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House of Commons

Monday 15 July 1991

The House met at half-past Two o'clock


[ Mr. Speaker-- in the Chair ]

Imprisonment of a Member

Mr. Speaker : I have received a letter from a magistrate from the petty sessional division of South Sefton informing me that Mr. Terry Fields, the hon. Member for Liverpool, Broadgreen, has been sentenced to a period of imprisonment of 60 days. I shall cause the text of this letter to be published in the Votes and Proceedings and in the Official Report.

Following is the letter :

Dear Mr. Speaker,

I must advise you that Mr. Terence Fields, Member of Parliament for Liverpool, Broadgreen, appeared before this Court yesterday in relation to non-payment of the community charge for the period ending 31st March, 1991.

The Court found that he had wilfully refused to pay the outstanding sum and as a consequence he was committed to prison for sixty days, the sentence to commence forthwith.

This information is provided in accordance with the requirement imposed by Home Office Circular 103/1982.

Yours sincerely,

G. W. Budd Justice of the Peace South Sefton P. S. D.

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Oral Answers to Questions


Alternative Energy Sources

1. Mr. Colvin : To ask the Secretary of State for Energy what is his present target for the percentage of electricity to be generated from alternative energy sources ; and if he will make a statement.

The Parliamentary Under-Secretary of State for Energy (Mr. Colin Moynihan) : The Government are working towards a figure of 1,000 MW of new renewable electricity generating capacity by the year 2000.

Mr. Colvin : Will my hon. Friend confirm that the Government are obviously doing their stuff in that regard, because, through expenditure on research and development and through the non-fossil fuel obligation, the Government and the Department of Energy are doing more than any other Government to help renewable energy? However, should not that be part of an overall strategy for energy encompassing all sources of energy? Is not that particularly important with the proposed privatisation of British Coal and the need for manufacturers in the industry to plan their R and D and commercial developments so that they can capitalise on the opportunities that will be offered in the future?

Mr. Moynihan : I am grateful for my hon. Friend's contribution and I agree with him completely. More than £180 million has been invested to date in the R and D programme with a record budget allocation of about £24 million for 1991-92. Through that sum, 300 projects are currently supported under the Department's R and D programme.

Mr. Alton : Does the Minister agree that it remains the Government's firm conviction that one of the best

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non-renewable schemes would be the construction of the Mersey barrage? Will the feasibility study continue to be financed?

Mr. Moynihan : I confirm the point that the hon. Gentleman has just made. With regard to the Mersey barrage, the Government are supporting, on a 50-50 basis, a third phase of feasibility studies and are contributing £1.5 million.

Dr. Michael Clark : Is my hon. Friend aware that members of the Select Committee on Energy recently visited Scandinavia to look at alternative energy sources such as power from wind, from burning refuse and from the use of waste hot water? Is he aware of the fact that despite this Government having devoted more money to encouraging alternative energy than any previous Government, it still appears that we are behind some of our continental neighbours? Is he satisfied that the Department of Energy is doing all that it can to sponsor research and to encourage the creation of commercial alternative energy sources from those developments?

Mr. Moynihan : I can confirm that and not least through the non- fossil fuel obligation which permitted the creation of a market for exactly the type of projects mentioned by my hon. Friend. When my hon. Friend was travelling with his colleagues, I hope that he emphasised that the United Kingdom's wind energy R and D programme is second to none and is creating enviable expertise and a sound basis for exactly what my hon. Friend wants- -the commercial exploitation of wind.

Mr. Redmond : Will the Minister agree to set up a full inquiry into energy needs, paying particular attention to the demise of the British coal industry, because British coal will fall into the category of alternative energy sources? Does he agree that something needs to be done to ensure that future needs are met from within this country and not from abroad?

Mr. Moynihan : I draw the hon. Gentleman's attention to the question, which concentrates on alternative energy sources. He asked whether there would be an inquiry and then deviated to coal. However, I assure him that, with regard to alternative energy sources, we are setting up a major review to ensure that the environmental benefits of renewables are fully exploited.

Independent Gas Suppliers

2. Mr. Rost : To ask the Secretary of State for Energy if he is satisfied with progress towards the development of a competitive gas market by independent suppliers.

The Secretary of State for Energy (Mr. John Wakeham) : I shall announce shortly the results of my Department's monitoring of gas contracted over the past two years. I am encouraged by the progress made so far, although there is still some way to go to achieve a fully competitive gas market.

Mr. Rost : Is my right hon. Friend aware that the Director General of Gas Supply has expressed the view that there will be no meaningful competition in gas until at least 30 per cent. of the industrial market is offered by the new independent suppliers? Will my right hon. Friend do everything that he can to encourage those efforts?

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Mr. Wakeham : The review is into the first two years of the new system and I hope shortly to be able to publish that and to report on it. We want there to be as fully competitive a market as possible. The advice given to us by Ofgas is important in formulating that opinion.

Mr. Hardy : Does the Minister accept that history is likely to find cause for deep regret in the unseemly haste with which British Gas reserves are being exploited? Does he realise that the unseemly haste is emphasised by the fact that that premium fuel is largely being used for steam-raising purposes? The Government will stand charged with gross irresponsibility when a wiser generation is in charge of this country's energy affairs.

Mr. Wakeham : I do not accept that at all. Gas has an important part to play in power generation, not least because of the good environmental effects of using gas.

Mr. Hannam : My right hon. Friend will be aware of the difficulties over the supply of gas to some independent private power project companies. Can he give an update on the latest stage of the negotiations between British Gas and the companies concerned?

Mr. Wakeham : British Gas is soon to introduce a new price schedule for all power generation customers. I hope that the new schedule will help to resolve the current difficulties not only between British Gas, Coryton and Thames Power, but for other operators.

Mr. Doran : The Secretary of State will be aware that one of the main tools in aiding competition onshore is the regulation of the gas transmission system. There is growing concern about the Government's failure to use their powers to regulate the transmission system offshore. That is leading to an inhibition of development of some of our vital gas supplies. Does he have any proposals to use the powers contained in the Petroleum and Submarine Pipelines Act 1975 to encourage development offshore?

Mr. Wakeham : I have no such proposals at present, but we are especially studying the development of some satellite fields. There may be a possibility of improving some of them.

Alternative Energy Sources

3. Mr. Knox : To ask the Secretary of State for Energy when he proposes to have discussions in the European Council of Ministers about alternative sources of energy.

Mr. Moynihan : Alternative sources of energy will continue to be important and relevant in future Council discussions. The next Energy Council meeting is planned for 29 October.

Mr. Knox : Can my hon. Friend say which specific area of research into alternative sources of energy is likely to be most fruitful? Does the European Community propose to devote additional funds to research in that area?

Mr. Moynihan : Grants are available for projects in a wide range of areas on renewables, not least energy efficiency, renewables across the board, clean coal technology and gas and oil exploration and development. We very much welcome the recent announcement that there will be an inclusion of wave power projects under the

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non-nuclear energy sub-programme of the third framework programme in view of that technology's potential contribution to energy supplies in Europe.

Mr. Janner : In recent meetings of the European Council of Ministers on energy matters, have the Government discussed the problem that is afflicting the Government and worrying the Opposition--the payment of those who make the decisions on these matters, such as the chairman of East Midlands Electricity, who has received a 63 per cent. pay increase at a time when industrial workers in the area have been held to 8.9 per cent? Surely that matter has a European dimension. Does any other European country have miseries that are similarly scandalous to those with which we contend here?

Mr. Moynihan : The hon. and learned Gentleman asks whether we have discussed that point at Energy Council meetings and the answer is no.

Mr. Michael Morris : As alternative energy sources are environmentally friendly, when my hon. Friend meets his colleagues in Europe, is not there a strong case for reviewing progress on clean coal technology, which is also an environmentally friendly source of electricity generation?

Mr. Moynihan : I agree with my hon. Friend. That is why the Commission and the Community, through its Thermie programme, have made grants available for projects on clean coal technology.

Mr. Morgan : When the Minister next discusses alternative energy at the European level, will he take the opportunity of separating nuclear energy and the Government's support through the nuclear levy and the non- fossil fuel obligation, which is justifiably due to finish in 1998 given that it is a mature industry that is now more than 30 years old, from the similar protection of the non-fossil fuel levy that is given to alternative energy, which should certainly not be terminated in 1998 as that is an infant industry? Will he confirm that, at some point or other, he will extend the protection of the two-tier price system that he has instituted beyond 1998 for non-fossil, non-nuclear energy?

Mr. Moynihan : I accept the importance of the hon. Gentleman's point. This year, despite the 1998 issue, which the hon. Gentleman raised, many projects for the second tranche of the NFFL obligation have come forward to be contracted and are thus financially viable. As I said, I recognise the importance of the hon. Gentleman's point, which will be discussed in detail by the group that is shortly to meet for the first time to consider the strategy of renewable energy projects.

Energy Saving

5. Mr. Cohen : To ask the Secretary of State for Energy what grants his Department gives to organisations to undertake energy-saving measures in homes.

The Parliamentary Under-Secretary of State for Energy (Mr. David Heathcoat-Amory) : My Department gives grants under the home energy efficiency scheme, which provides insulation measures to low-income households. Some £26 million is available under the scheme this year.

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Mr. Cohen : The Minister did not say how much is being spent, so his answer is cold comfort for the many householders on low incomes. Have not the Government punctured energy efficiency efforts in the home by voluntary and public organisations and the electricity and gas companies? Does he agree that there is scope for much more home insulation and for more energy -saving measures and would not it make environmental sense to do that? Are not the Tories too bloody mean to be green?

Mr. Speaker : Order. Those are not unparliamentary words, but they are distasteful and unnecessary in the Chamber.

Mr. Cohen : They are too mean to be green.

Mr. Heathcoat-Amory : I agree with the hon. Gentleman that it makes environmental sense to be more energy efficient. Our home energy efficiency scheme will enable 200,000 houses a year to receive insulation and energy efficiency advice, which is a substantial advance on any other year and on what was done by any previous Government.

Mr. Dickens : Does my hon. Friend agree that we need no lectures from the Opposition on energy efficiency, because the last time there was a Labour Government, they spent £2.4 million on energy efficiency, whereas today, under the Conservative Government, the figure stands at £40 million? Does my hon. Friend agree that we are doing something about energy efficiency, which was always neglected by Labour Governments?

Mr. Heathcoat-Amory : That is a typically sound point from my hon. Friend. I confirm that my Department's expenditure on energy efficiency has increased eightfold since 1979 when the Government took office.

Landfill Gas Projects

7. Mr. Tredinnick : To ask the Secretary of State for Energy how many landfill gas projects are in operation in the United Kingdom and other EC member states.

Mr. Moynihan : There are 34 landfill gas projects currently in operation in the United Kingdom. The latest approximate figure that I have for other EC member states indicates a total of 150 projects.

Mr. Tredinnick : I am grateful to my hon. Friend, who will be aware of the great interest in my constituency in all projects that support the environment. Can he give us some idea of the savings that can be made in conventional energy by the use of landfill gas projects and can he project what savings he thinks we will have made by the turn of the century?

Mr. Moynihan : The existing 34 schemes save some 160,000 tonnes of coal equivalent a year. In response to my hon. Friend's second point, as well as the existing schemes, nine others are under construction and 25 are proposed. When all 68 schemes are in operation, the energy saving will be equivalent to about 500,000 tonnes of coal equivalent per annum.

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Electricity Generation

8. Mr. Butler : To ask the Secretary of State for Energy how many independent electricity generation projects have been announced since the passage of the Electricity Act 1989.

Mr. Wakeham : Under section 36 of the Electricity Act 1989 I have given consent for four independent power stations to be constructed. They are at Coryton, Deeside, Keadby and Wilton, Cleveland.

Mr. Butler : Is not this excellent news for consumers? Can my right hon. Friend give a guarantee that we shall not return to a monolithic monopoly supply, which would be the case if we followed the advice of Opposition Members?

Mr. Wakeham : I have considerable expectations that we shall not return to such a system. Competition in generation is good for not only consumers but the environment. It should be very much encouraged.

Dr. Kim Howells : Does the Secretary of State agree that the dominance of National Power, PowerGen and Nuclear Electric precludes any real competition in electricity generation? Does he further agree that the monopolistic powers which have been handed to PowerGen and National Power in particular threaten to destroy Europe's most efficient coal industry, as those powers have all but destroyed the coal industry of south Wales and wasted a great national asset?

Mr. Wakeham : I do not accept that for a moment. First, competition in generation will be widespread. Apart from the four projects that I have announced, four other projects were applied for and received planning permission before the 1989 Act came into force. We have been advised about several other projects which, at this stage, are confidential. Secondly, I do not believe that the coal industry will be ruined, as the hon. Gentleman made out, as a result of the privatisation of the electricity generating industry. The industry has a significant and important future in the provision of coal for generation in Britain. If it continues to improve its productivity as it has done in recent years, it will stand to have a larger share of the market.

Sir Trevor Skeet : Will my right hon. Friend give some idea of not merely the number of projects but those which, in his estimation, are likely to materialise? Will he also tell us how many projects out of the total number are gas turbine projects and how many are coal? Are not they all gas turbine?

Mr. Wakeham : With the best will in the world, as the applications have to come to me and I have to consider them and decide whether to give planning approval, it would be unwise for me to speculate about which projects are good runners and which are not.

Electricity Supply

9. Mr. Flynn : To ask the Secretary of State for Energy what plans he has to meet the chairs of the statutory electricity consumer committees to discuss the regulation of the electricity supply industry.

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Mr. Wakeham : This matter falls within the responsibility of the Director General of Electricity Supply, who meets the chairmen of the consumers' committees on a regular basis.

Mr. Flynn : When the meeting with the chairs of the Merseyside and North-Western and the South-Western electricity boards takes place, will they be reminded that the Government knew in advance that the directors' salaries would be doubled and trebled and that the Government deliberately gagged the companies and forbade them to reveal that fact last autumn? Will the Secretary of State take advantage of the fact that today is a day of national penitence to confess the Government's and the Prime Minister's shameful complicity in this orgy of greed which scandalised the whole nation?

Mr. Wakeham : If any penitence is required it is from the hon. Gentleman, who has just made a statement which he knows to be untrue. The statement in the prospectus was the position and that position was set out. What was said at a meeting was subsequently withdrawn by those concerned. The hon. Gentleman should be ashamed of himself.

Mr. John Marshall : Will my right hon. Friend confirm that the privatised industries have had much more effective control of their prices than was ever the case when they were in the public sector? Does he agree that privatisation has led to much higher investment, productivity and revenue to the tax authorities than ever occurred when the industry was in the public sector?

Mr. Wakeham : My hon. Friend makes his point well. He is correct.

Mr. Dobson : Will the Secretary of State end this pretence that he and the rest of the Government were not involved in the massive pay increases for electricity bosses? In particular, will he confirm that the Government paid City advisers Coopers and Lybrand no less than £360,000 for advice on the pay and perks of electricity bosses? That sum is so large that it would almost pay for one of the chairmen. As the taxpayers paid for the advice that the Secretary of State received, will he now publish it so that they can see whether they got value for money?

Mr. Wakeham : In recent times we have had a number of exchanges and a debate on these matters and there is not much more that I want to say. I will just add this : Coopers and Lybrand produced one of several reports on executive pay. Naturally, the companies pressed for increases. The Government decided that salaries should be restrained while the companies were in the public sector. Thereafter it was a matter for the companies.

Mr. Simon Hughes : Will the Secretary of State look again at the regulation of privatised industries, such as the electricity industry? Does he recognise that it is unacceptable for the industries to be able to offer their chairmen and other executives such enormous pay increases when that goes contrary to Government policy? Does he accept that the House of Lords Select Committee, which is about to report, makes it clear that the new structure of the industry adds to the possibility of generation and supply, but goes against energy efficiency? The regulative powers of the new industry are not effective. What will he do about it?

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Mr. Wakeham : First, I will not add anything to what I said about directors' pay. I have already expressed my view, as has my right hon. Friend the Prime Minister. I merely add that salary increases do not affect the price to the consumer, because of the regulation. That is important. I disagree with the hon. Gentleman about energy efficiency in the privatised system. Competition in generation is one of the single most important steps that we have taken to improve energy efficiency. The generators now have a direct financial incentive to reduce the costs of producing electricity. As their principal cost is the fuel that they use, they have a powerful reason for wanting to improve efficiency.

Energy Efficiency

11. Mr. Holt : To ask the Secretary of State for Energy what is the current level of investment in energy efficiency.

Mr. Heathcoat-Amory : It is not possible to separate out a national figure for total investment in energy efficiency because it is often part of wider capital expenditure in industry, transport and the public sector. However, since 1983 the amount of energy used per unit of national output has fallen faster in the United Kingdom than in the majority of other EC countries.

Mr. Holt : However much we try to save energy, we are concerned about its creation in the first place. We on Teesside are getting worried that there is no strategy for the number of power plants that will be sited there, that there are no controls and, more particularly, that there is no concern about the transportation of that electricity by cables once the plants are in operation. Is not it time that the Government gave that some thought instead of just leaving it to the roulette wheel?

Mr. Heathcoat-Amory : My hon. Friend will appreciate that new and modern generating stations can mean new transmission networks. He will also know that any proposals for substantial overhead lines introduced by the National Grid Company must be accompanied by an environmental statement which balances the need for energy with the environmental concerns of my hon. Friend and others.

Mr. Bermingham : Does the Minister agree that any investment in energy conservation, whether by insulation or otherwise, creates employment for people in other industries? Surely now, when the whole of industry is in recession, any Government-led investment of that nature must be welcome?

Mr. Heathcoat-Amory : I agree about the importance of energy efficiency measures, which is why my Department is spending more than £40 million on promoting energy efficiency.

Mr. John Browne : I welcome my hon. Friend's answer. May I ask him whether he has any plans to encourage-- [Hon. Members :-- "Put your hat on."] individuals and corporations to invest in energy-saving devices, such as PL lightbulbs? Their use could be encouraged even at retail level through rebates, which are used in the United States and Canada. [Interruption.]

Mr. Speaker : Order. Perhaps that will encourage the hon. Gentleman not to wear his hat.

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Mr. Heathcoat-Amory : I am sorry about my hon. Friend's hat--as a result I have already forgotten part of my hon. Friend's question. There are plenty of incentives to invest in energy efficiency measures, because, by saving fuel and electricity, the customer is also saving money. For those low-income households where such savings may not apply we have a separate scheme which I have already described to the House.

Electricity Supply (Sharing)

12. Mr. Dykes : To ask the Secretary of State for Energy if he will make a statement on the operation of the EC Energy Council's development of electricity supply sharing arrangements.

Mr. Heathcoat-Amory : I understand that the European Commission expects to bring forward proposals for opening up electricity markets in Europe very soon. I welcome that development and look forward to such discussions with other EC countries in the Energy Council.

Mr. Dykes : I thank my hon. Friend for that answer. Will he confirm that Her Majesty's Government will press that campaign and policy vigorously, bearing in mind that there are rumours of tardiness by other member states as well as some of the officials in the Commission dealing with that policy? Notwithstanding that the single market has not yet begun- - [Interruption.] --if I had a hat I could take it off to hear my hon. Friend's answer--does my hon. Friend agree that a single market for electricity supply is vital so that we can sell some of our electricity to the continent?

Mr. Heathcoat-Amory : I agree, but there is resistance in some other member states to the proposals for a freer market in electricity. Their state monopolies are, inevitably, somewhat resistant to competition, but we strongly believe that a true internal market requires a freer market in electricity. We have introduced proposals to that end.

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