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House of Commons
Monday 27 January 1992
The House met at half-past Two o'clock
PRAYERS
[Mr. Speaker-- in the Chair ]
Oral Answers to Questions
ENERGY
Petrol Prices
1. Mr. Cox : To ask the Secretary of State for Energy if he will make a statement on present petrol prices in the United Kingdom.
The Parliamentary Under-Secretary of State for Energy (Mr. Colin Moynihan) : Petrol prices are currently estimated to be about 48p a litre for four-star and about 44 p a litre for unleaded petrol.
Mr. Cox : I thank the Minister for that reply. He will be aware of the recent increases in petrol prices and the effect that they have had on the entire day-to-day life of the country. Can he tell the House something about the agreement made on 13 December by his right hon. Friend the Secretary of State for the Environment, which I understand will lead to a 6 per cent. increase--the equivalent of 12p per gallon--in the price of petrol, to come into force in 1993? The agreement was signed in Brussels with other Euro-Ministers.
Mr. Moynihan : To my knowledge, no such agreement was made. Of course, I will look into the specific points that the hon. Gentleman made and ask my right hon. Friend to reply. The hon. Gentleman mentioned prices. They are set by the market and reflect international trading conditions. The recent increases were in line with movements in the Rotterdam spot market.
Sir Anthony Meyer : If prices reflect international conditions, can my hon. Friend explain why in Britain, almost uniquely, there is no differential between petrol and diesel prices?
Mr. Moynihan : I accept that at present diesel prices are only about p a litre below unleaded prices. As I am sure that my hon. Friend is aware, the reason for that is that the demand for gas oil, which is equivalent to diesel, is high at this time of the year because it is used for heating. That high demand tends to push up prices.
Energy Efficiency
2. Dr. Kim Howells : To ask the Secretary of State for Energy if he will give the amounts allocated to encourage improvements in energy efficiency among industrial and domestic electricity and gas customers in 1991-92.
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The Secretary of State for Energy (Mr. John Wakeham) : Public expenditure on energy efficiency benefiting such customers will total over £1 billion in 1991-92. Expenditure by supply utilities is a matter for these companies.
Dr. Howells : It is not just a matter for the utilities, because, of course, energy efficiency is important to all of us. Is it not the case that when the Government privatised the electricity and gas companies they created not a range of companies which could induce real competition for the benefit of customers and the environment but large companies with near monopoly supply status which are not in the least interested in energy efficiency? They are interested in maximising profits from sales of electricity and gas. That cannot be good for the environment.
Mr. Wakeham : That is not a fair analysis of the position. A great deal of competition is available to the whole range of industrial customers which was not available before. At the end of the transitional arrangement there will be competition throughout the whole of the industry.
I am sure that the hon. Gentleman will welcome the suggestion of the Office of Gas Supply that an E factor should be introduced into the gas tariff formula to fund cost-effective investment in energy efficiency. We shall await with interest further developments in that, as well as Professor Littlechild's intiative in publishing a consultation document on energy efficiency in the electricity industry. We shall follow that with great interest.
Mr. Dickens : Does my right hon. Friend agree that the Government have increased the budget of the Energy Efficiency Office to £59 million? Is not that a massive 40 per cent. increase in the money that we give to that office? Does not that show a total commitment to the preservation of energy?
Mr. Wakeham : Yes, indeed. Further increases are planned for 1993-94 and for 1994-95. By and large, energy efficiency is profitable for the user of electricity. Therefore, many of the Government's intiatives using those funds suggest ways in which energy consumers can save energy.
Mr. Alan W. Williams : Why does not the Government give the regulator the power to direct electricity-generating companies to use their massive profits to invest in home insulation and to improve the energy efficiency of industry?
Mr. Wakeham : The regulator, whose task has been laid down by Parliament, is perfectly entitled to come to me if he thinks that his powers are not enough. He does not share the hon. Gentleman's view that he should have further powers to achieve his objectives.
Energy-intensive Ratio
3. Mr. Jacques Arnold : To ask the Secretary of State for Energy what has been the change in the United Kingdom's energy-intensity ratio since 1983 ; and what are the corresponding figures for the rest of the EC and with Japan.
Mr. Moynihan : Latest available OECD figures show that between 1983 and 1989 the United Kingdom's energy ratio improved by 11 per cent.--more than any other
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European Community country or Japan. The improvement for the EC as a whole was 4.2 per cent ; for Japan it was 7 per cent.Mr. Arnold : Will my hon. Friend quantify the savings to this country as a result of a number of relevant programmes being run by the Government?
Mr. Moynihan : Savings resulting from the Energy Efficiency Office's programmes alone have led to a current annual energy saving worth more than £500 million a year.
Mr. Rost : My hon. Friend has identified the potential of £10 billion worth of energy saving a year which is cost effective. Can he give any sign of the time scale that he hopes will be achieved and what impact that would have on the energy ratio that he has just quoted?
Mr. Moynihan : I cannot give my hon. Friend a precise timetable. It is the Government's view that if we can implement the package of energy efficiency measures, not least through, for example, the home energy efficiency scheme, additional resources for the energy management assistance scheme, the best practice programme and our regional and publicity activities, we shall be well on the way to achieving significant additional savings.
Coal Mines
4. Mr. Mullin : To ask the Secretary of State for Energy how many pits were open in (a) January 1986 and (b) January 1992.
The Parliamentary Under-Secretary of State for Energy (Mr. David Heathcoat-Amory) : British Coal had 133 producing collieries in operation at the beginning of the financial year 1986-87, which produced 88 million tonnes of coal. There are currently 53 collieries in operation, which are expected to produce 68 million tonnes this financial year.
Mr. Mullin : Does the Secretary of State recall the letter sent by Mr. Ian MacGregor, the former chairman of the coal board, to every miner in June 1984, which described as "absolutely untrue" the claim by mine union leaders that the Government planned to reduce the number of working pits to under 100? The letter said :
"I state categorically and solemnly that you have been misled." Was Mr. MacGregor lying, or did he not know? Should not the Minister give mineworkers an apology?
Mr. Heathcoat-Amory : The chairman of the coal board made a fair assessment of market conditions at that time. The hon. Gentleman will know that the British coal industry must respond to a competitive environment. The best way to secure future jobs and future collieries is to win the largest possible share of the electricity-generation market, and the contracts are to be renewed next year.
Mr. Butler : Would any of the pits that have been closed still be open but for unfair competition from Germany? Why are the Germans allowed to subsidise their coal production so much?
Mr. Heathcoat-Amory : The European Commission is in dispute with the German Government over the level of their production subsidies, but I assure my hon. Friend
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that imports from Germany are minimal and that the real competition for the British coal mining industry comes from other fuels.Mr. Eadie : Is the hon. Gentleman not aware that the miners of this country feel betrayed by the Government? Is he aware that they posed me the question, "Is anybody in the Government prepared to stand up and fight to defend the coal industry?" Is he further aware that they feel that the chairman of British Coal acts as if he is a clone of the Government?
Mr. Heathcoat-Amory : I am by no means gloomy about the prospects for British Coal, but its future success and security depend on its becoming more competitive and productive so that it can secure a large part of the British energy market in years ahead. That can be delivered by the industry, rather than by the words of politicians.
Mr. Janman : Does my hon. Friend agree that it would be wrong to keep uneconomic pits open by trying to protect them from competition from imported coal? Does he agree that it would be totally wrong to start imposing levies or some form of import quota on coal coming into Britain, partly because that would jeopardise hundreds of jobs in the electricity industry, notably at two power stations in my constituency?
Mr. Heathcoat-Amory : My hon. Friend makes several fair and valid points. If we were to force the electricity-generating companies to take coal in volumes and at prices that they do not want, the certain consequence would be higher electricity prices for the domestic customer and for the rest of British industry, which could in turn be bad for long- term job prospects.
Mr. Dobson : Will the Minister tell us why the Government insist on making British miners redundant when they work in the most efficient collieries in western Europe? Can he name any other industry in Britain that is twice as efficient as its west German counterpart, but which, nevertheless, is suffering from job losses? Finally, why will the Government not allow the extra European funds to be spent in the coalfields to make up for the jobs that have been lost? Is it not true that the Government want to divert that money to keep down the poll tax in Wandsworth and Westminster?
Mr. Heathcoat-Amory : On European Community funds, I regret that Commissioner Millan is not releasing the RECHAR money, which we could well use in areas affected by colliery closures. I remind the hon. Gentleman that since the Government took office all the redundancies in the British coal industry have been voluntary and that the terms offered to miners affected are among the most generous in British industry and can reach £37,000 per man affected.
Oil Industry
5. Mr. Robert G. Hughes : To ask the Secretary of State for Energy what he is doing to promote opportunities for the British oil industry in winning orders and contracts overseas.
Mr. Wakeham : Last November, I visited Vietnam, Hong Kong, Japan and Korea in order to promote the United Kingdom's wide-ranging expertise in the energy
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sector. I hope that my visit provided opportunities for the British oil industry to take part in the development of oil and gas fields in that region.Mr. Hughes : Does my right hon. Friend accept that that news should be welcomed on both sides of the House? Is it not the case that on the trip he was identifying markets, boosting British business, ensuring that British companies can take advantage of that business and, in the end, creating jobs back here at home?
Mr. Wakeham : Yes, after 25 years of successful development of the North sea, our expertise is some of the best, if not the absolute best, in the world. It was important that in my visit to Vietnam, for example, I was accompanied by British business men from British Petroleum, Enterprise Oil, Shell, Lasmo, British Gas and Barclays bank. They all believe Vietnam to be a good market for British expertise and jobs to follow.
Mr. Dalyell : Before the Secretary of State sets sail to be Governor of Hong Kong, will he exercise his subtle and calming qualities on behalf of the 5,500 British expatriates, many of whom are Scots engineers working in the oil industry in Libya? Will he look at last Monday's Adjournment debate and see that there is another side to the story, before we start, heaven knows, on sanctions that will hurt the 36 British companies in Libya, which are led, by for example, Brown and Root, and which could lead to something worse in the form of another strike?
Mr. Wakeham : The hon. Gentleman is also talking of events in the aftermath of the Lockerbie tragedy. There are people who are required to appear before the courts either in Britain or in America, and all civilised people will wish to see that happen. As the hon. Gentleman invites me to read the Adjournment debate, I will.
Dr. Michael Clark : Does my right hon. Friend agree that as we are leaders in many forms of oil technology we have every reason to expect that we shall get some good export orders for that technology? Will he join me in congratulating the Petroleum, Science and Technology Institute in Edinburgh on its work on propagating Britain's ability in the oil industry?
Mr. Wakeham : Certainly, that institute is of the highest international standard and it is doing good work here and overseas providing advice and assistance. I am pleased that my right hon. Friend the Member for City of Chester (Sir P. Morrison) had a lot to do with its founding when he was a Minister in this Department.
Mr. Doran : Does the Secretary of State agree with the recent criticism that the British offshore supplies service industry is failing to take advantage of world opportunities? It has a comfortable market here with the North sea at its doorstep. The huge world market out there was worth $330 billion between 1989 and 1992, but the industry has won only a small share of that business. No amount of globe trotting by the Secretary of State will sort that problem out. What will he do about that at home?
Mr. Wakeham : The hon. Gentleman is being unfair to the North sea supplies industry. The total world value of those markets is about £40 billion a year and one third of all of the orders won by United Kingdom suppliers are for overseas markets. That is worth about £2 billion a year of the overseas markets won by the industry serving the
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North sea. That is a very creditable record. More can be done and more is being done and we shall encourage the industry to go out and get more business wherever it is ; but it has made a good start.Home Energy Labelling
6. Mr. Burns : To ask the Secretary of State for Energy what progress the Government have made in establishing a standard assessment procedure for home energy labelling.
Mr. Heathcoat-Amory : The Government have introduced a standard assessment procedure for rating the energy performance of homes. I am pleased to say that both the leading organisations which carry out home energy labelling, the National Energy Foundation and MVM-Starpoint, have agreed to incorporate the procedure into their labels. That will enable consumers to make direct comparisons between labels.
Mr. Burns : I thank my hon. Friend for his extremely helpful reply. Will he accept that it is of particular interest to householders in Chelmsford because they accept that home energy labelling will lead to substantial energy savings?
Mr. Heathcoat-Amory : I know that my hon. Friend has a long-standing interest in promoting energy efficiency in his constituency. These developments will help all those buying a home, moving house or taking a house to rent to choose dwellings that will not only save money on their fuel bills, but help to improve the environment.
Mr. Anthony Coombs : Given the importance of home energy labelling in saving energy and the Government's excellent record of funding an eightfold increase in expenditure in the past 12 years, will my hon. Friend consider the possibility of incorporating energy labelling with other initiatives undertaken by the National House-Building Council so that new homes have adequate levels of energy labelling and, therefore, energy efficiency?
Mr. Heathcoat-Amory : Yes, we believe that the recent moves would give greater assistance to the organisations that are undertaking energy efficiency assessments of homes, including new ones. I urge all those considering the purchase of a house--including brand-new houses--to look carefully at the energy efficiency or otherwise of those dwellings. An authoritative energy-labelling system will assist them to do that.
Coal Output
7. Sir Trevor Skeet : To ask the Secretary of State for Energy what was the output per man year in British Coal's mines in (a) 1978-79, (b) 1983-84 and (c) 1990-91.
Mr. Wakeham : The output per man year in British Coal's mines was 448 tonnes in 1978-79, 470 tonnes in 1983-84 and 1,181 tonnes in 1990-91-- an increase of 163 per cent. over 11 years.
Sir Trevor Skeet : Although the trend in the figures is most gratifying, thanks to the enormous investment by the Government, does my right hon. Friend agree that British Coal is still not competitive with coal from Australia,
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South Africa, Colombia and the United States? Much additional work has to be done to increase productivity further.Mr. Wakeham : I agree with my hon. Friend. The Government have supported the coal industry since 1979 with a total investment of £17 billion and productivity has improved, particularly in recent years. As the hon. Member for Holborn and St. Pancras (Mr. Dobson) said, productivity of British mines is the highest in Europe, but major exporting countries such as Australia and the United States achieve higher productivity. British Coal therefore needs to continue its efforts to raise productivity still further.
Mr. Redmond : Does the Secretary of State accept that the improvement in productivity is partly due to the fact that the number of registered disabled people employed by British Coal has fallen? Is he aware that that figure is now 0.4 per cent., which is way below the guidelines laid down in legislation? Does he intend to prosecute British Coal for its failure to maintain the percentage of registered disabled people employed in the industry?
Mr. Wakeham : On the general point, I do not believe that the substantial improvement in productivity has arisen through a reduction in the number of disabled people in the mines. The hon. Gentleman is being neither reasonable nor fair to the management or work force in British mines and is not taking account of the pain and suffering through which some of them had to go to achieve that improvement. I shall not necessarily take the hon. Gentleman's figures on the disabled as being correct, but I shall certainly make inquiries of British Coal to find out what the position is, and I shall write to the hon. Gentleman.
Mr. Batiste : However successful British Coal is in the future in building on its outstanding success in recent years and improving productivity, one of its basic problems is that it can sell only coal. Should not one of the objectives of our privatisation programme be to give British Coal, or whoever the private company may be, the freedom to produce electricity from its coal and to sell that electricity through the national grid?
Mr. Wakeham : My hon. Friend makes an interesting suggestion. However, the form and shape of privatisation will not be determined until after the general election. Those who have any doubts about it should note that there is scope for further improvements in productivity. I have received an encouraging report from Boyds, the US mining engineering company, which has reviewed British Coal's colliery operations and found much scope for further productivity improvements. It concludes that British Coal should be able to compete with the price of imported coal while continuing to improve safety standards.
Mr. Barron : The whole House will want to congratulate the British miners on doing everything that has been asked of them over a number of years and achieving that massive increase in productivity. The generators are now buying coal at 3 per cent. less than before privatisation. Given that 70 per cent. of the generators' costs is the cost of British coal, will the
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Secretary of State explain why the cost of electricity for more than 21 million households has risen by 40 per cent. during the same period?Mr. Wakeham : It represents some 25 per cent. of the cost of electricity. Electricity prices have fallen by some 2 per cent. in the past seven years, compared with an increase of 22 per cent. in real terms under Labour--or 2 per cent. every six weeks.
Overhead Power Lines
8. Mr. Hague : To ask the Secretary of State for Energy when he expects to announce the terms of the inquiry into the plans by the National Grid Company to erect new overhead power lines in North Yorkshire and Cleveland.
Mr. Heathcoat-Amory : The public inquiry will start in Northallerton on 19 May. My Department is writing to all those who have been registered as objectors to the applications, with details of the arrangements.
Mr. Hague : I thank my hon. Friend for announcing the inquiry today. Is he aware that my constituents remain strongly opposed to the proposed overhead power lines and are rightly concerned at their impact on the rural landscape? Will he confirm that the inquiry will be wide ranging and will pay close attention not only to the environmental impact of the proposed lines but to whether they are needed at all for the national grid to meet its licence standards?
Mr. Heathcoat-Amory : I am well aware of the views of many of my hon. Friend's constituents in this matter. I assure them that both the issues mentioned by my hon. Friend will be considered at the public inquiry.
Mr. Dobson : Does the Minister think that it is satisfactory for the people of Teesside to be faced with an application for a power station, another for a gas plant for the power station, and a separate application for the overhead line? Would not it have been more sensible to request all those concerned with the project to put forward their plans together and subject them all to just one public inquiry?
Mr. Heathcoat-Amory : I am quite satisfied with the structure and scope of the inquiry as announced.
Mr. John Greenway : Will my hon. Friend confirm that the terms of reference for the public inquiry that he has announced today will allow the inspector the option of recommending that my right hon. Friend refuse the National Grid Company's application? Does he agree that the private sector electricity industry makes it ever more important that safeguards should be built in to the process so that the need factor and the environmental impact are taken into account?
Mr. Heathcoat-Amory : The National Grid Company has a number of statutory obligations, including that of running a co-ordinated and efficient transmission system. The need for those new lines to discharge that obligation will be considered by the inquiry. I agree that it is an advance to have the industries in the private sector, regulated by the public sector, rather than having ownership, operation, regulation and the planning system all in the Government's hands.
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Scottish Coal Industry
9. Mr. Norman Hogg : To ask the Secretary of State for Energy if he has any plans for the expansion of the coal industry in Scotland ; and if he will make a statement.
Mr. Heathcoat-Amory : The future size of the coal industry in Scotland will depend on the success of British Coal and other mine operators, including the Monktonhall mineworkers' consortium, in producing coal at competitive prices.
Mr. Hogg : Is the Minister aware that there were more than 17,000 people employed in the Scottish coal industry in 1984, but by 1989 that figure had fallen to 3,480 and it will be even smaller now? Will the Minister commit himself and the Government to the development of the coal industry in Scotland and say more about the Government's intentions for Monktonhall, lest Yorkshire face the same problems as Scotland, as the Bishop of Durham made clear this weekend?
Mr. Heathcoat-Amory : There are still considerable quantities of good-quality coal in Scotland and I am confident that the industry will be able to make a success of producing coal at competitive prices. As regards Monktonhall mineworkers' consortium, it is encouraging that a group of ex- mineworkers have applied to British Coal to take over the pit, and I hope that they can make a success of it.
Mr. Hood : The Minister's enthusiasm sounds a bit hollow, especially as the Government ran away from Monktonhall and the idea of developing the Scottish coalfields. If the Government have any interest in coal, the Minister must agree to reconsider the franchise and develop the coal industry, which produces low sulphur coal and is highly efficient. The Scottish coal industry is waiting to be developed, not vandalised as the Government have vandalised the coal industry in general.
Mr. Heathcoat-Amory : Since 1979 the Government have given £17 billion to the British coal industry by way of grant and write-offs. In return, we require the industry to become productive and efficient so that it can win the largest possible share of the future market for electricity generation. I am confident that it will rise to that challenge, which must be faced whether the industry is in private or public hands.
Mr. John Marshall : Does my hon. Friend agree that the figures given demonstrate clearly that nationalisation has failed the Scottish coal industry and that the only hope now is that it will be privatised in the imminent future?
Mr. Heathcoat-Amory : The future of the industry will be best served in private ownership. That is why, after the next election, we shall introduce firm proposals for returning the industry to the private sector.
Electricity Supply
11. Mr. Harry Barnes : To ask the Secretary of State for Energy what are his plans to assist with the repair and protection of the electricity supply in the event of severe weather conditions.
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Mr. Heathcoat-Amory : Repair and protection of electricity supply in the event of severe weather conditions is the responsibility of each of the regional electricity distribution companies.
Mr. Barnes : That is an inadequate answer, given that more than a year ago there was a severe weather crisis throughout the country, especially in the east midlands district where 2 million people were without supplies, some of them for a considerable period. The Government did nothing and have apparently learnt nothing from the experience. They should have declared a state of emergency and ensured that Bellwin money was made available to councils so that they could take emergency action. Why have the Government learnt nothing from the experience, and why are they proposing to do nothing if a crisis emerges shortly, as it could?
Mr. Heathcoat-Amory : No distribution network in the world could have survived without damage the severe weather which struck that part of Britain in December 1990, but the regional electricity company concerned, with help from other companies and from overseas, did what it could in the circumstances to connect those who were temporarily cut off. It is an insult to the many managers and workers who responded so well for the hon. Gentleman to imply that they were less than efficient and hard working in those difficult circumstances.
Mr. Sayeed : Will my hon. Friend take this opportunity to pay tribute to the workers in the electricity industry who, despite foul weather and difficult circumstances, managed to restore supplies so swiftly?
Mr. Heathcoat-Amory : My hon. Friend is entirely right. The subsequent report on the incident showed that the company, its staff and workers responded magnificently in the difficult circumstances. I do not believe that any more could have been done--certainly not if the company had still been in the public sector.
Mrs. Margaret Ewing : Will the Minister consider holding a meeting with representatives of Hydro-power, which serves the most isolated communities in Scotland which are subjected regularly to the most severe weather conditions? Is he aware of the severe difficulties experienced in late December and early January when people in remote communities--often elderly people living alone--were without power for more than 48 hours, despite the best efforts of workers to reconnect power? Surely the Government have a responsibility to investigate mechanisms to reduce failures to a minimum.
Mr. Heathcoat-Amory : No system in the world can be wholly immune to bad weather conditions, but there are always lessons to be learnt. The report into the East Midlands Electricity Company, in the light of the severe storms of 1990, has been made widely available so that other electricity companies can learn from that experience.
Deep-mined Coal
12. Mr. Hardy : To ask the Secretary of State for Energy by what proportion productivity has been improved in deep-mined colleries operated by British Coal during the last three years.
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Mr. Wakeham : Poductivity in deep mines operated by British Coal improved by 29 per cent. in the last three years to December 1991.Mr. Hardy : Can the Minister tell the House of any other industry in Britain that could equal the productivity achievement of British miners? Is he concerned about the rewards for that achievement--the brutal loss of employment, the economic devastation of the coalfields, the adverse effect on our balance of payments, which will get worse, the excessive and inevitable energy dependence, and the deceitful diversion of funds from the coalfields as a result of the Government's approach to the European money that should be available to us?
Mr. Wakeham : I repeat that the European Community money should be for the benefit of coal communities, and we very much regret that the European Commission has not released the funds. It is not the Government who are blocking the money--it is the European Commission. I have been the first to pay tribute to improvements in productivity in the coal industry, but they must continue if the industry is to provide, as I believe that it can, the bulk of supplies to fossil-fuel generators in the years to come. If the hon. Gentleman believes otherwise, he is inviting electricity consumers to pay over the odds for their electricity.
Mr. Morgan : Does the Secretary of State agree that despite the tremendous advances in productivity made by the employees of British Coal, the perverse reward that the Government give them is to squeeze the British coal industry between the upper and nether millstones? The upper millstone consists of the new gas plants, which are protected by their 15-year contracts. The nether millstone is the nuclear industry, which is protected by the mysterious ENOR--the existing nuclear operating regime--which protects the nuclear industry so that all its power stations will run whenever they are available to run, a condition which may be applied to Sizewell B as well.
Mr. Wakeham : I have made it abundantly clear that the licences of the regional electricity companies require them to purchase from the cheapest suppliers. If the cheapest supplies are from gas, they will purchase gas ; if it is coal, I would expect them to use coal-fired methods.
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