretary of State confirm that if the Government chose to use the argument that the only way to hold back the greenhouse effect is to switch to nuclear

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power, 24 nuclear power stations would have to be built by the year 2020--something the British planning process could not possibly provide? Do they agree that it is shocking that when the alternative proposal, supported by most scientific and technical opinion-- that energy conservation is a far better way to hold back the greenhouse effect--needs to be pressed on the Prime Minister Jimmy Goldsmith, a friendly neighbourhood billionaire, must be called in and asked to use his influence with the Prime Minister, rather than the Secretary of State?

Mr. Spicer : The hon. Gentleman answered his own question about the planning constraints involved in the construction of 24 nuclear power stations. We envisage that there will be four new PWRs and that each one, with a capacity of 1.2 GW, will reduce CO emissions by about 6 million tonnes per year, or about 3 per cent. of the total emissions. That is pretty good.

Dr. Michael Clark : Is my hon. Friend aware that there seems to be a notion about that if a Labour Government come to power, coal will be burnt extensively without any adverse effect on the atmosphere? Will he confirm that 1 million tonnes of coal burnt will produce 3 million tonnes of carbon dioxide, whether a Conservative or Labour Government are in power, and that chemistry is impartial in terms of politics?

Mr. Spicer : My hon. Friend's logic is impeccable as, I am sure, are his figures. Certainly, the logical implication of the Labour party's policy is that, for the foreseeable future, it intends to base the entirety of our energy on coal technology. That will have a grave impact on CO emissions.

Nuclear Power

10. Mr. John Evans : To ask the Secretary of State for Energy if his Department has plans to increase the size of its nuclear power programme.

Mr. Parkinson : No, Sir.

Mr. Evans : In view of the fact that the Prime Minister is apparently determined to rely entirely on nuclear power in the future to combat the greenhouse effect, would it not be more realistic to start installing flue scrubbers in coal-fired power stations such as Fiddler's Ferry as an additional weapon in our fight against the greenhouse effect?

Mr. Parkinson : At the end of last week, the Prime Minister repeated the Government's position, which is that we wish to see four PWRs built to replace the Magnox stations that will be phased out between now and the year 2000. The Prime Minister also said--and it is a remark that I have repeatedly made in the House--that she believes that the argument is gradually turning in favour of nuclear power. Therefore, that number may turn out to be the minimum, but the Government's present plans envisage four PWRs being built.

Mr. Morgan : Oh, a minimum?

Mr. Parkinson : I have said that before, too. The hon. Gentleman should listen occasionally. The first orders have been placed for Drax and we are committed to a reduction of 60 per cent. in sulphur dioxide emissions by

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the year 2003. That will mean more retrofitting and it is for the CEGB and its successor companies to decide which stations will be retrofitted.

Mr. Jack : In view of my right hon. Friend's previous and excellent answer, what specific measures is the Central Electricity Generating Board taking to ensure that the existing, advanced gas-cooled reactors give the maximum output?

Mr. Parkinson : A Labour Government originally ordered them and we have presided over their development. Therefore, it should be encouraging to all hon. Members to know that at long last the AGRs appear to be working better. Last year was their best year for production. Torness and Heysham B have every possibility of being successful, therefore, good progress is being made.

Mrs. Margaret Ewing : Has the Department made any real assessment of the cost to the consumer of its programme of nuclear energy? Is the Secretary of State aware that Torness, which came on stream in Scotland on Saturday, led to £2 billion debts for the South of Scotland electricity board which, along with the servicing of that debt, will pass on to the consumer a bill of about £170 per year? Does the Secretary of State accept that nuclear energy is unwelcome to the population, and that Saturday was an example of the great white empress opening a great white elephant?

Mr. Parkinson : I congratulate the hon. Lady on thinking up that well-thought-out remark so spontaneously. We believe that nuclear power has justified its existence in this country on at least three occasions in the past 15 years : during the oil price explosions and during the miners' strike. I did not notice the critics of nuclear power complaining that their lights came on even though the NUM did its best to turn them off. There is a price to be paid for security, and we are prepared to pay it.

Sir Ian Lloyd : Does my right hon. Friend agree that one of the most dangerous things we can do when judging the greenhouse effect and its policy implications is to oversimplify the whole matter? If world reductions of carbon dioxide are to be achieved in the amounts that science suggests, we shall need every contribution we can get, not only from energy conservation and efficiency and a reduction of demand for electricity, but from nuclear power, too.

Mr. Parkinson : My hon. Friend is absolutely right. No one suggests that nuclear power is an alternative to conservation or that we should stop conservation. No one suggests that there is only one answer.

Our record on improved energy efficiency is extremely good, so we say exactly what my hon. Friend said. The world cannot afford to turn its back on any means of reducing carbon dioxide emissions, because they present a major threat to us all.

Mr. Barron : If the Secretary of State has no plans to increase nuclear power, is he happy that his diversity argument will also be used now about foreign coal? The question that we asked earlier is important. We understand that negotiations are going on for 15 million tonnes of foreign coal. Is the right hon. Gentleman's Department happy that that should take place in the next two months--yes or no?

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Mr. Parkinson : I am not in a position to settle the negotiations between the CEGB and British Coal ; they are going on now. Opposition Members do not realise that they are being used by proponents of one side of the argument to prevent proper negotiations from taking place. We have given the two sides permission to negotiate freely and we have made it clear that we shall not dragoon them. We have also put the British coal industry into a better position in which to compete than ever before and we believe that, based on its recent performance, it will get most of the business. We do not accept that British Coal can find customers only if they are dragooned into buying from it.

Mr. John Marshall : Does my right hon. Friend agree that Opposition Members are talking a load of scientific nonsense and that it is high time that Labour Members learnt from Socialist France that nuclear power is a positive and effective way of generating electricity?

Mr. Parkinson : I cannot see why my hon. Friend felt it necessary to qualify his "nonsense" remark with the adjective "scientific".

Offshore Installations

12. Mr. Doran : To ask the Secretary of State for Energy how many offshore installations have shut down in the last 12 months ; and what was the total loss of production of (a) oil and (b) gas.

Mr. Parkinson : Seventeen million tonnes of oil production has been deferred, not lost, as a result of the Piper Alpha disaster and other accidents in the past year. Apart from Piper Alpha, the operators expect the majority of fields currently out of production to be back on stream by the end of this month and the remainder by September. The loss, or deferment, of gas production was minimal ; the total capacity of the North sea and Morecambe bay remained well in excess of demand.

Mr. Doran : That is an appalling record. Does not the Minister think it ironic that the Tern Eider field is being opened almost as we speak, yet these fields are being shut down because of the closure of the Brent pipeline system? Given the serious consequences of these failures of safety --the loss of life and the effect on the economy--does he accept now that safety in the North sea is far too important to be left to the Department of Energy?

Mr. Parkinson : That exciting list of statements led nowhere, but it allowed the hon. Gentleman to run one of his favourite hobby horses at the end, which was interesting. No one could draw his conclusion. Until the day after Piper Alpha, not a single Labour Member had ever asked me a question about North sea safety, and I was never asked about the better performance of Norway, for the simple reason that its record until that time was a great deal worse than ours.

There are lessons to be learnt and we intend to learn them. My inspectors take their jobs extremely seriously.

Mr. Foot : Does the right hon. Gentleman agree that the Health and Safety Executive and Commission have a pretty good record of work generally? That being so, why, after all these incidents, does he resist so strongly extending their powers properly to cover this whole area?

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Mr. Parkinson : I am sure that the right hon. Gentleman remembers that our present arrangements were the direct result of a study by the Burgoyne committee set up by his right hon. Friend the Member for Chesterfield (Mr. Benn). That committee reported to us and recommended the arrangements that we now have. The arrangements were put in place as a result of the study by an independent committee. We have already made it clear that if Lord Cullen of Ashbourne feels that he wishes to make any comments on those arrangements and to express a view about seeing them changed, we shall be happy to consider it.

Mr. Hind : My right hon. Friend will be aware that the accidents in the North sea bring home to consumers the question of interruptible supplies of gas. Will he consider suggesting to our right hon. Friend the Chancellor of the Duchy of Lancaster that if we are to retain a horticultural industry the increase in gas prices as a result of the recent Monopolies and Mergers Commission report should be looked at again? Will he have discussions about that matter with the chairman of British Gas?

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