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House of Commons

Monday 29 January 1990

The House met at half-past Two o'clock


[ Mr. Speaker-- in the Chair ]


British Railways Bill

(By Order)

Order for consideration, as amended, read .

To be considered tomorrow .

Mr. Devlin : On a point of order, Mr. Speaker. Is it in order for me, as a Back-Bench Member of Parliament and member of the Franco-British parliamentary group, to ask whether you would welcome the French Members of Parliament who are gracing us with their presence in the Gallery today?

Mr. Speaker : We never refer to those who are present in the Gallery or elsewhere.

Oral Answers to Questions


Energy Efficiency Office

1. Mr. Menzies Campbell : To ask the Secretary of State for Energy if he will make a statement about the forward budget of the Energy Efficiency Office.

The Minister of State, Department of Energy (Mr. Peter Morrison) : The budget of the Energy Efficiency Office for

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the current year is £15 million. Its budget for future years will be substantially increased by funding for the proposed new insulation scheme for low-income households.

Mr. Campbell : How can we be confident about that assertion, given that the office's budget has been cut from its 1986-86 level of £24.5 million to £15 million for the current year? Did not the Government give evidence to the United Nations that we can save up to 60 per cent. of our fuel bill over the next 15 years by more effective methods of energy conservation? Should not we be looking for more investment and more commitment from the Government to energy efficiency, which would have substantial effects on the environment?

Mr. Morrison : Perhaps the hon. and learned Gentleman is overestimating the figure at 60 per cent.--it is about 20 per cent. The fact that £40,000 million is still being spent shows that considerable savings can be made. The hon. and learned Gentleman will recall that a significant amount of money was spent on advertising. I hope that he will agree that the fact that energy efficiency is at the top of the list of priorities of many businesses and domestic households shows that that money was well spent and need not be spent to the same extent again.

Mr. Moss : Will my right hon. Friend confirm that spending on energy efficiency has increased dramatically since 1979? Does he accept that an industrywide voluntary code on energy efficiency labelling of appliances would be warmly welcomed by Conservative Members?

Mr. Morrison : I agree with my hon. Friend. Compared with 1979, about £500 million is being saved on energy costs, which by any stretch of the imagination is a significant sum. My hon. Friend may know that the Department is conducting a study on domestic electrical appliances, which we shall publish as soon as possible. I agree with my hon. Friend that there are definite savings to be made.

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North Sea (Investment)

2. Miss Widdecombe : To ask the Secretary of State for Energy what was capital investment in the North sea in 1989 and 1988.

The Secretary of State for Energy (Mr. John Wakeham) : Capital investment in the United Kingdom continental shelf oil and gas projects was £2.1 billion in 1988, and my estimate for 1989 is £2.5 billion. Recent forecasts by the National Economic Development Office suggest that capital investment could reach £3.7 billion in 1990.

Miss Widdecombe : What effect have the changes in petroleum revenue tax and their relative tonnages had in respect of the southern basin?

Mr. Wakeham : The Government modified the offshore taxation regime to maintain the right environment for investment. I cannot give my hon. Friend exact figures, but it is generally accepted that the North sea has one of the most favourable taxation regimes in the world. All the evidence shows that North sea activity is booming.

Dr. Reid : I thank the Minister for giving us the capital investment figures for the North sea. Can he tell us what proportion of that investment goes to British firms and, in particular, what proportion of North sea oil steel purchases goes to the Clydesdale tube works--the only British Steel tube works? There is a grave suspicion that, despite all the efforts of the work force and management at the Clydesdale works, foreign tube producers are increasingly penetrating the North sea market. Can the right hon. Gentleman say what proportion is accounted for by British tube works?

Mr. Wakeham : The North sea is a great success story for British suppliers, who have a large proportion--about 80 per cent.--of the business, which is obtained by fair competition. There has rightly been an increase in imported steel tubes--mainly because British Steel was not in a position to supply.

Mr. Hannam : Will my right hon. Friend confirm that increasing investment in the North sea is now producing forecasts of self-sufficiency in oil for another 10 years? Is not that a tribute both to the effectiveness of the Government's policy and to the enterprise of the oil industry?

Mr. Wakeham : That is absolutely right. The surplus on trade in 1989 was a little bit down on the figure for 1988, but in the coming years the balance is expected to increase significantly to about £2 billion a year, the high investment in the North sea will ensure a healthy balance well into the 1990s.

Mr. Doran : We welcome the increase in expenditure that the Secretary of State has explained to us, but quite a large proportion of that expenditure goes on safety. The Secretary of State will be aware that hardly a week goes by without another safety problem arising in the North sea. I gather that only this morning the Shell Eider platform required partial evacuation because of a gas leak. When will the Secretary of State consider seriously the safety system in the North sea? Investment in technology is not

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enough, and there is clearly a problem with the multiplicity of agencies, including the Department, responsible for safety in the North sea.

Mr. Wakeham : I do not accept much of what the hon. Gentleman said. He is right that there was trouble this morning at the platform that he mentioned, but everyone was safely evacuated and there was no damage in that respect. We continually stress the paramount importance that the Government attach to the safety of offshore workers and repeat that safety standards will not be compromised for any reason. We constantly seek ways to improve the safety of all offshore workers and do not hesitate to introduce any new changes that we think necessary.

Mr. Ian Bruce : Did the figures that my right hon. Friend gave include figures for onshore workings? Will he confirm that there are valuable deposits available both onshore and in the English Channel and that the development at Wytch Farm is to be welcomed, in view of the enormous increase in the resources that have been found there?

Mr. Wakeham : The figures that I cited were for offshore workings, but my hon. Friend is right to point to the significance of onshore developments.

Energy Efficiency

3. Mr. McAvoy : To ask the Secretary of State for Energy what further proposals he has to promote the more efficient use of energy.

6. Mr. Cran : To ask the Secretary of State for Energy what recent initiatives he has announced to encourage greater energy efficiency.

Mr. Peter Morrison : Powers for the introduction of a new scheme of grants towards the cost of insulation measures in low-income households are contained in the Social Security Bill, which received its Second Reading on 22 January.

Mr. McAvoy : I thank the Minister for that answer. I am well aware of the proposals in the Social Security Bill. Does the Minister accept that those puny measures do no more than to take us back to 1988 in terms of energy efficiency promotion? It is all very well giving us fine words, but does the hon. Gentleman accept that it is about time that his Department produced a time scale, even if it is only for the measures in the Social Security Bill?

Mr. Morrison : The hon. Gentleman is being a little less than generous. No doubt he will know that some 700,000 households have benefited from insulation projects over the past few years, and it is intended that many more thousands should benefit from the Social Security Bill.

Sir Trevor Skeet : Will the Minister bear it in mind that although there are 23 million vehicles on the roads, the internal combustion engine is only 27 per cent. efficient, and that our conventional power stations are only about 37 per cent. efficient? Will he have a look at that matter and see whether the efficiency of the stations and the vehicles could be improved?

Mr. Morrison : I learn something new from my hon. Friend the Member for Bedfordshire, North (Sir T. Skeet) every day. I was not aware of that fact about the internal

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combustion engine. My hon. Friend is a great expert on all matters connected with power stations. We listen carefully to him and shall pay particular attention to his comments on this question. Several Hon. Members rose --

Mr. Speaker : Order. I have also made a mistake. I should have called the hon. Member for Beverley (Mr. Cran).

Mr. Cran : Does my right hon. Friend agree, in the light of the statement last week by the chairman-designate of British Petroleum to the effect that the consumption of oil was likely to increase and therefore the price to follow it, that the message is clear for industrial and other users that we must cut our present £40 billion a year energy bill?

Mr. Morrison : I agree with my hon. Friend. I am delighted that the electricity and gas industries, BP through BP Energy and Shell through Emstar, and contract energy management are directing what will be the private sector to the same end that the Government are aiming for through the Energy Efficiency Office.

Mr. Malcolm Bruce : Does the Minister accept that while the increase in the insulation grant, for which many of us have been calling for some years, is welcome, the scale of energy expenditure in the United Kingdom is vast--amounting to £40 billion, as the hon. Member for Beverley (Mr. Cran) said--and that our ability to meet the targets, which even the Government claim are achievable, seems to be virtually non-existent? What will the Minister's Department do, in conjunction with other agencies outside the House, to ensure that the savings are achieved?

Mr. Morrison : I am sure that the hon. Gentleman is aware of the figures. While over the past 10 years GDP has increased by 20 per cent., energy consumption has held level. That is a good set of figures and in that respect we are the best in the Common Market. Because of the large figure of £40 billion spend, to which the hon. Member for Gordon (Mr. Bruce) and my hon. Friend the Member for Beverley (Mr. Cran) referred, and the 20 per cent. potential savings, we shall continue to promote in every way possible what is in the interests of all householders and every business.

Mr. Benn : Will the Secretary of State tell the House whether his Department was consulted before Mr. Bernard Ingham was offered a university appointment sponsored by British Nuclear Fuels plc? Is it right that a Government press officer should accept that post, particularly in view of Mr. Bernard Ingham's long reputation for opposing journalists who have been critical of the nuclear industry?

Mr. Morrison : With respect to the right hon. Gentleman, I do not think that that is a matter for me. I know nothing about that.

Mr. Steen : Will my right hon. Friend congratulate South Western electricity board on its efficient use of its time and skill over the weekend in restoring electricity to many of the villages and towns throughout the south-west? Is he aware that many elderly people in my constituency, particularly along the coastline of Devon, are still without electric light, heating and telephone communications? Will my right hon. Friend consider bringing in private

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contractors in the electricity industry to help the electricity board to speed up the rate at which it can reconnect people who still have no electricity supply?

Mr. Morrison : I join my hon. Friend in congratulating the South Western electricity board, as I am sure that all hon. Members would, on its tremendous efforts to restore electricity supplies. On my hon. Friend's point about whether the electricity board's efforts can be augmented, I am sure that all the possibilities are being considered to ensure that electricity can be restored as soon as possible. Obviously, that will take time in the more distant communities. I am advised that it may take even until Thursday or Friday in some cases, but everything will be done to reconnect supplies as soon as possible.

Mr. Dobson : The Minister has told us about his airy-fairy plans for energy efficiency in the future, but he should consider what is happening now. With regard to the community insulation programme, draughtproofing jobs completed last year fell by 30,000 and loft insulations fell by about two thirds. In London and the south-east alone, the number of operatives involved has fallen from 1,100 to 150. Surely the Minister should be doing something now.

Mr. Morrison : I should have thought that the hon. Gentleman would notice--certainly his hon. Friend the Member for Glasgow, Rutherglen (Mr. McAvoy) has noticed--that we are doing something, and that was mentioned on Second Reading of the Social SecurityBill--

Mr. Dobson : That is just talk in the House. Do something.

Mr. Morrison : Of course, we are. If the hon. Gentleman were to look carefully at the reasons behind the figures that he gave, he would realise that the number of long-term unemployed has fallen substantially. That means that there are fewer people to do the job under the old programme. That is why we are introducing a new programme that will help tens of thousands of low-income households.

British Gas (Disconnections)

4. Mr. Andy Stewart : To ask the Secretary of State for Energy how many customers of British Gas were disconnected for debt during the last financial year.

9. Mr. Lester : To ask the Secretary of State for Energy how many customers of British Gas were disconnected for debt during the last financial year.

Mr. Peter Morrison : This is a matter for British Gas. However, I am delighted that the number of British Gas customers disconnected for debt is now lower than at any time since records were first kept in 1977.

Mr. Stewart : I warmly welcome my right hon. Friend's reply as it shows beyond doubt that privatised British Gas is superior in all respects to that which went before it in the days of nationalisation. That reply also refutes the Labour party's allegation that British Gas puts profits before consumers.

Mr. Morrison : I entirely agree with my hon. Friend. I know that it is unpleasant for Opposition Members to

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admit that the privatised British Gas is a great success. The number of disconnections, calculated on a yearly basis, to September last year was some 23,200, which is about half the number disconnected in the year before British Gas was privatised. The fall in the number of disconnections, let alone the comparative price of gas, demonstrates that British Gas is a success story.

Mr. Charles Wardle : What steps has my right hon. Friend taken to ensure that pensioners are reminded of the new British Gas code of practice and to explain to them that since privatisation, gas standing charges have increased by less than the increase in the cost of living?

Mr. Morrison : My hon. Friend will be aware that British Gas has consulted all 17 million of its customers and that it is making them aware of the services that it offers--that number includes, of course, pensioners. In the past five years standing charges have fallen in real terms by some 33 per cent. and, since privatisation, they have fallen by about 18 per cent. That is a good record.

Mr. Simon Hughes : I welcome the Minister's figures, but are there are any further plans to ensure that the particularly vulnerable, pensioners and the mentally ill, have an opportunity to register that vulnerability or to get someone to register it on their behalf, or will the industry provide a mechanism whereby vulnerable customers can be identified? In that way, they could be protected against accidental disconnection as a result of their inability to deal with reminders or any paperwork. Such things happen. The new arrangements could result in a further reduction in the disconnection rate for good reason.

Mr. Morrison : I am glad that the hon. Gentleman welcomes the figures and I know that in the past two and a half years that I have answered questions on this subject, he has been concerned with it. The figures demonstrate that British Gas is concerned to ensure that such small, select groups are properly catered for and looked after. I regret to say that, every now and then, one or two people may slip through the net, but every effort is being made by British Gas.

Mr. Viggers : Does my right hon. Friend agree that the last thing that British Gas wants to do is to cut off a consumer and, therefore, a customer? Sensitive arrangements are now in hand, however, and Southern Gas ensures that there is a minimum period of 77 days from the date of the first bill to the disconnection. Those arrangements also include counselling, when British Gas seeks to discuss the situation with the customer. Does my right hon. Friend agree that the message that should go from the House is that anyone in difficulty with his gas bill should please get in touch with his gas board?

Mr. Morrison : I entirely agree with my hon. Friend. The staff at the gas showrooms and offices that I have visited are most sympathetic towards their customers and are at pains to try to point out the procedures that are available to them.

British Coal

5. Mr. O'Brien : To ask the Secretary of State for Energy when he last met the chairman of British Coal ; and what was discussed.

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Mr. Wakeham : I meet the chairman of British Coal regularly to discuss all aspects of the coal industry.

Mr. O'Brien : Did the chairman of British Coal raise with the Secretary of State the significant problem of waste disposal in the Selby coalfield? I remind the Secretary of State that when the public inquiry into the development of the Selby coalfield was held in 1976, it was stated that there would be no waste to be disposed of there, but now there are over 1.25 million tonnes of waste per year, all of which has to be disposed of in my constituency. As the possibility that there would be waste disposal problems was denied at that public inquiry, will the Secretary of State prevail upon the chairman of British Coal to institute a public inquiry into those waste disposal problems, because of the significant effects that they have on my constituency, including the filling in of two miles of the river Calder, which cannot be regarded as acceptable in any language? When the Secretary of State next discusses British Coal matters with the chairman, will he raise the question of an inquiry into the waste disposal problems at the Selby coalfield?

Mr. Wakeham : I am not sure whether an inquiry would be helpful, but I understand the hon. Gentleman's concern about a matter involving his constituency. The waste disposal arrangements at Selby are a matter for British Coal, but I shall draw the chairman's attention to the points that the hon. Gentleman has made.

Dr. Michael Clark : When my right hon. Friend met the chairman of British Coal, did he discuss with him the speech that the chairman made at the Institution of Mining Engineers on 24 January, in which he said that colliery managers are now more free to manage and that miners and trade union officials are more open minded, more flexible and more realistic than they were 10 years ago? Is not that good news for the coal industry and does not it show the progress that has been made in the industry during the lifetime of this Government?

Mr. Wakeham : I was present when Sir Robert Haslam made those encouraging remarks at that dinner. Indeed, I made some encouraging remarks myself about the future of British Coal if it takes the opportunities that are available to it to continue the productivity gains that it has already made. Its productivity gains of 75 per cent. on the pre-strike levels are a good example of what can be done, but I am afraid that more will have to be done in the future.

Dr. Kim Howells : When the Secretary of State met the chairman of British Coal, did he discuss with him the recent appointment of Coopers and Lybrand, the accountants, as the body to administer the so-called "fossil fuel levy" which I believe the Minister should more accurately term the "nuclear levy", as it is designed to subsidise the nuclear sector? Will the Secretary of State give the House some details about that levy, such as the amount and the way in which it will be levied upon the customers of the electricity industry?

Mr. Wakeham : I did not discuss that matter with Sir Robert Haslam, but the details of the levy will be announced shortly. I know that the cross-Channel link and the electricity that comes from France are of particular interest to the hon. Gentleman, and I am happy to give him some details about that. As he knows electricity is

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traded in both directions and as it is an interruptible supply it will not qualify for the non-fossil fuel obligation, and therefore will not receive the "nuclear levy".

Coal Privatisation

7. Mr. Gow : To ask the Secretary of State for Energy what plans he has to introduce a Bill to give to miners the opportunity to become owners of the coal mining industry.

The Parliamentary Under-Secretary of State for Energy (Mr. Tony Baldry) : Employee participation will be looked at closely in the context of privatisation proposals for coal which we hope to bring forward in the next Parliament.

Mr. Gow : Is my hon. Friend aware that he has the congratulations and best wishes of the House on his first appearance on the Front Bench at Question Time? Is he aware that 85 per cent. of those who work for the water industry bought shares when that industry was privatised? Does he realise that the longer he postpones the privatisation of coal the longer he denies to those who work in the coal industry the opportunity that was rightly given to those who work in the water industry to become worker- shareholders?

Mr. Baldry : I thank my hon. Friend for his comments and I commend to the House the excellent speech that he made on 19 January. It is worthy of re-reading by every hon. Member. In it, he clearly set out the merits of the Government's programme of privatisation and its undoubted benefits for consumers, customers, taxpayers and, most particularly, employees.

Mr. Lofthouse : Does the Minister appreciate that many thousands of men in the mining industry will be unable to buy British Coal shares because under Government policy, once the contracts between British Coal and the electricity supply industry become operative, 30,000 miners will lose their jobs? What interest will they have in privatisation?

Mr. Baldry : I do not accept the hon. Gentleman's premise, but I can tell him that the coal industry, perhaps more than any other, depends on the fullhearted co-operation and enthusiasm of its work force to be successful. Unlike the Opposition, we believe that employees should have every opportunity to buy shares in their own industries and we see no reason why the coal industry should be treated any differently.

Mrs. Gorman : Does my hon. Friend agree that when we have returned the coal industry to a shareholding democracy through the market there will be little need for a Department of Energy any more? Will he assure us that we shall not retain that massive Government Department for the nefarious promotion of the efficient use of energy and will he agree with the previous Secretary of State that he looks forward to locking up the doors and throwing the keys into the Thames?

Mr. Baldry : Having only just arrived at the Department, I should not be forecasting its demise.

Coal Imports

8. Mr. Skinner : To ask the Secretary of State for Energy when he next expects to meet the chairman of British Coal to discuss coal imports ; and if he will make a statement.

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15. Mr. John Marshall : To ask the Secretary of State for Energy if he will make a statement about the level of coal imports.

Mr. Wakeham : I meet the chairman of British Coal regularly to discuss all aspects of the coal industry, including coal imports. Coal imports for the period January to November 1989 were 11.2 million tonnes. We do not produce estimates for future years.

Mr. Skinner : How can the Minister justify that massive increase in imported coal--to more than 11 million tonnes in less than a year--when we already have a balance of payments deficit of more than £20 billion? Is it not economic lunacy to add to that bill? Does he realise that that figure is equivalent to more than 10 pits and more than 11,000 jobs of miners who, having been thrown out of work, would have to be picked up by the taxpayer, who would have to pay their dole and welfare benefits? What is the point of it all?

Mr. Wakeham : The hon. Gentleman may make his point ; he has made it a number of times before. He referred to a massive increase in coal imports, but the figure that I quoted was 11,188,000 tonnes, which, as the hon. Gentleman knows, was less than the figure for 1988. The figure was for 11 months, not for 12. We cannot speak of those figures, therefore, as a "massive increase".

Of course, no Government have ever restricted the import of coal and we do not believe that restricting competition is in the best interests of the coal industry and of the long-term security of jobs, which rely on its being a competitive industry.

Mr. Marshall : Does my right hon. Friend agree that the world price of coal is somewhat lower than the price charged by the coal industry to the electricity boards? Does he therefore agree that coal imports are in the interests of the consumer, that they will lead to lower electricity bills for pensioners and that they will help to safeguard jobs in manufacturing industry?

Mr. Wakeham : I believe that overwhelmingly the main source of coal supplies for United Kingdom generating industry for a long time to come will be British Coal. But my hon. Friend makes an important point. The House may be interested to know that United Kingdom coal imports in 1988 cost an average £35.67 a tonne, compared with British Coal's price of £41.16 a tonne. So there is not a staggering difference, as some people make out, but there is a significant difference and British Coal must continue to improve its productivity.

Mr. Eadie : As the Secretary of State is aware both that it has been clearly established that if the Associated British Ports (No. 2) Bill passes through the House there will be an increase in coal imports and that the chairman of British Coal has said that he is against that Bill, is it not lunacy to proceed with it, especially when the Government and the nation are being confronted with our horrific balance of payments deficit, to which my hon. Friend the Member for Bolsover (Mr. Skinner) referred, and more miners will be made redundant as a consequence? Is that a sensible energy policy?

Mr. Wakeham : It is not an amazing surprise that the chairman of British Coal should not be wildly enthusiastic about any Bill that he perceives will increase competition.

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Nevertheless, we believe that competition is right. The hon. Gentleman's time scale is wrong. Even if the port is built as intended and all the necessary arrangements are made, it will be a good many years before much extra coal is imported through it. Moreover, British Coal has other competitors in the market, such as oil and gas. There is no need to build additional ports to bring in those facilities. That is why it is essential that British Coal continues making substantial improvements in future. That is its long-term security.

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