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Lord Marlesford: My Lords, I am much obliged. My noble friend said that it is desirable to "bear down" on the less efficient producers by price. The answer is that one would have to compensate those people who are forced out by cuts in prices experienced right through Europe up until now. Further, if one had to compensate them, one would have to do so with someone's money. The advantage of the quota system is that compensation comes from those who remain in the business rather than the taxpayer or the consumer.

Earl Howe: My Lords, I understand my noble friend's point. However, I have already argued that we do not believe that compensation would be warranted if

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price cuts took place gradually over a period of years. If there were a sudden cut in price, I agree that there would be a case for compensation. However, there are other difficulties involved.

Introducing transferable grower quotas would require fundamental changes to the regime, since quotas are expressed in terms of sugar and are allocated to member states, which then distribute them to sugar processors. Sugar processors contract with growers for the quantity of beet needed to meet the national sugar quota, and that varies from year to year according to growing conditions and productivity improvements. Clearly, the determination of growers' quotas would not be straightforward and would involve government, growers and processors in a bureaucratic exercise which is currently settled by commercial contracts.

My noble friend Lord Reay asked what the Government's view was on the international transfer of quotas. As my right honourable friend said in his reply to the committee's report, the movement of sugar and sugar beet production across national frontiers to more productive areas would be needed to make a real difference to the overall efficiency of production. To negotiate the necessary change in Community rules on quota allocation would obviously be difficult. The Government have not yet achieved that in any other sector where quotas apply. Moreover, to echo a point made by the noble Lord, Lord Carter, it is also not clear that giving a right of ownership to a transferable quota would create any increase in real wealth as less resources would be available for land, machinery and inputs. So, it is purely a point of economics. Capital would be tied up in quota and, if anything, I believe that that would, in turn, increase pressure to maintain prices at high levels to maintain the asset value of the quota. I do not believe that it would act as a depressant on price levels.

The committee also suggested that quota auctions and industry-financed restructuring schemes should be examined. Indeed, my noble friend Lord Marlesford spoke eloquently in favour of that broad idea. Again, I would agree with my noble friend that such schemes have attractions as a means of shifting production to the more efficient. But we have doubts about the negotiability of cost-effective schemes. As the committee acknowledges, there are strong producer interests in the regime and it would be difficult to avoid an outcome which did not impinge on consumers or the budget. That is a further reason why price reductions remain our preferred method of adjustment.

As regards the Commission's proposals, we welcome the Committee's support for the modifications to the cane supply arrangements, which should benefit both our refining industry and developing country suppliers. The noble Viscount, Lord Waverley, dwelt particularly on the ACP countries. Perhaps I may make a few points about the sugar protocol. Neither the GATT Uruguay Round nor the review of the regime will affect the provisions of the Lomé Sugar Protocol, which is of indefinite duration. Clearly, if EC prices change, the price to the ACP will have to be negotiated with that in mind. However, that is fully consistent with the protocol provisions. As my noble friend Lord Middleton said,

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that gives the ACP countries the right to export 1.3 million tonnes of cane sugar to the EC every year at zero import levy and annually negotiated prices which, in practice, have been equivalent to the EU intervention price. But it does not guarantee any particular level of income. In addition, the ACP countries will be able to benefit from additional access provisions under the Commission's proposals, although the supply terms have yet to be determined.

Although the Commission has indicated that priority will be given to ACP supplies as far as possible, the proposal does not exclude imports from other countries. However, as the noble Viscount said, it is clearly in the EU's interest to obtain the bulk of the supplies from ACP, since the Community's GATT export commitments are calculated net of a quantity equivalent to ACP and Indian imports.

The Commission's proposals define refiners' maximum needs, but do not guarantee a definite supply. They provide for arrangements to import a shortfall calculated according to a set formula. That is an improvement on the current arrangements. But it is not possible for the EU to dictate to the ACP/Lomé countries how much they should send or to whom. The formula will also not take account of any further substitution of raw cane sugar for refining with raw cane sugar for direct consumption, whether from ACP or DOM suppliers. If imports of such direct consumption sugar continue to increase, there will be a deficit of sugar for refining.

The noble Viscount, Lord Waverley, asked whether the ACP producers would be compensated in the case of price cuts. I should say that we will continue to support the ACP case for the right to supply more sugar to the EC cane refineries at preferential terms of access. But if EU prices are cut, import prices also need to be cut to maintain the viability of our cane refining industry. As for Community producers, as I have said, we do not agree that there is a need for compensation.

The noble Viscount also asked what criteria the Commission will adopt in setting the price for additional quantities. That will be a matter for negotiation. Obviously, the price will need to be sufficient to attract the suppliers in order to secure the necessary supplies at reasonable cost. I am afraid that that is as far as I can go at present.

We also agreed with the committee that storage refunds for non-quota "C" sugar should be abolished as proposed by the Commission. Like the committee, we are not convinced that abolition will affect security of supply. We agree with the Commission that the aid is unnecessary and acts as a stimulus to non-quota production. Its abolition will reduce storage levy charged, which should feed through to lower prices to consumers, which we would welcome. We believe that the decision to carry forward non-quota sugar should be a commercial judgment and not related to the availability of subsidy. Abolition of the refund should not affect the security of supply, since processors will still be able to carry over non-quota sugar if they wish and already existing Community regulations require processors to hold a minimum level of stocks, as a

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contingency measure, in addition to normal stocks. We also have an alternative source of supply in the form of refined cane sugar.

On national aids for the beet sector, we agree with the committee that aids in Spain and Germany should be discontinued and there should be no prolongation of any of the Italian aids. In conclusion, I am grateful to the committee for its report. The broad thrust of what the committee has recommended is very much in line with our own thinking. We too are frustrated by the lack of significant change proposed by the Commission, but I am bound to say that, sadly, this reflects the attitude of the majority of member states. But the recent GATT agreement has forced the Commission to look at the sugar regime and propose the introduction of some curbs to it. The pressure to change the regime will not go away and we will, in the current negotiations and in the future, maintain our efforts to seek greater rationalisation. I should like to thank the committee for the opportunity its report has provided for this helpful debate, which ensures that a close examination of the sugar regime is not overlooked.

7.40 p.m.

Lord Middleton: My Lords, I thank my noble friend the Minister for his reply on behalf of the Government and I thank noble Lords who have taken part in this debate. I took the vulpine attribute of the noble Lord, Lord Mackie, to myself as a compliment. I am grateful to him. I have a great respect for foxes. I note with much interest that there is little difference between the Select Committee's views about the sugar regime and its reform, and those of the Government. We agree that Community production should be curbed through the price mechanism. In view of the political practicalities, the committee recommends quota reduction in addition. How much emphasis should be laid on either of these control methods is hard to judge at this stage. The Government will go hard for price control, and they may well be right, if they can get it. If our report and this debate contribute in even a small way to giving added weight to pressure upon the Community to speed up CAP reform, then our efforts will not have been in vain.

On Question, Motion agreed to.

Pylons in the Vale of York

7.42 p.m.

Lord Crathorne rose to ask Her Majesty's Government under what conditions they would refuse permission for a 400 kilovolt line of pylons to be constructed between Lackenby and Shipton in addition to the existing 400 kilovolt line.

The noble Lord said: My Lords, I am most grateful for the opportunity to ask the Question on the Order Paper about the 400 kilovolt pylons which the National Grid wants to construct between Lackenby and Shipton. The matter has been raised on five occasions in another place but this is the first opportunity we have had in this House to discuss the issues involved. I realise that my noble friend sitting on the Front Bench will not be able

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to get into the detail regarding this specific application but I am sure he will be able to deal with a number of general issues which the application raises.

First, I must in the tradition of the House declare an interest. I live on an agricultural estate in the north-east and some of the pylons which are the subject of this planning application will run over land owned by a trust controlled by my family. However, I should like to emphasise that this is not a NIMBY question. We already have pylons in our backyard—14 of them in fact. The new proposals would add another five to our overall total.

No one chooses to have pylons running across his land; but in this case the degree of local opposition from individuals and organisations goes far beyond a general dissatisfaction with pylons. This opposition stems from the very basic fact that there is no proven need for this line which would run in parallel with the existing 400 kilovolt line.

The problem goes back to the moment that planning permission was granted for the construction of a gas fired electricity plant by Teesside Power Ltd. (TPL)—sometimes called Enron—at Wilton on Teesside. In September 1990 before the then Secretary of State gave planning consent for this power station, the Office of Electricity Regulation issued a derogation to the National Grid Company. This means that part of the planning standards could be disregarded for the connection. Shortly after this, the National Grid Company came to a commercial agreement with Scottish Power and Scottish Hydro-Electric to increase the transmission capacity from Scotland to England. NGC concluded that it would need further capacity and lodged an application with the North Yorkshire County Council for the line which is the subject of my Question tonight.

The existing line has a capacity of over 5,000 megawatts. In fact, no part of the National Grid has a greater capacity than this. TPL, since it started operating in April 1993, has put about 1,000 megawatts of its output down this existing line. The Scottish connection brings to the north-east only 240 megawatts. Very simple arithmetic shows that there is still a very substantial additional capacity on the existing line, so why is there a need for a second line?

The security backup requirements in case of a double circuit failure are seen by many people to be unnecessarily high. The average failure over the whole National Grid is one minute per year per customer. I remind your Lordships that there are over half a million minutes in every year. The existing Yorkshire line which has been in existence for 23 years has not failed once since its construction. Are we really going to have this line foisted on us for this contingency?

Since TPL started putting electricity into the existing line, there have been no problems relating to the line. The setting of the security standards is the responsibility of OFFER, the electricity industry watchdog run by Professor Littlechild. Last month he published the outcome of the review on NGC security standards. The review was conducted by NGC itself and it took two years to report back regarding its own transmission standards. Professor Littlechild made it clear in his

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statement that although he is not minded to change the planning standards in the short term, he is not satisfied with the existing standards as a whole.

Perhaps we may now turn to what I believe is the National Grid's real reason for wanting this second line. This is that two other gas fired generating stations are under consideration for the north-east; namely, Flotilla and Neptune. Indeed NGC has already entered into agreements for connection into the grid of these two stations should they be built. This is in spite of the fact that no formal planning application has yet been made. In the north-east we very much hope that these stations will never be given consent. In any event, the possibility of these two additional stations should not be taken into consideration in relation to the application we are discussing tonight. If that point is accepted by the Secretary of State, it is hard to see that there is sufficient justification for granting permission for this second line of pylons to be built.

The Government should not grant permission and should discourage remote generation of electricity. It is extraordinarily wasteful in two ways. First, the power loss that results when electricity is transported several hundred miles before it reaches the consumers is great. In the case of TPL, the power loss is about 6 per cent. and with the Scottish exports around 10 per cent.

Secondly, remote generation runs counter to the Government's own policy of the creation of combined heat and generation plants when both the electricity and the by-product of heat are sold. TPL was indeed meant to be a CHP station but the problem is that there is no market for Enron's heat in that location, and from my home I can see the great steam clouds rising daily from TPL just five miles down the road. About 50 per cent. of the energy from the gas used disappears with the steam into the atmosphere and it really is a terrible waste of a finite fossil fuel resource.

The 1989 Electricity Act makes remote generation the easiest option for a company considering building a power station. Building near the source of the fuel and then asking National Grid for a connection (which it is legally bound to give) almost regardless of where the electricity is needed, is, sadly, the easier option. But it is not the best option. It is much more efficient to pipe the gas to the point where the electricity is needed and then build your much smaller power station or stations in an area where both the electricity and the heat are marketable.

Although some undergrounding of gas pipes may be necessary, there is a national gas grid with substantial spare capacity. Combined heat and power plants can be very small and, for example, a few miles from where I live and from the TPL station, the Darlington Memorial Hospital opened a one megawatt power station last December. This provides the base load for both the electricity and the heat for the hospital. Such schemes should be encouraged. More are needed in areas of high consumption, particularly in the south.

I hope that from my remarks tonight your Lordships will understand why people in the north-east feel so strongly about this issue. Mr. John Greenway, the Member for Ryedale, in his adjournment debate in

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another place last week said that this was the most strongly felt public anger that he had ever known in his constituency.

When the public inquiry was held in 1992 more than 8,000 objections were lodged, and REVOLT, the group formed to fight the pylons, gave such effective evidence throughout the inquiry that the inspector, Mr. Graham, expressed his admiration for the work it had put in and the degree of expertise it had shown.

NGC's argument relied on the fact that it merely wished to fulfil a legal duty as the company saw it. Despite all the submissions about the environment, the possible ill-effects on health created by electromagnetic fields and the more environmentally friendly solution of undergrounding the cables, the DTI inspectors ended by siding with the National Grid company.

The Secretary of State's response was that he was "minded" to grant consent for the pylons once the wayleaves had been obtained by NGC. If landowners and occupiers of land are unwilling to grant wayleaves voluntarily the National Grid may seek the power to impose wayleaves. At the wayleave hearing, two thirds of those affected did not sign an agreement with the National Grid, which shows an extraordinarily high level of dissatisfaction with the National Grid proposals.

That is not the full extent of the dissatisfaction. The real figure is substantially higher as there were many who signed, myself included, who would much rather not have done so but whose hands were tied in one way or another, for example, by legal constraints.

The saga continues. A further public inquiry is now under way at Northallerton, examining alternative proposals for two sections of the proposed power line, where the issues are being raised again in evidence to the inspectors.

The electricity industry is in a state of flux, transition and uncertainty. It is clear that the privatised energy utilities are capable of delivering greater efficiency at lower prices. I mentioned earlier that Professor Littlechild is looking into security standards. He is also to look, with Ofgas, at the relative pricing of electricity and gas transmission lines. He will look at the whole question of the pricing of transmission and price control by NGC. The advances in superconductivity will enable undergrounding within a decade at lower cost and lower energy losses. There is still more to be done on the effects of electromagnetic fields on our health.

Finally, I feel strongly that the views of those affected should be taken into account by the Secretary of State. It may be a little time before he has to make a decision. I hope that he will look at the wider context and will come to the conclusion that the application should be rejected in the present circumstances and that the application should only be considered concurrently with that for any future power station which would create the need for the line.

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Before I sit down, I should like to thank those Peers who have put their names down to speak in the debate and also my noble friend on the Front Bench who will answer. We look forward very much to hearing what he has to say.

7.53 p.m.

The Marquess of Downshire: My Lords, I am glad that my noble friend Lord Crathorne has asked this particularly pertinent Question as it gives me the opportunity to underline what he said in a few words and to demonstrate the difficulties that individual electricity transmission schemes can face when there is no overall plan to guide those responsible for the National Grid.

It is all very well for the DTI to encourage the conversion of gas into electricity, which is in essence the embryo of the problem which has surfaced in this case, but the power so generated must surely travel over a minimum distance in order to obtain the maximum benefit. The proposed power line is nearly 50 miles in length. For most of that distance the transmission lines travel above ground through an area known as the Vale of York.

The landowners with whom the National Grid is treating are almost universally opposed to the pylons, despite the apparent generosity shown by the size of the compensation offered. There have been a great many objectors, including local authorities and other institutions.

To return to the subject of compensation, although I understand that negotiations between the National Grid and landowners have so far remained amicable, there could come a time, and it will surely come, when the pylon builders' purse runs out and compulsory purchase arrives. Surely there then arises a more potent conflict of interest—the invocation of public power in order to provide private profit.

I therefore earnestly entreat my right honourable friend the Secretary of State to look very hard at all the facts, not least the possibility of yet another line of pylons marching across unspoilt country. Although in this case agricultural land is not being removed, a substantial amount will be sterilised, thereby taking the land in question out of production. The farmers, landowners and others, from whatever walk of life, are not in the business of allowing unnecessary power lines to intrude. Surely those who come after will not thank them for that form of legacy.

7.57 p.m.

Lady Kinloss: My Lords, I am delighted that the noble Lord, Lord Crathorne, has given us the opportunity to debate this Question this evening, which he has explained so clearly.

I find myself speaking for the second time in less than three weeks, begging the Government to listen to the voice of the people in North Yorkshire, and hopefully not to turn a deaf ear this time.

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A great part of North Yorkshire is built up of small farms. Two thirds of the farmers have already refused to reach any agreement with the NGC. They have been offered money, in some cases more than £40,000, which they have refused. Their feelings must be very strong indeed for this to happen.

In 1992, more than 8,000 objections were lodged when the public inquiry was held. Since then a petition of more than 12,000 signatures has been lodged with the right honourable Gentleman the President of the Board of Trade. Much of the proposed line goes through open countryside, in which it will be visible for many miles around, especially at the height which has been proposed of 80-foot pylons. Can the Minister confirm that, should these pylons be erected, they will be of that height? I am sure that, living in Cumbria, the noble Lord will appreciate the worries of local people about their countryside, of which they are justifiably proud. Once you destroy an environment it can never be completely restored. It was of much of this area that Tacitus spoke 2,000 years ago and said, "that they had made a desert and called it peace". Do the Government wish to repeat the occasion?

The objections to these huge power lines have as their bases the environment, agriculture and the apparently unresolved question of whether there is a danger to health, whether human or animal.

The noble Lord, Lord Crathorne, has already mentioned the possibility of building two gas-fired generating stations, so I hope that the House will forgive me if I repeat some of what he said. The NGC has already entered into agreement with two other gas-fired generating stations for the north-east coast, Flotilla and Neptune, which are under consideration for connection into the grid. Whether or not those generating stations are to be built with private money, there have not yet been any formal applications for planning consent for either Flotilla or Neptune. Surely this is putting the cart before the horse.

No need for these power lines has yet been proved. I understand that instead they could put gas lines underground to a point where they wish to put a gas-fired generating station in the south, where the electricity is needed. So why not do this?

The regulator, Professor Littlechild, is conducting further inquiries over the pricing structure, so surely it would be sensible to wait before erecting any further power lines. The present line is the most powerful in the National Grid in the country and is not running to full capacity. Why erect those power lines before they are really needed, when perhaps in 10 years' time, or even less, it may be decided that nuclear power or some other form of power is better and cheaper?

What kind of environment are we leaving to future generations? Why do the Government not listen to the voice of the people in North Yorkshire? May I hope that they will do so?

8.1 p.m.

Lord Middleton: My Lords, I listened with great interest to what my noble friend Lord Crathorne said about the proposed 400 kilovolt line of pylons in North

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Yorkshire. I have not so far taken part in the public debate about the project. It is a debate that has rumbled on for about four years. Many of the arguments are highly technical and I am not qualified to speak on such matters.

Nevertheless, to the layman, on hearing my noble friend tonight there seemed to be five good reasons that the Government should not be in a hurry to give consent to the construction of this power line. First, there is the doubt as to whether a new power line is needed in addition to the existing line over roughly the same route. Secondly, new technology seems to be on the horizon and, if there were even a remote chance of 150 foot high pylons becoming obsolete in the near future, there must be a doubt hanging over the building of 50 miles or so of the old type.

Thirdly, there appears to be a case for paying attention to growing evidence of damage to health from exposure to electro-magnetic fields generated by power lines. Fourthly, as we have heard, the environmental damage would be considerable. The proposed route will grossly disfigure some of the prettiest parts of north Yorkshire and will be in full view from the North York Moors National Park. Fifthly, as my noble friend Lord Crathorne said, there is great public opposition to the project and there is a feeling of being bulldozed into accepting an invasion into property and amenity that may well turn out to be wholly unnecessary.

If I am told that delay would not be acceptable and that there is a hurry to get started because there is an extremely expensive gas-fired power station at Middlesbrough without the means to distribute its current, then I would have to compare the situation with the building of the Brabazon aircraft, which was built at Bristol just after the war without airfields on which to land.

Years ago, I attended an inquiry about pylons. They were bitterly opposed by all witnesses except one. He was a retired admiral whose great pleasure it was to sit looking down a line of pylons because they reminded him of the Grand Fleet at sea in line ahead. I do not expect that argument to be advanced this time. However, I support my noble friend in asking the Government to think very hard before launching this deeply unpopular proposed construction.

8.4 p.m.

Lord Marlesford: My Lords, I am grateful to my noble friend Lord Crathorne for giving us the opportunity to discuss this important subject. As I understand it, it will be quite difficult for the Minister to reply directly on this specific project since it is under investigation through the public inquiry procedure. Reading, as I have done, the debate on the same subject in another place, it seems to me that he may speak somewhat more generally on the problems involved in undergrounding wires. I am rather glad of that because, although I have been to the area to which my noble friend refers, I do not know it as well as I should.

The debate gives me the opportunity to speak perhaps rather generally on what I regard as an important subject. I should at once declare two interests: first, as

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a member of the board of the Eastern Group, which is the biggest of the regional electricity companies in this country; and, secondly, as chairman of the Council for the Protection of Rural England. With both hats on, I take a considerable interest in undergrounding wires.

When electricity was first produced, it was such an exciting event that its arrival by any means was acceptable. Indeed I suspect, although I do not remember the moment, that it was probably fairly prestigious to have wires approaching the premises where one lived or worked rather as, somewhat later (a period that I do remember) television and masts had the same attraction. However, things move on and there is no doubt that wires generally have grown like Topsy and now provide an unattractive feature—very intrusive to much of the landscape and countryside.

We know that the costs of undergrounding are great. The question must always be whether they are costs which can and should be paid. The costs vary a great deal with the line concerned. I understand that the line which my noble friend discusses is a 400 kilovolt line. The cost of undergrounding such a line is approximately 20 times the cost above ground. At the lower voltages the ratio is much smaller. For the 11 kilovolt line which will serve a small community, the cost is 2.3 times greater. For the 400 volt line which will go to ordinary properties the cost is approximately 1.7 times greater. It is very much more economic.

Having said that, we must consider carefully before new lines are put up, in particular when, as appears in this instance, they are dual lines. When I was a member of the Countryside Commission I remember the application for Sizewell B. One reason that the Countryside Commission did not oppose Sizewell B was that Sizewell A, which was already in an area of outstanding natural beauty, had erected for its service pylons which, with extra wires on them, were adequate to carry the power from Sizewell B also. That was a very good reason. We might have taken a very different view on the building of Sizewell B in the area of Sizewell A on the Suffolk coast, but given that the power station was there, and that the pylons could cope with Sizewell B, there was good reason to have Sizewell B.

As your Lordships perhaps know, the output of Sizewell A is some 430 megawatts, and that of Sizewell B some 1200 megawatts, making 1630 megawatts. I hope that my noble friend Lord Crathorne has pursued in some detail whether it is necessary to have those additional pylons, or whether it might not be possible to put more wires on the same pylons, as was done at Sizewell. That seems to be a perfectly reasonable request to make.

I should like to say a few words about what can be done much more easily. For that purpose I take the experience that I have had through Eastern Electricity. A programme has now been in force for three years whereby the company specifically sets aside money for undergrounding low voltage wires in designated areas; that is national parks, areas of outstanding natural beauty, heritage coasts, conservation areas and special landscape areas. So far the company has spent £½ million on undergrounding; the value of the undergrounding that

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has taken place is at least double that because others have contributed to the cost. So far, 18 villages in Suffolk, Norfolk and Essex—all in designated areas—have had their low voltage wires put underground. In 1995-96, £¼ million has been allocated for the same purpose and it is hoped to extend the scheme in the eastern area to Cambridgeshire, Hertfordshire, Buckinghamshire and Bedfordshire.

The method of choosing where the undergrounding should go, assuming that designated areas are involved, is that the parish councils will decide that they find the wirescape intrusive. They will apply to the district council to be included in a list which will be submitted to the county councils. The county councils will then submit their list to Eastern Electricity and eventually a judgment will have to be made as to which ones are included in the programme.

The effect is dramatic in hugely improving the view of the areas. Villages such as Maldon, Cavendish, Aldeburgh, Burnham Market, Stoke by Nayland and even the little village of Marlesford in which I live, have benefited from the scheme. I can assure noble Lords that if they went to those villages and saw the pictures of before and afterwards, they would realise the benefit.

The expenditure does not only come from Eastern Electricity. There is no point in an undergrounding project unless British Telecom puts its wires underground at the same time. It is expected to do so and has done so. The county councils and district councils contribute, and even the parish councils contribute their widow's mite, in order to show that they are serious about the matter. The National Trust has contributed in certain cases; so have English Heritage, the Countryside Commission and some of the local preservation societies. I hope that other regional electricity companies will now follow suit. So far, they have not and I suggest that those noble Lords who have an interest in the subject and know of designated areas where the wirescape is intrusive should, perhaps through the parish council chain, put pressure on regional electricity companies to set up similar programmes. They can well be afforded.

One point I wish to make is that it would be desirable for the regulator to allow such amenity expenditure to be a deductible cost—which it is not at the moment—for the purpose of working out the economics of the price of power. I recognise that undergrounding low voltage lines may not be much comfort to my noble friend with his 400 kilovolt wires, but it is still a step in the right direction.

I believe that one day there will be greater scope. In the long run, probably when we are no longer around, with the further development of nuclear and solar power as well as superconductivity, we shall probably be in the happy position where power is either produced on the spot where it is needed or it may be produced in a series of nuclear or solar power stations perhaps miles away on a desert coast. The power could be transmitted throughout the world by undergrounded superconductivity lines.

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Meanwhile, I suggest that the Government should do all they can, through the planning system, to encourage the most careful assessment of routes and the review of existing lines which are often no longer acceptable. Perhaps other electricity suppliers could be persuaded to follow the example of Eastern Electricity in introducing a serious programme of undergrounding throughout this beautiful country.

8.14 p.m.

Lord Gisborough: My Lords, with the leave of the House, I wish to support my noble friend. My noble kinsman mentioned the effect on the plain of Northallerton. It is a wide plain below the national park and there is no doubt that a large number of wires would be unattractive and visible from a long way.

It cannot be disputed that the proposal has caused great concern to people in the area and there has been a great deal of interest and opposition to it. Not many years ago large pipes were put in underground carrying either gas or oil from the north-east coast to Lancashire. It surprises me that when a pipe is clearly economically viable for chemical firms, it should not be viable to carry gas to the area where the electricity is needed and where there will be no loss of gas, as opposed to the large loss described of electricity.

I look forward to the Minister's reply, but I understand that one of the lines of wires will be taken down by Enron and a much bigger line substituted which will look worse than the line already there. But at least there will only be one line, not two. It will be interesting to see whether the Minister confirms or denies that. I support my noble friend and look forward to hearing what the Minister has to say.

8.16 p.m.

Lord Peston: My Lords, we are all indebted to the noble Lord, Lord Crathorne, for putting down the Question and to noble Lords who have contributed to our discussion. I must be honest and say that when I first saw the Question and was told that I had to deal with it, I took the rather cynical view that it was just a bunch of rich landowners objecting to damage to their property consequent on economic advance. I wondered why I should bother. However, as the noble Lord, Lord Crathorne, pointed out, this is not a NIMBY Question, nor a rich landowner matter, as I discovered by going into it in detail.

What I find most impressive is the scale of the objections to what is proposed. So far as I can see, they appear to cover virtually everyone in the area. All the local authorities are unhappy, the Council for the Protection of Rural England and the national parks people are unhappy. The farmers are certainly unhappy and the noble Lady, Lady Kinloss, drew to our attention that to a considerable degree we are discussing small farmers. Most of the ordinary people in that part of the world are unhappy, and I understand that for once even the local media are united in saying that it is an undesirable state of affairs. I am happy to add that so

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far as I can see there is no party aspect to the objections. Everyone who is aware of the proposal says that there is something wrong.

We start from the point raised by the noble Lord, Lord Crathorne, that there seems to be no proven need for the line in the first place. In my judgment, a proven need would have to consist of two parts. We would need a full economically sound assessment of what is required, but equally that must be coupled with an environmental assessment. In other words, one cannot take a narrow view of such a development and whether there is a simple pay off. We must calculate—and in my judgment it can be done—the effect on the environment and weigh everything in the balance. We must ask what are the economic benefits, net; what are the environmental disbenefits; do the former outweigh the latter? Even if we do that, we still have to deal with the question that if there are gainers and losers, will the gainers not be obliged to compensate the losers?

That takes me to an altogether more fundamental point which is more general than the specific case but the specific case enables us to discuss it. It is the point of compulsory purchase, to which the noble Marquess referred.

If the relevant utilities are public utilities, whether national or municipal, one can put up quite a good case for compulsory purchase. But once those utilities are in the private sector, as they are, I can see no economically sound case whatsoever for compulsory purchase. It seems to me that what follows in that case is the need for the two parties—those who wish to build the pylons and those whose land those pylons will cross—to come to some mutual agreement so that each benefits. If they cannot reach some mutual agreement, then there is no case for building these pylons or anything else. In other words, one of the things that the Government have to face up to is that once you privatise, you really do have to privatise.

The Government say that they believe that markets, and not politicians, should decide how much energy, and of what kind, should be produced or consumed, and by whom. If the Government believe that, their view is completely incompatible, as a matter of logic, with compulsory purchase. If markets are to decide this, then markets are to decide it; and they must fully compensate all those who are affected. If the people who wish to build the line cannot then do so, it should not be built.

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